8-K
XBP Global Holdings, Inc. (XBP)
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): July 29, 2025
XBP
GLOBAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40206 | 85-2002883 |
|---|---|---|
| (State<br> or other jurisdiction <br><br>of incorporation or organization) | (Commission File Number) | (I.R.S. Employer<br><br> Identification Number) |
| 6641 N. Belt Line Road, Suite 100<br><br> <br>Irving, TX | 75063 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(844) 935-2832
Registrant’s
telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | TradingSymbol | Name of Each Exchange on Which Registered |
|---|---|---|
| Common Stock, Par Value $0.0001 per share | XBP | The Nasdaq Global Market |
| Redeemable warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 | XBPEW | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.01. | Entry into a Material Definitive Agreement. |
|---|
As previously disclosed, on July 3, 2025, XBP Global Holdings, Inc. (the “Company,” formerly XBP Europe Holdings, Inc.) entered into a Transaction Support Agreement (the “Transaction Support Agreement”) with Exela Technologies BPA, LLC (together with its subsidiaries, the “BPA Group”) and certain of its affiliates (collectively, the “Debtors” or after the Restructuring (defined herein), the “Reorganized Debtors”). Pursuant to the Transaction Support Agreement, the Company agreed to, among other things, support the Debtors’ plan of reorganization (the “Plan”) in their Chapter 11 cases (the “Restructuring”), including seeking stockholder approvals at the Company’s annual shareholder meeting (the “Annual Meeting”) and issuing shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), as described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on July 15, 2025 (the “Proxy Statement”).
On July 29, 2025 (the “Effective Date”), the Company entered into:
| · | A Registration Rights Agreement (the “Registration Rights Agreement”) with certain holders of the Company’s common<br>stock, par value $0.0001 per share (“Common Stock”), issued and distributed in the Restructuring (the “Holders”),<br>granting the Holders shelf, demand, and piggyback registration rights for the resale of such shares, subject to certain conditions and<br>thresholds. |
|---|---|
| · | A Shareholder Rights Agreement (the “Shareholder Rights Agreement”), effective as of the Effective Date, which provides for<br>the issuance of one right per share of Common Stock, exercisable if any person or entity acquires 30% or more of the Common<br>Stock (subject to exceptions for existing holdings and shares issuable under the Plan). The Shareholder Rights Agreement is intended to<br>protect against unsolicited takeovers and expires 18 months from adoption unless redeemed or exchanged earlier. |
| --- | --- |
| · | A Tax Funding Agreement (the “Tax Funding Agreement”) with the Reorganized Debtors (the Debtors upon their emergence from Chapter<br>11), as Agent, and Exela Technologies, Inc. (“ETI”), GP 3XCV LLC, and XCV-STS, LLC (together, the “Consenting ETI Parties”).<br>The Tax Funding Agreement provides for the Consenting ETI Parties to fund certain Transaction Tax Liabilities (as defined in the Plan)<br>(up to the Initial ETI Funding Obligation of $15,000,000 and any excess over $25,000,000), with security over Blocked ETI Shares (as defined<br>therein) and provisions for release upon payment. |
| --- | --- |
Additionally, on the Effective Date, Exela Technologies BPA, LLC entered into a Credit and Security Agreement (the “ABL Credit Agreement”) with MidCap Financial Trust as Agent and Lender, providing a $150,000,000 revolving credit facility, secured by ABL Priority Collateral (as defined therein), with terms including interest at SOFR plus Applicable Margin (3.75%-4.25% based on EBITDA), maturity 36 months from closing, financial covenants (e.g., Fixed Charge Coverage Ratio), and other customary provisions.
Additionally, on the Effective Date, the Reorganized Debtors entered into exit financing arrangements, including:
| · | An Indenture (the “Indenture”) reflecting the issuance of $183 million of exit notes in a cashless rollover of a comparable amount<br>of debtor-in-possession obligations, plus $18 million in additional funding provided by the Company, with the remaining $10 million of<br>debtor-in-possession obligations being cancelled and replaced with $6 million of loans under the Gates Exit Facility Agreement (as defined<br>below). |
|---|---|
| · | A Financing Agreement (the “Gates Exit Facility Agreement”) consisting of $40 million of new loans used to refinance the Debtors’<br>prepetition senior secured term loan facility, which was in the aggregate principal amount of approximately $38.9 million, plus accrued<br>interest, fees, and expenses, and $6 million of take-back loans, secured by Term Loan Priority Collateral (as defined therein). |
| --- | --- |
| · | The ABL Credit Agreement. |
| --- | --- |
| · | An Amended and Restated Credit and Security Agreement (the “2L Credit Agreement”) with BRF Finance Co. LLC, as Agent,<br>and the lenders party thereto, amending and restating the Secured Promissory Note dated February 27, 2023, providing for term loans bearing<br>interest at Term SOFR plus 7.5%, and other terms as set forth therein. |
| --- | --- |
As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 31, 2025 (the “Prior 8-K”), in connection with the Restructuring, the Company entered into an Amendment Agreement on July 25, 2025 with HSBC UK Bank plc, as Agent and Security Agent, amending the term loan and revolving facilities agreement dated June 26, 2024.
The foregoing descriptions of the Transaction Support Agreement, Registration Rights Agreement, Shareholder Rights Agreement, Tax Funding Agreement, ABL Credit Agreement, Gates Exit Facility Agreement, Indenture and 2L Credit Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.1, 10.2, 4.2, 10.4, 10.5, 10.3, 4.1 and 10.7 hereto, respectively, and incorporated herein by reference.
| Item 1.02. | Termination of a Material Definitive Agreement. |
|---|
On the Effective Date, in connection with the consummation of the Restructuring and pursuant to the Plan, the indenture dated as of December 9, 2021 (as amended, supplemented or otherwise modified from time to time), among Exela Intermediate LLC and Exela Finance Inc., as issuers, the guarantors party thereto (including certain of the Debtors), and U.S. Bank Trust Company, National Association, as trustee and collateral agent, governing the 11.500% first-priority senior secured notes due 2026, and the indenture dated as of July 11, 2023 (as amended, supplemented or otherwise modified from time to time), among Exela Intermediate LLC and Exela Finance Inc., as issuers, the guarantors party thereto (including certain of the Debtors), and U.S. Bank Trust Company, National Association, as trustee and collateral agent, governing the 11.500% first-priority senior secured notes due 2026, were terminated, and all obligations thereunder were cancelled and discharged, with holders of claims thereunder receiving distributions of Common Stock as described in Item 3.02.
The ABL Credit Agreement replaced the BPA Group’s existing securitization arrangements with PNC Bank.
The disclosures in Items 1.01 and 3.02 are hereby incorporated by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
|---|
The information set forth in Item 1.01 regarding the exit financing arrangements is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
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On the Effective Date, pursuant to the Plan and the Nasdaq Proposal approved at the Annual Meeting (Proposal 4 in the Proxy Statement), the Company issued 81,799,821 shares of Common Stock to holders of Allowed Notes Claims (as defined in the Proxy Statement) and for backstop and funding fees, resulting in 117,516,255 shares of Common Stock issued and outstanding, and warrants to purchase 6,632,418 shares of Common Stock to GP 3XCV LLC and XCV-STS, LLC (two subsidiaries of the registrant’s former parent company ETI).
The issuances were exempt from registration under Section 1145 of the U.S. Bankruptcy Code. The warrants have standard terms, including cash less exercise provisions, and are exercisable immediately at Plan Equity Value (as defined in the Plan). The form of warrant is filed as Exhibit 4.3 hereto and incorporated herein by reference.
See also Item 8.01 regarding the Shareholder Rights Agreement.
| Item 3.03. | Material Modification to Rights of Security Holders. |
|---|
The information set forth in Item 1.01 regarding the Shareholder Rights Agreement is incorporated herein by reference. The Shareholder Rights Agreement materially affects the rights of holders of Common Stock through its anti-takeover provisions.
The information set forth in Item 5.03 regarding the effectiveness of the Amended Charter is also incorporated herein by reference.
The reverse stock split authorization described in Item 5.03 also materially modifies the rights of holders of Common Stock by potentially reducing the number of outstanding shares and increasing the proportion of authorized but unissued shares.
The information set forth in Item 5.03 regarding the Second Amended and Restated Bylaws is incorporated herein by reference. The Second Amended and Restated Bylaws might be deemed to modify the rights of holders of Common Stock by updating certain governance provisions, including changes to stockholder meeting procedures, advance notice requirements for stockholder proposals and nominations, and the ability to take action by written consent, which may affect stockholders’ ability to participate in corporate governance and influence Company decisions.
| Item 4.01. | Changes in Registrant’s Certifying Accountant. |
|---|
(a) Dismissal of Previous Independent Registered Public Accounting Firm.
In connection with the Restructuring, the Company dismissed EisnerAmper LLP (“Eisner”), the independent registered public accounting firm that audited the financial statements of the BPA Group (when it was a subsidiary of ETI), effective as of the Effective Date.
The reports of Eisner on the BPA Group’s financial statements as of and for the fiscal years ended December 31, 2024 and 2023 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. However, the report included an explanatory paragraph describing conditions raising substantial doubt about the Company’s ability to continue as a going concern, which is considered a modification related to audit scope under Item 304(a)(1)(v) of Regulation S-K.
During the BPA Group’s two most recent fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through the Effective Date, there were: (i) no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the BPA Group and Eisner on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Eisner, would have caused Eisner to make reference to the subject matter of the disagreement in connection with its reports on the BPA Group’s financial statements for such years, and (ii) no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K).
The Company provided Eisner with a copy of the disclosures it is making in this Current Report on Form 8-K and requested that Eisner furnish a letter addressed to the SEC stating whether or not it agrees with the statements made herein. A copy of Eisner’s letter, dated August 4, 2025, is filed as Exhibit 16.1 to this Current Report on Form 8-K.
(b) Engagement of New Independent Registered Public Accounting Firm.
On the Effective Date, the Company maintained UHY LLP (“UHY”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2025, consistent with stockholder ratification at the Annual Meeting on July 25, 2025. UHY served as the Company’s auditor prior to the Restructuring.
During the Company’s two most recent fiscal years ended December 31, 2024 and 2023, and the subsequent interim period through the Effective Date, neither the Company nor anyone on its behalf has consulted with UHY as it relates to the BPA Group regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that UHY concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions); or (iii) any reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
| Item 5.01. | Changes in Control of Registrant. |
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As a result of the Restructuring consummated on the Effective Date, the Company is no longer considered a “controlled company” under the rules of The Nasdaq Stock Market. Prior to the Restructuring, BTC International Holdings, Inc. (“BTC”), an indirect subsidiary of ETI, owned approximately 60.7% of the Company’s Common Stock. Pursuant to the Plan, BTC’s shares were distributed to holders of Allowed Notes Claims (including ETI). Post-issuance of new shares under the Plan, beneficial ownership is dispersed, with ETI holding approximately 27.1%, Gates Capital Management approximately 25.9%, and Avenue Capital approximately 9.8%, in each case, assuming the exercise of warrants by ETI and its affiliates. The Restructuring represents a dissipation of control, not a “change of control” in the traditional sense, because no new third party acquired control of the Company as a result of the Restructuring. There are no known arrangements that may result in a further change in control.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements ofCertain Officers. |
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As disclosed in the Prior 8-K, at the Annual Meeting held on July 25, 2025, stockholders approved the Director Election Proposal (Proposal 1 in the Proxy Statement), electing James G. Reynolds and Andrej Jonovic to serve until the 2026 annual meeting.
Additionally, as disclosed in the Prior 8-K, stockholders approved the Stock Plan Amendment Proposal (Proposal 6 in the Proxy Statement), amending the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan to increase the authorized shares by 5,000,000, with a conditional further increase to ensure the total equals 10% of outstanding Common Stock post-Restructuring. The amended plan is filed as Exhibit 10.6 hereto.
Effective as of the Effective Date and as part of the Plan, Messrs. J. Coley Clark and Martin P. Akins resigned from the Board, without disagreement on Company matters. Further, in connection with the Restructuring, the Board was increased to seven members and the vacancies on the Board were filled with four new directors: Regina Paolillo, Sanjay Srivastava, Robert Pryor and Randal Klein, each of whom were nominated by the Consenting Creditors (as defined in the Plan) pursuant to a one-time right under the Plan to designate four (4) nominees for appointment to our Board on behalf of all the recipients of Common Stock under the Plan.
The biographical information for each of the new directors is set forth below:
Regina Paolillo
Ms. Paolillo, age 67, served as Global Chief Operating Officer of TTEC Holdings, Inc. from 2021 to 2022, after serving as Executive Vice President, Chief Financial & Administrative Officer since 2011. From 2009 to 2011, she was Chief Financial Officer and Executive Vice President for Enterprise Services at TriZetto Group, Inc. She previously held senior finance and operations roles at General Atlantic, Genpact, Creditek, Gartner, Productivity, Inc., Citibank, Bristol-Myers Squibb, and PwC. She currently serves on the boards of Unisys Corp (Audit Committee Chair and Security & Risk Committee member since 2018), UST (Audit Committee Chair and Compensation & Talent Committee member since 2023), and SIRVA Worldwide (Audit Committee Chair since 2024). Ms. Paolillo holds a bachelor of arts degree from the University of New Haven.
Sanjay Srivastava
Mr. Srivastava, is currently a venture partner at Masa Group, LLC and serves as a senior advisor on digital and AI strategy. He served as the Chief Digital Officer of Genpact from 2012 to March 2024 and has served as the Chief Digital Strategist at Genpact since March 2024. Prior to joining Genpact, he founded and exited four startups acquired by Genpact, SunGard, BMC, and Akamai, and held leadership roles at FIS, Akamai, and Hewlett Packard. He also founded the Executive Technology Board, a global independent think tank, and serves on the board of directors of Legal Sifter, Inc. He holds a master’s degree in business administration from the University of Minnesota and a bachelor of science from the Indian Institute of Technology, Kharagpur.
Robert Pryor
Mr. Pryor, age 66, serves as Senior Advisor to NTT DATA and retired as Chief Executive Officer of NTT DATA Services in 2024, after serving as Chief Operating Officer and Chief Integration Officer. He previously was Chief Executive Officer of Fujitsu Americas, Inc., and held senior leadership roles at EDS, EY, Capgemini, HP, and Genpact. He serves as Independent Chair of C1, Board Member and Advisor to v4c.ai, and Advisor to NTT Ventures. He holds a master’s degree in business administration from the University of North Texas, a bachelor’s degree in finance and accounting from the University of Texas at Austin, and completed the Kellogg Executive Development Program at Northwestern University.
Randal T. Klein
Mr. Klein, age 60, joined affiliates of Avenue Capital Management II, L.P. (“Avenue”) in 2004 and is currently a Senior Portfolio Manager at Avenue responsible for assisting with the direction of the investment activities of Avenue’s global funds. Mr. Klein provides the investment professionals in the Avenue U.S. Strategy team with additional expertise, oversight and investment direction on a range of transactions. Prior to joining Avenue, Mr. Klein was a Senior Vice President at Lehman Brothers, where his responsibilities included restructuring advisory work, financial sponsors coverage, mergers and acquisitions and corporate finance. Prior to Lehman, Mr. Klein worked in sales, marketing and engineering as an aerospace engineer for The Boeing Company. Mr. Klein currently serves, or has served, on the boards of GenensisCare USA Group, Gravity Oilfield Services, NextWave Holdco, Amplify Energy Corp, Selcom Group, MagnaChip Semiconductor, Chassix Automotive, Midstates Petroleum and American Media. Mr. Klein is a National Association of Corporate Directors (NACD) Board Leadership Fellow. Mr. Klein holds a master of business administration degree in finance from the Wharton School of the University of Pennsylvania and a bachelor of science degree in aerospace engineering from the University of Virginia.
The continuing directors are Par Chadha, Andrej Jonovic, and James G. Reynolds.
| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
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On July 29, 2025, the Company filed a Certificate of Designations of Series A Participating Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State, designating the Series A Participating Preferred Stock (“Series A Preferred Stock”) issuable under the Rights Agreement described in Item 1.01. The Certificate of Designations is filed as Exhibit 3.1 hereto.
As disclosed in the Prior 8-K, at the Annual Meeting, stockholders approved the Charter Amendment Proposals (Proposals 3A-3D in the Proxy Statement), adopting the Third Amended and Restated Certificate of Incorporation (the “Amended Charter”). On the Effective Date, the Amended Charter was filed with the Delaware Secretary of State and became effective. The Amended Charter includes:
| · | A name change to “XBP Global Holdings, Inc.” |
|---|---|
| · | An increase in authorized shares to 400,000,000 shares of Common Stock and<br>20,000,000 shares of preferred stock. |
| --- | --- |
| · | Removal of the staggered board, reestablishment of stockholder action by<br>written consent (with exceptions for director elections and certain mergers), and clarification of the corporate opportunities waiver. |
| --- | --- |
| · | Overall restatement and conforming changes. |
| --- | --- |
The Amended Charter is filed as Exhibit 3.2 hereto.
Effective as of the Effective Date, the Company adopted the Second Amended and Restated Bylaws, which update governance provisions to reflect the name change, certain changes relating to the board composition and certain board and stockholder meeting procedures. The Second Amended and Restated Bylaws are filed as Exhibit 3.3 hereto.
As disclosed in the Prior 8-K, stockholders also approved the Reverse Stock Split Proposal (Proposal 5 in the Proxy Statement), amending the Amended Charter to authorize a reverse stock split of Common Stock at a ratio between 1-for-3 and 1-for-15, to be determined by the Board and may be implemented in 2025 (a reverse stock split has not yet been effected or declared and will be subject to Board discretion). The Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation effecting the reverse stock split was filed with the Delaware Secretary of State and became effective on the Effective Date and is filed as Exhibit 3.4 hereto.
| Item 8.01. | Other Events. |
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On July 29, 2025, in connection with the Rights Agreement described in Item 1.01, the Board declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of Common Stock to stockholders of record as of the Close of Business on August 15, 2025 (the “Record Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock at a price equal to five (5) times the Current Per Share Market Price (as defined in the Rights Agreement) of the Common Stock as of the Stock Acquisition Date (as defined in the Rights Agreement), subject to adjustment. The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement) and will expire on the Final Expiration Date (as defined in the Rights Agreement), unless earlier redeemed or exchanged.
The Rights will be issued as an unregistered dividend, and the issuance does not constitute a “sale” under Section 2(a)(3) of the Securities Act of 1933, as amended. A summary of the terms of the Rights is included in the Shareholder Rights Agreement filed as Exhibit 4.2 hereto.
Item 9.01. Financial Statements andExhibits
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 4, 2025
| XBP GLOBAL HOLDINGS, INC. | |
|---|---|
| By: | /s/ Dejan Avramovic |
| Dejan Avramovic | |
| Chief Financial Officer |
Exhibit 3.1
CERTIFICATE OF DESIGNATIONS
of
SERIES A PARTICIPATING PREFERRED STOCK
of
XBP EUROPE HOLDINGS, INC.
_______________________________________________________________
(Pursuant to Section 151 of the Delaware General Corporation Law)
_______________________________________________________________
XBP Europe Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation (the “Board”) as required by Section 151 of the General Corporation Law on July 29, 2025:
RESOLVED, that pursuant to the authority vested in the Board in accordance with the provisions of the Second Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), a series of Preferred Stock, without par value, of the Corporation (“Preferred Stock”) be and it hereby is created, and that the designation and amount thereof and the powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:
(1) Designation and Amount. The shares of this series shall be designated as Series A Participating Preferred Stock (the “Series APreferred Stock”), and the number of shares constituting the Series A Preferred Stock shall be 60,000. Such number of shares may be increased or decreased by resolution of the Board; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.
(2) Dividends and Distributions.
a. Subject to the rights of the holders of any shares of any series of Preferred Stock (or any other stock of the Corporation) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of common stock, par value $0.0001 per share, of the Corporation (the “Common Stock”), and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date a “QuarterlyDividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount (if any) per share (rounded to the nearest cent), equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 multiplied by the aggregate per share amount of all cash dividends, and 1,000 multiplied by the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise) declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
b. Dividends due pursuant to paragraph a of this (2) shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.
(3) Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:
a. Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
b. Except as otherwise provided in the Certificate of Incorporation, including any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
c. Except as set forth herein or in the Certificate of Incorporation, or as otherwise required by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
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(4) Certain Restrictions.
a. Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in (2) are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
i. declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock;
ii. declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
iii. redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding-up) to the Series A Preferred Stock; or
iv. redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
b. The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph a of this (4), purchase or otherwise acquire such shares at such time and in such manner.
(5) Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. The Corporation shall take all such actions as are necessary to cause all such shares to become authorized but unissued shares of Preferred Stock that may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in the Certificate of Incorporation, including any Certificate of Designations creating a series of Preferred Stock or any similar stock, or as otherwise required by law.
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(6) Liquidation, Dissolution or Winding-Up.
a. Upon any liquidation, dissolution or winding-up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock unless, prior thereto, the holders of Series A Preferred Stock shall have received an amount per share (the “Series A Liquidation Preference”) equal to $1,000 per share, plus an amount equal to any accrued and unpaid dividends thereon; provided, that the holders of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount to be distributed per share to holders of shares of Common Stock. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
b. If there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.
c. Neither the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall be deemed to be a liquidation, dissolution or winding-up of the Corporation within the meaning of this (6).
(7) Consolidation, Merger, Etc. If the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(8) Amendment. While any Series A Preferred Stock is issued and outstanding, the Certificate of Incorporation shall not be amended in any manner, including in a merger or consolidation, which would alter, change or repeal the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. In addition to the rights, preferences and privileges accorded to the Series A Preferred Stock herein, the Series A Preferred Stock shall have the rights, privileges and preferences, and be subject to the limitations, accorded generally to the Preferred Stock in the Certificate of Incorporation of the Corporation.
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(9) Rank. The Series A Preferred Stock shall be of equal rank with respect to the payment of dividends and upon liquidation, dissolution and winding-up, to all other series of Preferred Stock, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters.
(10) No Redemption. The shares of Series A Preferred Stock shall not be redeemable.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its duly authorized officer this 29th day of July 2025.
| XBP<br> EUROPE HOLDINGS, INC. |
|---|
| By: |
| Name:<br> Andrej Jonovic |
| Title:<br> Chief Executive Officer |
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Exhibit 3.2
THIRD AMENDED AND RESTATEDCERTIFICATE OF INCORPORATIONOF
XBP EUROPE HOLDINGS, INC.
XBP Europe Holdings, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify that:
ONE: The name of the Corporation is XBP Europe Holdings, Inc. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 8, 2020, under the name “CF Finance Acquisition Corp. VIII.”
TWO: This Third Amended and Restated Certificate of Incorporation restates and integrates, and also further amends, the provisions of the Second Amended and Restated Certificate of Incorporation of the Corporation, as heretofore amended.
THREE: This Third Amended and Restated Certificate of Incorporation of the Corporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”).
FOUR: Pursuant to Sections 242 and 245 of the DGCL, text of the Second Amended and Restated Certificate of Incorporation of the Corporation, as heretofore amended, is hereby amended and restated to read in its entirety as follows:
ARTICLE I
The name of this corporation is XBP Global Holdings, Inc. (the “Corporation”).
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is: c/o The Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808, in the county of New Castle. The name of the registered agent of the Corporation at such address is The Corporation Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
ARTICLE IV
**A.**The Corporation is authorized to issue two (2) classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is 420,000,000 shares: (x) 400,000,000 shares shall be Common Stock, each having a par value of $.0001 and (y) 20,000,000 shares shall be Preferred Stock, each having a par value of $.0001.
**B.**The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board of Directors”) is hereby expressly authorized to provide for the issue of all or any of the unissued shares of the Preferred Stock that have not been designated as to series, in one or more series, and to fix the number of shares and to determine for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted and filed by the Board of Directors in accordance with the DGCL. The number of authorized shares of Preferred Stock, or any series thereof, may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of stock of the Corporation entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock. Any shares of any series of Preferred Stock purchased, exchanged, converted or otherwise acquired by the Corporation, in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, without designation as to series, and may be reissued as part of any series of Preferred Stock created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth in this Third Amended and Restated Certificate of Incorporation or in such resolution or resolutions.
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**C.**Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Third Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Third Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).
**D.**Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board of Directors from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.
**E.**Subject to the applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, in any event of an voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation the holders of shares of Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them.
ARTICLE V
For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and stockholders, as the case may be, it is further provided that:
A. Management of the Business.
The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. Subject to any rights of the holders of shares of any series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the number of directors which shall constitute the Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors constituting the Board of Directors.
B. Board of Directors.
Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, all directors shall be elected annually by the stockholders for a term of one (1) year. Each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
C. Removal of Directors.
1. Subject to the rights of any series of Preferred Stock to remove directors elected by such series of Preferred Stock, neither the Board of Directors nor any individual director may be removed without cause.
2. Subject to any limitations imposed by applicable law and the rights of any series of Preferred Stock to remove directors elected by such series of Preferred Stock, any individual director or directors may be removed from office with cause by the affirmative vote of the holders of at least three-fourths (75%) of the voting power of all then-outstanding shares of capital stock of the Corporation entitled to vote generally at an election of directors.
D. Vacancies.
Subject to any limitations imposed by applicable law and subject to the rights of the holders of any series of Preferred Stock to elect additional directors or fill vacancies in respect of such directors, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors or by a sole remaining director, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified or such director’s earlier death, resignation or removal.
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E. Bylaw Amendments.
The Board of Directors is expressly authorized and empowered to adopt, amend or repeal any provisions of the Bylaws of the Corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Third Amended and Restated Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least three-fourths (75%) of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
F. Stockholder Actions.
1. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
2. Any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be effected at a duly called annual or special meeting of the stockholders called in accordance with the Bylaws or, except in the case of Excluded Consent Actions, by written consent of stockholders in accordance with the Bylaws. An “Excluded Consent Action” means (i) the election of directors, and (ii) the approval of a merger, consolidation, conversion, or sale of all or substantially all assets. Notwithstanding the foregoing, holders of one or more series of Preferred Stock may, to the extent permitted by and pursuant to the terms of such series of Preferred Stock adopted by resolution or resolutions of the Board of Directors, take action by written consent.
3. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.
ARTICLE VI
**A.**A director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except for liability of (i) a director or officer for any breach of the director’s or officer’s duty of loyalty to the Corporation or its stockholders, (ii) a director or officer for acts or omissions not in good faith or which involve, intentional misconduct or a knowing violation of law, (iii) a director under Section 174 of the DGCL, or (iv) a director or officer for any transaction from which the director or officer derived an improper personal benefit, or (v) an officer in any action by or in the right of the Corporation. If applicable law is amended after approval by the stockholders of this Article VI to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then, subject to clause (v), the liability of a director or officer to the Corporation shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.
**B.**To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which applicable law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in accordance with such applicable law.
**C.**Any repeal or modification of this Article VI shall only be prospective and shall not adversely affect the rights or protections or increase the liability of any officer or director of the Corporation under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification and occurring prior to such appeal or modification.
ARTICLE VII
**A.**Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents, (iii) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation arising pursuant to any provision of the DGCL or the Certificate of Incorporation or the Bylaws of the Corporation (as each may be amended from time to time), (iv) any action asserting a claim against the Corporation or any director or officer or other employee of the Corporation governed by the internal affairs doctrine; or (v) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants provided, that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).
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**B.**Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
ARTICLE VIII
**A.**In recognition and anticipation that the Exempted Persons may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article VIII are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any Exempted Person and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
**B.**To the extent permitted by applicable law, each Exempted Person shall not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its Subsidiaries, except as otherwise expressly provided herein or in any written agreement entered into between the Corporation and such Exempted Person. To the fullest extent permitted by applicable law, but subject to the following provisions of this Article VIII, the Corporation, on behalf of itself and its Subsidiaries, renounces any interest, right or expectancy of the Corporation and its Subsidiaries in, or in being offered an opportunity to participate in or receive any income or proceeds from, business opportunities that are from time to time available to the Exempted Persons, even if the opportunity is one that the Corporation or its Subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each such Exempted Person shall have no duty to communicate or offer such business opportunity to the Corporation or refrain from pursuing such business opportunity (and there shall be no restriction on the Exempted Persons using the general knowledge and understanding of the industry in which the Corporation operates which it has gained as an Exempted Person in considering and pursuing such opportunities or in making investment, voting, monitoring, governance or other decisions relating to other entities or securities) and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its Subsidiaries or stockholders for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Exempted Person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its Subsidiaries, or uses such knowledge and understanding in the manner described herein, in each case, except as otherwise expressly provided in any written agreement entered into between the Company and such Exempted Person or if all of the following conditions are satisfied: (a) the business opportunity is presented or offered to an Exempted Person solely in the person’s capacity as a director, officer or stockholder of the Corporation (expressly excluding any acquisition opportunities presented or offered to HandsOn Global Management or its controlled affiliated funds and not intended for the Corporation), (b) such business opportunity is one the Corporation or any of its Subsidiaries is legally and contractually permitted to undertake, and (c) a majority of the disinterested directors of the Corporation determines that the Corporation possesses, or would reasonably be expected to be able to possess, the resources necessary to exploit such business opportunity (which determination shall be promptly and reasonably made and communicated to the Exempted Person following presentation of such opportunity). If there is a separate written agreement for the Exempted Person applicable hereto, or if the foregoing clauses (a) through (c) are applicable and satisfied, then the applicable Exempted Person will have a fiduciary duty to refrain from engaging directly or indirectly in the applicable business activity unless a majority of the disinterested directors of the Corporation provides a written waiver to the applicable Exempted Person (which waiver shall not be unreasonably withheld or delayed). For the avoidance of doubt, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy. Any person or entity purchasing or otherwise acquiring any interest in any shares of stock of the Corporation shall be deemed to have notice of the provisions of this Article VIII.
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**C.**Neither the alteration, amendment, addition to or repeal of this Article VIII, nor the adoption of any provision of this Third Amended and Restated Certificate (including any Preferred Stock Designation) inconsistent with this Article VIII, shall eliminate or reduce the effect of this Article VIII in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article VIII, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article VIII shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Third Amended and Restated Certificate, the Bylaws or applicable law.
**D.**For purposes of this Article VIII, the following terms have the meanings set forth below:
“Affiliate” means, with respect to any specified person, any other person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified person.
“Exempted Person” means each of the stockholders, each of the independent directors of the Corporation and each of the directors of the Corporation (including for all purposes of this Article VIII directors who are also officers or employees of the Corporation), who are, or are Affiliates or designees of, Exela Technologies, Inc. and its Affiliates, and each of their respective controlled Affiliates and all of their respective partners, principals, directors, officers, members, managers, equity holders and/or employees, including any of the foregoing who serve as officers or directors of the Corporation; provided that the Corporation and its Subsidiaries shall not be Exempted Persons.
“Person” means any natural person, corporation, limited liability company, general or limited partnership, joint venture, trust, estate, proprietorship, unincorporated association, organization or other entity.
“Subsidiary,” when used with respect to any person, means any other person of which (x) in the case of a corporation, (1) at least fifty percent (50%) of the equity or (2) securities representing at least fifty percent (50%) of the outstanding voting power of such other person are owned or controlled, directly or indirectly, by such first person, by any one or more of its subsidiaries, or by such first person and one or more of its subsidiaries or (y) in the case of any person other than a corporation, such first person, one or more of its subsidiaries, or such first person and one or more of its subsidiaries (1) owns at least fifty percent (50%) of the equity interests thereof or (2) has the power to elect or direct the election of at least fifty percent (50%) of the members of the governing body thereof or otherwise has control over such organization or entity.
ARTICLE IX
Section 203 of the DGCL shall not be applicable to the Corporation.
ARTICLE X
**A.**The Corporation reserves the right to amend, alter, change or repeal, at any time and from time to time, any provision contained in this Third Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in paragraph C of Article VI and paragraph C of Article VIII, all rights, preferences and privileges of whatsoever nature conferred upon the stockholders, directors or any other persons whomsoever by and pursuant to this Third Amended and Restated Certificate of Incorporation in its present form or as hereafter amended herein are granted subject to this reservation.
**B.**Notwithstanding any other provisions of this Third Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of capital stock of the Corporation required by law or by this Third Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least seventy five percent (75%) of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal (whether by merger, consolidation or otherwise) Articles V, VI, VII, VIII, IX and X.
***
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IN WITNESS WHEREOF, the Corporation has caused this Third Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer on this 29th day of July, 2025.
| XBP<br> OPE HOLDINGS, INC |
|---|
| By: |
| Name: |
| Title: |
All values are in Euros.
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Exhibit 3.3
SECOND AMENDED AND RESTATED BYLAWS
OF
XBP GLOBAL HOLDINGS, INC.
ARTICLE I
OFFICES
Section 1.Offices. The registered office of the Corporation shall be in the State of Delaware. The Corporation may have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as may be necessary or convenient to the business of the Corporation.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1.Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the Corporation’s notice of the meeting. In lieu of holding an annual meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any annual meeting of stockholders may be held solely by means of remote communication.
Section 2.Special Meetings. Special meetings of the stockholders of the Corporation may be called only by or at the direction of the Board of Directors, pursuant to a resolution approved by a majority of the entire Board of Directors. Special meetings shall be held on such date, at such time, and at such place (if any) within or without the State of Delaware as shall be designated by the Board of Directors and stated in the Corporation’s notice of the meeting. In lieu of holding a special meeting of stockholders at a designated place, the Board of Directors may, in its sole discretion, determine that any special meeting of stockholders may be held solely by means of remote communication.
Section 3.Notice of Meetings. (a) The Corporation shall give notice of any annual or special meeting of stockholders. Notices of meetings of the stockholders shall state the place, if any, date, and hour of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining stockholders entitled to notice of the meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. In the case of a special meeting, the notice shall state the purpose or purposes for which the meeting is called. No business other than that specified in the notice thereof shall be transacted at any special meeting. Unless otherwise provided by applicable law or the Certificate of Incorporation, notice shall be given to each stockholder entitled to receive notice of such meeting not fewer than ten days or more than sixty days before the date of the meeting.
(b) Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any stockholder, such notice shall be given in accordance with Section 232 of the General Corporation Law of the State of Delaware. A notice to a stockholder shall be deemed given as follows: (i) if mailed, when the notice is deposited in the United States mail, postage prepaid, (ii) if delivered by courier service, the earlier of when the notice is received or left at such stockholder’s address, (iii) if given by electronic mail, when directed to such stockholder’s electronic mail address as it appears on the records of the corporation unless the stockholder has notified the corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by Section 232(e) of the General Corporation Law of the State of Delaware or, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (C) if by any other form of electronic transmission, when directed to the stockholder.
(c) Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
Section 4.Quorum and Adjournment. Except as otherwise required by law, by the Certificate of Incorporation of the Corporation, or by these Bylaws, the presence, in person or represented by proxy, of the holders of a majority of the aggregate voting power of the stock issued and outstanding, entitled to vote thereat, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If such majority shall not be present or represented at any meeting of the stockholders, a majority of the stockholders present, although less than a quorum, or the presiding officer of such meeting shall have the power to adjourn the meeting to another time and place.
Section 5.Adjourned Meetings. When a meeting is adjourned to another time and place, if any, unless otherwise provided by these Bylaws, notice need not be given of the adjourned meeting if the date, time, and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are (i) announced at the meeting at which the adjournment is taken (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxyholders to participate in the meeting by means of remote communication, or (iii) set forth in the notice of the meeting given in accordance with Section 3 of this Article II. At the adjourned meeting, the stockholders may transact any business that might have been transacted at the original meeting. If an adjournment is for more than 30 days or, if after an adjournment, a new record date is fixed for determining the stockholders entitled to vote at the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.
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Section 6.Vote Required. Except as otherwise provided by law, the Certificate of Incorporation, or these Bylaws:
(a) Directors shall be elected by a plurality in voting power of the shares present in person or represented by proxy at a meeting of the stockholders and entitled to vote on the election of directors; and
(b) Whenever any corporate action other than the election of directors is to be taken, it shall be authorized by a majority in voting power of the shares present in person or represented by proxy at a meeting of stockholders and entitled to vote on the subject matter.
Section 7.Manner of Voting; Proxies. (a) At each meeting of stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Each stockholder shall be entitled to vote each share of stock having voting power and registered in such stockholder’s name on the books of the Corporation on the record date fixed for determination of stockholders entitled to vote at such meeting.
(b) Each person entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. Proxies need not be filed with the Secretary of the Corporation until the meeting is called to order, but shall be filed before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute valid means by which a stockholder may grant such authority:
(1) A stockholder, or such stockholder’s authorized officer, director, employee or agent, may execute a document authorizing another person or persons to act for such stockholder as proxy; and
(2) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person or persons who will be the holder of the proxy or to an agent of the proxyholder(s) duly authorized by such proxyholder(s) to receive such transmission; provided, however, that any such transmission must either set forth or be submitted with information from which it can be determined that the transmission was authorized by the stockholder. If it is determined that any such transmission is valid, the inspectors or, if there are no inspectors, such other persons making that determination, shall specify the information upon which they relied.
Any copy, facsimile telecommunication, or other reliable reproduction of the document (including any electronic transmission) authorizing a person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original document for any and all purposes for which the original document could be used; provided, however, that such copy, facsimile telecommunication, or other reproduction shall be a complete reproduction of the entire original document.
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Section 8.Remote Communication. For the purposes of these Bylaws, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders may, by means of remote communication:
(a) participate in a meeting of stockholders; and
(b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, providedthat (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
Section 9.Stockholder Action Without a Meeting. (a) Except as otherwise provided by law or by the Certificate of Incorporation, any action required to be taken at any meeting of stockholders of the Corporation, or any action that may be taken at any annual or special meeting of such stockholders, other than Excluded Consent Actions may be taken without a meeting, without prior notice, and without a vote, if a consent or consents setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation pursuant to subsection (b). “Excluded Consent Actions” means (i) the election of directors, and (ii) the approval of a merger, consolidation, conversion, or sale of all or substantially all assets. A consent must be set forth in writing or in an electronic transmission. Prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall be given to those stockholders who have not consented and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that consents signed by a sufficient number of the holders to take the action were delivered to the Corporation as provided in subsection (b). Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such consent will be effective at a future time, including a time determined upon the happening of an event, occurring not later than 60 days after such instruction is given or such provision is made, if evidence of the instruction or provision is provided to the Corporation. If the person is not a stockholder of record when the consent is executed, the consent shall not be valid unless the person is a stockholder of record as of the record date for determining stockholders entitled to consent to the action. Unless otherwise provided, any such consent shall be revocable prior to its becoming effective.
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(b) A consent permitted by this Section 9 shall be delivered: (i) to the principal place of business of the Corporation; (ii) to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; (iii) to the registered office of the Corporation in the State of Delaware by hand or by certified or registered mail, return receipt requested; or (iv) subject to the next sentence, in accordance with Section 116 of the General Corporation Law of the State of Delaware to an information processing system, if any, designated by the Corporation for receiving such consents. In the case of delivery pursuant to (iv), such consent must set forth or be delivered with information that enables the Corporation to determine the date of delivery of such consent and the identity of the person giving such consent, and, if such consent is given by a person authorized to act for a stockholder as proxy, such consent must comply with the applicable provisions of Section 212(c)(2) and Section 212(c)(3) of the General Corporation Law of the State of Delaware.
(c) Any copy, facsimile, or other reliable reproduction of a consent in writing (or reproduction in paper form of a consent by electronic transmission) may be substituted or used in lieu of the original writing (or original reproduction in paper form of a consent by electronic transmission) for any and all purposes for which the original consent could be used, provided that such copy, facsimile, or other reproduction shall be a complete reproduction of the entire original writing (or original reproduction in paper form of a consent by electronic transmission).
Section 10.Presiding Officer and Secretary. (a) The Chairperson of the Board shall preside at meetings of the stockholders. In the absence of the Chairperson of the Board, the Lead Independent Director (as defined below), if any, and, in his or her absence, the Chief Executive Officer shall preside at meetings of the stockholders. In the absence of each of the Chairperson of the Board, the Lead Independent Director, and the Chief Executive Officer, any director or officer designated by any of them and/or the Board of Directors shall preside at meetings of the stockholders.
(b) The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but, in the absence of the Secretary, the Assistant Secretary designated in accordance with Section 11(b) of Article IV of these Bylaws shall act as secretary of meetings of the stockholders. In the absence of the Secretary and any designated Assistant Secretary, the presiding officer of the meeting may appoint any person to act as secretary of the meeting.
Section 11.Conduct of Meetings. At each meeting of stockholders, the presiding officer of the meeting shall fix and announce the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting and shall determine the order of business and all other matters of procedure. The Board of Directors may adopt by resolution such rules, regulations, and procedures for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with any such rules and regulations adopted by the Board of Directors, the presiding officer of the meeting shall have the right and authority to convene and to adjourn the meeting and to establish rules, regulations, and procedures, which need not be in writing, for the conduct of the meeting and to maintain order and safety. Without limiting the foregoing, he or she may:
(a) restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the presiding officer or Board of Directors;
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(b) place restrictions on entry to the meeting after the time fixed for the commencement thereof;
(c) restrict dissemination of solicitation materials and use of audio or visual recording devices at the meeting;
(d) adjourn the meeting without a vote of the stockholders, whether or not there is a quorum present; and
(e) make rules governing speeches and debate, including time limits and access to microphones.
The presiding officer of the meeting shall act in his or her absolute discretion, and his or her rulings shall not be subject to appeal.
Section 12.Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector so appointed or designated is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for an office at an election may serve as an inspector at such election.
Section 13. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors, or (c) by any stockholder of the Corporation (i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner was the beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraphs (A)(2) and (A)(3) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the meeting, (ii) who is entitled to vote at the meeting upon such election of directors or upon such business, as the case may be, and (iii) who complies with the notice procedures set forth in Paragraphs (A)(2) and (A)(3) of this Section 13. Except for proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so amended and inclusive of such rules and regulations, the “ExchangeAct”), and included in the notice of meeting given by or at the direction of the Board of Directors, the foregoing clause (c) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of stockholders. In addition, for business (other than the nomination of persons for election to the Board of Directors) to be properly brought before an annual meeting by a stockholder, such business must be a proper matter for stockholder action pursuant to the Certificate of Incorporation, these Bylaws, and applicable law.
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(2) For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (c) of Paragraph (A)(1) of this Section 13, the stockholder (a) must have given timely notice thereof in writing and in proper form to the Secretary at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such notice at such times and in the forms required by this Section 13. To be timely, a stockholder’s notice relating to an annual meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90^th^) day and not earlier than the close of business on the one hundred twentieth (120^th^) day before the date of the one-year anniversary of the immediately preceding year’s annual meeting (provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than thirty (30) days after such anniversary date, notice by the stockholder must be so delivered, or mailed and received, not earlier than the close of business on the one hundred twentieth (120th) day before such annual meeting and not later than the close of business on the later of the ninetieth (90^th^) day before such annual meeting or the tenth (10^th^) day following the day on which public announcement (as defined below) of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting of stockholders commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(3) To be in proper form for purposes of this Section 13, a stockholder’s notice to the Secretary (whether pursuant to this Paragraph (A) or Paragraph (B) of this Section 13) must set forth:
(a) as to each Proposing Person (as defined below), (i) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records); and (ii) the class or series and number of shares of capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person (provided that for purposes of this Section 13, such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future);
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(b) as to each Proposing Person, (i) any derivative, swap, or other transaction or series of transactions engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to give such Proposing Person economic risk similar to ownership of shares of any class or series of capital stock of the Corporation, including due to the fact that the value of such derivative, swap, or other transactions are determined by reference to the price, value, or volatility of any shares of any class or series of capital stock of the Corporation, or which derivative, swap, or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of capital stock of the Corporation (“Synthetic Equity Interests”), which Synthetic Equity Interests shall be disclosed without regard to whether (x) the derivative, swap, or other transactions convey any voting rights in such shares to such Proposing Person, (y) the derivative, swap, or other transactions are required to be, or are capable of being, settled through delivery of such shares, or (z) such Proposing Person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap, or other transactions; (ii) any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding, or relationship pursuant to which such Proposing Person has or shares a right to vote any shares of any class or series of capital stock of the Corporation (including the number of shares and class or series of capital stock of the Corporation that are subject to such proxy, agreement, arrangement, understanding, or relationship); (iii) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of capital stock of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Proposing Person with respect to the shares of any class or series of capital stock of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Corporation (“Short Interests”); (iv) any rights to dividends on the shares of any class or series of capital stock of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation; (v) any performance related fees (other than an asset based fee) to which such Proposing Person is entitled based on any increase or decrease in the price or value of shares of any class or series of the capital stock of the Corporation, or any Synthetic Equity Interests or Short Interests, if any; and (vi) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the nominations or business proposed to be brought before the meeting pursuant to Regulation 14A under the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (i) through (vi) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company, or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner;
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(c) if such notice pertains to the nomination by the stockholder of a person or persons for election to the Board of Directors (each, a “nominee”), as to each nominee, (i) the name, age, business and residence address, and principal occupation or employment of the nominee; (ii) all other information relating to the nominee that would be required to be disclosed about such nominee if proxies were being solicited for the election of the nominee as a director in an election contest (whether or not such proxies are or will be solicited), or that is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act; (iii) such nominee’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected; (iv) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among the Proposing Person, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Item 404 or any successor provision promulgated under Regulation S-K if the Proposing Person, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and (v) all information with respect to such nominee that would be required to be set forth in a stockholder’s notice pursuant to this Section 13 if such nominee were a Proposing Person;
(d) if the notice relates to any business (other than the nomination of persons for election to the Board of Directors) that the stockholder proposes to bring before the meeting, (i) a reasonably brief description of the business desired to be brought before the meeting, (ii) the text of the proposal or business (including the text of any resolutions proposed for consideration and if such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), (iii) the reasons for conducting such business at the meeting, and (iv) any material interest in such business of each Proposing Person;
(e) a representation that the stockholder giving the notice is a holder of record of stock of the Corporation entitled to vote at such meeting and such stockholder, or a representative of such stockholder, intends to appear in person or by proxy at the meeting to propose such business or nomination; and
(f) a representation whether any Proposing Person intends or is part of a group that intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination, including to solicit proxies in support of nominees other than the Corporation’s nominees in accordance with Rule 14a-19 under the Exchange Act.
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The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine (i) the eligibility of such proposed nominee to serve as a director of the Corporation, and (ii) whether such nominee qualifies as an “independent director” or “audit committee financial expert” under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter of the Corporation.
(4) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 13 to the contrary, if the number of directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming all of the Board of Directors’ nominees for director or specifying the size of the increased Board of Directors at least one hundred (100) days before the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 13 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10^th^) day following the day on which such public announcement is first made by the Corporation.
(5) Only such persons who are nominated in accordance with the procedures set forth in Paragraph (A) of this Section 13 (including those persons nominated by or at the direction of the Board of Directors) shall be eligible to be elected at an annual meeting of stockholders of the Corporation to serve as directors. Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in Paragraph (A) of this Section 13. Except as otherwise provided by law, the chairman of an annual meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination or any business proposed to be brought before the annual meeting was not made or was not proposed, as the case may be, in accordance with the procedures set forth in Paragraph (A) of this Section 13, and (b) if any proposed nomination or business was not made or was not proposed in compliance with Paragraph (A) of this Section 13, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. For the avoidance of doubt, a Proposing Person shall not be entitled to make additional or substitute nominations at an annual meeting following the expiration of the time periods set forth in these Bylaws. Unless otherwise required by law, if any Proposing Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act, and (ii) subsequently fails to comply with any requirements of Rule 14a-19 of the Exchange Act, or any other rules or regulations thereunder, then the Corporation shall disregard any proxies or votes solicited for such nominees and such nominations shall be disregarded.
(B) Special Meetings of Stockholders.
(1) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2 of these Bylaws. Stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only (a) by or at the direction of the Board of Directors or (b) if a purpose for such meeting as stated in the Corporation’s notice for such meeting is the election of one or more directors, by any stockholder of the Corporation (i) who was a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner was the beneficial owner of shares of the Corporation) both at the time the notice provided for in Paragraph (B)(2) of this Section 13 is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the special meeting, (ii) who is entitled to vote at the meeting and upon such election, and (iii) who complies with the notice procedures set forth in Paragraph (B)(2) of this Section 13; provided, however, that a stockholder may nominate persons for election at a special meeting only to such position(s) as specified in the Corporation’s notice of the meeting.
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(2) If a special meeting has been called in accordance with Section 2 of this Article II for the purpose of electing one or more directors to the Board of Directors, then for nominations of persons for election to the Board of Directors to be properly brought before such special meeting by a stockholder pursuant to clause (b) of Paragraph (B)(1) of this Section 13, the stockholder (a) must have given timely notice thereof in writing and in the proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, and (b) must provide any updates or supplements to such notice at such times and in the forms required by this Section 13. To be timely, a stockholder’s notice relating to a special meeting shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120^th^) day before such special meeting and not later than the close of business on the later of the ninetieth (90^th^) day before such special meeting or the tenth (10^th^) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. To be in proper form for purposes of this Paragraph (B) of this Section 13, such notice shall set forth the information required by clauses (a), (b), (c), (e), and (f) of Paragraph (A)(3) of this Section 13.
(3) Only such persons who are nominated in accordance with the procedures set forth in Paragraph (B) of this Section 13 (including those persons nominated by or at the direction of the Board of Directors) shall be eligible to be elected at a special meeting of stockholders of the Corporation to serve as directors. Except as otherwise provided by law, the chairman of a special meeting of stockholders shall have the power and duty (a) if the facts warrant, to determine that a nomination proposed to be made at the special meeting was not made in accordance with the procedures set forth in Paragraph (B) of this Section 13, and (b) if any proposed nomination was not made in compliance with Paragraph (B) of this Section 13, to declare that such nomination shall be disregarded. For the avoidance of doubt, a Proposing Person shall not be entitled to make additional or substitute nominations at a special meeting following the expiration of the time periods set forth in these Bylaws. Unless otherwise required by law, if any Proposing Person (i) provides notice pursuant to Rule 14a-19(b) under the Exchange Act, and (ii) subsequently fails to comply with any requirements of Rule 14a-19 of the Exchange Act, or any other rules or regulations thereunder, then the Corporation shall disregard any proxies or votes solicited for such nominees and such nominations shall be disregarded.
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(C) General.
(1) A stockholder providing notice of nominations of persons for election to the Board of Directors at an annual or special meeting of stockholders or notice of business proposed to be brought before an annual meeting of stockholders shall further update and supplement such notice so that the information provided or required to be provided in such notice pursuant to Paragraph (A)(3)(a) through Paragraph (A)(3)(f) of this Section 13 shall be true and correct both as of the record date for the determination of stockholders entitled to notice of the meeting and as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof, and such updated and supplemental information shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation (a) in the case of information that is required to be updated and supplemented to be true and correct as of the record date for the determination of stockholders entitled to notice of the meeting, not later than the later of five (5) business days after such record date or five (5) business days after the public announcement of such record date, and (b) in the case of information that is required to be updated and supplemented to be true and correct as of ten (10) business days before the meeting or any adjournment or postponement thereof, not later than eight (8) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated and supplemental information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement). In addition, if the stockholder has provided notice pursuant to Rule 14a-19(b) of the Exchange Act, the stockholder shall deliver to the Corporation no later than ten (10) days prior to the date of the meeting or any adjournment or postponement thereof reasonable evidence that it has complied with the requirements of Rule 14a-19 of the Exchange Act.
(2) Notwithstanding the foregoing provisions of this Section 13, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 13, to be considered a qualified representative of the stockholder, a person must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(3) For purposes of this Section 13, (a) “publicannouncement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act; (b) “Proposing Person” shall mean (i) the stockholder giving the notice required by Paragraph (A) or Paragraph (B) of this Section 13, (ii) the beneficial owner or beneficial owners, if different, on whose behalf such notice is given, and (iii) any affiliates or associates (each within the meaning of Rule 12b-2 under the Exchange Act for purposes of these Bylaws) of such stockholder or beneficial owner.
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(4) Paragraph (A) of this Section 13 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made pursuant to Rule 14a-8 under the Exchange Act. Nothing in this Section 13 shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor thereto) promulgated under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any class or series of Preferred Stock to nominate and elect directors pursuant to and to the extent provided in any applicable provisions of the certificate of incorporation. Subject to Rule 14a-8 and Rule 14a-19 under the Exchange Act, nothing in these Bylaws shall be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Corporation’s proxy statement any nomination of director or directors or any other business proposal.
(5) In addition to the provisions of this Section 13, a stockholder shall also comply with all applicable requirements of state law and all applicable requirements of the Exchange Act, and the rules and regulations thereunder, with respect to the matters set forth herein.
Section 14.Record Dates. (a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty or fewer than ten days before the date of such meeting. If the Board of Directors so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines, at the time it fixes the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at any meeting of stockholders or any adjournment thereof shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to receive notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote at such adjourned meeting in accordance with the foregoing provisions of this subsection (a) of this Section 13.
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(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action without a meeting in accordance with Section 228 of the General Corporation Law of the State of Delaware, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days after the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner set forth in Section 9(b) of this Article II. If no record date has been fixed by the Board of Directors and prior action by the Board of Director is required by applicable law, the Certificate of Incorporation, or these Bylaws, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution, or allotment of any rights, or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of capital stock, or for the purpose of any other lawful action, except as may otherwise be provided in these Bylaws, the Board of Directors may fix a record date. Such record date shall not precede the date upon which the resolution fixing such record date is adopted, and shall not be more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
ARTICLE III
DIRECTORS
Section 1.Number. The number of directors that shall constitute the whole Board of Directors shall be seven as of the time the Bylaws become effective, and thereafter shall be no fewer than three and no greater than eleven, the exact number of directors to be determined from time to time by resolution adopted by the Board of Directors.
Section 2.Powers. Subject to any limitations set forth in the Certificate of Incorporation and to any provision of the General Corporation Law of the State of Delaware relating to powers or rights conferred upon or reserved to the stockholders or the holders of any class or series of the Corporation’s issued and outstanding stock, the business and affairs of the corporation shall be managed, and all corporate powers shall be exercised, by or under the direction of the Board of Directors.
Section 3.Resignations and Removal. (a) Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or the Secretary; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director. Such resignation shall take effect at the date of receipt of such notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective.
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(b) Except as otherwise may be provided in the Certificate of Incorporation, any director or the entire Board of Directors may be removed, with or without cause, by the holders of capital stock having a majority in voting power of the shares entitled to vote in the election of directors.
Section 4.Annual Meetings. The Board of Directors shall meet each year as soon as practicable following the annual meeting of stockholders, at the place where such meeting of stockholders has been held, or at such other place as shall be fixed by the Board of Directors (or if not previously fixed by the Board of Directors, by the person presiding over the meeting of the stockholders), for the purpose of election of officers and consideration of such other business as the Board of Directors considers relevant to the management of the Corporation.
Section 5.Regular Meetings. Regular meetings of the Board of Directors shall be held on such dates and at such times and places, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors, such determination to constitute the only notice of such regular meetings to which any director shall be entitled. In the absence of any such determination, such meetings shall be held, upon notice to each director in accordance with Section 7 of this Article III, at such times and places, within or without the State of Delaware, as shall be designated by the Chairperson of the Board.
Section 6.Special Meetings. Special meetings of the Board of Directors shall be held at the call of the Chairperson of the Board at such times and places, within or without the State of Delaware, as he or she shall designate, upon notice to each director in accordance with Section 7 of this Article III. Special meetings may also be called by the Lead Independent Director, if any, and shall be called by the President or Secretary on like notice at the written request of any two other directors then in office.
Section 7.Notice. Notice of any regular (if required) or special meeting of the Board of Directors may be given by personal delivery, mail, courier service (including, without limitation, Federal Express), facsimile transmission (directed to the facsimile transmission number at which the director has consented to receive notice), electronic mail (directed to the electronic mail address at which the director has consented to receive notice), or other form of electronic transmission pursuant to which the director has consented to receive notice. If notice is given by personal delivery, by facsimile transmission, by electronic mail, or by other form of electronic transmission pursuant to which the director has consented to receive notice, then such notice shall be given on not less than twenty-four hours’ notice to each director. If written notice is delivered by mail, then it shall be given on not less than two (2) calendar days’ notice to each director. If written notice is delivered by courier service, then it shall be given on not less than two (2) calendar days’ notice to each director.
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Section 8.Waiver of Notice. Notice of any meeting of the Board of Directors, or any committee thereof, need not be given to any member if waived by him or her in writing or by electronic transmission, whether before or after such meeting is held, or if he or she shall sign the minutes of such meeting or attend the meeting, except that if such director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, then such director shall not be deemed to have waived notice of such meeting. If waiver of notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the director.
Section 9.Quorum and Powers of a Majority. At all meetings of the Board of Directors and of each committee thereof, a majority of the total number of directors constituting the whole Board of Directors or such committee shall be necessary and sufficient to constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting of the Board of Directors or a committee thereof at which a quorum is present shall be the act of the Board of Directors or such committee, unless by express provision of applicable law, the Certificate of Incorporation, or these Bylaws, a different vote is required, in which case such express provision shall govern and control. In the absence of a quorum, a majority of the members present at any meeting may, without notice other than announcement at the meeting, adjourn such meeting from time to time until a quorum is present.
Section 10.Manner of Acting. (a) Members of the Board of Directors, or any committee thereof, may participate in any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating therein can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(b) Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given for purposes of this subsection at such effective time so long as such person is then a director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to becoming effective. After an action is taken, the consent or consents relating thereto shall be filed with the minutes of the proceedings of the Board of Directors, or the committee thereof, in the same paper or electronic form as the minutes are maintained.
Section 11.Organization. Meetings of the Board of Directors shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Lead Independent Director, if any, or in his or her absence by a presiding person chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the presiding person at the meeting may appoint any person to act as secretary of the meeting.
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Section 12.Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more directors, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporation Law of the State of Delaware to be submitted to stockholders for approval (other than recommending the election or removal of directors) or (ii) adopting, amending, or repealing any Bylaw of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting of such committee and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified director.
Section 13.Committee Procedure. (a) Except as otherwise determined by the Board of Directors or provided by these Bylaws, each committee shall adopt its own rules governing the time, place, and method of holding its meetings and the conduct of its proceedings and shall meet as provided by such rules or by resolution of the Board of Directors. Unless otherwise provided by these Bylaws or any such rules or resolutions, notice of the time and place of each meeting of a committee shall be given to each member of such committee as provided in Section 7 of this Article III with respect to notices of meetings of the Board of Directors.
(b) Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors when required.
(c) Any member of any committee may be removed from such committee either with or without cause, at any time, by the Board of Directors at any meeting thereof. Any vacancy in any committee may be filled by the Board of Directors in the manner prescribed by the Certificate of Incorporation or these Bylaws for the original appointment of the members of such committee.
Section 14.Vacancies and Newly-Created Directorships. Unless otherwise provided in the Certificate of Incorporation or in these Bylaws, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled only by a majority of the directors then in office (and not by the stockholders), although less than a quorum, or by a sole remaining director, and directors so chosen shall serve for a term expiring at the annual meeting of stockholders at which the term of office to which they have been elected expires and until such directors’ successors have been duly elected and qualified.
Section 15.Director Compensation. (a) The Board of Directors, by a resolution or resolutions, may fix, and from time to time change, the compensation of Directors.
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(b) Each director shall be entitled to reimbursement from the Corporation for his or her reasonable expenses incurred with respect to duties as a member of the Board of Directors or any committee thereof.
(c) Nothing contained in these Bylaws shall be construed to preclude any director from serving the Corporation in any other capacity and from receiving compensation from the Corporation for service rendered to it in such other capacity.
ARTICLE IV
OFFICERS
Section 1.Number. The officers of the Corporation shall include a Chief Executive Officer, a President, a Chief Financial Officer, a Secretary, and a Treasurer. The Board of Directors also shall elect a Chairperson of the Board. The Board of Directors also may elect one or more Vice Presidents (including one or more Executive Vice Presidents and one or more Senior Vice Presidents if deemed appropriate by the Board of Directors), one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as the Board of Directors may from time to time deem appropriate or necessary.
Section 2.Election of Officers, Term, and Qualifications. The officers of the Corporation shall be elected from time to time by the Board of Directors and shall hold office at the pleasure of the Board of Directors. A vacancy in any office because of death, resignation, removal, disqualification, or any other cause shall be filled in the manner prescribed in this Section 2 for the regular election to such office. Except for the Chairperson of the Board, none of the officers of the Corporation needs to be a director of the Corporation. Any two or more offices may be held by the same person to the extent permitted by the General Corporation Law of the State of Delaware and other applicable law.
Section 3.Divisional or Departmental Vice Presidents. The Board of Directors may delegate to the Chief Executive Officer the power to appoint one or more employees of the Corporation as divisional or departmental vice presidents and fix the duties of such appointees. However, no such divisional or departmental vice president shall be considered to be an officer of the Corporation, the officers of the Corporation being limited to those officers elected by the Board of Directors in accordance with this Article IV.
Section 4.Removal. Any officer may be removed, either with or without cause, by the Board of Directors at any meeting thereof, or to the extent delegated to the Chairperson of the Board, by the Chairperson of the Board.
Section 5.Resignations. Any officer of the Corporation may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Chairperson of the Board; provided, however, that if such notice is given by electronic transmission, such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the officer. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
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Section 6.Compensation of Officers. The salaries and other compensation of all officers of the Corporation shall be fixed by or in the manner directed by the Board of Directors from time to time, and no officer shall be prevented from receiving such salary by reason of the fact that he or she also is a director of the Corporation.
Section 7.The Chairperson of the Board. The Chairperson of the Board shall have the powers and duties customarily and usually associated with the office of the Chairperson of the Board, as well as such additional powers and duties as may be from time to time assigned to him or her by the Board of Directors. The Chairperson of the Board shall preside at meetings of the stockholders and of the Board of Directors. The individual serving as Chairperson shall have the discretion to be designated by the title “Chair,” “Chairman,” “Chairwoman,” or any other reasonable variation or derivative thereof, consistent with their personal preference and identity. The Board of Directors may also designate one of the independent directors of the Corporation to serve as a lead independent director (the “Lead Independent Director”) in accordance with a Lead Independent Director Charter, as may be adopted and amended by the Board of Directors from time to time, and in such event, in the case of absence or disability of the Chairperson of the Board, the Lead Independent Director shall perform the duties and exercise the powers of the Chairperson of the Board.
Section 8.The Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation. The Chief Executive Officer shall have, subject to the supervision, direction, and control of the Board of Directors, the general powers and duties of supervision, direction, and management of the affairs and business of the Corporation customarily and usually associated with the position of chief executive officer, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. The Chief Executive Officer shall have such additional powers and duties as may be from time to time assigned to him or her by the Board of Directors. If at any time the office of the Chairperson of the Board and the Lead Independent Director shall not be filled, or in the event of the temporary absence or disability of the Chairperson of the Board and the Lead Independent Director, the Chief Executive Officer shall perform the duties and exercise the powers of the Chairperson of the Board unless otherwise determined by the Board of Directors.
Section 9.The President. At the request of the Chief Executive Officer, or in the absence of the Chief Executive Officer, or in the event of his or her inability or refusal to act, the President shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon such office. The President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe.
Section 10.The Chief Financial Officer. The Chief Financial Officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall perform such other duties and exercise such other powers which are or from time to time may be delegated to him or her by the Board of Directors or these Bylaws, all in accordance with basic policies as established by and subject to the oversight of the Board of Directors. In the absence of a named Treasurer, the Chief Financial Officer shall also have the powers and duties of the Treasurer as hereinafter set forth and shall be authorized and empowered to sign as Treasurer in any case where such officer’s signature is required.
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Section 11.The Vice Presidents. Each Vice President shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the Chairperson of the Board, or the Chief Executive Officer.
Section 12.The Secretary and Assistant Secretaries. (a) The Secretary shall attend meetings of the Board of Directors and meetings of the stockholders and record all votes and minutes of all such proceedings in a book or books kept for such purpose. The Secretary shall have all such further powers and duties as are customarily and usually associated with the position of Secretary or as may from time to time be assigned to him or her by the Board of Directors, the Chairperson of the Board, or the Chief Executive Officer.
(b) Each Assistant Secretary shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the Chairperson of the Board, the Chief Executive Officer, the President, or the Secretary. In the case of absence or disability of the Secretary, the Assistant Secretary designated by the President (or, in the absence of such designation, by the Secretary) shall perform the duties and exercise the powers of the Secretary.
Section 13.The Treasurer and Assistant Treasurers. (a) The Treasurer shall have custody of the Corporation’s funds and securities, shall be responsible for maintaining the Corporation’s accounting records and statements, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited moneys or other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer also shall maintain adequate records of all assets, liabilities, and transactions of the Corporation and shall assure that adequate audits thereof are currently and regularly made. The Treasurer shall have all such further powers and duties as are customarily and usually associated with the position of Treasurer or as may from time to time be assigned to him or her by the Board of Directors, the Chairperson of the Board, or the Chief Executive Officer.
(b) Each Assistant Treasurer shall have such powers and perform such duties as may from time to time be assigned to him or her by the Board of Directors, the Chief Executive Officer, or the Treasurer. In the case of absence or disability of the Treasurer, the Assistant Treasurer designated by the Chief Executive Officer (or, in the absence of such designation, by the Treasurer) shall perform the duties and exercise the powers of the Treasurer.
ARTICLE V STOCK
Section 1.Certificates. The shares of capital stock of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the General Corporation Law of the State of Delaware. Certificates for shares of stock of the Corporation shall be issued under the seal of the Corporation, or a facsimile thereof, and shall be numbered and shall be entered in the books of the Corporation as they are issued. Each certificate shall bear a serial number, shall exhibit the holder’s name and the number of shares evidenced thereby, and shall be signed by any two authorized officers of the corporation. Any or all of the signatures on the certificate may be a facsimile. If any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, the certificate may be issued by the Corporation with the same effect as if such person or entity were such officer, transfer agent, or registrar at the date of issue.
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Section 2.Transfers. Transfers of record of shares of stock of the Corporation shall be made only upon the books administered by or on behalf of the Corporation, and only upon proper transfer instructions, including by electronic transmission, pursuant to the direction of the registered holder thereof, such person’s attorney lawfully constituted in writing or from an individual presenting proper evidence of succession, assignment or authority to transfer the shares of stock; or, in the case of stock represented by certificate(s) upon delivery of a properly endorsed certificate(s) for a like number of shares of accompanied by a duly executed stock transfer power provided, however, that in each case, such succession, assignment, or transfer is not prohibited by the Certificate of Incorporation, these Bylaws, applicable law, or contract.
Section 3.Lost, Stolen, or Destroyed Certificates. Any person claiming a certificate of stock to be lost, stolen, or destroyed shall make an affidavit or an affirmation of that fact, and shall give the Corporation a bond of indemnity in satisfactory form and with one or more satisfactory sureties, whereupon a new certificate (if requested) may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen, or destroyed.
Section 4.Registered Stockholders. The names and addresses of the holders of record of the shares of each class and series of the Corporation’s capital stock, together with the number of shares of each class and series held by each record holder and the date of issue of such shares, shall be entered on the books of the Corporation. Except as otherwise required by the General Corporation Law of the State of Delaware or other applicable law, the Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares of capital stock of the Corporation as the person entitled to exercise the rights of a stockholder, including, without limitation, the right to vote in person or by proxy at any meeting of the stockholders of the Corporation. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly required by the General Corporation Law of the State of Delaware or other applicable law.
Section 5.Fractional Shares. The Corporation may, but shall not be required to, issue fractional shares of its capital stock if necessary or appropriate to effect authorized transactions. If the Corporation does not issue fractional shares, it shall (i) arrange for the disposition of fractional interests on behalf of those that otherwise would be entitled thereto, (ii) pay in cash the fair value of fractions of a share as of the time when those who otherwise would be entitled to receive such fractions are determined, or (iii) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or in bearer form (represented by a certificate), which scrip or warrants shall entitle the holder to receive a full share upon surrender of such scrip or warrants aggregating a full share. Fractional shares shall, but scrip or warrants for fractional shares shall not (unless otherwise expressly provided therein), entitle the holder to exercise voting rights, to receive dividends thereon, to participate in the distribution of any assets in the event of liquidation, and otherwise to exercise rights as a holder of capital stock of the class or series to which such fractional shares belong.
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Section 6.Additional Powers of the Board. (a) In addition to, and without limiting, those powers set forth in Section 2 of Article III, the Board of Directors shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the General Corporation Law of the State of Delaware, other applicable law, the Certificate of Incorporation, and these Bylaws.
(b) The Board of Directors may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.
ARTICLE VI
INDEMNIFICATION
Section 1.Indemnification. (a) Subject to Section 3 of this Article VI, the Corporation shall indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (hereinafter, a “Proceeding”), by reason of the fact that such person is or was a director or officer of the Corporation, or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including service with respect to an employee benefit plan (collectively, “Another Enterprise”), against expenses (including attorneys’ fees), judgments, fines (including ERISA excise taxes or penalties) and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
(b) The Corporation may indemnify, to the full extent that it shall have power under applicable law to do so and in a manner permitted by such law, any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, against expenses (including attorneys’ fees), judgments, fines (including ERISA excise taxes or penalties) and amounts paid in settlement actually and reasonably incurred by him or her in connection with such Proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
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(c) To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any threatened, pending, or completed Proceeding referred to in Section 145(a) or (b) of the General Corporation Law of the State of Delaware, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.
(d) The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
Section 2.Advancement of Expenses. (a) Subject to Section 3 of this Article VI, with respect to any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was a director or officer of the Corporation or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation shall pay the expenses (including attorneys’ fees) incurred by such person in defending any such Proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that any advancement of expenses shall be made only upon receipt of an undertaking (hereinafter an “undertaking”) by such person to repay all amounts advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses under this Article VI or otherwise.
(b) With respect to any person who is made or threatened to be made a party to or is otherwise involved (as a witness or otherwise) in any threatened, pending, or completed Proceeding, by reason of the fact that such person is or was an employee or agent of the Corporation, or while not serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise, the Corporation may, in its discretion and upon such terms and conditions, if any, as the Corporation deems appropriate, pay the expenses (including attorneys’ fees) incurred by such person in defending any such Proceeding in advance of its final disposition.
Section 3.Actions Initiated Against The Corporation. Anything in Section 1(a) or Section 2(a) of this Article VI to the contrary notwithstanding, except as provided in Section 5(b) of this Article VI, with respect to a Proceeding initiated against the Corporation by a person who is or was a director or officer of the Corporation (whether initiated by such person in or by reason of such capacity or in or by reason of any other capacity, including as a director, officer, employee, or agent of Another Enterprise), the Corporation shall not be required to indemnify or to advance expenses (including attorneys’ fees) to such person in connection with prosecuting such Proceeding (or part thereof) or in defending any counterclaim, cross-claim, affirmative defense, or like claim of the Corporation in such Proceeding (or part thereof) unless such Proceeding was authorized by the Board of Directors of the Corporation.
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Section 4.Contract Rights. The rights to indemnification and advancement of expenses conferred upon any current or former director or officer of the Corporation pursuant to this Article VI (whether by reason of the fact that such person is or was a director or officer of the Corporation, or while serving as a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise) shall be contract rights, shall vest when such person becomes a director or officer of the Corporation, and shall continue as vested contract rights even if such person ceases to be a director or officer of the Corporation. Any amendment, elimination, repeal, or modification of, or adoption of any provision inconsistent with, this Article VI (or any provision hereof) shall not adversely affect any right to indemnification or advancement of expenses granted to any person pursuant hereto with respect to any act or omission of such person occurring prior to the time of such amendment, elimination, repeal, modification, or adoption (regardless of whether the Proceeding relating to such acts or omissions, or any proceeding relating to such person’s rights to indemnification or to advancement of expenses, is commenced before or after the time of such amendment, elimination, repeal, modification, or adoption), and any such amendment, elimination, repeal, modification, or adoption that would adversely affect such person’s rights to indemnification or advancement of expenses hereunder shall be ineffective as to such person, except with respect to any threatened, pending, or completed Proceeding that relates to or arises from (and only to the extent such Proceeding relates to or arises from) any act or omission of such person occurring after the effective time of such amendment, repeal, modification, or adoption.
Section 5.Claims. (a) If (X) a claim under Section 1(a) of this Article VI with respect to any right to indemnification is not paid in full by the Corporation within sixty days after a written demand has been received by the Corporation or (Y) a claim under Section 2(a) of this Article VI with respect to any right to the advancement of expenses is not paid in full by the Corporation within twenty days after a written demand has been received by the Corporation, then the person seeking to enforce a right to indemnification or to an advancement of expenses, as the case may be, may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim.
(b) If successful in whole or in part in any suit brought pursuant to Section 5(a) of this Article VI, or in a suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the person from whom the Corporation sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Corporation the reasonable expenses (including attorneys’ fees) of prosecuting or defending such suit.
(c) In any suit brought by a person seeking to enforce a right to indemnification hereunder (but not a suit brought by a person seeking to enforce a right to an advancement of expenses hereunder), it shall be a defense that the person seeking to enforce a right to indemnification has not met any applicable standard for indemnification under applicable law. With respect to any suit brought by a person seeking to enforce a right to indemnification or right to advancement of expenses hereunder or any suit brought by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), neither (i) the failure of the Corporation to have made a determination prior to commencement of such suit that indemnification of such person is proper in the circumstances because such person has met the applicable standards of conduct under applicable law, nor (ii) an actual determination by the Corporation that such person has not met such applicable standards of conduct, shall create a presumption that such person has not met the applicable standards of conduct or, in a case brought by such person seeking to enforce a right to indemnification, be a defense to such suit.
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(d) In any suit brought by a person seeking to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the burden shall be on the Corporation to prove that the person seeking to enforce a right to indemnification or to an advancement of expenses or the person from whom the Corporation seeks to recover an advancement of expenses is not entitled to be indemnified, or to such an advancement of expenses, under this Article VI or otherwise.
Section 6.Determination of Entitlement to Indemnification. Any indemnification required or permitted under this Article VI (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because he or she has met all applicable standards of conduct set forth in this Article VI and Section 145 of the General Corporation Law of the State of Delaware. Such determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (i) by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum; (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (iv) by the stockholders. Such determination shall be made, with respect to any person who is not a director or officer of the Corporation at the time of such determination, in the manner determined by the Board of Directors (including in such manner as may be set forth in any general or specific action of the Board of Directors applicable to indemnification claims by such person) or in the manner set forth in any agreement to which such person and the Corporation are parties.
Section 7.Non-Exclusive Rights. The indemnification and advancement of expenses provided in this Article VI shall not be deemed exclusive of any other rights to which any person may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be such director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such person.
Section 8.Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of Another Enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI or otherwise.
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Section 9.Severability. If any provision or provisions of this Article VI shall be held to be invalid, illegal, or unenforceable for any reason whatsoever: (1) the validity, legality, and enforceability of the remaining provisions of this Article VI (including, without limitation, each portion of any paragraph or clause containing any such provision held to be invalid, illegal, or unenforceable, that is not itself held to be invalid, illegal, or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Article VI (including, without limitation, each such portion of any paragraph or clause containing any such provision held to be invalid, illegal, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable.
Section 10.Miscellaneous. For purposes of this Article VI: (a) references to serving at the request of the Corporation as a director or officer of Another Enterprise shall include any service as a director or officer of the Corporation that imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan; (b) references to serving at the request of the Corporation as an employee or agent of Another Enterprise shall include any service as an employee or agent of the Corporation that imposes duties on, or involves services by, such employee or agent with respect to an employee benefit plan; (c) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Corporation; and (d) references to a director of Another Enterprise shall include, in the case of any entity that is not managed by a board of directors, such other position, such as manager or trustee or member of the governing body of such entity, that entails responsibility for the management and direction of such entity’s affairs, including, without limitation, general partner of any partnership (general or limited) and manager or managing member of any limited liability company.
ARTICLE VII MISCELLANEOUS
Section 1.Books and Records. (a) Any books or records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases); provided, however, that the books and records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any books or records so kept upon the request of any person entitled to inspect such records pursuant to the Certificate of Incorporation, these Bylaws, or the provisions of the General Corporation Law of the State of Delaware.
(b) The Corporation shall prepare, no later than ten days before each meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the stockholder’s name; provided, however, if the record date for determining the stockholders entitled to vote at the meeting is fewer than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date. Nothing contained in this subsection (b) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of 10 days ending on the day before the meeting date: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. If the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. The stock ledger shall be the only evidence of the identity of the stockholders entitled to examine such list.
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(c) Except to the extent otherwise required by law, or by the Certificate of Incorporation, or by these Bylaws, the Board of Directors shall determine from time to time whether and, if allowed, when and under what conditions and regulations the stock ledger, books, records, and accounts of the Corporation, or any of them, shall be open to inspection by the stockholders and the stockholders’ rights, if any, in respect thereof. Except as otherwise provided by law, the stock ledger shall be the only evidence of the identity of the stockholders entitled to examine the stock ledger, the books, records, or accounts of the Corporation.
Section 2.Voting Shares in Other Business Entities. The Chief Executive Officer, President, Chief Financial Officer, any Vice President, or any other officer or officers of the Corporation designated by the Board of Directors or the Chief Executive Officer may vote, and otherwise exercise on behalf of the Corporation any and all rights and powers incident to the ownership of, any and all shares of stock or other equity interest held by the Corporation in any other corporation or other business entity. The authority herein granted may be exercised either by any such officer in person or by any other person authorized to do so by proxy or power of attorney duly executed by any such officer.
Section 3. Execution of Corporate Instruments.
(a) The Board of Directors may in its discretion determine the method and designate the signatory officer or officers, or other person or persons, to execute, sign, or endorse any corporate instrument or document, or to sign the corporate name without limitation, except where otherwise provided by law, and such execution or signature shall be binding upon the Corporation.
(b) Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts of the Corporation, promissory notes, deeds of trust, mortgages, and other evidences of indebtedness of the Corporation, and other corporate instruments or documents requiring the corporate seal, shall be executed, signed, or endorsed by the Chairperson of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer. All other instruments and documents requiring a corporate signature but not requiring the corporate seal may be executed as aforesaid or in such other manner and by such other person or persons as may be determined from time to time by the Board of Directors or the Chief Executive Officer.
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(c) All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be executed, signed, or endorsed by the Chief Financial Officer, the Treasurer, any Assistant Treasurer, or in such other manner and by such other person or persons as may be determined from time to time by the Board of Directors.
(d) Unless otherwise specifically determined by the Board of Directors or otherwise required by law, the execution, signing, or endorsement of any corporate instrument or document may be effected manually, by facsimile, or (to the extent permitted by applicable law and subject to such policies and procedures as the Corporation may have in effect from time to time) by electronic signature.
Section 4.Fiscal Year. The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.
Section 5.Gender/Number. As used in these Bylaws, the masculine, feminine, or neuter gender, and the singular and plural number, shall each include the other whenever the context so indicates.
Section 6.Section Titles. The titles of the sections and subsections have been inserted as a matter of reference only and shall not control or affect the meaning or construction of any of the terms and provisions hereof.
Section 7.Certain Definitions. For purposes of these Bylaws:
(a) “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, including the use of, or participation in, 1 or more electronic networks or databases (including 1 or more distributed electronic networks or databases), that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
(b) “Electronic mail” means an electronic transmission directed to a unique electronic mail address (which electronic mail shall be deemed to include any files attached thereto and any information hyperlinked to a website if such electronic mail includes the contact information of an officer or agent of the corporation who is available to assist with accessing such files and information).
(c) “Electronic mail address” means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the “local part” of the address) and a reference to an internet domain (commonly referred to as the “domain part” of the address), whether or not displayed, to which electronic mail can be sent or delivered.
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Section 8.Amendment. These Bylaws, or any of them, may be altered, amended, or repealed, and new Bylaws may be made, (a) at any annual or regular meeting of the Board of Directors or at any special meeting of the Board of Directors if notice of the proposed alteration, amendment, or repeal be contained in written notice of such special meeting; or (b) at any annual meeting of the stockholders or at any special meeting of the stockholders of the Corporation if noticed of the proposed alteration, amendment, or repeal is contained in the Corporation’s notice of such special meeting of stockholders. Anything herein to the contrary notwithstanding but subject to the terms of the Certificate of Incorporation, any alteration, amendment, or repeal of these Bylaws, or the making of any new Bylaw, by the stockholders shall require the affirmative vote of the holders of not less than a majority of the voting power represented by the issued and outstanding shares of the Corporation entitled to vote thereon. Any Bylaws altered, amended, or made by the stockholders may be altered, amended, or repealed by either the Board of Directors or the stockholders, in the manner set forth in this Section 8, except a Bylaw amendment adopted by the stockholders that specifies the votes that shall be necessary for the election of directors shall not be amended or repealed by the Board of Directors.
Section 9.Certificate of Incorporation. Anything herein to the contrary notwithstanding, if any provision contained in these Bylaws is inconsistent with or conflicts with a provision of the Certificate of Incorporation, such provision of these Bylaws shall be superseded by the inconsistent provision in the Certificate of Incorporation to the extent necessary to give effect to such provision in the Certificate of Incorporation.
Approved by the Board of Directors effective July 29, 2025
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Exhibit 3.4
CERTIFICATE OF AMENDMENTTO THE THIRD AMENDED AND RESTATEDCERTIFICATE OF INCORPORATIONOF XBP GLOBAL HOLDINGS, INC.
XBP Global Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies that:
1. The name of the Corporation is XBP Global Holdings, Inc. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 8, 2020, under the name “CF Finance Acquisition Corp. VIII.”
2. This Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation was duly authorized and adopted by the Corporation’s Board of Directors and stockholders in accordance with Section 242 of the General Corporation Law of the State of Delaware and amends the provisions of the Company’s Third Amended and Restated Certificate of Incorporation.
3. The amendment to the existing Third Amended and Restated Certificate of Incorporation being effected hereby is as follows:
(a) Add the following paragraph at the end of Article IV as a new paragraph F.:
“F. Upon this Amendment to the Third Amended and Restated Certificate becoming effective pursuant to the DGCL during the year ending December 31, 2025 (the “2025 Effective Time”), each three (3) to fifteen (15) shares of Common Stock issued and outstanding immediately prior to the 2025 Effective Time shall automatically be reclassified and combined into one (1) validly issued, fully paid and non-assessable share of Common Stock, the exact ratio within the foregoing range to be determined by the Board and publicly announced by the Corporation prior to the 2025 Effective Time, without any further action by the Corporation or the holder thereof (the “2025 Reverse StockSplit”). No fractional shares shall be issued in connection with the 2025 Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares of Common Stock shall be entitled to receive cash (without interest or deduction) from the Corporation’s transfer agent in lieu of such fractional share interests upon the submission of a transmission letter by a stockholder and, where shares are held in certificated form, the surrender of the applicable certificate, in an amount equal to the product obtained by multiplying (a) the closing price per share of the Common Stock as reported on the Nasdaq Capital Market as of the date of the 2025 Effective Time (after giving effect to the 2025 Reverse Stock Split) by (b) the fraction of one share owned by the stockholder.”
4. This Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation shall be effective immediately upon filing with the Delaware Secretary of State.
****
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer on this 29th day of July, 2025.
| XBP<br> GLOBAL HOLDINGS, INC | |
|---|---|
| By: | /s/ Andrej Jonovic |
| Name: | Andrej Jonovic |
| Title: | Chief Executive Officer |
Exhibit 4.1
Execution Version
ExelaTechnologies BPA, LLC
as Company
EXELA FINANCE INC.,
As Co-Issuer
the Guarantors party hereto from time to time
U.S. BANK TRUSTCOMPANY, NATIONAL ASSOCIATION,
as Trustee
and
ANKURA TRUSTCOMPANY, LLC,
as Collateral Agent
12.000% FIRST-PRIORITY SENIOR SECURED NOTESDUE 2030
INDENTURE
Dated as of July 29, 2025
TABLE OF CONTENTS
Page
| Article I DEFINITIONS AND INCORPORATION BY REFERENCE | 1 | ||
|---|---|---|---|
| Section 1.01. | Definitions | 1 | |
| Section 1.02. | Other Definitions | 47 | |
| Section 1.03. | Rules of Construction | 48 | |
| Section 1.04. | No Incorporation by Reference of Trust Indenture Act | 48 | |
| Section 1.05. | Exchange Rates | 49 | |
| Section 1.06. | Quebec Interpretation | 49 | |
| Article II THE NOTES | 50 | ||
| Section 2.01. | Amount of Notes | 50 | |
| Section 2.02. | Form and Dating | 51 | |
| Section 2.03. | Execution and Authentication | 51 | |
| Section 2.04. | Registrar and Paying Agent | 52 | |
| Section 2.05. | Paying Agent to Hold Money in Trust | 52 | |
| Section 2.06. | Holder Lists | 52 | |
| Section 2.07. | Transfer and Exchange | 53 | |
| Section 2.08. | Replacement Notes | 54 | |
| Section 2.09. | Outstanding Notes | 54 | |
| Section 2.10. | Cancellation | 54 | |
| Section 2.11. | Defaulted Interest | 55 | |
| Section 2.12. | CUSIP Numbers, ISINs, etc | 55 | |
| Section 2.13. | Maturity | 55 | |
| Section 2.14. | Calculation of Principal Amount of Notes | 55 | |
| Article III REDEMPTION | 56 | ||
| Section 3.01. | Optional Redemption | 56 | |
| Section 3.02. | Mandatory Redemption | 56 | |
| Section 3.03. | Applicability of Article | 56 | |
| Section 3.04. | Notices to Trustee | 56 | |
| Section 3.05. | Selection of Notes to Be Redeemed | 57 | |
| Section 3.06. | Notice of Optional Redemption | 57 | |
| Section 3.07. | Effect of Notice of Redemption | 58 | |
| Section 3.08. | Deposit of Redemption Price | 59 | |
| Section 3.09. | Notes Redeemed in Part | 59 |
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| Article IV COVENANTS | 59 | ||
|---|---|---|---|
| Section 4.01. | Payment of Notes | 59 | |
| Section 4.02. | Reports and Other Information | 59 | |
| Section 4.03. | Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 62 | |
| Section 4.04. | Limitation on Restricted Payments | 71 | |
| Section 4.05. | Dividend and Other Payment Restrictions Affecting Subsidiaries | 75 | |
| Section 4.06. | Asset Sales | 77 | |
| Section 4.07. | Transactions with Affiliates | 79 | |
| Section 4.08. | Change of Control | 82 | |
| Section 4.09. | Compliance Certificate | 84 | |
| Section 4.10. | Further Instruments and Acts | 85 | |
| Section 4.11. | Future Guarantors | 85 | |
| Section 4.12. | Liens | 85 | |
| Section 4.13. | After-Acquired Property | 86 | |
| Section 4.14. | Maintenance of Office or Agency; Fiscal Year | 86 | |
| Section 4.15. | [Reserved] | 87 | |
| Section 4.16. | Liability Management Transactions | 87 | |
| Section 4.17. | Rating | 87 | |
| Section 4.18. | Offer to Purchase by Application of Debt Proceeds | 87 | |
| Section 4.19. | Offers to Repurchase by Application of Excess Cash Flow | 88 | |
| Section 4.20. | Suspension of Certain Covenants | 90 | |
| Article V SUCCESSOR COMPANY | 91 | ||
| Section 5.01. | When Issuers and Guarantors May Merge or Transfer Assets | 91 | |
| Article VI DEFAULTS AND REMEDIES | 94 | ||
| Section 6.01. | Events of Default | 94 | |
| Section 6.02. | Acceleration | 95 | |
| Section 6.03. | Other Remedies | 96 | |
| Section 6.04. | Waiver of Past Defaults | 96 | |
| Section 6.05. | Control by Majority | 96 | |
| Section 6.06. | Limitation on Suits | 97 | |
| Section 6.07. | Contractual Rights of the Holders to Receive Payment | 97 | |
| Section 6.08. | Collection Suit by Trustee | 97 | |
| Section 6.09. | Trustee May File Proofs of Claim | 97 | |
| Section 6.10. | Priorities | 98 |
-ii-
| Section 6.11. | Undertaking for Costs | 98 | |
|---|---|---|---|
| Section 6.12. | Waiver of Stay or Extension Laws | 99 | |
| Article VII TRUSTEE | 99 | ||
| Section 7.01. | Duties of Trustee | 99 | |
| Section 7.02. | Rights of Trustee | 100 | |
| Section 7.03. | Individual Rights of Trustee | 102 | |
| Section 7.04. | Trustee’s Disclaimer | 102 | |
| Section 7.05. | Notice of Defaults | 103 | |
| Section 7.06. | [Reserved] | 103 | |
| Section 7.07. | Compensation and Indemnity | 103 | |
| Section 7.08. | Replacement of Trustee | 104 | |
| Section 7.09. | Successor Trustee by Merger | 105 | |
| Section 7.10. | Eligibility; Disqualification | 105 | |
| Section 7.11. | [Reserved] | 105 | |
| Section 7.12. | Limitation on Duty of Trustee in Respect of Collateral; Indemnification | 105 | |
| Article VIII DISCHARGE OF INDENTURE; DEFEASANCE | 106 | ||
| Section 8.01. | Discharge of Liability on Notes; Defeasance | 106 | |
| Section 8.02. | Conditions to Defeasance | 108 | |
| Section 8.03. | Application of Trust Money | 109 | |
| Section 8.04. | Repayment to Issuers | 109 | |
| Section 8.05. | Indemnity for U.S. Government Obligations | 109 | |
| Section 8.06. | Reinstatement | 109 | |
| Article IX AMENDMENTS AND WAIVERS | 110 | ||
| Section 9.01. | Without Consent of the Holders | 110 | |
| Section 9.02. | With Consent of the Holders | 111 | |
| Section 9.03. | Revocation and Effect of Consents and Waivers | 112 | |
| Section 9.04. | Notation on or Exchange of Notes | 113 | |
| Section 9.05. | Trustee to Sign Amendments | 113 | |
| Section 9.06. | Additional Voting Terms; Calculation of Principal Amount | 113 | |
| Article X RANKING OF NOTE LIENS | 114 | ||
| Section 10.01. | Relative Rights | 114 | |
| Article XI COLLATERAL | 115 | ||
| Section 11.01. | Security Documents | 115 | |
| Section 11.02. | Collateral Agent | 116 |
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| Section 11.03. | Authorization of Actions to Be Taken | 120 | |
|---|---|---|---|
| Section 11.04. | Release of Liens | 121 | |
| Section 11.05. | Powers Exercisable by Receiver or Trustee | 123 | |
| Section 11.06. | Release Upon Termination of the Issuers’ Obligations | 123 | |
| Section 11.07. | Designations | 123 | |
| Article XII GUARANTEE | 123 | ||
| Section 12.01. | Guarantee | 123 | |
| Section 12.02. | Limitation on Liability | 126 | |
| Section 12.03. | [Reserved] | 126 | |
| Section 12.04. | Successors and Assigns | 126 | |
| Section 12.05. | No Waiver | 127 | |
| Section 12.06. | Modification | 127 | |
| Section 12.07. | Execution of Supplemental Indenture for Future Guarantors | 127 | |
| Section 12.08. | Non-Impairment | 127 | |
| Section 12.09. | Prohibition on Release of Guarantees | 127 | |
| Article XIII [Reserved] | 128 | ||
| Article XIV MISCELLANEOUS | 128 | ||
| Section 14.01. | [Reserved] | 128 | |
| Section 14.02. | Notices | 128 | |
| Section 14.03. | [Reserved] | 130 | |
| Section 14.04. | Certificate and Opinion as to Conditions Precedent | 130 | |
| Section 14.05. | Statements Required in Certificate or Opinion | 130 | |
| Section 14.06. | When Notes Disregarded | 130 | |
| Section 14.07. | Rules by Trustee, Paying Agent and Registrar | 131 | |
| Section 14.08. | Legal Holidays | 131 | |
| Section 14.09. | GOVERNING LAW | 131 | |
| Section 14.10. | No Recourse Against Others | 131 | |
| Section 14.11. | Successors | 131 | |
| Section 14.12. | Multiple Originals | 131 | |
| Section 14.13. | Table of Contents; Headings | 131 | |
| Section 14.14. | Indenture Controls | 132 | |
| Section 14.15. | Severability | 132 | |
| Section 14.16. | Intercreditor Agreements | 132 | |
| Section 14.17. | Waiver of Jury Trial | 132 |
-iv-
| Section 14.18. | Parent | 132 |
|---|
Appendix A - Provisions Relating to Initial Notes and Additional Notes
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SCHEDULE AND EXHIBIT INDEX
| Schedule 1.01(A) - | Investments |
|---|---|
| Schedule 1.01(B) - | Existing Liens |
| Schedule 4.03(b)(iii) - | Existing Indebtedness |
| Schedule 4.04(b) - | Existing Non-Exclusive Intellectual Property Licenses |
| Schedule 4.05(c)(1)(A) - | Contractual Encumbrances or Restrictions |
| Exhibit A - | Form of Initial Note |
| Exhibit B - | Form of Transferee Letter of Representation |
| Exhibit C - | Form of Supplemental Indenture |
| Exhibit D - | Form of ABL Intercreditor Agreement |
| Exhibit E - | Form of Super-Senior Intercreditor Agreement |
| Exhibit F - | Restructuring Plan |
-vi-
INDENTURE, dated as of July 29, 2025 (as amended, supplemented or otherwise modified from time to time, this “Indenture”), by and among Exela Technologies BPA, LLC, a Delaware limited liability company (the “Company”), EXELA FINANCE INC., a Delaware corporation (the “Co-Issuer” and, each of the Company and the Co-Issuer, an “Issuer” and, together, the “Issuers”), the Guarantors (as defined below) party hereto from time to time and, U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and Ankura Trust Company, LLC, as Collateral Agent (as defined below).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the holders of (i) $200,988,002 aggregate principal amount of the Issuers’ 12.000% First-Priority Senior Secured Notes due 2030 issued on the date hereof (the “Initial Notes”) and (ii) Additional Notes issued from time to time in accordance with the terms hereof (together with the Initial Notes, the “Notes”):
Article I
DEFINITIONSAND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
“ABL Agent” means MidCap Financial Trust as administrative agent and collateral agent under the ABL Facility or any Person who acts as administrative agent and/or collateral agent under the ABL Facility.
“ABL Credit Agreement” means that certain Credit and Security Agreement, dated as of July 29, 2025, by and among the Company as borrower, the ABL Agent and the lenders from time party thereto.
“ABL Facility” means indebtedness incurred pursuant to the ABL Credit Agreement, and any other asset-based revolving credit facility (a) made available to the Notes Parties by commercial banks and other financial institutions that customarily provide asset-based revolving loan financing in the ordinary course of business, (b) providing for revolving credit loans in the ordinary course of business with availability based upon a customary borrowing base formula calculated by the value of ABL Priority Collateral, (c) secured by Liens only on the Collateral (which Liens may be senior in priority to the Liens securing the Notes Obligations with respect to Collateral that constitutes ABL Priority Collateral and shall be junior in priority as to all other Collateral) and subject to the ABL Intercreditor Agreement, and (d) subject to terms, conditions, covenants and events of default that are (x) not materially more restrictive than those set forth in this Indenture, taken as a whole (other than with respect to provisions customarily included in an asset-based revolving credit facility, including borrowing base formulas, representations and warranties, grace periods, cross default instead of cross acceleration, financial covenants and other provisions that are customarily more restrictive in asset-based lending facilities or that are customarily absent in high yield debt securities) or (y) on customary market terms and conditions for asset-based lending facilities for comparable borrowers.
“ABL Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the ABL Agent, B. Riley Agent, the Trustee, the Collateral Agent and the Super Senior Agent, or any other intercreditor agreement in substantially the same form attached hereto as Exhibit D.
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“ABL Priority Collateral” has the meaning set forth in the ABL Intercreditor Agreement.
“Acquired Indebtedness” means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Subsidiary of such specified Person, so long as no such Indebtedness was created or incurred in connection with, or in contemplation of, such merger, consolidated or amalgamation, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person, so long as such Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the asset being acquired on the date of acquisition.
Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
“Additional Notes” means the Notes issued under the terms of this Indenture subsequent to the Issue Date.
“Additional Refinancing Amount” means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest, premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
“After-Acquired Property” means any property or assets (other than Excluded Property) of the Issuers or any Guarantor that secures or is required to secure any Notes Obligations (including any Funded Debt) that is not already subject to the Lien under the Security Documents.
“Asset Sale” means:
(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of Sale/Leaseback Transactions) outside the ordinary course of business of the Company or any Subsidiary of the Company (each referred to in this definition as a “disposition”); or
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(2) the issuance or sale of Equity Interests (other than directors’ qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Subsidiary (other than to the Company or a Subsidiary of the Company) (whether in a single transaction or a series of related transactions),
in each case other than:
(a) (i) a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business and (ii) any dispositions of Investments in joint ventures to the extent required by, or made pursuant to buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
(b) the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control;
(c) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;
(d) any disposition of assets of the Company or any Subsidiary or issuance or sale of Equity Interests of the Company or any Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by the Company) of less than $ 1,000,000;
(e) any disposition of property or assets, or the issuance of securities by the Company, a Subsidiary of the Company or a Guarantor;
(f) any disposition occurring in accordance with the terms of the Tax Funding Agreement;
(g) Foreclosure or any similar action with respect to any property or other asset of the Company or any of the Subsidiaries of the Company;
(h) [reserved];
(i) the lease, assignment or sublease of any real or personal property in the ordinary course of business;
(j) any sale of inventory in the ordinary course of business;
(k) any grant in the ordinary course of business of any non-exclusive license or sublicense of patents, trademarks, know-how or any other intellectual property;
(l) any disposition (including by capital contribution), pledge, factoring, transfer or sale of (i) Securitization Assets to any Special Purpose Securitization Subsidiary in connection with a Permitted Securitization Financing or any pledge, factoring, transfer or sale in connection with any Permitted Securitization Financing, and (ii) any other Securitization Assets subject to Liens securing Permitted Securitization Financings;
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(m) any financing transaction with respect to property built or acquired by the Company or any Subsidiary after the Issue Date, including any Sale/Leaseback Transaction;
(n) dispositions in connection with Permitted Liens;
(o) [reserved];
(p) [reserved];
(q) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(r) any surrender, expiration or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind;
(s) sales and contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility as in effect as of the Issue Date; provided that certain of the proceeds from such sale and contribution are used to repay the B. Riley Credit Agreement (which may be by way of a purchase of a participation interest, so long as such participation interest is purchased by a Notes Party or immediately transferred to a Notes Party) in accordance with the terms of the Exar Facility as in effect as of the date hereof;
(t) to the extent constituting an Asset Sale, any termination, settlement or extinguishment of Hedging Obligations; and
(u) any sale, transfer or disposition of Claims Administration Investments; provided, that the Net Proceeds thereof received by the Company or any Subsidiary are used to make additional Claims Administration Investments or to repay any outstanding Claims Administration Indebtedness prior to being used for any other purpose.
“B. Riley Agent” means BRF Finance Co. LLC, as administrative agent under the B. Riley Credit Agreement.
“B. Riley Credit Agreement” means that certain Amended and Restated Credit Agreement, dated July 29, 2025 among B. Riley Agent, the lenders party thereto from time to time, the Company and other entities party thereto, as borrowers, and the guarantors party thereto from time to time, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Bank Indebtedness” means any and all amounts payable under or in respect of one or more (a) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (b) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (c) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
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“Bankruptcy Code” means, as applicable, Title 11 of the U.S. Code (11 U.S.C. § 101 et seq), as now and hereafter in effect, or any successor statute, and any rule or regulation issued thereunder.
“Bankruptcy Law” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ CreditorsArrangement Act (Canada), the Winding-up and Restructuring Act (Canada), any corporate statute which is used by a Person to propose an arrangement in connection with a compromise of such Person’s debt obligations each as now and hereafter in effect, any successors to such statutes, and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States, Canada or other applicable jurisdiction from time to time in effect.
“Board of Directors” means with respect to (a) any corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) a partnership, the board of directors of the general partner of the partnership, (c) a limited liability company, the managing member or members or any controlling committee or board of directors of such company or the sole member or the managing member thereof, and (d) any other Person, the board or committee of such Person serving a similar function.
“Business Day” means any day that is not a Saturday, Sunday or any day which is a federal holiday or any other day on which banking institutions are authorized or required by law to close in New York City or the place of payment.
“Canadian Note Party” means each Notes Party which is incorporated, formed or organized under the laws of Canada or any province or territory thereof.
“Canadian Security Agreement” means the Canadian Pledge and Security Agreement, dated as of the date hereof, made by each Canadian Note Party in favor of the Collateral Agent, for the benefit of the Notes Secured Parties securing the Notes Obligations in accordance with the terms thereof.
“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance that are properly charged to current operations).
“Capital Stock” means:
(1) in the case of a corporation, corporate stock or shares;
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(2) in the case of an association or business entity, any and all shares,
(3) interests, participations, rights or other equivalents (however designated) of corporate stock;
(4) in the case of a partnership or limited liability company, partnership or
(5) membership interests (whether general or limited); and
(6) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Capitalized Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided, that obligations of the Issuers or their Subsidiaries, or of a special purpose or other entity not consolidated with the Issuers or their Subsidiaries, either existing on the Issue Date or created thereafter that (a) initially were not included on the consolidated balance sheet of the Issuers as capital lease obligations and were subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with the Issuers and their Subsidiaries were required to be characterized as capital lease obligations upon such consolidation, in either case, due to a change in accounting treatment or otherwise, or (b) did not exist on the Issue Date and were required to be characterized as capital lease obligations but would not have been required to be treated as capital lease obligations on the Issue Date had they existed at that time, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.
“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Subsidiaries.
“Cash Equivalents” means:
(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits with
(4) maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000 and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
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(5) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(6) commercial paper issued by a corporation (other than an Affiliate of the Company) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(7) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(8) Indebtedness issued by Persons with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(9) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and
(10) instruments equivalent to those referred to in clauses (1) through (8) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States of America to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.
“Cash Management Agreement” means any agreement to provide to the Company or any of its Subsidiaries cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
“Cash Management Services” means cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
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“Casualty Event” means any involuntary loss of title or any involuntary loss of or damage to or destruction of, or any condemnation or other taking (including by any Governmental Authority) of, any property of any Notes Party. “Casualty Event” shall include any taking of all or any part of any real property of any Person or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any legal requirement, or by reason of the temporary requisition of the use or occupancy of all or any part of any real property of any Person or any part thereof by any Governmental Authority, or any settlement in lieu thereof.
“Change of Control” means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuers and their respective Subsidiaries, taken as a whole, to a Person; or
(2) the Issuers become aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the direct or indirect acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Company or Parent.
“Claims Administration Arrangements” means any and all arrangements entered into by any Issuer or any of its Subsidiaries and any Claims Administration Bank whereby short-term loans (which loans shall be secured solely by Claim Administration Liens) are made by such Claims Administration Bank to any Issuer or any of its Subsidiaries; provided, that the proceeds of such loans are deposited in one or more segregated deposit or securities accounts and are solely used to purchase Claims Administration Investments (which shall be held in such segregated accounts) and pay transaction costs in connection therewith.
“Claims Administration Bank” means any third-party financial institution meeting the qualifications specified in clause (3) of the definition of “Cash Equivalents” that is designated by any Issuer or any of its Subsidiaries to hold and distribute certain legal settlement funds administered by any Issuer or its Subsidiaries in connection with any Issuer’s claims administration business.
“Claims Administration Indebtedness” means Indebtedness for borrowed money of the Company or any of its Subsidiaries in favor of the Claims Administration Bank in respect of loans made pursuant to Claims Administration Arrangements.
“Claims Administration Investments” means Cash Equivalents invested with proceeds of Claims Administration Indebtedness.
“Claims Administration Liens” means Liens in favor of the Claims Administration Bank on Claims Administration Investments and related segregated deposit and securities accounts securing Claims Administration Indebtedness solely to the extent the amount of such Claims Administration Investment equals or exceeds the amount of such Claims Administration Indebtedness.
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“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Notes Obligations pursuant to the Security Documents.
“Collateral Agent” means Ankura Trust Company, LLC, the collateral agent under the Notes Documents, together with its successors and assigns in such capacity.
“Consolidated Current Assets” means, as of any date of determination, the total assets of the Issuers and their Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding cash and Cash Equivalents, amounts related to current or deferred taxes based on income or profits, assets held for sale, loans (permitted) to third parties, pension assets, deferred bank fees and derivative financial instruments, and excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of the Issuers and their Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding (a) the current portion of any Funded Debt, (b) the current portion of interest, (c) accruals for current or deferred taxes based on income or profits, (d) accruals of any costs or expenses related to restructuring reserves, (e) without duplication of clause (a), all obligations owing with respect to the ABL Facility, the B. Riley Credit Agreement, any other revolving facility or any Permitted Securitization Financing to the extent such Permitted Securitization Financing is a liability of the Issuers and/or their Subsidiaries, (f) the current portion of any Capitalized Lease Obligation, (g) deferred revenue arising from cash receipts that are earmarked for specific projects, (h) liabilities in respect of unpaid earn-outs and (i) the current portion of any other long-term liabilities, and, furthermore, excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
“Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including, without limitation, the amortization of intangible assets, deferred financing fees, capitalized contract incentives, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
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“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including the interest component of Capitalized Lease Obligations and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees and original issue discount, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2) consolidated capitalized interest of such Person and its Subsidiaries for such period, whether paid or accrued; minus
(3) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, restructuring expenses, curtailments or modifications to pension and post-retirement employee benefit plans, excess pension charges, any expenses related to any New Project or any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facility closing costs, facility rebranding costs, acquisition integration costs, facility opening costs, project and contract start-up costs, business optimization costs, recruiting costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or Incurrence, issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions (including any costs relating to auditing prior periods, any transition-related expenses, and transaction expenses incurred before, on or after the Issue Date), in each case, shall be excluded;
(2) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries and including, without limitation, the effects of adjustments to (A) deferred rent, (B) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending funds with suppliers or (C) any other deferrals of income) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
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(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;
(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Company) shall be excluded;
(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) (a) the Net Income for such period of any Person that is not a Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Subsidiary thereof in respect of such period and (b) the Net Income for such period shall include any dividend, distribution or other payment in cash (or to the extent converted into cash) received by the referent Person or a Subsidiary thereof from any Person in excess of, but without duplication of, the amounts included in subclause (a);
(8) [reserved];
(9) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with Section 4.04(b)(xxiii) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles and other fair value adjustments arising pursuant to GAAP shall be excluded;
(11) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12) any (a) non-cash compensation charges, (b) costs and expenses after the Issue Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors and employees, in each case of such Person or any Subsidiary, shall be excluded;
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(13) accruals and reserves that are established or adjusted within 12 months after the Issue Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(14) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded, (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included, (iii) the non-cash amortization of tenant allowances shall be excluded, (iv) cash received from landlords for tenant allowances shall be included and (v) to the extent not already included in Net Income, the cash portion of sublease rentals received shall be included (for the avoidance of doubt, the net effect of the adjustments in this clause (14)(a) as well as any related adjustments pursuant to clause (2) above shall be to compute rent expense and rental income on a cash basis for purposes of determining Consolidated Net Income) and (b) non cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(15) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;
(16) (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);
(17) Capitalized Software Expenditures shall be excluded;
(18) non-cash charges for deferred tax asset valuation allowances shall be excluded;
(19) any other costs, expenses or charges resulting from facility closures or sales, including income (or losses) from such facility closures or sales, shall be excluded;
(20) any deductions attributable to minority interests shall be excluded; and
(21) any gain, loss, income, expense or charge resulting from the application of any LIFO shall be excluded.
“Consolidated Non-Cash Charges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided, that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
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“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, federal, state, provincial, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.
“Consolidated Total Indebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of the Issuers and their Subsidiaries (excluding letters of credit or bank guarantees, to the extent undrawn, cash collateralized or backstopped) consisting of Capitalized Lease Obligations and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of the Issuers and their respective Subsidiaries and all Preferred Stock of the Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
“Consolidated Working Capital” means, as of any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.
“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
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“Corporate Trust Office” means the designated office of the Trustee in the United States of America at which at any time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the holders, the Collateral Agent, and the Issuers, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the holders and the Issuers).
“Debt Issuance” means the incurrence by any Notes Party of any Indebtedness after the Issue Date (other than as permitted by Section 4.03).
“Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith by the Issuers) of non-cash consideration received by the Issuers or a Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
“DIP Claims” has the meaning specified in the Restructuring Plan.
“Discharge of the ABL Priority Obligations” has the meaning specified in the ABL Intercreditor Agreement.
“Disclosure Statement Date” means the date of approval by the Bankruptcy Court of the disclosure statement delivered in connection with the Restructuring Plan, which date is May 8, 2025.
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts, (b) the early termination or modification of any contract resulting in the receipt by any Notes Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification) or (c), any sale of merchant accounts (or any rights thereto (including, without limitation, any rights to any residual payment stream with respect thereto)) by any Notes Party.
“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
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(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Subsidiaries, or
(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),
in each case prior to 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuers or their Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
“Domestic Subsidiary” means a Subsidiary that is not a Foreign Subsidiary.
“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Subsidiaries for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Fixed Charges and costs of surety bonds in connection with financing activities; plus
(3) Consolidated Depreciation and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) any expenses or charges (other than Consolidated Depreciation and Amortization Expense) (i) related to any issuance of Equity Interests, Investment, acquisition, New Project, disposition, loan origination, recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by this Indenture (including a refinancing thereof) (whether or not successful) or (ii) incurred in connection with the Transactions, including (A) such fees, expenses or charges related to the Notes or any Bank Indebtedness, (B) any amendment or other modification of the Notes or other Indebtedness and (C) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Permitted Securitization Financing; plus
(6) business optimization expenses and other restructuring charges, reserves or expenses not related to the Transactions (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, severance, systems establishment costs, contract termination costs, future lease commitments and excess pension charges) and Pre-Opening Expenses; plus
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(7) the amount of loss or discount on sale of assets to a Special Purpose Securitization Subsidiary in connection with a Permitted Securitization Financing, including amortization of loan origination costs and amortization of portfolio discounts; plus
(8) any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of an Issuer or a Guarantor or net cash proceeds of an issuance of Equity Interests of the Company (other than Disqualified Stock); plus
(9) the amount of any loss attributable to a New Project, until the date that is 12 months after the date of completing the construction, acquisition, assembling or creation of such New Project, as the case may be; provided, that (a) such losses are reasonably identifiable and factually supportable and certified by a responsible financial or accounting officer of the Company and (b) losses attributable to such New Project after 12 months from the date of completing such construction, acquisition, assembling or creation, as the case may be, shall not be included in this clause (9); plus
(10) [reserved]; plus
(11) with respect to any joint venture that is not a Subsidiary and solely to the extent relating to any net income referred to in clause (7) of the definition of “Consolidated Net Income,” an amount equal to the proportion of those items described in clauses (1) and (2) above relating to such joint venture corresponding to the Company’s and the Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Subsidiary); plus
(12) [reserved]; plus
(13) [reserved]; and
less, without duplication, to the extent the same increased Consolidated Net Income,
(14) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period).
“ECF Prepayment Period” means the applicable fiscal year and the period following the end of such fiscal year and prior to the date of such Excess Cash Flow Offer pursuant to Section 4.19(a) (provided that, with respect to any such Excess Cash Flow Offer Amount following the end of such fiscal year, such amount is not included in any calculation pursuant to the definition of Excess Cash Flow or Section 4.19(a) for the subsequent ECF Prepayment Period).
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“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Equity Issuance” means either (a) the sale or issuance by any Notes Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by the Company of any cash capital contributions.
“Equivalent Amount” means, on any date of determination, with respect to obligations or valuations denominated in one currency (the “first currency”), the amount of another currency (the “second currency”) which would result from the Trustee converting the first currency into the second currency at the Spot Rate on the applicable date of determination, or at such other rate as the Trustee may determine in its sole discretion.
“ETI” means Exela Technologies, Inc.
“ETI Funding Obligation” has the meaning assigned to it in the Restructuring Plan.
“Exar Buyer” means BR EXAR, LLC, a Delaware limited liability company (as ultimate successor by assignment to B. Riley Securities, Inc.), as buyer under the Exar Facility.
“Exar Facility” means the receivables purchase facility established pursuant to that certain Receivables Purchase Agreement, dated as of February 12, 2024, among Exar SPV, as seller, Exar Buyer, as buyer, and the Exar Originators, as amended, restated, amended and restated, supplemented or otherwise modified from time to time (for the avoidance of doubt, other than with respect to amendments, restatements amendments and restatements, supplements or modifications which change the identities of the Exar Originators).
“Exar Originators” mean the originators party to the Exar Facility as of the Issue Date.
“Exar SPV” means Exela BR SPV LLC, a Delaware limited liability company.
“Excess Cash Flow” means, for any period, an amount equal to the excess of:
(a) the sum, without duplication, of:
| (i) | Consolidated Net Income of the Issuers and their Subsidiaries for such period, plus |
|---|---|
| (ii) | an amount equal to the amount of all non-cash charges (including depreciation and amortization) for such<br>period to the extent deducted in arriving at such Consolidated Net Income, but excluding any such non-cash charges representing an accrual<br>or reserve for potential cash items in any future period and excluding amortization of a prepaid cash item that was paid in a prior period,<br>plus |
| --- | --- |
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| (iii) | decreases in Consolidated Working Capital for such period (other than any such decreases arising from<br>acquisitions or Dispositions by the Issuers and their Subsidiaries completed during such period, the application of purchase accounting<br>or the reclassification of items from short term to long term or vice versa), plus |
|---|---|
| (iv) | an amount equal to the aggregate net non-cash loss on Dispositions by the Issuers and their Subsidiaries<br>during such period (other than Dispositions in the ordinary course of business) to the extent deducted in arriving at such Consolidated<br>Net Income, plus |
| --- | --- |
| (v) | the amount deducted as tax expense in determining Consolidated Net Income to the extent in excess of cash<br>taxes paid in such period, plus |
| --- | --- |
| (vi) | cash receipts in respect of Hedging Obligations during such period to the extent not otherwise included<br>in such Consolidated Net Income; over |
| --- | --- |
(b) the sum, without duplication, of:
| (i) | an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income<br>(but excluding any non-cash credit to the extent representing the reversal of an accrual or reserve described in clause (a)(ii) above)<br>and cash charges excluded by virtue of clauses (1) through (15) and (17) through (21) of the definition of “Consolidated Net<br>Income”, plus |
|---|---|
| (ii) | without duplication of amounts deducted pursuant to clause (xi) below or this clause (ii) in<br>prior periods, the amount of Capital Expenditures or acquisitions of intellectual property accrued or made in cash during the applicable<br>ECF Prepayment Period to the extent not financed with the proceeds of Funded Debt, plus |
| --- | --- |
| (iii) | the aggregate amount of all principal payments of Indebtedness (including the principal component of payments<br>in respect of Capitalized Lease Obligations) of the Issuers and their Subsidiaries during the applicable ECF Prepayment Period to the<br>extent such prepayments or repayments are not funded with the proceeds of Funded Debt, excluding all payments of Indebtedness described<br>in Section 4.19(a) to the extent such payments reduce the Excess Cash Flow Offer Amount pursuant to Section 4.19(a), plus |
| --- | --- |
| (iv) | an amount equal to the aggregate net non-cash gain on Dispositions by the Issuers and their Subsidiaries<br>during the applicable ECF Prepayment Period (other than Dispositions in the ordinary course of business) to the extent included in arriving<br>at such Consolidated Net Income and the net cash loss on Dispositions to the extent otherwise added to arrive at Consolidated Net Income,<br>plus |
| --- | --- |
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| (v) | increases in Consolidated Working Capital for such period (other than any such increases arising from<br>acquisitions or Dispositions by the Issuers and their Subsidiaries completed during such period, the application of purchase accounting<br>or the reclassification of items from short term to long term or vice versa), plus |
|---|---|
| (vi) | cash payments by the Issuers and their Subsidiaries actually made during the applicable ECF Prepayment<br>Period to the extent not financed with the proceeds of Funded Debt in respect of any purchase price holdbacks, earn-out obligations, long-term<br>liabilities of the Issuers and their Subsidiaries (other than Indebtedness) to the extent such payments are not expensed during such period<br>or are not deducted in calculating Consolidated Net Income for such period (and so long as there has not been any reduction in respect<br>of such payments in arriving at Consolidated Net Income for such fiscal year), plus |
| --- | --- |
| (vii) | without duplication of amounts deducted pursuant to clauses (viii) and (xi) below in prior periods,<br>the amount of Investments made during the applicable ECF Prepayment Period to the extent that such Investments were not financed with<br>the proceeds of Funded Debt, not deducted in calculating Consolidated Net Income, plus |
| --- | --- |
| (viii) | the amount of Restricted Payments actually paid (and permitted to be paid) during the applicable ECF Prepayment<br>Period pursuant to Sections 4.04(b)(xiii), (xviii), (xix) and (xxii) in each case to the extent such Restricted Payments were<br>not financed with the proceeds of Funded Debt, not deducted in calculating Consolidated Net Income, plus |
| --- | --- |
| (ix) | the aggregate amount of expenditures actually made by the Issuers and their Subsidiaries to the extent<br>not financed with the proceeds of Funded Debt during such period (including expenditures for the payment of financing fees) to the extent<br>that such expenditures are not expensed during such fiscal year or are not deducted in calculating Consolidated Net Income (and so long<br>as there has not been any reduction in respect of such expenditures in arriving at Consolidated Net Income for such period), plus |
| --- | --- |
| (x) | without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration<br>required to be paid in cash by the Issuers or any of the Subsidiaries pursuant to binding contracts, commitments, or binding purchase<br>orders (to the extent not financed with the proceeds of Funded Debt, the “Contract Consideration”) entered into prior<br>to or during such ECF Prepayment Period relating to Permitted Investments, Capital Expenditures or acquisitions of Intellectual Property<br>to be consummated; provided that, to the extent the aggregate amount actually utilized to finance such Permitted Investments, Capital<br>Expenditures or acquisitions of Intellectual Property during any period is less than the Contract Consideration that reduced Excess Cash<br>Flow for the prior period, the amount of such shortfall shall be added to the calculation of Excess Cash Flow for such period, plus |
| --- | --- |
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| (xi) | the amount of cash taxes (including penalties and interest) and tax distributions paid pursuant to Sections<br>4.04(b)(xxiii), or tax or tax distribution reserves set aside or payable (without duplication) in such period, to the extent they exceed<br>the amount of tax expense deducted in calculating Consolidated Net Income for such period, plus |
|---|---|
| (xii) | cash expenditures in respect of Hedging Obligations during such period to the extent not deducted in calculating<br>Consolidated Net Income, plus |
| --- | --- |
| (xiii) | cash payments by the Issuers and their Subsidiaries actually made during the applicable ECF Prepayment<br>Period to their Parent in satisfaction of Equity Issuance costs or issuance costs related to Funded Debt incurred by Parent on behalf<br>of the Issuers and their Subsidiaries, plus |
| --- | --- |
| (xiv) | fees or expenses paid in cash during such period in connection with any Investment, Disposition, incurrence<br>or repayment of Indebtedness, issuance of Equity Interests or amendment or modification of any debt instrument (including any amendment<br>or other modification of this Indenture or the other Notes Documents) and including, in each case, any such transaction consummated on<br>or immediately prior to the Issue Date and any such transaction undertaken but not completed to the extent not deducted in calculating<br>Consolidated Net Income for such period. |
| --- | --- |
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Excluded Property” means the property and other assets of the Notes Parties that are excluded from the grant of security interests in favor of the Collateral Agent, on behalf of the Notes Secured Parties, pursuant to the terms of this Indenture and the Security Documents.
“Excluded Subsidiary” means, with respect to any Subsidiary of the Issuers, (a) each Subsidiary that is prohibited from guaranteeing the Notes by any requirement of law or that would require consent, approval, license or authorization of a governmental (including regulatory) authority to guarantee the Notes (unless such consent, approval, license or authorization has been received); provided, that, for the avoidance of doubt, such Subsidiary shall have no obligation to seek such consent, approval, license or authorization, (b) each Subsidiary that is prohibited by any applicable contractual requirement from guaranteeing the Notes on the Issue Date or at the time such Subsidiary becomes a Subsidiary (in each case for so long as such restriction or any replacement or renewal thereof is in effect and only to the extent that such prohibition was not implemented or consented to with the intent of evading the requirements of Section 4.11), (c) any Special Purpose Securitization Subsidiary, (d) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of the Issuers most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of the Issuers and their respective Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries being excluded pursuant to this clause (d), as of the last day of the fiscal quarter of the Issuers most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of the Issuers and their Subsidiaries on a consolidated basis as of such date, and (e) any Subsidiary for which providing a Guarantee or granting Liens required by the Security Documents to secure Indebtedness could reasonably be expected to result in material tax consequences as determined in good faith by the Issuers in consultation with the requisite lenders under the Super Senior Facility, in each case pursuant to clauses (a) through (e) hereof, only for so long as it remains as such; provided, that any Subsidiary that incurs or provides a guaranty under (or has pledged its assets to secure the obligations of) any Indebtedness for borrowed money shall not be an Excluded Subsidiary.
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“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
“Fixed Charge Calculation Date” has the meaning assigned in the “Fixed Charge Coverage Ratio” definition.
“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuers or any of its Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Issuers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Issuers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuers as set forth in an Officer’s Certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided that for all purposes of determining EBITDA hereunder adjustments for operating expense reductions and other operating improvements, synergies or cost savings shall not be more than 20% of EBITDA for the most recently ended four fiscal quarter period (calculated prior to giving effect to such capped adjustments (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight-line basis during such period, taking into account any seasonality adjustments determined by the Issuers in good faith.
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For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Subsidiaries.
“Foreign Subsidiary” means a Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
“Funded Debt” means all Indebtedness of the Issuers and their Subsidiaries for borrowed money that (i) matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or (ii) arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with its Subsidiaries.
“Governing Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization, governance and capitalization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization.
“Governmental Authority” means any nation or government, any foreign, federal, state, territory, provincial, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency 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).
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“guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations payable by another Person. The amount of any guarantee shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith.
“Guarantee” means any guarantee of the obligations of the Issuers under this Indenture and the Notes by any Subsidiary of the Company in accordance with the provisions of this Indenture.
“Guarantor” means any Subsidiary of the Company that Incurs a Guarantee; provided, that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Guarantor or Subsidiary ceases to be a Guarantor.
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
“holder” or “noteholder” means the Person in whose name a Note is registered on the Registrar’s books.
“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. “Incurred” and “Incurrence” shall have correlative meanings.
“Indebtedness” means, with respect to any Person:
(1) the principal of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than twelve months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
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(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by the Company) of such asset at such date of determination, and (b) the principal amount of such Indebtedness of such other Person;
provided, however, that, notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Permitted Securitization Financings; (5) trade and other ordinary course payables, accrued expenses and intercompany liabilities, including with respect to working capital advancements, arising in the ordinary course of business; (6) [reserved]; (7) obligations in respect of Third Party Funds; (8) in the case of the Issuers and their respective Subsidiaries (x) all intercompany Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business and (y) intercompany liabilities in connection with cash management, tax and accounting operations of the Issuers and their respective Subsidiaries; (9) [reserved]; (10) any obligations under Hedging Obligations; and (11) any Claims Administration Indebtedness of the Issuers and Subsidiaries (except to the extent that any such Claims Administration Indebtedness exceeds the Claims Administration Investments of such Person); provided, that such agreements are entered into for bona fide hedging purposes of the Issuers or their Subsidiaries (as determined in good faith by the Board of Directors or senior management of the Company, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of the Issuers or their Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of the Issuers or their Subsidiaries Incurred without violation of this Indenture.
Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.
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“Indenture” means this Indenture as amended, supplemented or otherwise modified from time to time.
“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is independent of the Issuers and any Affiliate thereof and, in the good faith determination of the Issuers, qualified to perform the task for which it has been engaged.
“Intellectual Property” has the meaning specified therefor in the Security Agreement or the Canadian Security Agreement, as applicable.
“Intercreditor Agreements” means the Super Senior Intercreditor Agreement, the ABL Intercreditor Agreement and the Pari Passu Intercreditor Agreement and any junior Lien intercreditor agreement, in each case entered into on the Issue Date or pursuant to Section 11.02(f) or (h), as applicable.
“Interest Payment Date” has the meaning set forth in Paragraph 1 of the Note.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.
“Investment Grade Securities” means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among the Issuers and their respective Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
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“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees of loans), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property.
“Issue Date” means the date on which the Initial Notes are originally issued.
“Junior Lien Obligations” means the Obligations with respect to other Indebtedness permitted to be incurred under this Indenture and the Super Senior Facility, which is by its terms intended to be secured by the Collateral on a basis junior to the Notes and the Obligations under the Super Senior Facility, excluding the ABL Facility and the B. Riley Credit Agreement.
“Liability Management Transaction” means, other than a transaction undertaken in good faith for a bona fide business purpose and not designed primarily to implement any of the transactions described in clauses (i) through (vi) hereof, any transaction or series of related transactions that is designed primarily to restructure or otherwise impact the capital structure of the Notes Parties in a manner that improves the prospects of a class or subset of stakeholders (including any equityholder, and any debt financing providers (including any subset of holders of the Notes)) that is pari passu with or junior to the holders of the Notes by elevating such stakeholder’s payment or lien priority (whether effectively, structurally or contractually) or ability to direct actions under the Notes Documents, or by introducing any new Indebtedness that is effectively, structurally or contractually senior to the Notes in payment or lien priority except as explicitly permitted pursuant to the terms of the Notes Documents as of the Issue Date, including any of the following: (i) any Indebtedness issued in exchange for, or the net proceeds (or deemed net proceeds in the event of a cashless transaction) of which are used, in whole or in part, to modify, extend, refinance, renew, replace, retire or refund (or any other transaction that would have the effect of circumventing the restrictions set forth in the covenants hereof or achieve the same effect as the foregoing) any existing Indebtedness of the Company or any of its Subsidiaries (the “Existing LMT Debt”) with any other Indebtedness or debt-like instruments (including preferred Equity Interests) of the Company or any of its Subsidiaries (the “New LMT Debt”) in a transaction the result of which is to ‘uptier’ holders of such Existing LMT Debt on a non-pro rata basis into New LMT Debt that is effectively (including as to security or recourse to additional assets or through a ‘double dip or ‘pari plus’ structure), contractually or structurally senior (in right of payment or security) to the Existing LMT Debt, (ii) any Investment, Asset Sale, Restricted Payment or other transfer or disposition (including any indirect transfers effectuated through a release of a Guarantor, a merger, amalgamation, division, or similar undertaking) of assets constituting Collateral immediately prior to such Investment, Asset Sale, Restricted Payment or other transfer or disposition to an Affiliate of the Company or any of its Subsidiaries that is not a Notes Party (including any Subsidiary of a party that is not a Notes Party or Affiliate that is not an Issuer or a Guarantor), in each case, to (a) facilitate a new financing of Indebtedness or debt-like instruments (including the issuance of any preferred Equity Interests) incurred by such Person who is not a Notes Party under such Indebtedness or debt-like instruments, or otherwise undertakes a transaction that monetizes such property, the result of which raises, directly or indirectly, liquidity for a Notes Party or to provide cash flow assistance to a Notes Party (including in furtherance of exchanging, modifying, extending, refinancing, renewing, replacing, retiring or refunding, in whole or in part, Existing LMT Debt), (b) guarantee any existing Indebtedness or debt-like instrument, or (c) transfer (whether by a distribution, dividend, or otherwise) such property to an Affiliate of a Notes Party the primary purpose of which preserves the value of such property for such Affiliate, (iii) any release of the Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) or of a Guarantor who owns any Material Property, or of a material portion of the Collateral or any Material Property, in each case the results of which is intended to secure or serve as support for new Indebtedness or Refinancing Indebtedness, a new equity issuance, or to otherwise raise liquidity or to provide cash flow assistance, (iv) any transaction whereby an obligation of a Notes Party owed to an Affiliate of a Notes Party (other than another Notes Party) would directly or indirectly be pari passu or senior (in right of payment or security) to the Notes Obligations, (v) any Notes Party incurring any Indebtedness for borrowed money, or granting a Lien on its assets securing Indebtedness for borrowed money, on a senior basis (in right of payment or security) to the Notes Obligations or the Liens securing the Notes Obligations (other than Liens which are explicitly permitted to be incurred on a senior basis under the Notes Documents as in effect as of the Issue Date), or (vi) incurring any indebtedness for the primary purpose of, or that has the effect of, influencing the provision of, or in connection with, obtaining any modification, amendment, release or waiver under this Indenture. Notwithstanding any of the foregoing, the incurrence of any Refinancing Indebtedness permitted to be incurred under this Indenture shall not constitute a Liability Management Transaction.
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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or any lease in the nature thereof); provided, that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
“Material Property” means any asset (or group of assets), including intellectual property owned by the Notes Parties or their respective Subsidiaries that is material to the business, operations, assets, or financial condition of the Company and its Subsidiaries, taken as a whole.
“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.
“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
“Net Proceeds” means:
(1) the aggregate cash proceeds received by the Issuers or any Subsidiary in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including, without duplication, Tax Distributions and after taking into account any available tax credits or deductions and any tax sharing arrangements related solely to such disposition), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)) to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuers as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuers after such sale or other disposition thereof, including, without limitation, pension and other postemployment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction, and payments made to holders of minority interests in Subsidiaries that are joint ventures as a result of such Asset Sale.
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(2) with respect to any Debt Issuance, the cash proceeds thereof received by, or on behalf of, any Notes Party, net of fees, commissions, costs and other expenses incurred in connection therewith;
(3) with respect to any Casualty Event, the cash insurance proceeds, condemnation awards and other compensation received by, or on behalf of, any Notes Party in respect thereof, net of all costs and expenses incurred in connection with the collection of such proceeds, awards or other amounts paid or reasonably expected to be paid to third parties as damages, settlements or other compensation in respect of such Casualty Event (including, in respect of any such Casualty Event, transfer and similar taxes and the Issuers’ good faith estimate of income taxes paid or payable in connection with such sale (after taking into account any available tax credits or deductions and any tax sharing arrangements) (provided, that, to the extent and at the time that any such damages, settlements, other compensation or taxes are no longer required to be paid or payable, such amounts shall then constitute Net Proceeds)); and
(4) with respect to any or Specified Insurance Event, 50% of the net proceeds received by the Issuers or any Subsidiary of the Issuers in respect of the Specified Insurance Event.
“New Project” means (x) each contract or project with respect to new customers and any expansions of contracts or projects with respect to existing customers and (y) each creation (in one or a series of related transactions) of a business unit to the extent such business unit commences operations or each expansion (in one or a series of related transactions) of business into a new market.
“Notes Documents” means this Indenture, the Notes, the Guarantees, the Security Documents and the Intercreditor Agreements, and all agreements, documents and instruments at any time executed and/or delivered by any Notes Party to, with or in favor of the Trustee and the Collateral Agent in connection therewith.
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“Notes Obligations” means Obligations in respect of the Notes, this Indenture, the Guarantees, the Security Documents and the other Notes Documents.
“Notes Parties” means the Issuers and the Guarantors and “Notes Party” means any one of them.
“Notes Secured Parties” means the Trustee, the Collateral Agent and each other Person holding any Notes Obligations.
“Obligations” means any principal, interest, penalties, fees, expenses, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness (including interest, fees, expenses, indemnity claims and other monetary obligations accrued during the pendency of an insolvency proceeding, whether or not constituting an allowed claim in such proceeding); provided, that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee and the Collateral Agent.
“Officer” means the Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of each Issuer to the extent appointed.
“Officer’s Certificate” means a certificate signed on behalf of an Issuer by an Officer of such Issuer who is the Chief Executive Officer, the Chief Financial Officer, the President, the Treasurer, or the Chief Accounting Officer of such Issuer, which meets the requirements set forth in this Indenture.
“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee or the Collateral Agent, as applicable.
“Parent” means XBP Europe Holdings Inc., a Delaware corporation, and any successor thereto.
“Pari Passu Indebtedness” means (a) with respect to an Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes and (b) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari passu in right of payment to such Guarantor’s Guarantee.
“Pari Passu Intercreditor Agreement” means that certain Pari Passu Intercreditor Agreement, dated as of the date hereof, by and among the Issuers, the Guarantors, the Other Pari Passu Representative (as defined therein), the Trustee and the Collateral Agent, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time.
“Permitted Investments” means:
(1) any Investment in the Issuers or any of its Subsidiaries that is a Guarantor;
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(2) any Investment by the Issuers or any Subsidiary in Cash Equivalents or Investment Grade Securities for the account of such Person;
(3) any Investment by the Issuers or any of its Subsidiaries in a Person if as a result of such Investment (a) such Person becomes a Subsidiary of the Issuers that is a Guarantor, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuers or a Subsidiary of the Issuers that is a Guarantor;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received by the Issuers or any Subsidiary in connection with an Asset Sale made by such respective Person pursuant to Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date, in each case, that is disclosed on Schedule 1.01(A) hereto; provided, that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(6) advances of payroll payments, business related travel expenses, moving expenses and other similar expenses and expenses to employees in the ordinary course of business;
(7) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business of the Issuers or any Subsidiary or Investments acquired by the Issuers or any of its Subsidiaries as a result of a foreclosure by the Issuers or any of its Subsidiaries, respectively, with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(8) Hedging Obligations permitted under Section 4.03(b)(x);
(9) Investments in any Subsidiary that is not a Guarantor not to exceed, at any one time in the aggregate outstanding under this clause (9), $3,000,000;
(10) any Investment occurring in accordance with the terms of the Tax Funding Agreement;
(11) additional Investments by the Issuers or any Subsidiary of the Issuers having an aggregate Fair Market Value (as determined in good faith by the Issuers at the time of the making thereof, and without giving effect to any subsequent changes in value), taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed $15,000,000; provided, however, that if any Investment pursuant to this clause (11) is made in any Person that is not the Issuers or a Subsidiary of the Issuers that is a Guarantor at the date of the making of such Investment and such Person becomes the Issuers or a Subsidiary of the Issuers that is a Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (11) for so long as such Person continues to be the Issuers or a Subsidiary of the Issuers that is a Guarantor;
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(12) Investments the payment for which consists of Equity Interests of the Issuers (other than Disqualified Stock) or any direct or indirect parent of the Issuers, as applicable;
(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (iv), (ix)(B) and (xvi) of Section 4.07(b));
(14) guarantees issued in accordance with Section 4.03 and Section 4.11;
(15) (i) Investments consisting of the licensing or contribution of intellectual property (on a non-exclusive basis) pursuant to joint marketing arrangements with other Persons in the ordinary course of business; (ii) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property (on a non-exclusive basis) in each case in the ordinary course of business;
(16) Investments consisting of Securitization Assets in connection with a Permitted Securitization Financing or arising as a result of Permitted Securitization Financings;
(17) additional Investments in joint ventures (as determined in good faith by the Issuers at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed, at any one time in the aggregate outstanding under this clause (17), $3,000,000; provided, that if any Investment pursuant to this clause (17) is made in any Person that is not the Issuers or a Subsidiary of the Issuers that is a Guarantor at the date of the making of such Investment and such Person becomes the Issuers or a Subsidiary of the Issuers that is a Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (17) for so long as such Person continues to be the Issuers or a Subsidiary of the Issuers that is a Guarantor;
(18) Investments of a Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuers or a Subsidiary of the Issuers that is a Guarantor in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(19) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(20) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Issuers or their Subsidiaries in the ordinary course of business;
(21) any Investment consisting of intercompany current liabilities in connection with the cash management, tax and accounting operations of the Issuers and their Subsidiaries;
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(22) any Investment in the form of a participation interest in the B. Riley Credit Agreement which the Issuer and its Subsidiaries are required to make pursuant to the Exar Facility, as in effect as of the Issue Date, so long as such Investment is immediately contributed to the Notes Parties and is not transferred to any Person other than a Notes Party;
(23) any Investments pursuant to clause (s) of the definition of “Asset Sale”;
(24) Investments resulting from pledges and deposits referred to in clauses (1), (4), (21), (34) and (35) of the definition of “Permitted Liens”;
(25) (i) accounts receivable, security deposits and prepayments arising, and trade credit granted, in the ordinary course of business and (ii) any securities received in satisfaction or partial satisfaction of defaulted accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; and
(26) Guarantees by the Issuers or any Subsidiary of the Issuers of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case, entered into by the Issuers or any Subsidiary of the Issuers in the ordinary course of business.
“Permitted Liens” means, with respect to any Person:
(1) (i) pledges and deposits and other Liens made in the ordinary course of business in compliance with the Federal Employers Liability Act or any other workers’ compensation, unemployment insurance and other social security laws or regulations and deposits securing liability to insurance carriers under insurance or self-insurance arrangements in respect of such obligations and (ii) pledges and deposits and other Liens securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to such Person;
(2) Liens imposed by law, such as landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, supplier’s, construction or other like Liens securing obligations of the Issuers or any Subsidiary that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings and in respect of which, if applicable, the Issuers or any Subsidiary of the Issuers, respectively, shall have set aside on its books reserves in accordance with GAAP;
(3) Liens for taxes, assessments or other governmental charges or levies not yet overdue by more than 30 days or that are being contested in good faith by appropriate proceedings;
(4) deposits and other Liens by the Issuers or any Subsidiary to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capitalized Lease Obligations), statutory obligations, surety and appeal bonds, performance and return of money bonds, bids, leases, government contracts, trade contracts, agreements with public utilities, and other obligations of a like nature (including letters of credit in lieu of any such bonds or to support the issuance thereof) incurred by such Person in the ordinary course of business, including those incurred to secure health, safety, insurance and environmental obligations in the ordinary course of business;
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(5) zoning restrictions, building codes and laws, survey exceptions, easements, trackage rights, leases (other than Capitalized Lease Obligations), licenses, special assessments, rights-of-way, covenants, conditions, restrictions and declarations on or with respect to the use of real property, servicing agreements, development agreements, site plan agreements and other similar encumbrances, in each case, incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and that, in the aggregate, do not interfere in any material respect with the ordinary conduct of the business of the Issuers or any Subsidiary of the Issuers;
(6)
(a) [Reserved];
(b) Liens securing Obligations in respect of Permitted Securitization Financing and pursuant to Sections 4.03(b)(i)(C), 4.03(b)(ii), 4.03(b)(xxxi) and 4.03(b)(xxxii); provided, that (x) Liens securing the ABL Facility and the B. Riley Credit Agreement shall be subject to the ABL Intercreditor Agreement and (y) Liens in respect of Permitted Securitization Financings shall extend only to the assets subject thereto and Equity Interests of Special Purpose Securitization Subsidiaries; and
(c) Liens securing Obligations in respect of Indebtedness permitted to be Incurred pursuant to clause (iv), (xiii) (or (xiv) to the extent it guarantees any such Indebtedness), (xvi), (xx) or (xxiii) of Section 4.03(b) (provided, that (i) in the case of clause (xx), such Lien does not extend to the property or assets of the Issuers or any Subsidiary of the Issuers other than a Subsidiary that is not an Issuer or a Guarantor, (ii) in the case of clause (iv), such Liens do not extend to any property or assets that are not being acquired, leased, constructed, repaired, replaced or improved with the proceeds of such Indebtedness being incurred pursuant to clause (iv) (or the indebtedness refinanced thereby) or sold in the applicable sale and lease back transaction and accessions and additions thereto, proceeds and products thereof, customary security deposits and related property; provided, that individual financings provided by one lender may be cross-collateralized to other financings provided by such lender (and its Affiliates) (it being understood that with respect to any Liens on the Collateral being incurred under this clause (c)(ii) to secure Refinancing Indebtedness, if Liens on the Collateral securing the Indebtedness being refinanced (if any) constituted Junior Lien Obligations, then any Liens on such Collateral being incurred under this clause (c)(ii) to secure Refinancing Indebtedness shall also constitute Junior Lien Obligations), (iii) in the case of clause (xvi), such Liens securing Indebtedness Incurred pursuant to clause (xvi) shall only be permitted under this clause (c) if such Liens secure Indebtedness not created or Incurred in connection with, or in contemplation of, the acquisition and only extend to the property or assets acquired in such acquisition (and accessions and additions thereto and proceeds and products thereof)), and (iv) in the case of clause (xxiii), it being understood that with respect to any Liens on the Collateral being incurred under this clause (c)(iv) to secure Refinancing Indebtedness, if Liens on the Collateral securing the Indebtedness being refinanced (if any) constituted Junior Lien Obligations, then any Liens on such Collateral being incurred under this clause (c)(iv) to secure Refinancing Indebtedness shall also constitute Junior Lien Obligations;
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(7) Liens existing on the Issue Date and described on Schedule 1.01(B) hereto (other than Liens described in clause (6)(b) of this definition of “Permitted Liens”);
(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary of the Issuers; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary of the Issuers; provided, further, however, that such Liens may not extend to any other property owned by the Issuers or any Subsidiary of the Issuers (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(9) Liens on assets or property at the time the Issuers or any Subsidiary of the Issuers acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuers or any Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other property owned by the Issuers or any Subsidiary of the Issuers (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(10) Liens securing Indebtedness or other obligations of the Issuers or a Subsidiary of the Issuers owing to the Issuers or another Subsidiary of the Issuers to the extent permitted to be Incurred in accordance with Section 4.03;
(11) Liens (i) on not more than $5,000,000 of deposits securing Hedging Obligations entered into for non-speculative purposes and (ii) on cash or cash equivalents securing Hedging Obligations in the ordinary course of business submitted for clearing in accordance with applicable requirements of law);
(12) Liens by the Issuers or any Subsidiary of the Issuers on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit, bank guarantee or bankers’ acceptance issued or created for the account of the Issuers or any Subsidiary of the Issuers in the ordinary course of business; provided that such Lien secures only the obligations of the Issuers or such Subsidiaries in respect of such letter of credit, bank guarantee or banker’s acceptance to the extent permitted under this Indenture;
(13) leases and subleases not constituting Capitalized Lease Obligations of real property not material to the conduct of any business line of the Issuers or any Subsidiary of the Issuers granted to others in the ordinary course of business that do not materially interfere with the ordinary conduct of the business of the Issuers or any Subsidiary of the Issuers;
(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Indenture;
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(15) Liens in favor of an Issuer or any Guarantor;
(16) [Reserved];
(17) Liens securing the Notes Obligations;
(18) licenses of intellectual property and software that are not material to the conduct of any of the business lines of the Issuers or any Subsidiary of the Issuers and the value of which does not constitute a material portion of the assets of the Issuers and their respective Subsidiaries, taken as a whole, and such license does not materially interfere with the ordinary course of conduct of the business of the Issuers or any of their Subsidiaries;
(19) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (11), (15), (24) and (32) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Indebtedness being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the applicable Indebtedness described under clauses (6), (7), (8), (9), (10), (11), (15), (24) and (32) of this definition at the time the original Lien became a Permitted Lien under this Indenture, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any underwriting discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(b) or (6)(c) of this definition, the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(b) or (6)(c)of this definition and not this clause (19) for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(b) or (6)(c) of this definition; provided, further, that any Lien securing any refinancing of any Indebtedness secured by a Lien referred to in clause (32) of this definition shall be a junior Lien subject to an Intercreditor Agreement in a form acceptable to the Agents and Required Lenders under, and as defined in, the Super Senior Facility to the extent such Super Senior Facility is in effect at such time or otherwise satisfactory to the Trustee and the Collateral Agent (acting at the direction of holders of a majority in principal amount of the outstanding Notes)); provided, further, that Liens securing the ABL Facility and the B. Riley Credit Agreement shall be subject to the ABL Intercreditor Agreement;
(20) non-consensual Liens (not incurred in connection with borrowed money) on equipment of any of the Company or any of its Subsidiaries granted in the ordinary course of business to any client of the Company or such Subsidiary at which such equipment is located;
(21) judgment and attachment Liens not giving rise to an Event of Default;
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(22) Liens arising out of consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(23) Liens that (i) are contractual rights of set-off (and related pledges) (a) relating to the establishment of depository relations with banks and other financial institutions not given in connection with the issuance of Indebtedness or (b) relating to pooled deposits, sweep accounts, reserve accounts or similar accounts of the Issuers or any Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuers or any Subsidiary, including with respect to credit card charge-backs and similar obligations, or (ii) relate to purchase orders and other agreements entered into with customers, suppliers or service providers of the Issuers or any Subsidiary (a) in the ordinary course of business or (b) in connection with implementation of business optimization programs;
(24) other Liens of the Issuers or any Subsidiary securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (24) that are at that time outstanding, exceed (i) in the event such Liens incurred under this clause (24) are subordinated to the Liens securing the Obligations, $15,000,000 or (ii) otherwise, $1,000,000;
(25) Liens on any amounts held by a trustee or agent under any indenture or other debt agreement issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture or other debt agreement pursuant to customary discharge, redemption or defeasance provisions;
(26) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code in effect in the State of New York or similar provisions in similar codes, statutes or laws in other jurisdictions on items in the course of collection, (ii) attaching to commodity trading accounts, other commodity brokerage accounts or securities incurred in the ordinary course of business, (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, (iv) encumbering customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes, (v) in respect of Third Party Funds or (vi) in favor of credit card companies pursuant to agreements therewith;
(27) Liens disclosed by the title insurance policies delivered on (with respect to any mortgages delivered on the Issue Date) or subsequent to the Issue Date and any replacement, extension or renewal of any such Lien; provided, that such replacement, extension or renewal Lien shall not cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal; provided,further, that the Indebtedness and other obligations secured by such replacement, extension or renewal Lien are permitted under this Indenture;
(28) any interest or title of a lessor or sublessor under any leases or subleases entered into by the Issuers or any Subsidiary in the ordinary course of business;
(29) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights;
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(30) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents under clause (4) of the definition of “Cash Equivalents”;
(31) Liens securing insurance premium financing arrangements; provided, that such Liens are limited to the applicable unearned insurance premiums;
(32) Liens on the Collateral securing Junior Lien Obligations (subject to a customary intercreditor agreement in a form acceptable to the Agents and Required Lenders under, and as defined in, the Super Senior Facility to the extent such Super Senior Facility is in effect at such time or otherwise satisfactory to the Trustee and the Collateral Agent (acting at the direction of holders of a majority in principal amount of the outstanding Notes)) in an aggregate amount not to exceed $3,000,000; provided, that the Notes are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien;
(33) Liens on non-Collateral assets in an aggregate amount not to exceed $5,000,000;
(34) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(35) Liens solely on any cash earnest money deposits made by the Issuers or any of their Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted under this Indenture;
(36) Liens to secure cash management services in the ordinary course of business; provided, that such Liens are not incurred in connection with, and do not secure, any borrowings or Indebtedness;
(37) Liens granted by (i) each Exar Originator in favor of Exar SPV and (ii) Exar SPV to the Exar Buyer, in each case, in Receivables Assets, pursuant to the Exar Facility, as in effect as of the Issue Date;
(38) Claims Administration Liens;
(39) Liens on cash and Cash Equivalents on deposit with lenders and affiliates of lenders securing obligations owing to such Persons under any treasury, depository, overdraft or other cash management services agreements or arrangements with the Issuers or any of their Subsidiaries; and
(40) in the case of real property that constitutes a leasehold interest, any Lien to which the fee simple interest (or any superior leasehold interest) is subject.
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“Permitted Securitization Financing” means one or more transactions pursuant to which (a) Securitization Assets or interests therein are sold or transferred to or financed by one or more Special Purpose Securitization Subsidiaries, and (b) such Special Purpose Securitization Subsidiaries finance (or refinance) their acquisition of such Securitization Assets or interests therein, or the financing thereof, by selling or borrowing against Securitization Assets, and any Hedging Obligations entered into in connection with such Securitization Assets; provided, that, recourse to the Issuers or any Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to the extent customary (as determined by the Issuers in good faith) for similar transactions in the applicable jurisdictions (including, to the extent applicable, in a manner consistent with the delivery of a “true sale”/”absolute transfer” opinion with respect to any transfer by the Issuers or any Subsidiary (other than a Special Purpose Securitization Subsidiary)), it being understood and agreed that such transactions may be either on-balance sheet or off-balance sheet arrangements; provided, further, that Permitted Securitization Financings shall be limited such that, at the time of incurrence of such securitization financings, the sum of the maximum amount of Indebtedness that could be outstanding at any time under the ABL Facility, the B. Riley Credit Agreement, the Exar Facility and all Permitted Securitization Financings then in effect shall not exceed 90% of the Receivables Assets as of the most recent date for which financial statements have been delivered to the Trustee immediately preceding the date on which such securitization financings is incurred.
“Person” means an individual, corporation, limited liability company, unlimited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.
“PPSA” means the Personal Property Security Act (Ontario) (or any successor statute) and the regulations thereunder; provided that if validity, perfection and effect of perfection and non-perfection and opposability of the Collateral Agent’s Lien in any Collateral are governed by the personal property security laws of any Canadian jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code of Quebec) of such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.
“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
“Prepayment Conditions” means “Payment Conditions”, as defined in the ABL Credit Agreement (as in effect on the date of such calculation; provided, that the prepayment condition shall be no more restrictive than the Prepayment Condition on the date hereof); provided, that, (i) for purposes of the calculation of the Fixed Charge Coverage Ratio such ratio shall be determined on a pro forma basis (including a pro forma application of the prepayment) and (ii) for purposes of the Excess Availability (as defined in the ABL Credit Agreement) any required period shall be with respect to the date of such prepayment.
For the avoidance of doubt, no Prepayment Conditions shall apply for purposes of this Indenture (including, without limitation, with respect to any prepayment hereunder and related deliverables to the Trustee) after the Discharge of the ABL Priority Obligations (in respect of the ABL Obligations existing on the Issue Date under the ABL Credit Agreement, and not any refinancing thereof). The Issuers shall provide, in connection with a voluntary redemption or mandatory repurchase by the Issuers under Section 3.01(a) and 4.19, as applicable, an Officer’s Certificate to the Trustee, certifying that the Prepayment Conditions have been met (upon which the Trustee may conclusively rely without further inquiry).
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“Pre-Opening Expenses” means, with respect to any fiscal period, the amount of expenses (other than interest expense) incurred with respect to facilities which are classified as “pre-opening expenses” (or any similar or equivalent caption) on the applicable financial statements of the Issuers and their respective Subsidiaries for such period, prepared in accordance with GAAP.
“Rating Agency” means (1) each of Moody’s and S&P (and their respective successors and assigns) and (2) if Moody’s or S&P ceases to rate the Notes for reasons outside of the Issuers’ control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Issuers or any direct or indirect parent of the Issuers as a replacement agency for Moody’s or &P, as the case may be.
“Receivables Assets” means accounts receivable (including any bills of exchange) from time to time originated, acquired or otherwise owned by the Issuers or any Subsidiary and all right, title and interests in and to (i) all security interests or liens securing payment of such accounts receivable, (ii) any obligations supporting such accounts receivable, including all guarantees, insurance and other agreements or arrangements supporting or securing payment of such accounts receivable, (iii) all books and records relating to such accounts receivables and the related obligor and (iv) all payments and collections with respect to, and other proceeds of, such accounts receivable.
“Record Date” has the meaning set forth in Paragraph 2 of the Note.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and their respective direct and indirect equityholders, partners, directors, officers, employees, agents (including sub-agents and co-agents), consultants, trustees, administrators, managers, members, attorneys, attorneys-in-fact, advisors and representatives of such Person and of such Person’s Affiliates.
“Restricted Cash” means (i) cash and Cash Equivalents held by Subsidiaries that would appear as “restricted” on a consolidated balance sheet of the Issuers or any of their Subsidiaries and (ii) cash and Cash Equivalents not available to be distributed to the Issuers or a Subsidiary (other than a Special Purpose Securitization Subsidiary) from issuers of Permitted Securitization Financings.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restructuring Plan” means the Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code, attached to the Confirmation Order as Exhibit G, and all exhibits, supplements, appendices, and schedules thereto, as may be altered, amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
“S&P” means S&P Global Ratings or any successor to the rating agency business thereof.
“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by the Issuers or a Subsidiary whereby the Issuers or such Subsidiary transfers such property to a Person and the Issuers or such Subsidiary leases it from such Person, other than leases between the Issuers and a Subsidiary or between Subsidiaries.
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“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the federal government administering the Securities Act.
“Secured Indebtedness” means any Consolidated Total Indebtedness secured by a Lien.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same shall be in effect from time to time.
“Securitization Assets” means any of the following assets (or interests therein) from time to time originated, acquired or otherwise owned by the Issuers or any Subsidiary or in which the Issuers or any Subsidiary has any rights or interests, in each case, without regard to where such assets or interests are located: (1) Receivables Assets and (2) any Equity Interests of any Special Purpose Securitization Subsidiary or any Subsidiary of a Special Purpose Securitization Subsidiary and any rights under any limited liability company agreement, trust agreement, shareholders agreement, organizational or formation documents or other agreement entered into in furtherance of the organization of such entity.
“Security Agreement” means the Pledge and Security Agreement, dated as of the date hereof, made by each Notes Party in favor of the Collateral Agent, for the benefit of the Notes Secured Parties securing the Notes Obligations in accordance with the terms thereof.
“Security Documents” means the Security Agreement, the Canadian Security Agreement and the security agreements, pledge agreements, intercreditor agreements, collateral assignments and mortgages, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral in favor of the Collateral Agent for the benefit of itself and the other Notes Secured Parties as contemplated by this Indenture and the other Notes Documents.
“Senior Secured Leverage Calculation Date” has the meaning assigned in the “Senior Secured Leverage Ratio” definition.
“Senior Secured Leverage Ratio” means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Subsidiaries constituting Notes Obligations, Obligations under the Super Senior Facility, Obligations in respect of the ABL Facility and Obligations under the B. Riley Credit Agreement, in each case as of such date of calculation (determined on a consolidated basis in accordance with GAAP), less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Subsidiaries and held by such Person and its Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which financial statements have been delivered to the Trustee immediately preceding such date on which such additional Indebtedness is Incurred. In the event that the Issuers or any Subsidiary Incurs, repays, repurchases or redeems any Indebtedness subsequent to the commencement of the period for which the Senior Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Senior Secured Leverage Ratio is made (the “Senior Secured Leverage Calculation Date”), then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock as if the same had occurred at the beginning of the applicable four-quarter period.
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For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Issuers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Issuers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuers as set forth in an Officer’s Certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided that for all purposes of determining EBITDA hereunder adjustments for operating expense reductions and other operating improvements, synergies or cost savings shall not be more than 20% of EBITDA for the most recently ended four fiscal quarter period (calculated prior to giving effect to such capped adjustments (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Senior Secured Leverage Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuers may designate.
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For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight-line basis during such period, taking into account any seasonality adjustments determined by the Issuers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
“Significant Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the Issuers within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
“Special Purpose Securitization Subsidiary” means (i) a direct or indirect Subsidiary of the Issuers established in connection with a Permitted Securitization Financing for the acquisition of Securitization Assets or interests therein, and which is organized in a manner (as determined by the Issuers in good faith) intended to reduce the likelihood that it would be substantively consolidated with the Issuers or any of its Subsidiaries (other than Special Purpose Securitization Subsidiaries) in the event the Issuers or any such Subsidiary becomes subject to a proceeding under the Bankruptcy Code (or other Bankruptcy Law) and (ii) any subsidiary of a Special Purpose Securitization Subsidiary.
“Specified Insurance Event” means the contribution to a Subsidiary of the Company of the net proceeds received by ETI or any of its affiliates arising out of or in connection with the claims made under that certain litigation pending in the Superior Court of the State of Delaware captioned Exela Technologies, Inc. v. Columbia Casualty Co., et al., C.A. No. N24C-04-162 SKR CCLD.
“Specified Professional Fees” means the professional fees and expenses of Ropes & Gray LLP, as counsel to certain holders and Cleary Gottlieb Steen & Hamilton LLP in connection with the Transactions to the extent incurred in connection with the Transactions.
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“Spot Rate” means, on any date, as determined by the Issuers, the spot selling rate posted by Reuters on its website for the sale of the applicable currency for U.S. Dollars at approximately 11:00 a.m., New York City time, on such date; provided, that if, for any reason, no such spot rate is being quoted, the spot selling rate shall be determined by reference to such publicly available services for displaying exchange rates as may be reasonably selected by the Issuers, or, in the event no such service is selected, such spot selling rate shall instead be the rate reasonably determined by the Issuers as the spot rate of exchange in the market where its foreign currency exchange operations in respect of the applicable currency are then being conducted, at or about 11:00 a.m., New York City time, on the applicable date for the purchase of the relevant currency for delivery two Business Days later; provided, that, the Issuers may obtain such spot rate from another financial institution designated by the Issuers if the Issuers do not have a spot rate for any such currency as of the date of determination.
“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable.
“Subordinated Indebtedness” means (a) with respect to an Issuer, any Indebtedness of such Issuer which is by its terms subordinated in right of payment to the Notes, (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.
“Subsidiary” means, with respect to any Person, (1) any corporation, association, unlimited liability company or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity. Unless otherwise indicated in this Indenture or the context requires otherwise, all references to Subsidiaries shall mean Subsidiaries of the Issuers.
“Super Senior Agent” means Ankura Trust Company, LLC, as administrative agent and collateral agent under the Super Senior Facility or any Person who acts as agent under the Super Senior Facility.
“Super Senior Facility” means the financing agreement dated as of the date hereof among the Issuers, the guarantors party thereto, the lenders from time-to-time party thereto and the Super Senior Agent, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time.
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“Super Senior Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the Issuers, the Guarantors, the Super Senior Agent, the Trustee and the Collateral Agent, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time.
“Super Senior Obligations” means the Obligations under the Super Senior Facility.
“Suspension Period” means the period in time between a Covenant Suspension Event and the related Reversion Date.
“Tax Distributions” means any distributions described in Section 4.04(b)(xxiii).
“Tax Funding Agreement” means that certain Tax Funding Agreement, dated as of the date hereof, by and among the Exela Technologies BPA, LLC and each of its debtor affiliates, Exela Technologies BPA, LLC, in its capacity as agent, Parent, ETI., GP 3XCV LLC and XCV-STS, LLC.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Third Party Funds” means any accounts or funds, or any portion thereof, received by the Issuers or any of their Subsidiaries as agent on behalf of third parties in accordance with a written agreement that imposes a duty upon the Issuers or one or more of their Subsidiaries to collect and remit those funds to such third parties.
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
“Total Assets” means the total consolidated assets of the Issuers and their respective Subsidiaries, as shown on the most recent balance sheet of the Issuers, calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.
“Transactions” means the transactions under or pursuant to or contemplated by the Restructuring Plan, including the Restructuring Transactions (as defined in the Restructuring Plan).
“Trust Officer” means:
(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject, and
(2) who shall have direct responsibility for the administration of this Indenture.
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“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
“Uniform Commercial Code” or “UCC” means the New York Uniform Commercial Code (or other applicable UCC) as in effect from time to time.
“Unsecured Cash Pool” has the meaning specified in the Restructuring Plan.
“U.S. Government Obligations” means securities that are:
(1) direct obligations of the United States of America denominated in U.S. dollars for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.
“Voting Stock” of any Person as of any date means the Equity Interests of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
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Section 1.02. Other Definitions.
| Term | Section |
|---|---|
| $ | Section 1.03(j) |
| Affiliate<br> Transaction | Section 4.07(a) |
| Agent<br> Members | Appendix |
| Asset<br> Sale Offer | Section 4.06(b) |
| Change<br> of Control Offer | Section 4.08(b) |
| Clearstream | Appendix |
| Co-Issuer | Preamble |
| Company | Preamble |
| covenant<br> defeasance option | Section 8.01(b) |
| Covenant<br> Suspension Event | Section 4.20 |
| Custodian | Section 6.01(k) |
| Debt<br> Proceeds Offer | Section 4.18(a) |
| Debt<br> Proceeds Offer Amount | Section 4.18(a) |
| Deemed<br> Date | Section 4.03(c)(iii) |
| Euroclear | Appendix |
| Event<br> of Default | Section 6.01 |
| Excess<br> Cash Flow Offer | Section 4.19(a) |
| Excess<br> Cash Flow Offer Amount | Section 4.19(a) |
| Fixed<br> Charge Calculation Date | Other |
| Global<br> Notes | Appendix |
| Guaranteed<br> Obligations | Section 12.01(a) |
| Increased<br> Amount | Section 4.12(c) |
| Initial<br> Notes | Preamble |
| Issuers | Preamble |
| legal<br> defeasance option | Section 8.01(b) |
| Notes | Preamble |
| Notice<br> of Default | Section 6.01(k) |
| Offer<br> Period | Section 4.06(f) |
| OFFSHORE<br> TRANSACTION | Appendix |
| Paying<br> Agent | Section 2.04(a) |
| Permitted<br> Jurisdiction | Section 5.01(a)(vi) |
| primary<br> obligations | Other |
| primary<br> obligor | Other |
| pro<br> forma event | Other |
| QUALIFIED<br> INSTITUTIONAL BUYER | Appendix |
| Refinancing<br> Indebtedness | Section 4.03(b)(xv) |
| Registrar | Section 2.04(a) |
| Regulation<br> S Global Notes | Appendix |
| Regulation<br> S Permanent Global Note | Appendix |
| Regulation<br> S Temporary Global Note | Appendix |
| Reporting<br> Entity | Section 4.02(b) |
| Restricted<br> Payments | Section 4.04(a) |
| Reversion<br> Date | Section 4.20 |
| Rule 144A<br> Global Notes | Appendix |
| Secured<br> Leverage Calculation Date | Other |
| SECURITIES<br> ACT | Appendix |
| Senior<br> Secured Leverage Calculation Date | Other |
| Successor<br> Co-Issuer | Section 5.01(b)(i) |
| Successor<br> Company | Section 5.01(a)(i) |
| Successor<br> Guarantor | Section 5.01(b)(i) |
| Suspended<br> Covenants | Section 4.20 |
| Transfer | Section 5.01(b)(ii) |
| Trustee | Other |
| U.S.<br> dollars | Section 1.03(j) |
| U.S.<br> PERSON | Appendix |
| UNITED<br> STATES | Appendix |
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Section 1.03. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) “or” is not exclusive;
(d) “including” means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;
(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP;
(h) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;
(i) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP; and
(j) “$” and “U.S. dollars” each refer to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts.
Section 1.04. No Incorporation by Reference of Trust Indenture Act. This Indenture is not qualified under the TIA, and the TIA shall not apply to or in any way govern the terms of this Indenture. As a result, no provisions of the TIA are incorporated into this Indenture unless expressly incorporated pursuant to this Indenture.
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Section 1.05. Exchange Rates. Principal, interest, reimbursement obligations, fees, and all other amounts payable under this Indenture and the other Notes Documents to the Trustee and Collateral Agent and the other Notes Secured Parties shall be payable in U.S. dollars. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Indenture and the other Notes Documents shall be made in U.S. dollars. For the purpose of such calculations, comparisons, measurements or determinations, amounts or proceeds denominated in other currencies shall be converted to the Equivalent Amount of U.S. dollars on the date of calculation, comparison, measurement or determination. Unless expressly provided otherwise, where a reference is made to a dollar amount, the amount is to be considered as the amount in U.S. dollars and, therefore, each other currency shall be converted into the Equivalent Amount thereof in U.S. dollars.
Section 1.06. Quebec Interpretation. For purposes of the interpretation or construction of this Indenture pursuant to the laws of the Province of Quebec, for purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Notes Document) and for all other purposes pursuant to which the interpretation or construction of any other Notes Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, a "reservation of ownership", “prior claim” and a “resolutory clause,” (f) all references to filing, registering or recording under the PPSA or the UCC shall be deemed to include publication under the Civil Code of Québec, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary,” (k) “construction liens” shall be deemed to include “legal hypothecs in favour of persons having taken part in the construction or renovation of an immovable”, (l) “joint and several” shall be deemed to include “solidary” and “jointly and severally” shall be deemed to include “solidarily” (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “legal title” shall be deemed to include “holding title on behalf of an owner as mandatary or prête-nom”, (p) “easement” shall be deemed to include “servitude”, (q) “priority” shall be deemed to include “prior claim” or "rank", as applicable, (r) “survey” shall be deemed to include “certificate of location and plan”, (s) “fee simple title” and "fee title" shall be deemed to include “right of ownership”, (t) “foreclosure” shall be deemed to include “the exercise of a hypothecary right”, (u) “leasehold interest” shall be deemed to include “valid rights resulting from a lease”, (v) “lease” for personal or movable property shall be deemed to include a “contract of leasing (crédit-bail)”, (x) “deposit account” shall include a “financial account” as defined in Article 2713.6 of the Civil Code of Québec, and (y) “guarantee” and “guarantor” shall include “suretyship” and “surety”, respectively.
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Article II
THENOTES
Section 2.01. Amount of Notes. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $200,988,002 .
(a) The Issuers may from time to time after the Issue Date issue Additional Notes under this Indenture in a principal amount not to exceed (i) the ETI Funding Obligation, so long as the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03(b)(xxxi), the Liens with respect thereto are permitted by Section 4.12, and such Additional Notes are issued to ETI and either (1) sold for cash at no less than par or (2) granted on a dollar-for-dollar basis in exchange for the payment of the ETI Funding Obligation and are otherwise issued in compliance with the other applicable provisions of this Indenture, and (ii) $10,000,000, so long as the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03(b)(xxxii), the Liens with respect thereto are permitted by Section 4.12, and such Additional Notes are otherwise issued in compliance with the other applicable provisions of this Indenture. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.07, 2.08, 2.09, 3.09, 4.06(f), 4.08(c), 4.18(c), 4.19(b) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors of each Issuer and (b) (i) set forth or determined in the manner provided in an Officer’s Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(i) the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture;
(ii) the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes shall accrue; and
(iii) if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu of those set forth in Section 2.2 of Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof.
(b) If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee and the Collateral Agent at or prior to the delivery of the Officer’s Certificate or an indenture supplemental hereto setting forth the terms of the Additional Notes.
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(c) The Initial Notes and any Additional Notes shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided, that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number, if applicable.
Section 2.02. Form and Dating. Provisions relating to the Initial Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustee’s certificate of authentication and (ii) any Additional Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuers or any Guarantor is subject, if any, or usage (provided, that any such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons and in minimum denominations of $1.00 and any integral multiples of $1.00 in excess thereof.
Section 2.03. Execution and Authentication. The Trustee shall authenticate and make available for delivery upon a written order of the Issuers signed by one Officer of each Issuer (a) Initial Notes for original issue on the date hereof in an aggregate principal amount of $200,988,002 and (b) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of separate Note certificates to be authenticated, the principal amount of each of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, whether the Notes are to be Initial Notes or Additional Notes, the registered holder of each of the Notes and delivery instructions. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $1.00 and integral multiples of $1.00 in excess thereof.
One Officer shall sign the Notes for each of the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee may appoint one or more authenticating agents reasonably acceptable to the Company to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuers. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
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Section 2.04. Registrar and Paying Agent.
(a) The Issuers shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the “Registrar”) and (ii) an office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuers may have one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrars. The term “Paying Agent” includes the Paying Agent and any additional paying agents. The Issuers initially appoint the Trustee as Registrar, Paying Agent and the Notes Custodian with respect to the Global Notes.
(b) The Issuers may enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee in writing of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically organized Subsidiaries may act as Paying Agent or Registrar.
(c) The Issuers may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor Registrar or Paying Agent, as the case may be, as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuers and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
Section 2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the principal of and interest on any Note, the Issuers shall deposit with each Paying Agent (or if the Company or a Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes and shall notify the Trustee of any default by the Issuers in making any such payment. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.
Section 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of holders. If the Trustee is not the Registrar, the Issuers shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of holders.
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Section 2.07. Transfer and Exchange. The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrar’s request. The Issuers may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Issuers shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or transfers or exchanges of any Notes for a period of 15 days before a selection of Notes to be redeemed or between a record date and the related payment date.
Prior to the due presentation for registration of transfer of any Note, the Notes Parties, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Notes Parties, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.
Any holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the holder of such Global Note (or its agent) or (b) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.
All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
None of the Trustee, Registrar or Paying Agent shall have any responsibility for any actions taken or not taken by the Depository.
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Section 2.08. Replacement Notes. If a mutilated Note is surrendered to the Registrar or if the holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall, upon receipt of a written order of the Issuers, authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the holder (a) satisfies the Issuers and the Trustee within a reasonable time after such holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuers and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Issuers and the Trustee. If required by the Trustee or the Issuers, such holder shall furnish an indemnity bond sufficient in the judgment of the Trustee, with respect to the Trustee, and the Issuers, with respect to the Issuers, to protect the Issuers, the Trustee, the Paying Agent and the Registrar, as applicable, from any loss or liability that any of them may suffer if a Note is replaced and subsequently presented or claimed for payment. The Issuers and the Trustee may charge the holder for their expenses in replacing a Note (including without limitation, attorneys’ fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Issuers.
The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
Section 2.09. Outstanding Notes. Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. Subject to Section 14.06, a Note does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Note.
If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuers receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and no Paying Agent is prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
Section 2.10. Cancellation. The Issuers at any time may deliver Notes to the Trustee for cancellation. Notwithstanding the above, and without limiting the generality of Section 2.09 and Section 14.06, the Issuers shall promptly deliver to the Trustee for cancellation all Notes that the Issuers or any of their Subsidiaries have redeemed, purchased or otherwise acquired, along with any additional items or deliverables that the Trustee may require to effectuate such cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. Upon receipt of a written order of the Issuers, the Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures. The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
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Section 2.11. Defaulted Interest. If the Issuers default in a payment of interest on the Notes, the Issuers shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner, in each case at the rate provided in the Notes plus 2.00%. The Issuers may pay the defaulted interest to the Persons who are holders on a subsequent special record date. The Issuers shall fix or cause to be fixed any such special record date and payment date, which specified record date shall not be less than 10 days prior to the payment date for such defaulted interest, and shall promptly mail or cause to be mailed, or delivered electronically if held by the Depository, to each affected holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. The Issuers shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on the Notes and the date of the proposed payment, and at the same time the Issuers shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest, or make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when so deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.11.
Section 2.12. CUSIP Numbers, ISINs, etc. The Issuers in issuing the Notes may use CUSIP numbers, ISINs and “Common Code” numbers (if then generally in use), and the Trustee shall use any such CUSIP numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuers shall advise the Trustee of any change in any such CUSIP numbers, ISINs and “Common Code” numbers.
Section 2.13. Maturity. The Notes shall mature on July 15, 2030.
Section 2.14. Calculation of Principal Amount of Notes. The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the holders of a specified percentage of the principal amount of all the Notes, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes then outstanding, the holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of all Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 14.06. Any calculation of the interest or changes in interest made pursuant to this Indenture or the Notes shall be made by the Company and delivered to the Trustee pursuant to an Officer’s Certificate.
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Section 2.15. Canadian Interest Act Disclosure. For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid under any Notes Document is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Indenture are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Indenture.
Article III
REDEMPTION
Section 3.01. Optional Redemption. The Notes may be redeemed, in whole or from time to time in part, subject to, if applicable, satisfaction of the Prepayment Conditions and the conditions and at the redemption price set forth in Paragraph 5 of the form of Note set forth in Exhibit A hereto, which is hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
Section 3.02. Mandatory Redemption. The Issuers shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuers may be required to offer to purchase Notes as described under Sections 4.06, 4.08, 4.18 and 4.19. For the avoidance of doubt, other than as set forth in Section 4.19 hereof, the Issuers shall not be required to comply with the Prepayment Conditions in order to effect a mandatory repurchase offer in accordance with this Indenture. The Issuers may from time to time, in their sole discretion, acquire the Notes by means other than redemption, whether by tender offer, open market purchases, privately negotiated transactions or otherwise, in accordance with applicable securities laws.
Section 3.03. Applicability of Article. Redemption of Notes at the election of the Issuers or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article III.
Section 3.04. Notices to Trustee. If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Paragraph 5 of the Note, the Issuers shall notify the Trustee in an Officer’s Certificate of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price and (v) if applicable, supporting calculations in respect of the satisfaction of the Prepayment Conditions. The Issuers shall give notice to the Trustee provided for in this Section 3.04 at least 10 days but not more than 30 days before a redemption date if the redemption is a redemption pursuant to Paragraph 5 of the Note. The Issuers may also include a request in such Officer’s Certificate that the Trustee give the notice of redemption in the Issuers’ name and at its expense and setting forth the information to be stated in such notice as provided in Section 3.06. Any such notice may be canceled if written notice from the Issuers of such cancellation is actually received by the Trustee on the Business Day immediately prior to notice of such redemption being mailed, or delivered electronically if held by the Depository, to any holder or otherwise delivered in accordance with the applicable procedures of the Depository and shall thereby be void and of no effect. The Issuers shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 3.05.
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Section 3.05. Selection of Notes to Be Redeemed. In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed (and the Issuers shall notify the Trustee of any such listing) and/or the relevant depository, or if the Notes are not so listed, on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in such manner that complies with the requirements of the Depository, if applicable); provided that no Notes of $1.00 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $1.00. Notes and portions of them the Trustee selects shall be in amounts of $1.00 or integral multiples of $1.00 in excess thereof. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuers promptly of the Notes or portions of Notes to be redeemed.
Section 3.06. Notice of Optional Redemption.
(a) At least 10 but not more than 30 days before a redemption date pursuant to Paragraph 5 of the Note, the Issuers shall mail or cause to be mailed by first-class mail at its registered address, or otherwise deliver in accordance with the procedures of the Depository, a notice of redemption to each holder whose Notes are to be redeemed (with a copy to the Trustee), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article VIII.
Any such notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price, plus accrued and unpaid interest, if any;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;
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(vi) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, ISIN and/or “Common Code” number, if any, printed on the Notes being redeemed;
(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common Code” number, if any, listed in such notice or printed on the Notes;
(ix) if the redemption is subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers’ discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed (provided, that no such redemption date may be delayed such that it would occur more than 60 days after the delivery of the notice of redemption); and
(x) at the Issuers’ option, that the payment of the redemption price and performance of the Issuers’ obligations with respect to such redemption may be performed by another Person.
Notice of any redemption upon any corporate transaction or other event may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers’ discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
(b) At the Issuers’ request, the Trustee shall deliver the notice of redemption in the Issuers’ name and at the Issuers’ expense. In such event, the Issuers shall notify the Trustee of such request at least three (3) Business Days (or such shorter period as is acceptable to the Trustee) prior to the date such notice is to be provided to holders.
Section 3.07. Effect of Notice of Redemption. Once notice of redemption is mailed or otherwise delivered in accordance with Section 3.06, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice, except as provided in Paragraph 5 of the Note or Section 3.06(a). Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued and unpaid interest, if any, to, but excluding, the redemption date; provided, however, that if the redemption date is after a regular Record Date and on or prior to the next Interest Payment Date, the accrued interest shall be payable to the holder of the redeemed Notes registered on the relevant Record Date. Failure to give notice or any defect in the notice to any holder shall not affect the validity of the notice to any other holder.
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Section 3.08. Deposit of Redemption Price. With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if the Company or a Subsidiary of the Company is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued and unpaid interest, if any, on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuers to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuers have deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest, if any, to but excluding the redemption date, on, the Notes or portions thereof to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture.
Section 3.09. Notes Redeemed in Part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. Upon surrender and cancellation of a Note that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the holder (at the Issuers’ expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered and cancelled (or if the Note is a Global Note, an adjustment shall be made to the “Schedule of Increases or Decreases in Global Note” attached thereto).
Article IV
COVENANTS
Section 4.01. Payment of Notes. The Issuers shall promptly pay the principal of and interest on the Notes in cash on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds as of 12:00 p.m. New York City time money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the holders on that date pursuant to the terms of this Indenture.
The Issuers shall pay interest on overdue principal at the rate specified therefor in the Notes plus 2.00%, and it shall pay interest on overdue installments of interest at the same rate borne by the Notes plus 2.00%, to the extent lawful (the foregoing, “Additional Interest”).
Additional Interest and interest payable upon redemption, repurchase or maturity shall be payable in cash.
Section 4.02. Reports and Other Information.
(a) For so long as any Notes are outstanding, the Issuers shall deliver to the Trustee and each holder a copy of all of the information and reports referred to below:
(i) within 15 days after the time period specified in the SEC’s rules and regulations for non-accelerated filers, annual reports of the Reporting Entity (as defined below) for such fiscal year containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC;
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(ii) within 15 days after the time period specified in the SEC’s rules and regulations for non-accelerated filers, quarterly reports of the Reporting Entity for such fiscal quarter containing the information that would have been required to be contained in a quarterly report on Form 10-Q (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC; and
(iii) within 15 days after the time period specified in the SEC’s rules and regulations for filing current reports on Form 8-K, current reports of the Reporting Entity containing substantially all of the information that would be required to be filed in a current report on Form 8-K under the Exchange Act on the Issue Date pursuant to Sections 1, 2 and 4, Items 5.01, 5.02 (a), (b) and (c) and Item 9.01(a) and (b) (only to the extent relating to any of the foregoing) of Form 8-K if the Reporting Entity had been a reporting company under the Exchange Act.
Any financial statements provided pursuant to this Section 4.02(a)(i) and Section 4.01(a)(ii) shall also include a statement of cash flows.
In addition to providing such information to the Trustee, the Issuers shall make available to the holders, prospective investors, securities analysts, and the Collateral Agent the information required to be provided pursuant to the foregoing clauses (i), (ii) and (iii), by posting such information to the Company’s website (or the website of any of the Company’s parent companies, including the Reporting Entity) or on IntraLinks or any comparable online data system or website to which each of the foregoing has access. If at any time the Company or any direct or indirect parent of the Company has made a good faith determination to file a registration statement with the SEC with respect to an initial public offering of such entity’s Capital Stock, the Issuers will not be required to disclose any information or take any actions that, in the good faith view of the Company, would violate the securities laws or the SEC’s “gun jumping” rules.
Notwithstanding the foregoing, (A) neither the Company nor another Reporting Entity will be required to deliver any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain financial information required by Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X or include any exhibits or certifications required by Form 10-K, Form 10-Q or Form 8-K (or any successor or comparable forms) or related rules under Regulation S-K, and (C) such reports shall not be required to present compensation or beneficial ownership information.
(b) The financial statements, information and other documents required to be provided as described in this Section 4.02 may be those of (i) the Company and its Subsidiaries (on a combined basis) or (ii) any direct or indirect parent of the Company (any such entity, a “Reporting Entity”); provided, that, if the financial information so delivered relates to such direct or indirect parent of the Company, the same is accompanied by consolidating financial statements (including statements of cash flows) that explain in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Company and its Subsidiaries on a standalone basis, on the other hand, for the applicable period. Notwithstanding any of the foregoing herein, to the extent any of the Company’s parent companies is subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act, such information described in this paragraph shall be included in the Form 10-K and Form 10-Q reports of the Reporting Entity described in Section 4.02(a)(i) and (ii) filed with the SEC.
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(c) In addition, the Issuers shall, for so long as any Notes remain outstanding during any period when neither the Company nor another Reporting Entity is subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to and does furnish the SEC with the information required pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Notwithstanding the foregoing, the Issuers will be deemed to have delivered such reports and information referred to in this Section 4.02 to the holders, prospective investors, securities analysts, the Collateral Agent and the Trustee for all purposes of this Indenture if the Company or another Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, except as required by the last sentence of Section 4.02(b), the requirements of this Section 4.02 shall be deemed satisfied and the Issuers will be deemed to have delivered such reports and information referred to this Section 4.02 to the Trustee, the Collateral Agent, holders, prospective investors, and securities analysts for all purposes of this Indenture by the posting of reports and information that would be required to be provided on the Company’s website (or that of any of the Company’s parent companies, including the Reporting Entity). The Trustee shall have no obligation to monitor whether the Issuers post such reports, information and documents on the Company’s website (or that of any of the Company’s parent companies, including the Reporting Entity) or the SEC’s EDGAR service, or collect any such information from the Company’s (or any of the Company’s parent companies) website or the SEC’s EDGAR service.
(e) The Company or the Reporting Entity will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Issue Date, for all holders of the Notes, prospective investors and securities analysts to discuss such financial information no later than ten Business Days after the distribution of such information required by clauses (i) or (ii) of Section 4.02(a) and, prior to the date of each such conference call, will announce the time and date of such conference call and either include all information necessary to access the call or inform holders of the Notes, prospective investors and securities analysts how they can obtain such information, including, without limitation, the applicable password or login information (if applicable).
(f) Delivery of reports, information and documents to the Trustee and the Collateral Agent pursuant to this Section 4.02 is for informational purposes only, and the information and the Trustee’s and the Collateral Agent’s receipt of the foregoing shall not constitute actual or constructive notice of any information contained therein, or determinable from information contained therein, including the Issuers’ compliance with any of its covenants thereunder (as to which the Trustee and the Collateral Agent, as applicable, is entitled to rely exclusively on an Officer’s Certificate). Neither the Trustee nor the Collateral Agent is under any duty to examine such reports, information or documents to ensure compliance with the provision of this Indenture or to ascertain the correctness or otherwise of the information or the statements contained therein. In addition, the Trustee and the Collateral Agent shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated hereunder, and the Trustee and the Collateral Agent shall have no duty to participate in or monitor any conference calls.
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Section 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
(a) (i) The Company shall not, and shall not permit any of the Company’s Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Subsidiaries (other than any Subsidiary that is a Guarantor) to issue any shares of Preferred Stock; provided, however, that the Issuers and any Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock in an aggregate amount not to exceed $25,000,000 at any time outstanding if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which financial statements have been delivered to the Trustee immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a proforma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further, that any Subsidiary that is not an Issuer or a Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or any Subsidiary of (A) the Initial Notes (excluding any Additional Notes), (B) Permitted Securitization Financings, plus (C) up to an additional aggregate principal amount of $5,000,000, so long as the Senior Secured Leverage Ratio for the most recently ended four full fiscal quarters for which financial statements have been delivered to the Trustee, determined on a pro forma basis, does not exceed 3.75 to 1.00;
(ii) Indebtedness of the Company under (A) the Super Senior Facility in an aggregate principal amount at any time not to exceed $56,000,000, (B)(I) the ABL Facility in an aggregate principal amount outstanding at any time not to exceed the lesser of (x) $150,000,000 and (y) the Borrowing Base (as defined in the ABL Credit Agreement as in effect as of the date hereof) at such time and (II) the B. Riley Credit Agreement in an aggregate principal amount outstanding at any time (after giving effect to the transactions occurring on the Effective Date) not to exceed $22,500,000; provided that such Indebtedness under the B. Riley Credit Agreement shall not be permitted to remain outstanding after March 31, 2027, and (C) the Unsecured Cash Pool.
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(iii) Indebtedness existing on the Issue Date and described on Schedule 4.03(b)(iii) hereto (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));
(iv) (1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any Subsidiary, Disqualified Stock issued by the Company or any Subsidiary and Preferred Stock issued by any Subsidiary to finance (whether prior to or within 180 days after) the acquisition, lease, construction, repair, replacement or improvement by such Person of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv)(1), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $35,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount); and (2) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending or other funds made available by suppliers in connection with any sale and leaseback arrangements not in violation of this Indenture;
(v) Indebtedness Incurred by the Company or any Subsidiary of the Company owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Company or any of the Company’s Subsidiaries, respectively, pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the ordinary course of business or consistent with industry practices;
(vi) Indebtedness arising from agreements of the Company or any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition, in each case, to the extent such obligation or transaction is permitted by this Indenture;
(vii) Indebtedness of the Company to any of its Subsidiaries; provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries) any such Indebtedness owed to a Subsidiary that is not an Issuer or a Subsidiary that is a Guarantor is subordinated in right of payment to the obligations of the Issuers under the Notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Subsidiary of the Company or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (vii);
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(viii) shares of Preferred Stock of a Subsidiary issued to the Company or another Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Subsidiary that holds such shares of Preferred Stock of another Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness of any Subsidiary to the Company or any other Subsidiary; provided that if a Subsidiary that is a Guarantor incurs such Indebtedness to a Subsidiary that is not an Issuer or a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Subsidiary; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Subsidiary of the Company holding such Indebtedness ceasing to be a Subsidiary of the Company or any other subsequent transfer of any such Indebtedness (except to the Company or another Subsidiary of the Company or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations by a Person that are not incurred for speculative purposes but (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness of such Person that is permitted by the terms of this Indenture to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk of such Person with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk of such Person with respect to any commodity purchases or sales and, in each case, extensions or replacements thereof;
(xi) Indebtedness of the Company and its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Company and the Subsidiaries, respectively, as conducted in accordance with good and prudent business industry practices and otherwise as permitted by this Indenture;
(xii) [reserved];
(xiii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of any Subsidiary, in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xiii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $25,000,000 (plus, in the case of any Refinancing Indebtedness the Additional Refinancing Amount);
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(xiv) any guarantee by the Company or any Subsidiary of Indebtedness or other obligations of the Company or any Subsidiary so long as the Incurrence of such Indebtedness or other obligations by the Company or such Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of the Company or such Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Company, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11 solely to the extent Section 4.11 is applicable;
(xv) the Incurrence by the Issuers or any of their Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under clauses (i)(C), (ii)(A), (ii)(B)(II), (iii), (iv)(1), (xiii), (xv), (xvi), (xx) and (xxiii) of this Section 4.03(b) in an aggregate amount not to exceed the then-outstanding principal amount (or, if applicable, the liquidation preference face amount of the Indebtedness, Disqualified Stock or Preferred Stock being so refunded, refinanced or defeased), together with any accrued interest and any related fees, expenses and premiums (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;
(B) to the extent such Refinancing Indebtedness refinances (a) Indebtedness subordinated in right of payment to the Notes or a Guarantee, as applicable, such Refinancing Indebtedness is subordinated in rights of payment to the Notes or the Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(C) shall not have any of the Company or any Subsidiary of the Company as an obligor thereon except to the extent such Person was an obligor on the Indebtedness being extended, refinanced or modified, and shall not be secured by any Lien on any asset other than the assets that secured such Indebtedness being extended, refinanced or modified or, if applicable, shall be unsecured;
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(D) shall not (if secured) have a Lien priority greater than such Indebtedness being extended, refinanced or modified; and
(E) shall not include Indebtedness (including any guarantees) of a Subsidiary that is not an Issuer or a Guarantor that refinances Indebtedness of an Issuer or a Subsidiary that is a Guarantor;
(xvi) Indebtedness, Disqualified Stock or Preferred Stock of (A) the Company or any Subsidiary incurred to finance an acquisition or (B) Persons that are acquired by the Company or any Subsidiary or merged, consolidated or amalgamated with or into the Company or any Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to such acquisition or merger, consolidation or amalgamation, either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio of the Company would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
providedfurther, that the aggregate principal amount of Indebtedness under this clause (xvi) (solely if incurred in contemplation of such acquisition or merger, consolidation or amalgamation), together with any Refinancing Indebtedness in respect thereof incurred under clause (xv) hereof, shall not exceed $10,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(xvii) [reserved];
(xviii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business (provided, that such Indebtedness is extinguished within five Business Days of its Incurrence) or other cash management services in the ordinary course of business;
(xix) Indebtedness of the Company or any Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xx) Indebtedness of any Subsidiary that is not an Issuer or a Guarantor; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), together with Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) hereof, does not exceed $4,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
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(xxi) Indebtedness of the Company or any Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xxii) Indebtedness of the Company and its Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of business;
(xxiii) Indebtedness, Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company and any Subsidiary; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xxiii), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xxiii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) hereof, does not exceed $10,000,000;
(xxiv) to the extent constituting Indebtedness of the Company and the Subsidiaries, all premium (if any), defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness otherwise permitted to be incurred pursuant to this Section 4.03;
(xxv) Indebtedness in respect of Obligations of the Company or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services for such Person; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(xxvi) [reserved].
(xxvii) deposits raised by any Subsidiary that is subject to state and/or federal banking regulations that constitute Indebtedness owing to such depositor;
(xxviii) Indebtedness consisting of earn outs and obligations of the Company or any Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions or any Permitted Investment by such Person;
(xxix) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(xxx) obligations in respect of Cash Management Agreements;
(xxxi) Indebtedness consisting of Additional Notes issued in connection with the ETI Funding Obligation; and
(xxxii) Indebtedness consisting of Additional Notes issued other than in connection with the ETI Funding Obligation, in an amount not to exceed $10,000,000.
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(c) For purposes of determining compliance with this Section 4.03:
(i) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxxii) of Section 4.03(b) above or is entitled to be Incurred or issued pursuant to Section 4.03(a), then the Company may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.03; provided, that (i) the Initial Notes shall be incurred under clause (i)(A) of Section 4.03(b) above, (ii) the Super Senior Facility issued on the Issue Date shall be incurred under clause (ii)(A) of Section 4.03(b) above, (iii) the ABL Facility and the B. Riley Credit Agreement shall be incurred under clause (ii)(B) of Section 4.03(b) above, (iv) any Permitted Securitization Financing shall be incurred under clause (i)(B) of Section 4.03(b), (v) Indebtedness incurred in connection with the ETI Funding Obligation shall be incurred under clause (xxxi) of Section 4.03(b) above, (vi) the Unsecured Cash Pool shall be incurred under clause (ii)(D) of Section 4.03(b) above and (vii) Indebtedness incurred in connection through the issuance of Additional Notes, other than those issued pursuant to Section 4.03(b)(xxxi) above, shall be incurred under clause (xxxii) of Section 4.03(b) above, and in each case, may not be reclassified;
(ii) at the time of Incurrence, classification or reclassification, the Company will be entitled to divide and classify an item of Indebtedness in more than one of the categories of Indebtedness described in Section 4.03(a) or clauses (i) through (xxx) of Section 4.03(b) (or any portion thereof) without giving pro forma effect to the Indebtedness Incurred, classified or reclassified pursuant to any other clause or paragraph of this Section 4.03 (or any portion thereof) when calculating the amount of Indebtedness that may be Incurred, classified or reclassified pursuant to any such clause or paragraph (or any portion thereof) at such time; provided, that, for the avoidance of doubt, it is understood and agreed that for any Indebtedness Incurred, classified or reclassified in reliance on a category of permitted Indebtedness involving the calculation of a ratio, such Indebtedness will be included in the calculation of such ratio at the time of such Incurrence, classification or reclassification; and
(iii) in connection with (x) the Incurrence or issuance, as applicable, of revolving loan Indebtedness under this Section 4.03 or (y) any commitment to Incur or issue Indebtedness, Disqualified Stock or Preferred Stock under this Section 4.03, the Company or applicable Subsidiary may designate such Incurrence or issuance as having occurred on the date of first Incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual Incurrence or issuance will be deemed for all purposes under this Indenture to have been Incurred or issued on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Senior Secured Leverage Ratio and EBITDA (and all such calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro formabasis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith).
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Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of the refinancing Indebtedness does not exceed the principal amount of the Indebtedness being refinanced.
Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that the Company and its Subsidiaries may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which the respective Indebtedness is denominated that is in effect on the date of the refinancing.
(d) All Indebtedness (other than the Notes and the Super Senior Facility) owed by the Notes Parties to an Affiliate of the Notes Parties that is not a Guarantor (or any Guarantee by the Notes Parties of Indebtedness (other than the Notes and the Super Senior Facility) owed to an Affiliate of the Notes Parties that is not a Guarantor) shall be subordinated to the Notes Obligations, including for the avoidance of doubt, the Issuers’ and the Guarantors’ obligations under the Notes and the Guarantees, respectively.
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Section 4.04. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of the Company’s Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of any of the Company’s or any of its Subsidiaries’ Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Company (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of the Company; or (B) dividends or distributions by a Subsidiary, so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Subsidiary that is not a Wholly Owned Subsidiary, the Company or a Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities), respectively;
(ii) purchase or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent of the Company;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of an Issuer or any Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement, (B) [reserved] and (C) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b));
(iv) make any Restricted Investment; or
(v) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, at maturity thereof or otherwise, any Indebtedness (other than the Notes and the Super Senior Facility) owed to any Affiliate of the Company that is not an Issuer, a Subsidiary of the Company or a Guarantor.
(all such payments and other actions set forth in clauses (i) through (v) above being collectively referred to as “Restricted Payments”).
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such redemption, as applicable, such payment would have complied with the provisions of this Indenture;
(ii) [reserved];
(iii) the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of an Issuer or Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Subordinated Indebtedness of such Issuer or Guarantor, which is Incurred in accordance with Section 4.03 so long as:
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(A) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),
(B) such Indebtedness is subordinated to the Notes or the related Guarantee of such Guarantor, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(C) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Notes then outstanding, and
(D) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date;
(iv) [reserved];
(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Company or any Subsidiary issued or incurred in accordance with Section 4.03;
(vi) [reserved].
(vii) [reserved];
(viii) [reserved];
(ix) [reserved];
(x) [reserved];
(xi) [reserved];
(xii) [reserved];
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(xiii) any Restricted Payment in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries; provided that the allocation of such fees and expenses attributable to the ownership or operation of the Company and its Subsidiaries shall be determined in the aggregate based on the proportion of revenues of the Company and its Subsidiaries to the revenues of all subsidiaries of such direct or indirect parent of the Company;
(xiv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(xv) [reserved];
(xvi) [reserved];
(xvii) the repurchase, redemption or other acquisition or retirement for value of any Preferred Stock or any Subordinated Indebtedness pursuant to the provisions similar to those described in Sections 4.06 and 4.08; provided, that all Notes tendered by holders of the Notes in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;
(xviii) payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of the Company and the Subsidiaries, taken as a whole, that complies with Section 5.01; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, the Issuers shall have made a Change of Control Offer (if required by this Indenture) and that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, redeemed or acquired for value;
(xix) any Restricted Payment used to fund amounts owed by and attributable to the Company in connection with the Transactions and the payment of fees and expenses Incurred by and attributable to the Company in connection with the Transactions or owed by the Company, in each case to the extent permitted by Section 4.07;
(xx) [reserved];
(xxi) any Restricted Payment used to fund the payment of professional fees and expenses of Loeb & Loeb LLP in connection with the Transactions and the Specified Professional Fees; and
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(xxii) any Person may make distributions to minority shareholders of any Subsidiary that is acquired pursuant to an acquisition or Investment permitted under this Indenture pursuant to appraisal or dissenters’ rights with respect to shares of such Subsidiary held by such shareholders;
(xxiii) with respect to any taxable period (or portion thereof) for which the Company and any of its Subsidiaries are members (or are disregarded from a member) of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which Parent is the common parent, dividends or distributions by the Company or such applicable Subsidiaries, as the case may be, to such direct or indirect parent of the Company in an amount not to exceed the lesser of (i) the sum of the amount of the relevant U.S. federal, state, local or foreign income Taxes reduced by any such income Taxes directly paid or withheld at the level of the Company or such Subsidiaries or (ii) the amount of any U.S. federal, state, local or non-U.S. income taxes that the Issuers and/or their Subsidiaries, as applicable, would have paid for such taxable period (taking into account prior year losses) had the Issuers and/or their Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; provided that distributions pursuant to this clause shall not exceed the actual Tax liability of Parent of the Company in respect of the relevant U.S. federal, state, local or non-U.S. income Taxes;
provided,however, that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by the Company) of such property.
Notwithstanding the foregoing or any other term of this Indenture, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, invest, transfer, dispose, sell or otherwise convey any Material Property, a material portion of the assets constituting Collateral or Intellectual Property to any Affiliate of the Company other than the Company or any Guarantor provided, however, that the foregoing shall not prohibit non-exclusive intellectual property licenses (i) set forth on Schedule 4.04(b) hereto as of the date hereof and (ii) on and after the date hereof consistent with Schedule 4.04(b) or otherwise in the ordinary course of business consistent with past practice.
(c) The Company, in its sole discretion, may classify any Restricted Payment or Permitted Investment as being made in part under one of the clauses or subclauses of this Section 4.04 or under one of the clauses or subclauses of the definition of “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 4.04 to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (9), (11), (16), (18) and (21) of the definition of “Permitted Investments.”
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Section 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company shall not, and shall not permit any of its Subsidiaries, to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Subsidiary to:
(a) (i) pay dividends or make any other distributions to the Company or any Subsidiary (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to the Company or any Subsidiary of the Company;
(b) make loans or advances to the Company or any Subsidiary of the Company; or
(c) sell, lease or transfer any of its properties or assets to the Company or any Subsidiary of the Company;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) (A) contractual encumbrances or restrictions in effect on the Issue Date and described in Schedule 4.05(c)(1)(A) hereto and (B) contractual encumbrances or restrictions pursuant to the Super Senior Facility and related documents, the ABL Facility and related documents, the B. Riley Credit Agreement and related documents and, in each case, any similar contractual encumbrances or restrictions or any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments to the extent not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing;
(2) this Indenture, the Notes, the Security Documents, the Intercreditor Agreements or the Guarantees;
(3) applicable law or any applicable rule, regulation or order;
(4) any agreement or other instrument of a Person acquired by the Company or any Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(5) contracts or agreements for the sale of assets, including any restriction with respect to a Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Subsidiary;
(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 4.03 and Section 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
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(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in Section 4.05(c) above on the property so acquired;
(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business or consistent with industry norm;
(11) in the case of Section 4.05(c) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any such lease, license (including without limitation, licenses of intellectual property ) or other contracts;
(12) any encumbrances or restrictions of a Special Purpose Securitization Subsidiary effected in connection with a Permitted Securitization Financing; provided, however, that such restrictions apply only to such Special Purpose Securitization Subsidiary;
(13) other Indebtedness, Disqualified Stock or Preferred Stock (a) of the Company or any Subsidiary that is an Issuer, a Guarantor or a Foreign Subsidiary or (b) of any Subsidiary that is not an Issuer, a Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuers’ ability to make anticipated principal or interest payments on the Notes (as determined in good faith by the Company), provided that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date pursuant to Section 4.03;
(14) any Restricted Investment not prohibited by Section 4.04 and any Permitted Investment; or
(15) any encumbrances or restrictions of the type referred to in Section 4.05(a), (b) or (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (14) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Company or a Subsidiary to other Indebtedness Incurred by the Company or any such Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
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Section 4.06. Asset Sales.
(a) The Company shall not, and shall not permit any of its Subsidiaries to, cause or make an Asset Sale, unless the Company or such Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Company) of the assets sold or otherwise disposed of, and at least 75% of the consideration therefor received by the Company or such Subsidiary is in the form of cash or Cash Equivalents; provided that the amount of:
(i) [reserved],
(ii) any notes or other obligations or other securities or assets received by the Company or such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received),
(iii) Indebtedness of any Subsidiary that is no longer a Subsidiary as a result of such Asset Sale, to the extent that the Company and each other Subsidiary are released from any guarantee of payment of such Indebtedness in connection with the Asset Sale,
(iv) [reserved], and
(v) any Designated Non-cash Consideration received by the Company or such Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by the Company), taken together with all other Designated Non-cash Consideration received pursuant to this Section 4.06(a)(v) that is at that time outstanding, not to exceed $30,000,000 (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),
shall in each case be deemed to be Cash Equivalents for the purposes of Section 4.06(a).
(b) Any Net Proceeds from any Asset Sale, Casualty Event or Specified Insurance Event that are not applied to the repayment of any Indebtedness pursuant to the Intercreditor Agreements shall constitute “Excess Proceeds.” Within ten (10) Business Days of the first date in which the aggregate amount of Excess Proceeds exceeds $15,000,000, the Issuers shall make an offer, subject to the Intercreditor Agreements, to all holders of Notes (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes, that is at least $1.00 and an integral multiple of $1.00 in excess thereof that may be purchased out of the aggregate amount of the Excess Proceeds as of the date of the Asset Sale Offer (provided, that such offer amount shall be increased by the amount of Net Proceeds from any Asset Sale, Casualty Event or Specified Insurance Event received prior to the expiration of such Asset Sale Offer) at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuers will commence any such Asset Sale Offer by mailing, or delivering electronically if held by the Depository, the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Net Proceeds from the Asset Sale, Casualty Event or Specified Insurance Event, the Issuers may use any remaining Net Proceeds from the Asset Sale, Casualty Event or Specified Insurance Event for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof exceeds the amount of the Net Proceeds from the Asset Sale, Casualty Event or Specified Insurance Event, the Issuers shall select the Notes to be purchased in the manner described in Section 4.06(f) or otherwise in accordance with the applicable procedures of the Depository. After completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero as of the date of the expiration of the offer period with respect to such Asset Sale Offer.
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(c) [Reserved]
(d) [Reserved].
(e) The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuers will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.
(f) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, the Issuers shall deliver to the Trustee an Officer’s Certificate as to (i) the amount of the Net Proceeds from the Asset Sale, Casualty Event or Specified Insurance Event, (ii) the allocation of the proceeds or Net Proceeds from the Asset Sale, Casualty Event or Specified Insurance Event pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On the Asset Sale Offer purchase date, the Issuers, or any Person acting on their behalf, shall irrevocably deposit with the Trustee or with the applicable Paying Agent (or, if the Company or a Subsidiary is acting as the Paying Agent, segregate and hold in trust) an amount equal to the Asset Sale Offer purchase price to be paid in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the “Offer Period”), the Issuers or any such Subsidiary or any entity acting on behalf of the foregoing, in each case, conducting the Asset Sale Offer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted thereby in such Asset Sale Offer. The Trustee (or the applicable Paying Agent, if not the Trustee) shall, on the date of purchase, deliver payment to each tendering holder in the amount of the purchase price by written instructions provided by the Issuers to the Paying Agent. Holders electing to have a Note purchased shall be required to surrender such Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date, a facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes are tendered pursuant to an Asset Sale Offer than the Issuers are required to purchase, selection of such Notes for purchase shall be made by the Issuers in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuers shall notify the Trustee in writing of any such listing) and/or relevant depository, or if such Notes are not so listed, on a pro rata basis to the extent practicable, by lot or by such other method as the Issuers deem appropriate (and in such manner as complies with the requirements and customary procedures of the Depository, if applicable). Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
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(g) Notices of an Asset Sale Offer shall be mailed by the Issuers by first class mail, postage prepaid, or delivered electronically if held by the Depository, at least 30 but not more than 60 days before the purchase date to each holder of Notes at such holder’s registered address, with a copy to the Trustee. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.
Section 4.07. Transactions with Affiliates.
(a) The Company shall not and shall not permit any of its Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Company (other than payments under the Notes and the Super Senior Facility) (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $5,000,000, unless:
(i) such Affiliate Transaction is in the ordinary course of business and on terms that are not materially less favorable to the Company or the relevant Subsidiary than those that could have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person; and
(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25,000,000, the Company delivers to the Trustee (i) a resolution adopted in good faith by a majority of disinterested directors of the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions), approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) above or (ii) if there are no directors on the Board of Directors of the Parent (or in the committee thereof comprised of disinterested directors tasked with the review of such transactions) that are disinterested with respect to such transaction(s), a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view.
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(b) The provisions of Section 4.07(a) shall not apply to the following:
(i) transactions between or among the Company and/or any of its Subsidiaries (or an entity that becomes a Subsidiary as a result of such transaction) in the ordinary course of business and any merger, consolidation or amalgamation of the Company and any direct parent of the Company; provided, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Company and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;
(ii) sales and contributions of Receivables Assets by (A) each Exar Originator to Exar SPV and (B) Exar SPV to the Exar Buyer pursuant to the Exar Facility as in effect as of the Issue Date;
(iii) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company, any Subsidiary, or any direct or indirect parent of the Company in the ordinary course of business, provided that that the payment of any such fees or reimbursements to, on behalf of, or for the account of, shareholders of the Parent, Affiliates of the Parent or any of their respective Affiliates (other than the Parent and its Subsidiaries) shall not be permitted other than payment or reimbursement of fees and expenses incurred by Ernst & Young in connection with Ernst & Young’s determination or re-determination (if any) of the Transaction Tax Liability (as defined in the Restructuring Plan), and provided,further, that no such payments shall be permitted under this clause (iii) to any of ETI or its Affiliates (other than the Parent and its Subsidiaries) for, or in respect of, or as reimbursement for, any consultants;
(iv) transactions in which the Company or any Subsidiary of the Company, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);
(v) payments of compensation in the ordinary course of business to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of the Company in good faith;
(vi) issuance, transfer or assignment of loans in accordance with the terms of the Super Senior Facility and performance of the obligations thereunder and issuance, transfer or assignment of Notes in accordance with the terms of this Indenture and performance of the Notes Obligations hereunder;
(vii) the existence of, or the performance by the Company or any Subsidiary of the Company of its obligations under the terms of, any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Company or any Subsidiary of the Company of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the holders of the Notes in any material respect than the original transaction, agreement or arrangement as in effect on the Issue Date, as determined in good faith by the Issuers;
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(viii) the execution of the Transactions;
(ix) (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, which are fair to the Company and the Subsidiaries of the Company in the reasonable determination of the Board of Directors of the Company or (B) transactions with joint ventures entered into in the ordinary course of business;
(x) transactions pursuant to any Permitted Securitization Financing;
(xi) the issuance of Equity Interests (other than Disqualified Stock) of the Company to any Person;
(xii) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Company or any direct or indirect parent of the Company or of a Subsidiary of the Company, as appropriate, in good faith;
(xiii) the entering into of any tax sharing agreement or arrangement that complies with Section 4.04(b)(xxiii) and the performance under any such agreement or arrangement;
(xiv) any contribution to the capital of the Company;
(xv) transactions permitted by, and complying with, Section 5.01;
(xvi) transactions between the Company or any of its Subsidiaries and any Person that would constitute an Affiliate Transaction solely because a director of such other Person is also a director of the Company or any direct or indirect parent of the Company; provided, however, that such director abstains from voting as a director of the Company or such direct or indirect parent, as the case may be, on any matter involving such other Person;
(xvii) [reserved];
(xviii) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
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(xix) [reserved];
(xx) [reserved];
(xxi) intercompany transactions for the purpose of improving the consolidated tax efficiency of the Company and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;
(xxii) [reserved]; and
(xxiii) any agreements or arrangements between a third party and an Affiliate of the Company that are acquired or assumed by the Company or any Subsidiary in connection with an acquisition or merger of such third party (or assets of such third party) by or with the Company or any Subsidiary; provided that (A) such acquisition or merger is permitted under this Indenture and (B) such agreements or arrangements are undertaken in good faith and not entered into in contemplation of such acquisition or merger or otherwise for the purpose of avoiding the restrictions imposed by this Section 4.07.
(c) Notwithstanding the foregoing or anything in this Indenture to the contrary, with respect to any Asset Sale or other sale, lease, transfer or other disposition of any property or asset with a Fair Market Value of or involving aggregate consideration in excess of $5,000,000 to an Affiliate (other than to the Company or a Subsidiary of the Company), whether in a single transaction or series of related transactions, such Asset Sale or other disposition (A) shall be on terms that are not less favorable to the Company or Subsidiary of the Company than those that could have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person, and the transferor shall have received a letter from an Independent Financial Advisor hired by a majority of the disinterested directors of the Board of Directors of the Company stating that such transaction is fair to the transferor from a financial point of view, (B) shall be made for no less than Fair Market Value, and (C) 100% of the consideration therefor shall be in cash.
Section 4.08. Change of Control.
(a) Upon the occurrence of a Change of Control, each holder shall have the right to require the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), in accordance with the terms contemplated in this Section 4.08; provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase any Notes pursuant to this Section 4.08 in the event that it has previously or concurrently elected to redeem all Notes in accordance with Article III. In the event that at the time of such Change of Control, the terms of any Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this Section 4.08, then prior to the mailing (or other delivery) of the notice to holders provided for in Section 4.08(b) but in any event within 30 days following any Change of Control, the Issuers shall: (i) repay in full such Bank Indebtedness or, if doing so will allow the purchase of Notes, offer to repay in full such Bank Indebtedness and repay the Bank Indebtedness of each lender and/or noteholder who has accepted such offer; or (ii) obtain the requisite consent under the agreements governing such Bank Indebtedness to permit the repurchase of the Notes as provided for in Section 4.08(b).
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(b) Within 30 days following any Change of Control, except to the extent that the Issuers have exercised their right to redeem the Notes in accordance with Article III, the Issuers shall mail to each holder’s registered address, or deliver electronically if held by the Depository, with a copy to the Trustee a notice (a “Change of Control Offer”) stating:
(i) that a Change of Control has occurred and that such holder has the right to require the Issuers to repurchase such holder’s Notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest on the relevant Interest Payment Date);
(ii) the circumstances and relevant facts and financial information regarding such Change of Control;
(iii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or delivered electronically); and
(iv) the instructions determined by the Issuers, consistent with this Section 4.08, that a holder must follow in order to have its Notes purchased.
(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. The holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date a facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered for purchase by the holder and a statement that such holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
(d) On the purchase date, all Notes purchased by the Issuers under this shall be delivered to the Trustee for cancellation, and the Issuers shall pay the purchase price plus accrued and unpaid interest, if any, to the holders entitled thereto.
(e) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(f) Notwithstanding the provisions of this Section 4.08, the Issuers shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Issuers and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
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(g) Notes repurchased by the Issuers pursuant to a Change of Control Offer will have the status of Notes issued but not outstanding or will be retired and canceled at the option of the Issuers. Notes purchased by a third party pursuant to the preceding clause (f) will have the status of Notes issued and outstanding.
(h) At the time the Issuers deliver Notes to the Trustee which are to be accepted for purchase, the Issuers shall also deliver an Officer’s Certificate stating that such Notes are to be accepted by the Issuers pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering holder.
(i) Prior to any Change of Control Offer, the Issuers shall deliver to the Trustee an Officer’s Certificate stating that all conditions precedent contained herein to the right of the Issuers to make such offer have been complied with.
(j) The Issuers shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.08. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 by virtue thereof.
(k) If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuers, or any third party making a Change of Control Offer in lieu of the Company as described above, purchase all of the Notes validly tendered and not withdrawn by such holders, the Issuers or such third party will have the right, upon not less than 30 nor more than 60 days’ prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to, but excluding, the date of redemption. Any such redemption shall be effected pursuant to Article III.
Section 4.09. Compliance Certificate. The Issuers shall deliver to the Trustee and the Collateral Agent within 120 days after the end of each fiscal year of the Company, beginning with the fiscal year ending in December 2025, an Officer’s Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuers they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If any Officer of the Issuers does, the certificate shall describe the Default, its status and what action the Issuers are taking or propose to take with respect thereto. The Issuers also shall deliver to the Trustee and the Collateral Agent, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Issuers are taking or propose to take in respect thereof. Except with respect to the Trustee’s receipt of payments of principal and interest on the Notes and any Default or Event of Default information contained in the Officer’s Certificate delivered to it pursuant to this Section 4.09, the Trustee and the Collateral Agent shall have no duty to review, ascertain or confirm the Issuers’ compliance with or the breach of any representation, warranty or covenant made in this Indenture, the Notes or any Security Documents.
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Section 4.10. Further Instruments and Acts. Upon request of the Trustee, the Issuers and the Guarantors shall, and shall cause their respective Subsidiaries to, execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
Section 4.11. Future Guarantors. The Company shall cause each Subsidiary that is not an Excluded Subsidiary to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C hereto pursuant to which such Subsidiary will guarantee the Issuers’ Obligations under the Notes, this Indenture and joinders to or new Security Documents and take all actions required by the Security Documents to perfect the Liens created thereunder and, if required by the Intercreditor Agreements, execute and deliver a joinder to the Intercreditor Agreements.
Section 4.12. Liens.
(a) The Company shall not, and shall not permit any of the Company’s Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of the Company or such Subsidiary securing Indebtedness of the Company or any of the Company’s Subsidiaries.
(b) For purposes of determining compliance with this Section 4.12, (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 4.12(a) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 4.12(a), the Company may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to only include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 4.12(a) and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to Section 4.12(a) without giving pro forma effect to such item (or portion thereof) when calculating the amount of Liens or Indebtedness that may be Incurred pursuant to any other clause or paragraph (or portion thereof) at such time. In addition, with respect to any revolving loan Indebtedness or commitment to Incur Indebtedness that is designated to be Incurred on any Deemed Date pursuant to Section 4.03(c)(iii), any Lien that does or that shall secure such Indebtedness may also be designated by the Company or any Subsidiary to be Incurred on such Deemed Date and, in such event, any related subsequent actual Incurrence of such Lien shall be deemed for all purposes under this Indenture to be Incurred on such prior date, including for purposes of calculating usage of any “Permitted Lien” (and any calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith).
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(c) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of the Company, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “Indebtedness.”
Section 4.13. After-Acquired Property. Upon the acquisition by an Issuer or any Guarantor of any After-Acquired Property, or upon any additional Subsidiary of the Company becoming a Guarantor, such Issuer or such Subsidiary shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and other Security Documents as shall be reasonably necessary to vest in the Collateral Agent a perfected security interest, subject only to Permitted Liens and Liens permitted under Section 4.12, in such After-Acquired Property and to have such After-Acquired Property (but subject to the limitations as described in Article XI, the Security Documents and the Intercreditor Agreements) added to the Collateral (or in the case of a Guarantor all of its assets that constitute After-Acquired Property), and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.
Section 4.14. Maintenance of Office or Agency; Fiscal Year.
(a) The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee as set forth in Section 14.02.
(b) The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuers of their obligation to maintain an office or agency for such purposes. The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
(c) The Issuers hereby designate the Corporate Trust Office of the Trustee or its agent as such office or agency of the Issuers in accordance with Section 2.04.
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(d) The fiscal year of the Issuers shall be the twelve months ending on December 31, of each year, and the Issuers may not change their fiscal year.
Section 4.15. [Reserved]
Section 4.16. Liability Management Transactions.
(a) The Issuers shall not, and shall not permit any of their Subsidiaries to, enter into any Liability Management Transaction; provided, that Issuers and/or their Subsidiaries shall be permitted to enter into a Liability Management Transaction so long as each holder of Notes is offered a bona fide right to participate in such Liability Management Transaction, on a pro rata basis, on not less than five (5) Business Days’ notice prior to the deadline established by Issuers to elect to participate in such Liability Management Transaction.
(b) None of the Issuers nor any Guarantor shall, and shall not permit any of their Subsidiaries to, directly or indirectly, offer or pay or provide, or cause to be offered or paid or provided, any fee, cash or otherwise, opportunity, benefit, or other consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes, the Security Documents or the Intercreditor Agreements, or any Guarantee of the Notes, unless such fee, opportunity, benefit or other consideration is offered to be paid or provided to all holders of the Notes and is paid or provided to all holders of the Notes.
Section 4.17. Rating. Within one year of the Issue Date, the Issuers shall use their reasonable best efforts to obtain a rating on the Notes from either Moody’s or S&P, and shall use their reasonable best efforts to maintain the ratings with such rating agency for so long as any Notes remain outstanding.
Section 4.18. Offer to Purchase by Application of Debt Proceeds.
(a) If the Notes Parties or any Subsidiary thereof receives Net Proceeds from a Debt Issuance, then the Issuers will be required to make an offer (such offer, the “Debt Proceeds Offer”) to all holders to purchase the maximum principal amount of Notes that may be purchased with 100% of such Net Proceeds (the “Debt Proceeds Offer Amount”), subject to the Intercreditor Agreements. The offer price for the Notes in any such Debt Proceeds Offer shall be an amount in cash equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any, on the Notes to be repurchased to, but excluding, the date of purchase, subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date falling on or prior to the date of purchase.
(b) Within 15 Business Days following receipt of any Net Proceeds described in Section 4.18(a), the Issuers will send a notice (or otherwise transmit a notice in accordance with the depositary’s applicable policies and procedures) to each holder and the Trustee describing the Debt Proceeds Offer and the amount of such Net Proceeds and offering to purchase the Notes on the date specified in the notice (which shall be a Business Day not earlier than 10 days nor later than 60 days from the date the notice is sent). If sent in a manner provided for in this Indenture, the notice shall be conclusively presumed to have been given, whether or not a holder receives such notice. In any case, failure to give notice or any defect in such notice to any holder shall not affect the validity of the proceedings for the repurchase of any other Notes. Upon the expiration of the period for which the Debt Proceeds Offer remains open, the Issuers or any such Subsidiary or any entity acting on behalf of the foregoing, in each case, conducting the Debt Proceeds Offer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted thereby in such Debt Proceeds Offer. The Trustee (or the applicable Paying Agent, if not the Trustee) shall, on the date of purchase, deliver payment to each tendering holder in the amount of the purchase price by written instructions provided by Issuers to the Paying Agent. Holders electing to have a Note purchased shall be required to surrender such Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date, a facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased.
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(c) To the extent holders properly tender Notes in an amount that is less than the Debt Proceeds Offer Amount, the Issuers may use any remaining Debt Proceeds Offer Amount for general corporate purposes, subject to other covenants contained in this Indenture. To the extent holders properly tender Notes in an amount exceeding the Debt Proceeds Offer Amount, selection of Notes for purchase shall be made by the Issuers in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuers shall notify the Trustee in writing of any such listing) and/or the relevant depository, or if such Notes are not so listed, on a pro rata basis to the extent practicable, by lot or by such other method as the Issuers deem appropriate (and in such manner as complies with the requirements and customary procedures of the Depository, if applicable). Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
(d) The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Debt Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.18, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.18 by virtue thereof.
(e) For the avoidance of doubt, the application of the Net Proceeds from a Debt Issuance in accordance with the above provisions or otherwise shall not constitute a waiver of any Default or Event of Default resulting from the incurrence of Indebtedness in violation of Section 4.03 of this Indenture.
Section 4.19. Offers to Repurchase by Application of Excess Cash Flow.
(a) The Issuers shall determine the amount of Excess Cash Flow and provide the Trustee and the holders with an Officer’s Certificate including (i) the calculations thereof and (ii) if applicable, supporting calculations in respect of the satisfaction of the Prepayment Conditions as of the date of such Officer’s Certificate contemporaneously with the delivery of corresponding reports described in Section 4.02(a)(i), and in any event not later than 120 days after the end of each fiscal year, commencing with the fiscal year ending December 31, 2026. If the Issuers have Excess Cash Flow for any fiscal year commencing with the fiscal year ending December 31, 2026 , then the Issuers, subject to the Prepayment Conditions will be required to make an offer (such offer, the “Excess Cash Flow Offer”) to all holders to purchase the maximum principal amount of Notes that may be purchased with 25% of such Excess Cash Flow for such fiscal year (the “Excess Cash Flow Offer Amount”), which Excess Cash Flow Offer Amount shall be reduced by the amount of any payment made pursuant to an excess cash flow sweep obligation applied to the repayment of the Super Senior Facility during such fiscal year. The offer price for the Notes in any such Excess Cash Flow Offer shall be an amount in cash equal to 100.0% of the principal amount thereof, plus accrued and unpaid interest, if any, on the Notes to be repurchased to, but excluding, the date of purchase, subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date falling on or prior to the date of purchase. Notwithstanding anything to the contrary herein, to the extent applicable, if the Issuers have not satisfied the Prepayment Conditions as of the date of delivery of the Officer’s Certificate herein, the Issuers shall not be required to make any offer to redeem to the holders.
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(b) Within 130 days after the end of any fiscal year for which an Excess Cash Flow Offer is required to be made, the Issuers will send a notice (or otherwise transmit a notice in accordance with the depositary’s applicable policies and procedures) to each holder and the Trustee describing the Excess Cash Flow Offer and offering to purchase the Notes on the date specified in the notice (which shall be a Business Day not earlier than 30 days nor later than 60 days from the date the notice is sent). If sent in a manner provided for in this Indenture, the notice shall be conclusively presumed to have been given, whether or not a holder receives such notice. In any case, failure to give notice or any defect in such notice to any holder shall not affect the validity of the proceedings for the repurchase of any other Notes. Upon the expiration of the period for which the Excess Cash Flow Offer remains open, the Issuers or any such Subsidiary or any entity acting on behalf of the foregoing, in each case, conducting the Excess Cash Flow Offer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted thereby in such Excess Cash Flow Offer. The Trustee (or the applicable Paying Agent, if not the Trustee) shall, on the date of purchase, deliver payment to each tendering holder in the amount of the purchase price by written instructions provided to the Paying Agent. Holders electing to have a Note purchased shall be required to surrender such Note, with an appropriate form duly completed, to the Issuers at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuers receive not later than one Business Day prior to the purchase date, a facsimile transmission or certified letter setting forth the name of the holder, the principal amount of the Note which was delivered by the holder for purchase and a statement that such holder is withdrawing his election to have such Note purchased. To the extent that the aggregate amount of Notes tendered pursuant to an Excess Cash Flow Offer is less than the Excess Cash Flow Offer Amount, the Issuers may use any remaining Excess Cash Flow Offer Amount for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by holders thereof exceeds the Excess Cash Flow Offer Amount, selection of Notes for purchase shall be made by the Issuers in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuers shall notify the Trustee in writing of any such listing) and/or relevant depository, or if such Notes are not so listed, on a pro rata basis to the extent practicable, by lot or by such other method as the Issuers deem appropriate (and in such manner as complies with the requirements and customary procedures of the Depository, if applicable). Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
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(c) With respect to each Excess Cash Flow Offer, the Issuers shall be entitled to reduce the applicable Excess Cash Flow Offer Amount with respect thereto by an amount equal to the sum of, in each case, during the period with respect to which such Excess Cash Flow was being computed, (x) the aggregate repurchase price paid for any Notes theretofore repurchased by the Issuers in the open market or pursuant to tender offers (and cancelled by the Issuers), (y) the aggregate redemption price paid for any Notes theretofore redeemed pursuant to one or more optional redemptions, and (z) any reduction in the principal amount of Indebtedness that is senior to the Notes of such Person and its Subsidiaries resulting from principal payments made thereon during such period (provided, that (i) such Indebtedness has been incurred in accordance with this Indenture and (ii) to the extent such Indebtedness is revolving in nature, such payment shall have been accompanied by a concurrent corresponding permanent reduction in the revolving commitment relating thereto); provided, that the portion of such prepayment allocated to any such other Indebtedness shall not exceed the amount required to be allocated to such other Indebtedness pursuant to the terms thereof, and the remaining amount, if any, shall be allocated to the Notes in accordance with the terms hereof. Notwithstanding anything to the contrary in the immediately preceding sentence, the Issuers shall not be entitled to reduce the applicable Excess Cash Flow Offer Amount by the aggregate repurchase price of any Notes theretofore repurchased by the Issuers pursuant to any Asset Sale Offer, Change of Control Offer or Debt Proceeds Offer. Upon completion of each Excess Cash Flow Offer, the Excess Cash Flow Offer Amount will be reset at zero.
(d) The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Excess Cash Flow Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.19, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.19 by virtue thereof.
Section 4.20. Suspension of Certain Covenants. If on any date following the Issue Date, (i) the Notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under this Indenture, then, beginning on that day (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”), and subject to the provisions of the following paragraph, the Company and its Subsidiaries shall not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.18 and 4.19 and 5.01(a)(iv) (collectively the “Suspended Covenants”).
In the event that the Company and its Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating, then the Company and its Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events.
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The Issuers shall provide the Trustee with written notice of each Covenant Suspension Event or Reversion Date within five Business Days of the occurrence thereof. The Trustee shall have no duty to monitor or provide notice to the holders of the Notes of any such Covenant Suspension Event or Reversion Date.
On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to Sections 4.03(a) or (b) (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to Sections 4.03(a) or (b), such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.03(b)(iii). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect since the Issue Date and prior to, but not during, the Suspension Period. As described above, however, no Default or Event of Default will be deemed to have occurred on the Reversion Date as a result of any actions taken by the Company or its Subsidiaries during the Suspension Period in violation of the Suspended Covenants.
Within 30 days of such Reversion Date, the Issuers must comply with the terms of Section 4.11.
Article V
SUCCESSORCOMPANY
Section 5.01. When Issuers and Guarantors May Merge or Transfer Assets.
(a) The Company may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Company is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:
(i) the Company is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Company or such Person, as the case may be, being herein called the “Successor Company”); provided, that in the event that the Successor Company is not a corporation, a co-obligor of the Notes is a corporation;
(ii) the Successor Company (if other than the Company) expressly assumes all the obligations of the Company under this Indenture and the Security Documents pursuant to supplemental indentures or other applicable documents or instruments;
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(iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;
(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction), either
(A) the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio for the Successor Company and its Subsidiaries would be no less than such ratio for the Company and its Subsidiaries immediately prior to such transaction;
(v) if the Company is not the Successor Company, each Subsidiary that is a Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and
(vi) the Successor Company shall have delivered to the Trustee and the Collateral Agent (a) an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indentures (if any) comply with this Indenture, and (b) if applicable, any documentation and other information regarding the Successor Company reasonably requested by the Trustee or the Collateral Agent in order to comply with its obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the USA PATRIOT Act.
The Successor Company (if other than the Company) will succeed to, and be substituted for, the Company under this Indenture, the Notes and the Security Documents, and in such event the Company will automatically be released and discharged from its obligations under this Indenture, the Notes and the Security Documents. Notwithstanding the foregoing clauses (iii) and (iv) of this Section 5.01(a), (A) the Company or any Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to a Subsidiary and (B) the Company may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing the Company in another state of the United States, the District of Columbia or any territory of the United States (collectively, “Permitted Jurisdiction”) or may convert into a corporation, partnership or limited liability company, in each case in clauses (A) or (B), so long as the amount of Indebtedness of the Company and the Subsidiaries is not increased thereby. This Section 5.01(a) will not apply to a sale, assignment, transfer, conveyance or other disposition of assets from any Guarantor to the Company or any other Guarantor.
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(b) The Co-Issuer may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Co-Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:
(i) the Co-Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Co-Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Co-Issuer or such Person, as the case may be, being herein called the “Successor Co-Issuer”) and the Successor Co-Issuer (if other than the Co-Issuer) expressly assumes all of the obligations of the Co-Issuer under this Indenture and the Security Documents and the Notes pursuant to a supplemental indenture or other documents or instruments; or
(ii) after giving effect thereto, at least one obligor of the Notes shall be a corporation organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof,
provided, that the Successor Co-Issuer shall have delivered to the Trustee and the Collateral Agent, if applicable, any documentation and other information regarding the Successor Co-Issuer reasonably requested by the Trustee or the Collateral Agent in order to comply with its obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the USA PATRIOT Act.
The Successor Co-Issuer (if other than the Co-Issuer) will succeed to, and be substituted for, the Co-Issuer under this Indenture, the Notes and the Security Documents, and in such event the Co-Issuer will automatically be released and discharged from its obligations under this Indenture, the Notes and the Security Documents. This Section 5.01(b) will not apply to a sale, assignment, transfer, conveyance or other disposition of assets from any Guarantor to the Co-Issuer.
(c) Subject to the provisions of Section 11.04, Section 12.02(b) and Section 12.09, no Guarantor shall, and the Company shall not permit any Subsidiary that is a Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) either (A) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a company, corporation, partnership or limited liability company or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “Successor Guarantor”) and the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under this Indenture, the Notes, the Security Documents and the Guarantee, as applicable, pursuant to a supplemental indenture or other applicable documents or instruments, or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 4.06; and
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(ii) the Successor Guarantor (if other than such Guarantor) shall have delivered or caused to be delivered to the Trustee and the Collateral Agent an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.
Except as otherwise provided in this Indenture, the Successor Guarantor (if other than such Guarantor) will succeed to, and be substituted for, such Guarantor under this Indenture, the Notes, the Security Documents and the Guarantee, as applicable, and such Guarantor will automatically be released and discharged from its obligations under this Indenture, the Notes, the Security Documents and its Guarantee. Notwithstanding the foregoing, (1) a Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing such Guarantor in a Permitted Jurisdiction or may convert into a limited liability company, corporation, partnership or similar entity organized or existing under the laws of any Permitted Jurisdiction so long as the amount of Indebtedness of such Guarantor is not increased thereby and (2) a Subsidiary that is a Guarantor may merge, amalgamate or consolidate with an Issuer or any other Subsidiary that is a Guarantor.
In addition, notwithstanding the foregoing, a Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “Transfer”) to the Company or any of the Company’s Subsidiaries that is a Guarantor.
Article VI
DEFAULTSAND REMEDIES
Section 6.01. Events of Default.
An “Event of Default” occurs with respect to Notes if:
(a) there is a default in any payment of interest on any Note when due and payable, and such default continues for a period of 30 days;
(b) there is a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(c) there is a failure by the Issuers for 120 days after receipt of written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee and the Collateral Agent) to comply with any of their obligations, covenants or agreements in Section 4.02;
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(d) there is a failure by the Issuers or any of the Issuers’ Subsidiaries for 60 days after written notice given by the Trustee or the holders of not less than 30% in aggregate principal amount of the Notes then outstanding (with a copy to the Trustee and the Collateral Agent) to comply with its other obligations, covenants or agreements (other than a default referred to in clauses (a), (b) and (c) above) contained in the Notes or this Indenture;
(e) there is a failure by the Issuers or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) to pay any Indebtedness (other than Indebtedness owing by the Issuers or any of their Subsidiaries to the Issuers or any of their Subsidiaries) within any applicable grace period after final maturity or the default under or acceleration of any such Indebtedness by the holders thereof, in each case, (i) with respect to the Super Senior Facility, (ii) with respect to the ABL Facility, or (iii) with respect to any other Indebtedness if the total amount of such Indebtedness unpaid or accelerated exceeds $25,000,000 or its foreign currency equivalent;
(f) the Issuers or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency;
(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Issuers or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) in an involuntary case;
(ii) appoints a Custodian of the Issuers or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) or for any substantial part of its property; or
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(iii) orders the winding up or liquidation of the Issuers or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary);
or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days;
(h) there is a failure by the Issuers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) to pay final judgments aggregating in excess of $25,000,000 or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days;
(i) the Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) with respect to the Notes ceases to be in full force and effect (except as contemplated by the terms thereof) or an Issuer, or any Subsidiary that qualifies as a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) denies or disaffirms its obligations under this Indenture or any Guarantee with respect to the Notes (except as contemplated by the terms thereof) and such Default continues for 10 days;
(j) unless such Liens have been released in accordance with the provisions of this Indenture, the Security Documents or the Intercreditor Agreements, the Liens in favor of the Collateral Agent for the benefit of the Notes Secured Parties with respect to all or substantially all of the Collateral cease to be valid or enforceable and such Default continues for 30 days; or
(k) there is a failure by an Issuer or any Guarantor to comply for 60 days after notice to such Issuer or Guarantor with its other agreements contained in the Security Documents except for a failure that would not be material to the holders of the Notes and would not materially affect the value of the Collateral taken as a whole.
The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
Section 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to the Company) occurs and is continuing, the Trustee by notice to the Issuers (with a copy to the Collateral Agent) or the holders of more than 30% in aggregate principal amount of outstanding Notes by notice to the Issuers, with a copy to the Trustee and the Collateral Agent, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee, the Collateral Agent or any holders.
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In the event of any Event of Default specified in Section 6.01(e), such Event of Default and all consequences thereof (excluding, however, any resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the Trustee, the Collateral Agent or the holders of the Notes, if within 20 days after such Event of Default arose the Issuers deliver an Officer’s Certificate to the Trustee and the Collateral Agent stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of the Notes as described above be annulled, waived or rescinded upon the happening of any such events.
Section 6.03. Other Remedies. The Trustee and the Collateral Agent may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents.
The Trustee and the Collateral Agent may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee, the Collateral Agent or any holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. To the extent required by law, all available remedies are cumulative.
Section 6.04. Waiver of Past Defaults. Provided the Notes are not then due and payable by reason of a declaration of acceleration, the holders of a majority in principal amount of the Notes then outstanding by written notice to the Trustee and the Collateral Agent may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each holder affected (or a provision under Section 9.02 that requires the consent of a higher threshold of ownership of the Notes, such that only the holders of such requisite threshold shall be entitled to so waive such Default). When a Default is waived, it is deemed cured and the Issuers, the Trustee, the Collateral Agent and the holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
Section 6.05. Control by Majority. The holders of a majority in principal amount of outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee and the Collateral Agent or of exercising any trust or power conferred on the Trustee and the Collateral Agent. However, the Trustee and the Collateral Agent may refuse to follow any direction that conflicts with law or this Indenture or, if the Trustee or the Collateral Agent, as applicable, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee or the Collateral Agent, as applicable, in good faith shall determine that the action or proceeding so directed would involve the Trustee or the Collateral Agent, as applicable, in personal liability or expense for which it is not adequately indemnified, or subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders) or that would involve the Trustee or the Collateral Agent, as applicable, in personal liability. Prior to taking any action under this Indenture, the Trustee and the Collateral Agent shall be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
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Section 6.06. Limitation on Suits.
(a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to this Indenture, the Notes or the other Notes Documents unless:
(i) holders of at least 30% in aggregate principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy,
(ii) such holders have offered and, if requested, provided to the Trustee (and if applicable, the Collateral Agent) security or indemnity satisfactory to it against any loss, liability or expense,
(iii) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and
(iv) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.
(b) A holder may not use this Indenture to prejudice the rights of another holder or to obtain a preference or priority over another holder.
Section 6.07. Contractual Rights of the Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the contractual right of any holder to receive payment of principal of and interest on the Note held by such holder, on or after the respective due dates thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes plus, in each case, 2.00%) and the amounts provided for in Section 7.07.
Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim, statements of interest and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)), the Collateral Agent and the holders allowed in any judicial proceedings relative to the Notes Parties, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the holders, to pay to each of the Trustee and the Collateral Agent any amount due it for the reasonable compensation, expenses, disbursements and advances of each of the Trustee, the Collateral Agent, and their respective agents and counsel, and any other amounts due the Trustee and the Collateral Agent under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.
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Section 6.10. Priorities. Subject to the terms of the Intercreditor Agreements and the Security Documents, any money or property collected by the Trustee pursuant to this Article VI and any other money or property distributable in respect of any Notes Party’s obligations under this Indenture (including upon exercise of any remedies in respect of Collateral) after an Event of Default shall be applied in the following order:
FIRST: to the Trustee and the Collateral Agent for amounts due hereunder and under the other Notes Documents;
SECOND: to the holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amount for any Guarantor, to such Guarantor or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to the holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each holder and the Company a notice that states the record date, the payment date and the amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee or the Collateral Agent for any action taken or omitted by it as Trustee or Collateral Agent, as applicable, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Article VI does not apply to a suit by the Trustee or the Collateral Agent, a suit by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in principal amount of the Notes.
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Section 6.12. Waiver of Stay or Extension Laws. Neither the Issuers nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Notes Parties (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee or the Collateral Agent, but shall suffer and permit the execution of every such power as though no such law had been enacted.
Article VII
TRUSTEE
Section 7.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the other Notes Documents. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and the other Notes Documents and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the other Notes Documents and no implied covenants or obligations shall be read into this Indenture or the other Notes Documents against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the form of certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;
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(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05; and
(iv) no provision of this Indenture or the other Notes Documents shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties, obligations or responsibilities hereunder or under the other Notes Documents or in the exercise of any of its rights, powers, authority or discretion hereunder or thereunder.
(d) Every provision of this Indenture or the other Notes Documents that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture or the other Notes Documents relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on and shall be fully protected in acting or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports and statements of the Issuers as provided herein, but shall have no duty to review or analyze such reports or statements, to determine compliance with covenants or other obligations of the Issuers.
(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be responsible or liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct or negligence.
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(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture, the Notes, or the other Notes Documents shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the holders of not less than a majority in principal amount of the Notes at the time outstanding and indemnified in accordance with Section 6.05, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine (or is requested in writing by the holders as set forth above) to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney, at the expense of the Issuers and shall Incur no liability of any kind by reason of such inquiry or investigation. The Trustee (in any capacity) shall have no liability or responsibility to determine if any holder is an Affiliate of an Issuer or whether any beneficial holder has received the interest required hereunder or under the Notes.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture, the Security Documents or the other Notes Documents at the request or direction of any of the holders pursuant to this Indenture, unless such holders shall have offered and, if requested, provided to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be Incurred by it in compliance with such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture or the other Notes Documents.
(i) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture or the other Notes Documents upon the request or authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding upon future holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.
(j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee from the Issuers, any Guarantor, or any holder, and such notice references the Notes and this Indenture.
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(k) The Trustee may request that the Issuers deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(l) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.
(m) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture or the other Notes Documents.
(n) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture or any other Notes Documents arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, any act or provision of any present or future law or regulation or governmental authority; acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; civil disturbances; sabotage; epidemics; pandemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authorities and governmental action; or the unavailability of any wire or communication facility.
(o) The Trustee shall not have any liability or responsibility for any action or inaction of the Collateral Agent nor shall the Trustee be obligated or required to assume or take on any duties or obligations of the Collateral Agent or act as a “Collateral Agent” under or in connection with this Indenture or any other Notes Document.
Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. The Collateral Agent and any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10.
Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Guarantees, the Notes, or the other Notes Documents it shall not be accountable for the Issuers’ use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuers or any Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j) or (k), or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 14.02 hereof from the Issuers, any Guarantor or any holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of Notes and the Issuers having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.
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Section 7.05. Notice of Defaults. If a Default occurs and is continuing and is actually known to a Trust Officer of the Trustee, the Trustee shall mail, or deliver electronically if held by the Depository, to each holder of the Notes (with a copy to the Collateral Agent) notice of the Default within the later of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee at the Corporate Trust Office of the Trustee from the Issuers, any Guarantor, or any holder. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the holders of the Notes.
Section 7.06. [Reserved].
Section 7.07. Compensation and Indemnity. The Notes Parties, jointly and severally, shall pay to the Trustee from time to time compensation for the Trustee’s acceptance of this Indenture and its services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Notes Parties, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Notes Parties, jointly and severally, shall indemnify the Trustee or any predecessor Trustee and their Related Parties against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees, disbursements and expenses and including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) Incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder and under the other Notes Documents or the exercise of any of its rights or powers hereunder or thereunder, including the costs and expenses of enforcing this Indenture, the Notes, any Guarantee, any Security Document or any other Notes Documents against the Notes Parties (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Issuers, any Guarantor, any holder or any other Person). The obligation to pay such amounts shall survive the payment in full or defeasance of the Notes or the removal or resignation of the Trustee. The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuers shall not relieve the Issuers or any Guarantor of its indemnity obligations hereunder. If requested by the indemnified party, the Issuers shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers’ expense in the defense. Such indemnified parties may have separate counsel and the Notes Parties shall pay the fees, disbursements and expenses of such counsel; provided, however, that the Notes Parties shall not be required to pay such fees, disbursements and expenses if they assume such indemnified parties’ defense at their request and, in such indemnified parties’ reasonable judgment, there is no actual or potential conflict of interest between the Notes Parties, on the one hand, and such indemnified parties, on the other hand, in connection with such defense. The Notes Parties need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such party’s own willful misconduct or gross negligence (as determined by a court of competent jurisdiction in a final, non-appealable order).
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To secure the Notes Parties’ payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Notes Parties’ payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee Incurs expenses after the occurrence of a Default specified in Section 6.01(f) or with respect to the Issuers or any Significant Subsidiary, the expenses (including the charges and expenses of the Trustee’s agents and counsel) are intended to constitute expenses of administration under the Bankruptcy Law.
No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction. The predecessor Trustee shall have no liability for any action or inaction of any successor Trustee.
Section 7.08. Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Issuers. The holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Company or by the holders of a majority in principal amount of the Notes and such holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail (or otherwise deliver in accordance with the procedures of the Depository) a notice of its succession to the holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.
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(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the holders of 10% in principal amount of the Notes may petition at the expense of the Issuers any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the obligations of the Notes Parties under Section 7.07 shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger. Any organization or entity into which the Trustee may be merged or converted or with which it may be consolidated, or any organization or entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any organization or entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such organization or entity shall be otherwise qualified and eligible under this Article VII, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates of authentication shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of authentication of the Trustee shall have.
Section 7.10. Eligibility; Disqualification. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.
Section 7.11. [Reserved].
Section 7.12. Limitation on Duty of Trustee in Respect of Collateral; Indemnification.
(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise creating, preserving, perfecting or maintaining the perfection or priority of any security interest in the Collateral. Each of the Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the Collateral Agent without gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.
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(b) The Trustee and the Collateral Agent shall not be responsible or liable for, or have any duty to ascertain or inquire into or monitor, (i) the existence, genuineness or value of any of the Collateral, (ii) the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on their respective part hereunder or under any other Notes Documents, (iii) the validity or sufficiency of the Collateral or any agreement or assignment contained therein, (iv) the validity of the title of the Notes Parties to the Collateral, (v) insurance on the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the care, protection or maintenance of the Collateral or (vi) for any encumbrances on the Collateral. Subject to Section 7.01, the Trustee and the Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Intercreditor Agreements, the Security Agreement, the Canadian Security Agreement, any other Security Document, or any other Notes Documents by the Notes Parties. The Trustee and the Collateral Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Issuers or by the Trustee or the Collateral Agent, in relation to any matter arising in the administration of this Indenture, the Intercreditor Agreements, the Security Documents and the other Notes Documents.
Article VIII
DISCHARGEOF INDENTURE; DEFEASANCE
Section 8.01. Discharge of Liability on Notes; Defeasance.
(a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights, privileges, protections, indemnities and immunities of the Trustee (and each Paying Agent and Registrar and the Collateral Agent) and rights of registration or transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes when:
(i) either (A) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation or (B) all of the Notes not delivered to the Trustee for cancellation (1) have become due and payable, (2) will become due and payable at their stated maturity within one year or (3) if redeemable at the option of the Issuers, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers, and the Issuers have irrevocably deposited or caused to be deposited with the Trustee funds in U.S. dollars in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit (in the case of Notes that have become due and payable), or to the date of maturity or redemption, as applicable, together with irrevocable written instructions from the Issuers directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
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(ii) the Notes Parties have paid all other sums due and payable under this Indenture; and
(iii) the Issuers have delivered to the Trustee and the Collateral Agent an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Issuers at any time may terminate (i) all of its obligations under the Notes and this Indenture with respect to the holders of the Notes (“legal defeasance option”), and (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.11, 4.12, 4.13, 4.16, 4.17, 4.18 and 4.19 and the operation of Section 5.01(a)(iv) for the benefit of the holders of the Notes, and Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and 6.01(g) with respect to Significant Subsidiaries only), 6.01(h), 6.01(i), 6.01(j) and 6.01(k) (“covenant defeasance option”). The Issuers may exercise their legal defeasance option notwithstanding their prior exercise of their covenant defeasance option. In the event that the Issuers terminate all of their obligations under the Notes and this Indenture (with respect to such Notes) by exercising their legal defeasance option or their covenant defeasance option, the obligations of each Guarantor with respect to its Guarantee and the Security Documents shall be terminated simultaneously with the termination of such obligations.
If the Issuers exercise their legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuers exercise their covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g) (in the case of Sections 6.01(f) and (g), with respect to Significant Subsidiaries only), 6.01(h), 6.01(i), 6.01(j) or 6.01(k) or because of the failure of the Company to comply with Section 5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminated (with a copy to the Collateral Agent).
(c) Notwithstanding clauses (a) and (b) above, the Issuers’ obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08 and 2.09 and Article VII, including, without limitation, Sections 7.07 and 7.08 and in this Article VIII and the rights, privileges, protections, indemnities and immunities of the Trustee and the Collateral Agent under this Indenture and the other Notes Documents shall survive until the Notes Obligations have been paid in full. Thereafter, the Issuers’ obligations in Sections 7.07, 7.08, 8.05 and 8.06 and the rights, privileges, protections, indemnities and immunities of the Trustee and the Collateral Agent under this Indenture and the other Notes Documents shall survive such satisfaction and discharge.
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Section 8.02. Conditions to Defeasance.
(a) The Issuers may exercise their legal defeasance option or its covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee money in U.S. dollars or U.S. Government Obligations in an amount that is sufficient for the payment of principal, premium (if any) and interest on the Notes to redemption or maturity, as the case may be;
(ii) the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;
(iii) no Default specified in Section 6.01(f) or (g) with respect to the Issuers shall have occurred or is continuing on the date of such deposit;
(iv) the deposit does not constitute a default under any other material agreement or instrument binding on the Issuers;
(v) in the case of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required by the immediately preceding sentence with respect to a legal defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable at their Stated Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers;
(vi) such exercise does not impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Notes on or after the due dates therefore or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes;
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(vii) in the case of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(viii) the Issuers deliver to the Trustee and the Collateral Agent an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article VIII have been complied with.
(b) Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article III.
Section 8.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. The Trustee shall apply the deposited money and the money from U.S. Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.
Section 8.04. Repayment to Issuers. Each of the Trustee and each Paying Agent shall promptly turn over to the Issuers upon request any money or U.S. Government Obligations held by it as provided in this Article VIII that, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article VIII.
Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
Section 8.05. Indemnity for U.S. Government Obligations. The Issuers shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
Section 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or any Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Issuers have made any payment of principal of, or interest on, any such Notes because of the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or any Paying Agent.
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Article IX
AMENDMENTSAND WAIVERS
Section 9.01. Without Consent of the Holders.
(a) The Issuers and the Trustee (and/or the Collateral Agent, as applicable) may amend this Indenture, the Notes, the Guarantees, the Security Documents and/or the Intercreditor Agreements without notice to or the consent of any holder:
(i) to cure any ambiguity, omission, mistake, defect or inconsistency;
(ii) to provide for the assumption by a Successor Company (with respect to the Company) of the obligations of the Company under this Indenture, the Notes, the Security Documents and the Intercreditor Agreements or to provide for the assumption by a Successor Co-Issuer (with respect to the Co-Issuer) of the obligations of the Co-Issuer under this Indenture, the Notes, the Security Documents and the Intercreditor Agreements;
(iii) to provide for the assumption by a Successor Guarantor (with respect to any Guarantor), as the case may be, of the obligations of a Guarantor under this Indenture, its Guarantee, the Security Documents and the Intercreditor Agreements;
(iv) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;
(v) [Reserved];
(vi) to add a Guarantee or collateral with respect to the Notes;
(vii) to release or subordinate Collateral as permitted by this Indenture, the Security Documents or the Intercreditor Agreements;
(viii) to add additional secured creditors holding other Obligations so long as such obligations are not prohibited by this Indenture;
(ix) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power conferred upon the Issuers;
(x) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of, this Indenture under the TIA (if the Issuers elect to qualify this Indenture under the TIA);
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(xi) to make any change that does not adversely affect the rights of any holder in any material respect; or
(xii) to make changes to provide for the issuance of Additional Notes (to the extent permitted by, and in accordance with the terms of, this Indenture), which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities.
(b) The Intercreditor Agreements may be amended (i) without notice to or the consent of any holder, the Trustee or the Collateral Agent in connection with the permitted entry by a joinder into the Intercreditor Agreements of any class of additional secured creditors holding Obligations so long as such Obligations are not prohibited by this Indenture and are permitted by the Intercreditor Agreements and (ii) without notice to or consent of any holder to reflect administrative changes thereto.
(c) After an amendment under this Section 9.01 becomes effective, the Issuers shall mail or otherwise deliver a copy of such amendment to the holders (with a copy to the Collateral Agent); provided, that this requirement shall be deemed satisfied to the extent disclosure of such amendment is made in accordance with Section 4.02; provided, further, that the failure to provide such copy to any of the holders shall not impair or affect the validity of an amendment under this Section 9.01.
Section 9.02. With Consent of the Holders. The Issuers and the Trustee may amend this Indenture, the Notes, the Guarantees, the Security Documents and the Intercreditor Agreements with the consent of the holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes) and any past default or compliance with any provisions of this Indenture may be waived with the consent of the holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each holder of an outstanding Note affected, an amendment may not:
(a) reduce the amount of Notes whose holders must consent to an amendment;
(b) reduce the rate of or extend the time for payment of interest on any Note;
(c) reduce the principal of or change the Stated Maturity of any Note;
(d) reduce the premium payable upon the redemption of any Note or change the time (other than the notice period)at which any Note may be redeemed in accordance with Article III, or reduce the purchase price payable upon the repurchase of any Note or change the time or conditions under which any Note is required to be repurchased in accordance with Sections 4.06, 4.08, 4.18 or 4.19;
(e) make any Note payable in money other than that stated in such Note;
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(f) release all or substantially all of the Guarantees, expressly subordinate the Notes or any Guarantee to any other Indebtedness of an Issuer or any Guarantor, or subordinate the Liens securing the Notes or any Guarantee to Liens securing any other Indebtedness;
(g) impair the contractual right of any holder to receive payment of principal of, premium, if any, and interest on such holder’s Note on or after the due dates thereof or to institute suit for the enforcement of any payment on or with respect to such holder’s Note on or after such respective dates;
(h) make any change in the amendment provisions which require each holder’s consent or in the waiver provisions;
(i) make any change to the provisions of this Indenture, the Intercreditor Agreements or the Security Documents with respect to the pro rata application of proceeds of Collateral in respect of the Notes required thereby in a manner that by its terms modifies the application of such proceeds in respect of the Notes required thereby to be on a less than pro rata basis to the holder of such Note; or
Except as expressly provided by this Indenture, the Security Documents or the Intercreditor Agreements, without the consent of the holders of at least 66.67% in an aggregate principal amount of the Notes then outstanding, the Notes Parties may not take any action that would or would have the effect of, directly or indirectly, and no amendment or waiver may, (i) release all or substantially all of the Collateral from the Lien of this Indenture and the Security Documents with respect to the Notes or (ii) amend, modify or waive any provision of the definition of Liability Management Transaction or Sections 4.03(d), 4.04(c), 4.16 or 12.09.
It shall not be necessary for the consent of the holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Issuers shall mail, or otherwise deliver in accordance with the procedures of the Depository, to the holders a notice briefly describing such amendment (with a copy to the Collateral Agent). The failure to give such notice to all holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
No amendment, waiver or consent shall, unless in writing and signed by the Trustee or the Collateral Agent, affect the rights, privileges, protections, indemnities, liabilities, duties or immunities of, or any fees or other amounts payable to, the Trustee (in any capacity hereunder or in connection herewith), or the Collateral Agent (for its own account), respectively, under this Indenture or the other Notes Documents.
Section 9.03. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a holder of a Note shall bind the holder and every subsequent holder of that Note or portion of the Note that evidences the same debt as the consenting holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such holder or subsequent holder may revoke the consent or waiver as to such holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officer’s Certificate from the Issuers certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuers or the Trustee of consents by the holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Notes Parties, and the Trustee.
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(b) The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
Section 9.04. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Issuers may require the holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the holder. Alternatively, if the Issuers or the Trustee so determine, the Issuers in exchange for the Note shall issue and, upon written order of the Issuers signed by an Officer of each Issuer, the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.
Section 9.05. Trustee to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities, indemnities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, (i) an Officer’s Certificate, (ii) an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuers and any Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof, (iii) a copy of the resolution of the Board of Directors, certified by the Secretary or Assistant Secretary of the Company, authorizing the execution of such amendment, supplement or waiver and (iv) if such amendment, supplement or waiver is executed pursuant to Section 9.02, evidence reasonably satisfactory to the Trustee of the consent of the holders required to consent thereto.
Section 9.06. Additional Voting Terms; Calculation of Principal Amount. All Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class and no Notes will have the right to vote or consent as a separate class on any matter. Determinations as to whether holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article IX and Sections 2.14 and 14.06.
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Section 9.07. Action by Beneficial Owners. Notwithstanding anything herein or in any other Notes Documents to the contrary but subject to Sections 2.14 and 14.06 hereof, any written instrument executed by any Person which (a) certifies that they are a beneficial owner of the Notes and attaches a broker statement, custodial record or similar evidence of beneficial ownership, (b) also includes a certification from a DTC participant that such Person is a beneficial owner of the Notes, and (c) indicates that such Person has consented to or approved, or provided direction to the Trustee or Collateral Agent with respect to, any matter under this Indenture or any Security Document (including, without limitation, those provisions of this Indenture or any Security Document which expressly provide for such consent, approval, or direction and those provisions pursuant to which the Trustee or Collateral Agent is entitled to seek direction or instruction from the Holders) shall constitute binding and conclusive evidence for all purposes under this Indenture and the Security Documents of the consent, approval or direction of such Person, upon which the Trustee and Collateral Agent and the Company and Guarantors will be entitled to conclusively rely without further investigation. For avoidance of doubt, if any such written instrument is delivered to the Company, the Trustee and/or the Collateral Agent, no evidence of consent, approval, or direction obtained from DTC pursuant to DTC’s ATOP procedures, demand/dissent letter procedures, or any other applicable procedures of DTC will be required in order for such consent, approval, or direction provided by such Person to be effective for all purposes under this Indenture and the other Notes Documents.
Article X
RANKINGOF NOTE LIENS
Section 10.01. Relative Rights. The Intercreditor Agreements govern the relative rights and remedies, as lienholders, among holders of Liens secured by the Collateral. Nothing in this Indenture or the Intercreditor Agreements will:
(a) impair, as between the Issuers and holders of Notes, the obligation of the Issuers which is absolute and unconditional, to pay principal of, premium and interest on Notes in accordance with their terms or to perform any other obligation of the Issuers or any other obligor under this Indenture, the Notes, the Guarantees and the Security Documents;
(b) restrict the right of any holder to sue for payments that are then due and owing, in a manner not inconsistent with the provisions of the Intercreditor Agreements;
(c) prevent the Trustee, the Collateral Agent or any holder from exercising against the Issuers or any other obligor any of its other available remedies upon a Default or Event of Default (other than its rights as a secured party, which are subject to the Intercreditor Agreements); or
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(d) restrict the right of the Trustee, the Collateral Agent or any holder:
(i) to file and prosecute a petition seeking an order for relief in an involuntary bankruptcy case as to any obligor or otherwise to commence, or seek relief commencing, any insolvency or liquidation proceeding involuntarily against any obligor;
(ii) to make, support or oppose any request for an order for dismissal, abstention or conversion in any insolvency or liquidation proceeding;
(iii) to make, support or oppose, in any insolvency or liquidation proceeding, any request for an order extending or terminating any period during which the debtor (or any other Person) has the exclusive right to propose a plan of reorganization or other dispositive restructuring or liquidation plan therein;
(iv) to seek the creation of, or appointment to, any official committee representing creditors (or certain of the creditors) in any insolvency or liquidation proceedings and, if appointed, to serve and act as a member of such committee without being in any respect restricted or bound by, or liable for, any of the obligations under this Article X;
(v) to seek or object to the appointment of any professional person to serve in any capacity in any insolvency or liquidation proceeding or to support or object to any request for compensation made by any professional person or others therein;
(vi) to make, support or oppose any request for order appointing a trustee or examiner in any insolvency or liquidation proceedings; or
(vii) otherwise to make, support or oppose any request for relief in any insolvency or liquidation proceeding that it is permitted by law to make, support or oppose if it were a holder of unsecured claims, or as to any matter relating to (x) any plan of reorganization or other restructuring or liquidation plan or (y) the administration of the estate or the disposition of the case or proceeding (in each case except as set forth in the Intercreditor Agreements).
Article XI
COLLATERAL
Section 11.01. Security Documents.
(a) The payment of the principal of and interest and premium, if any, on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Issuers pursuant to the Notes or by the Guarantors pursuant to the Guarantees, the payment of all other Notes Obligations and the performance of all other obligations of the Notes Parties under this Indenture, the Notes, the Guarantees and the other Notes Documents shall be secured as provided in the Security Documents, which the Issuers and the applicable Guarantors will enter into on the Issue Date and will be secured by Security Documents thereafter delivered as required or permitted by this Indenture. The Notes Parties shall, and shall cause each of their respective Subsidiaries to, make all filings (including filings of continuation statements and amendments to UCC financing statements and PPSA financing statements that may be necessary to continue the effectiveness of such UCC financing statements and PPSA financing statements) and all other actions as are necessary or required by the Security Documents to maintain (at the sole cost and expense of the Notes Parties, and their respective Subsidiaries) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a perfected security interest subject only to Permitted Liens and Liens permitted by Section 4.12.
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(b) Notwithstanding the foregoing, the Notes Parties shall use commercially reasonable efforts to perfect all security interests in the Collateral (other than Excluded Property) on the Issue Date and, with respect to any Collateral (other than Excluded Property), for which security interests have not been granted or perfected on the Issue Date, use commercially reasonable efforts to cause the taking of additional actions required to grant or perfect the security interest in the Collateral required to be pledged under this Indenture and the Security Documents within 30 days following the Issue Date.
Section 11.02. Collateral Agent.
(a) The Collateral Agent is authorized and empowered to appoint one or more co-agents, sub-agents and attorneys-in-fact as it deems necessary or appropriate and may perform any and all of its duties and exercise its rights and powers hereunder or under any other Notes Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents or of exercising any rights and remedies thereunder) by or through such Persons. The Collateral Agent and any such co-agents, sub-agents and attorneys-in-fact may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. All provisions of Article VII and this Article XI and all other rights, privileges, protections, immunities, and indemnities granted to the Collateral Agent hereunder and under the other Notes Documents shall apply to any such co-agents, sub-agents and attorneys-in-fact, and to the Related Parties of the Collateral Agent and any such co-agents, sub-agents and attorneys-in-fact. The Collateral Agent shall not be responsible for the negligence or misconduct of any such co-agents, sub-agents and attorneys-in-fact except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Collateral Agent acted with gross negligence or willful misconduct in the selection of such co-agents, sub-agents and attorneys-in-fact.
(b) Neither the Trustee (subject to Section 7.01) nor the Collateral Agent nor any of their respective Related Parties will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Lien securing Notes Obligations, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens securing Notes Obligations or the Security Documents or any delay in doing so.
(c) Subject to Section 11.02(e) and Article VII, the Collateral Agent will be subject to such directions as may be given it by the Trustee or the holders of a majority in principal amount of the outstanding Notes from time to time (as required or permitted by this Indenture); provided, that in the event of conflict between the Intercreditor Agreements and directions received hereunder, the Collateral Agent will be subject to the Intercreditor Agreements. Except as directed by the Trustee or the holders of a majority in principal amount of the outstanding Notes from time to time as required or permitted by this Indenture or as required under the Intercreditor Agreements (but subject to Section 11.02(e) and Article VII), the Collateral Agent will not be obligated:
(i) to act upon directions purported to be delivered to it by any other Person;
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(ii) to foreclose upon or otherwise enforce any Lien securing Notes Obligations; or
(iii) to take any other action whatsoever with regard to any or all of the Liens securing Notes Obligations, Security Documents or Collateral or any of the Notes Documents.
(d) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing Notes Obligations or the Security Documents and the Collateral Agent shall be authorized to remit such amounts to the Trustee for application in accordance with this Indenture.
(e) In acting as Collateral Agent, the Collateral Agent may rely upon and enforce each and all of the rights, powers, immunities, indemnities and benefits of the Trustee under Article VII hereof.(as if it were the “Trustee” thereunder) and shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by this Indenture and the other Notes Documents; provided, that, notwithstanding anything to the contrary herein or the other Notes Documents, the Collateral Agent and its Related Parties shall be entitled to the following additional protections:
(i) The duties of the Collateral Agent shall be mechanical and administrative in nature; and the Collateral Agent shall not have, by reason of any Notes Document or any Default or Event of Default, a fiduciary, principal-agency, or trustee relationship in respect of any holder or any other Notes Secured Party. Without limiting the generality of the foregoing, the use of the term “agent” in this Indenture or the other Notes Documents with reference to the Collateral 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 merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties. The Collateral Agent shall be entitled to the protections set forth in Section 7.01(a) and (b) regardless of whether a Default or Event of Default has occurred and is continuing.
(ii) The Collateral Agent shall not be liable for any action taken or not taken by it (x) with the consent or at the request of the Trustee (or holders of a majority in principal amount of the outstanding Notes from time to time as required or permitted by this Indenture) (and such consent or request and such action or action not taken pursuant thereto shall be binding upon all the other Notes Secured Parties) or (y) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and nonappealable judgment (which shall not include any action taken or omitted to be taken in accordance with clause (x), for which the Collateral Agent shall have no liability). The Collateral Agent shall be entitled to remit any proceeds of Collateral to the Trustee for application in accordance with the Notes Documents.
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(iii) The Collateral Agent shall not be responsible or liable for or have any duty to ascertain or inquire into or monitor (A) any recital, statement, warranty or representation made in or in connection with this Indenture or any other Notes Document, (B) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, the use of proceeds of the Notes, or the occurrence or possible occurrence of any Default or Event of Default, (C) the execution, validity, enforceability, effectiveness, genuineness, collectability or sufficiency of this Indenture, any other Notes Document or any other agreement, instrument or document, (D) the satisfaction of any condition set forth in the Notes Documents, or the inspection of the properties, books or records of any Notes Party or any Affiliate thereof, or (E) the financial condition or business affairs of any Notes Party or any other Person liable for the payment of any Obligations.
(iv) For the avoidance of doubt, and without limiting the other protections set forth in this Indenture, the Collateral Agent shall be entitled to request direction from the Trustee with respect to any approval, determination, designation, or judgment to be made by the Collateral Agent herein or in the other Notes Documents.
(v) The Collateral Agent may at any time give notice of its resignation to the Trustee and the Issuer. Upon receipt of any such notice of resignation, the Trustee shall have the right (but not the obligation), with the consent of the Issuers (which consent of the Issuers shall not be unreasonably withheld, conditioned or delayed, and shall not be required upon the occurrence and during the continuation of an Event of Default), to appoint a successor Collateral Agent. If no such successor shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may appoint a successor; provided that if the retiring Collateral Agent shall notify the Trustee and the Issuers that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and the retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Notes Documents (except that the retiring Collateral Agent shall continue to hold the Collateral security until such time as a successor Collateral Agent is appointed) and (b) all payments, communications and determinations provided to be made to the retiring Collateral Agent shall instead be made by or to the Trustee, until such time as a successor Collateral Agent is appointed as provided above. Upon the acceptance of a successor’s appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Notes Documents (if not already discharged therefrom as provided above). All rights, privileges, protections, immunities, and indemnities granted to the Collateral Agent hereunder and the other Notes Documents shall continue in effect for the benefit of such retiring Collateral Agent and its Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent.
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(f) If the Issuers (i) Incur Indebtedness at any time when no intercreditor agreement is in effect or at any time when such Indebtedness is entitled to the benefit of the Intercreditor Agreements is concurrently retired, and (ii) deliver to the Collateral Agent an Officer’s Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Intercreditor Agreements, as applicable) in favor of a designated agent or representative for the holders of the other Notes Obligations so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
(g) The Issuers will deliver to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all documents delivered to the Collateral Agent pursuant to this Indenture and the Security Documents.
(h) If the Issuers Incur any Junior Lien Obligations and deliver to the Collateral Agent and/or the Trustee, as applicable, an Officer’s Certificate requesting the Collateral Agent and/or the Trustee, as applicable, to enter into an intercreditor agreement with a designated agent or representative for the holders of the Junior Lien Obligations so Incurred and certifying that such intercreditor agreement provides for the subordination of Liens of such Junior Lien Obligations to the Liens securing the Notes Obligations and other intercreditor provisions with respect to such Junior Lien Obligations that are customary in the good faith determination of the Company, the Collateral Agent and/or the Trustee, as applicable, shall (and each is hereby authorized and directed to) enter into such intercreditor agreement, bind the holders on the terms set forth therein and perform and observe its obligations thereunder.
(i) Notwithstanding anything in this Indenture to the contrary and for the avoidance of doubt, the Collateral Agent and the Trustee shall have no duty to act outside of the United States of America and Canada in respect of any Collateral.
(j) Without limiting the powers of the Collateral Agent, for the purposes of holding any hypothec granted to the Attorney (as defined below) pursuant to the laws of the Province of Quebec to secure the prompt payment and performance of any and all Notes Obligations by any Notes Party, each holder of the Notes Obligations hereby irrevocably appoints and authorizes the Collateral Agent and, to the extent necessary, ratifies the appointment and authorization of the Collateral Agent, to act as the hypothecary representative of the creditors as contemplated under Article 2692 of the Civil Code of Quebec (in such capacity, the “Attorney”), and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon the Attorney under any related deed of hypothec. The Attorney shall: (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to the Attorney pursuant to any such deed of hypothec and applicable law, and (b) benefit from all rights, privileges, protections, immunities, and indemnities of the Collateral Agent and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and reimbursement and indemnification by the Notes Secured Parties and the Notes Parties. Any person who becomes a Notes Secured Party shall be deemed to have consented to and confirmed the Attorney as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a holder of Notes Obligations, all actions taken by the Attorney in such capacity. The substitution of the Collateral Agent also constitutes the substitution of the Attorney.
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Section 11.03. Authorization of Actions to Be Taken.
(a) Each holder of Notes, by its acceptance thereof, appoints the Collateral Agent as its collateral agent under the Security Documents, consents and agrees to the terms of each Security Document and the Intercreditor Agreements as originally in effect and as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee and/or the Collateral Agent to enter into the Intercreditor Agreements and the Security Documents to which it is a party, authorizes and empowers the Trustee to direct the Collateral Agent to enter into, and the Collateral Agent to execute and deliver, the Security Documents to which it is a party and the Intercreditor Agreements and authorizes and empowers the Trustee and the Collateral Agent to bind the holders of Notes and other holders of Notes Obligations secured by the Security Documents as set forth in the Security Documents to which it is a party and the Intercreditor Agreements and to perform its obligations and exercise its rights and powers thereunder. Subject to the provisions of the Intercreditor Agreements and the Security Documents, the Trustee and the Collateral Agent are authorized and empowered to receive for the benefit of the holders of Notes any funds collected or distributed under the Security Documents to which the Collateral Agent or Trustee is a party and to make further distributions of such funds to the holders of Notes according to the provisions of this Indenture.
(b) Subject to the provisions of Article VI, Section 7.01 and Section 7.02 hereof, the Intercreditor Agreements and the Security Documents, upon the occurrence and continuance of an Event of Default, the Trustee may, in its sole discretion and without the consent of the holders, direct, on behalf of the holders, the Collateral Agent to take all actions it deems necessary or appropriate in order to:
(i) foreclose upon or otherwise enforce any or all of the Liens securing the Notes Obligations;
(ii) enforce any of the terms of the Security Documents to which the Collateral Agent or Trustee is a party; or
(iii) collect and receive payment of any and all Notes Obligations.
Subject to the Intercreditor Agreements, the Trustee is authorized and empowered to institute and maintain, or direct the Collateral Agent to institute and maintain, such suits and proceedings as the Trustee may deem expedient to protect or enforce the Liens securing the Notes Obligations or the Security Documents to which the Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of the Security Documents to which the Collateral Agent or Trustee is a party or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem expedient to preserve or protect its interests and the interests of the holders of Notes in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of holders, the Trustee or the Collateral Agent.
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Section 11.04. Release of Liens.
(a) Notwithstanding anything to the contrary in the Security Documents or the Intercreditor Agreements, Collateral may be released from the Lien and security interest created by the Security Documents to secure the Notes and obligations under this Indenture at any time or from time to time in accordance with the provisions of the Intercreditor Agreements or the Security Documents or as provided hereby. The applicable assets included in the Collateral shall be automatically released from the Liens securing the Notes, and the applicable Guarantor shall be automatically released from its obligations under this Indenture and the Security Documents, under any one or more of the following circumstances or any applicable circumstance as provided in the Intercreditor Agreements or the Security Documents:
(i) to enable the Issuers, any Guarantor to consummate the disposition (other than any disposition to an Issuer or another Guarantor) of such property or assets to the extent not prohibited under Section 4.06;
(ii) [reserved];
(iii) in respect of the property and assets of a Guarantor, upon the release or discharge of the Guarantee of such Guarantor in accordance with this Indenture;
(iv) [reserved];
(v) in respect of any Collateral transferred to a third party or otherwise disposed of in connection with any enforcement by the Collateral Agent or the ABL Agent in accordance with the Intercreditor Agreements;
(vi) pursuant to an amendment or waiver in accordance with Article IX; and
(vii) if the Notes have been discharged or defeased pursuant to Section 8.01.
In addition, (i) the security interests granted pursuant to the Security Documents securing the Obligations shall automatically terminate and/or be released all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the applicable Pledgors (as defined in the Security Agreement or the Canadian Security Agreement, as applicable), as of the date when all the Obligations under the Notes, this Indenture and the Security Documents, and the other Notes Documents (other than contingent or unliquidated obligations or liabilities not then due) have been paid in full in cash or immediately available funds; and (ii) the security interests granted pursuant to the Security Documents securing the Notes Obligations shall automatically terminate as of the date when the holders of at least 66.67% in an aggregate principal amount of the Notes then outstanding consent to the termination of the Security Documents.
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In connection with any termination or release pursuant to this Section 11.04(a), upon receipt by the Collateral Agent of any items required by Sections 11.04(b) or 11.06, as applicable, and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuers, the Collateral Agent shall execute and deliver to any Pledgor (as defined in the Security Agreement or the Canadian Security Agreement, as applicable), at such Pledgor’s expense, all documents that such Pledgor shall reasonably request to evidence such termination or release (including, without limitation, UCC termination statements, PPSA financing change statements (discharges) or amendments), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral (as defined in the Security Agreement or the Canadian Security Agreement, as applicable) that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to this Indenture or the Security Documents. Any execution and delivery of documents pursuant to this Section 11.04(a) or Section 11.06 shall be without recourse to or representation or warranty by the Collateral Agent of any kind, and the Collateral Agent shall not be required to execute any such document or take any action to evidence any such termination or release on terms which, in the Collateral Agent’s opinion or the opinion of its counsel, could expose the Collateral Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse to or representation or warranty by the Collateral Agent of any kind. In connection with any release pursuant to this Section 11.04(a) or Section 11.06, the Pledgors shall be permitted to take any action in connection therewith consistent with such release including, without limitation, the filing of UCC termination statements or PPSA financing change statements (discharges).
(b) Notwithstanding anything herein to the contrary, in connection with (x) any release of Collateral pursuant to Section 11.04(a)(iii) or (vi), such Collateral may not be released from the Lien and security interest created by the Security Documents and the Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release, and (y) any release of Collateral pursuant to Section 11.04(a)(i) or (v), the Collateral Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release unless, in each case, an Officer’s Certificate and Opinion of Counsel certifying that all conditions precedent, including, without limitation, this Section 11.04, have been met, and stating under which of the circumstances set forth in Section 11.04(a) above the Collateral is being released, have been delivered to the Collateral Agent on or prior to, in the case of clause (x) above, the date of such release or, in the case of clause (y) above, the date on which the Collateral Agent executes any such instrument.
(c) Notwithstanding anything herein to the contrary, at any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee or the holders of 30% in aggregate principal amount of the outstanding Notes has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the holders, the Trustee or the Collateral Agent, except as otherwise provided in the Intercreditor Agreements.
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Section 11.05. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XI upon the Notes Parties with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Notes Parties or of any officer or officers thereof required by the provisions of this Article XI; and if the Trustee, Collateral Agent or a nominee of the Trustee or Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, Collateral Agent or a nominee of the Trustee or Collateral Agent.
Section 11.06. Release Upon Termination of the Issuers’ Obligations. In the event (i) that the Issuers deliver to the Trustee and the Collateral Agent an Officer’s Certificate and Opinion of Counsel certifying that all the Obligations under this Indenture, the Notes, the Security Documents, and the other Notes Documents have been satisfied and discharged by the payment in full of the Issuers’ Notes Obligations under the Notes, this Indenture, the Security Documents, and the other Notes Documents and all such Notes Obligations have been so satisfied, or (ii) a discharge, legal defeasance or covenant defeasance of this Indenture occurs under Article VIII, the Trustee shall deliver to the Issuers and the Collateral Agent a written notice stating that the Trustee, on behalf of the holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents and the other Notes Documents, and upon receipt by the Collateral Agent of such notice, the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary at the reasonable request and expense of the Issuers to release such Lien as soon as is reasonably practicable.
Section 11.07. Designations. Except as provided in the next sentence, for purposes of the provisions hereof and the Intercreditor Agreements requiring the Issuers to designate Indebtedness for the purposes of the term Junior Lien Obligations or any other such designation hereunder or under the Intercreditor Agreements, any such designation shall be sufficient if the relevant designation provides in writing that such Junior Lien Obligations are permitted under this Indenture and is signed on behalf of the Company by an Officer and delivered to the Trustee and the Collateral Agent.
Article XII
GUARANTEE
Section 12.01. Guarantee.
(a) Each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, on a senior basis, as a primary obligor and not merely as a surety, to each holder and to the Trustee and the Collateral Agent and their respective successors and assigns (i) the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all Notes Obligations of the Issuers under this Indenture, the Notes, and the other Notes Documents, whether for payment of principal of, premium, if any, or interest on the Notes and all other monetary obligations of the Company under this Indenture, the Notes and the other Notes Documents and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuers whether for fees, expenses, indemnification or otherwise under this Indenture, the Notes and the other Notes Documents (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). The Guaranteed Obligations of all Guarantors shall be secured by security interests (subject to Permitted Liens and Liens permitted by Section 4.12) in the Collateral owned by such Guarantor pursuant to the terms of the Security Documents and the Intercreditor Agreements, but subject to the terms and conditions of the Security Documents and the Intercreditor Agreements. Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from any Guarantor and that each Guarantor shall remain bound under this Article XII notwithstanding any extension or renewal of any Guaranteed Obligation.
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(b) [Reserved]
(c) Each Guarantor waives presentation to, demand of payment from and protest to the Issuers of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any holder, the Trustee or the Collateral Agent to assert any claim or demand or to enforce any right or remedy against the Issuers or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any holder, the Trustee or the Collateral Agent for the Guaranteed Obligations or each Guarantor; (v) the failure of any holder, the Trustee, or the Collateral Agent to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of each Guarantor, except as provided in Section 12.02(b). Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantor’s obligations would be less than the full amount claimed.
(d) Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuers first be used and depleted as payment of the Issuers’ or such Guarantor’s obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Issuers be sued prior to an action being initiated against such Guarantor.
(e) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any holder, the Trustee or the Collateral Agent to any security held for payment of the Guaranteed Obligations.
(f) Subject to the terms of the Intercreditor Agreements, the Guarantee of each Guarantor is, to the extent and in the manner set forth in this Article XII, equal in right of payment to all existing and future Pari Passu Indebtedness of such Guarantor, and senior in right of payment to all existing and future Subordinated Indebtedness of such Guarantor.
(g) Except as expressly set forth in Sections 8.01(b), 12.02 and 12.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any holder, the Trustee or the Collateral Agent to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Notes Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
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(h) Each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest or any other Guaranteed Obligation is rescinded or must otherwise be restored by any holder, the Trustee or the Collateral Agent upon the bankruptcy or reorganization of the Issuers or otherwise.
(i) In furtherance of the foregoing and not in limitation of any other right which any holder, the Trustee or the Collateral Agent, as applicable, has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the holders, the Trustee, or the Collateral Agent, as applicable, an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuers to the holders, the Trustee and the Collateral Agent.
(j) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the holders, the Trustee and the Collateral Agent, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of the Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purposes of this Section 12.01.
(k) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable out of pocket attorneys’ fees and expenses) Incurred by the Trustee, the Collateral Agent or any holder in enforcing any rights under this Section 12.01.
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(l) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
Section 12.02. Limitation on Liability.
(a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by each Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the applicable Guarantor without rendering the Guarantee or this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally or capital maintenance or corporate benefit rules applicable to guarantees for obligations of affiliates.
(b) A Guarantee as to any Subsidiary that is (or becomes) a party hereto on the date hereof or that executes a supplemental indenture in accordance with Section 4.11 hereof and provides a guarantee shall terminate and be of no further force or effect and such Guarantee shall be deemed to be automatically released from all obligations under this Article XII upon any of the following:
(i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock of the applicable Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of this Indenture;
(ii) [reserved];
(iii) [reserved];
(iv) the Issuers’ exercise of their legal defeasance option or covenant defeasance option under Article VIII or if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture; and
(v) if such Guarantor is a Subsidiary, such Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of the Notes Obligations or other exercise of remedies in respect thereof, subject to, in each case, the application of the proceeds of such foreclosure or exercise of remedies in the manner described in the Security Documents and the Intercreditor Agreements.
Section 12.03. [Reserved].
Section 12.04. Successors and Assigns. This Article XII shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee, the Collateral Agent and the holders and, in the event of any transfer or assignment of rights by any holder, the Trustee, or the Collateral Agent the rights and privileges conferred upon that party in this Indenture, in the Notes and the other Notes Documents shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
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Section 12.05. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the holders in exercising any right, power or privilege under this Article XII shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee, the Collateral Agent and the holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XII at law, in equity, by statute or otherwise.
Section 12.06. Modification. No modification, amendment or waiver of any provision of this Article XII, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee (acting at the direction of the holders of the requisite amount of Notes as specified herein), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle any Guarantor to any other or further notice or demand in the same, similar or other circumstances.
Section 12.07. Execution of Supplemental Indenture for Future Guarantors. Each Subsidiary of the Company which is required to become a Guarantor of the Notes pursuant to Section 4.11 shall promptly execute and deliver to the Trustee (with a copy to the Collateral Agent) a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary shall become a Guarantor under this Article XII and shall guarantee the Notes. Concurrently with the execution and delivery of such supplemental indenture, the Issuers shall deliver to the Trustee and the Collateral Agent an Officer’s Certificate as provided in Section 9.05; however, for the avoidance of doubt, no Opinion of Counsel shall be required in connection with the execution and delivery of a supplemental indenture for the addition of a Guarantor under this Indenture.
Section 12.08. Non-Impairment. The failure to endorse a Guarantee on any Note shall not affect or impair the validity thereof.
Section 12.09. Prohibition on Release of Guarantees. No Guarantor will be released from its Guarantee or become an Excluded Subsidiary, including as a result of ceasing to be a Subsidiary, unless (i) at the time such Guarantor ceases to be a Subsidiary or otherwise becomes an Excluded Subsidiary, the primary purpose of such transaction was not to evade the guarantee requirements hereof, including Section 4.11, (ii) the transaction by which such Guarantor ceases to be a Subsidiary or otherwise becomes an Excluded Subsidiary was consummated on an arms’ length basis with an unaffiliated third party and (iii) such transaction otherwise complies with the terms of this Indenture (with the Company being deemed to have made an Investment in such resulting Excluded Subsidiary or other Person at the time of such transaction); provided, that no such release shall occur if such Guarantor continues to be a guarantor with respect to any Indebtedness or any permitted refinancing thereof.
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Article XIII
[Reserved]
(a) [Reserved]
Article XIV
MISCELLANEOUS
Section 14.01. [Reserved].
Section 14.02. Notices.
(a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:
if to the Issuers or a Guarantor:
c/o Exela Technologies BPA, LLC
6641 N. Belt Line Road, Suite 100
Irving, TX 75063 USA
Attention: Suresh Yannamani and Matt Brown
Email: suresh.yannamani@exelatech.com and matt.brown@exelatech.com
with copies to:
Latham & Watkins LLP
1271 avenue of the Americas
New York, NY 10020
Attention: Alexander Welch, Hugh Murtagh, Jonathan Weichselbaum
Email: alex.welch@lw.com, hugh.murtagh@lw.com,
jon.weichselbaum@lw.com
if to the Trustee:
U.S. Bank Trust Company, National Association
West Side Flats
60 Livingston Ave.
St. Paul, Minnesota 55107
Attention: Administrator— Exela Technologies BPA, LLC
Fax: (651) 466-7430
if to the Collateral Agent:
Ankura Trust Company, LLC
140 Sherman Street, 4th Floor
Fairfield, CT 06824
Attention: Beth Micena
Email: Beth.Micena@ankura.com
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with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600
Attention: Mark Somerstein, Patricia Chen
Email: mark.somerstein@ropesgray.com; patricia.chen@ropesgray.com
The Issuers, the Trustee or the Collateral Agent by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices or other communications sent in accordance with this Section 14.02, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (i) notices sent by overnight courier service shall be deemed to have been given when received, and (ii) notices by facsimile 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).
(b) Any notice or communication mailed to a holder shall be mailed, first class mail, to the holder at the holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
(c) Failure to mail a notice or communication to a holder or any defect in it shall not affect its sufficiency with respect to other holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.
Each of the Trustee and the Collateral Agent may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Indenture sent by e-mail, facsimile transmission or other similar electronic methods. Electronic signatures believed by the Trustee or the Collateral Agent, as applicable, to comply with the ESIGN Act of 2000 or other applicable law (including electronic images of handwritten signatures and digital signatures provided by DocuSign, Orbit, Adobe Sign or any other digital signature provider acceptable to the Trustee or the Collateral Agent, as applicable) shall be deemed original signatures for all purposes. If the party elects to give the Trustee or the Collateral Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee or the Collateral Agent, as applicable, in its discretion elects to act upon such instructions, the Trustee’s or the Collateral Agent’s (as applicable) understanding of such instructions shall be deemed controlling. The Trustee and the Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s and the Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee and the Collateral Agent, including without limitation the risk of the Trustee and the Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties. Notwithstanding the foregoing, each of the Trustee and the Collateral Agent may in any instance and in its sole discretion require that an original document bearing a manual signature be delivered to the Trustee or the Collateral Agent, as applicable, in lieu of, or in addition to, any such electronic instructions.
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Notwithstanding anything to the contrary contained herein, as long as the Notes are in the form of a Global Note, notice to the holders may be made electronically (or otherwise) in accordance with procedures of the Depository.
Section 14.03. [Reserved].
Section 14.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuers to the Trustee or the Collateral Agent to take or refrain from taking any action under this Indenture or any other Notes Documents, the Issuers shall furnish to the Trustee or the Collateral Agent, as applicable at the request of the Trustee or the Collateral Agent, as applicable:
(a) an Officer’s Certificate in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable, stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture and the other Notes Documents relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee or the Collateral Agent, as applicable, stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
Section 14.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:
(a) a statement that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.
Section 14.06. When Notes Disregarded. In determining whether the holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any of its Subsidiaries shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee actually knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
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Section 14.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of the holders. The Collateral Agent, the Registrar and a Paying Agent may make reasonable rules for their functions.
Section 14.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular Record Date is not a Business Day, the Record Date shall not be affected.
Section 14.09. GOVERNING LAW. THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS INDENTURE OR ANY OTHER NOTES DOCUMENT MAY BE BROUGHT IN THE FEDERAL COURTS SITTING IN THE SOUTHERN DISTRICT OF NEW YORK IN THE STATE OF NEW YORK, OR IF SUCH FEDERAL COURTS DO NOT HAVE JURISDICTION, THEN TO THE COMMERCIAL DIVISION OF THE STATE COURTS RESIDING IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK, OR, TO THE EXTENT THAT ANY ACTION IS NOT ELIGIBLE FOR FILING IN THE COMMERCIAL DIVISION, THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND, BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH NOTES PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURT.
Section 14.10. No Recourse Against Others. No director, officer, employee, manager, incorporator or holder of any Equity Interests in the Company or any direct or indirect parent companies, as such, shall have any liability for any obligations of the Issuers or any Guarantor under the Notes, the Guarantees or this Indenture, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Section 14.11. Successors. All agreements of the Issuers and the Guarantors in this Indenture and the Notes shall bind such person’s successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind their respective successors.
Section 14.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. Delivery of an executed counterpart of a signature page to this Indenture by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) shall be effective as delivery of a manually executed counterpart thereof.
Section 14.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
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Section 14.14. Indenture Controls. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.
Section 14.15. Severability. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
Section 14.16. Intercreditor Agreements. The terms of this Indenture are subject to the terms of the ABL Intercreditor Agreement and the Super Senior Intercreditor Agreement, if applicable.
Section 14.17. Waiver of Jury Trial. EACH OF THE NOTES PARTIES AND THE TRUSTEE HEREBY (AND EACH HOLDER OF A NOTE BY ITS ACCEPTANCE THEREOF) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 14.18. Parent. The parties hereto acknowledge and agree that Parent is not a party to this Indenture or any other Notes Document and shall not be deemed an Issuer, Guarantor, or other obligor with respect to the Notes Obligations.
[Remainder of page intentionally leftblank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first above written.
| ISSUERS: | |
|---|---|
| EXELA TECHNOLOGIES BPA, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA FINANCE INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| GUARANTORS: | |
| EXELA INTERMEDIATE LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| SOURCEHOV HOLDINGS, INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| CORPSOURCE HOLDINGS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP, INCORPORATED | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP BPS INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DELIVEREX, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| UNITED INFORMATION SERVICES, INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| ECONOMIC RESEARCH SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP LEGAL INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RUST CONSULTING, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV HEALTHCARE, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| KINSELLA MEDIA LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| HOV SERVICES, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOV ENTERPRISE SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| MERIDIAN CONSULTING GROUP, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RUSTIC CANYON III, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOV SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| CHARTER LASON, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| LASON INTERNATIONAL, INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP MANAGEMENT, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| PANGEA ACQUSITIONS INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC GROUP LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC (PUERTO RICO), INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| DOCUDATA SOLUTIONS, L.C. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BTC VENTURES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RECOGNITION MEXICO HOLDING INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC INTERMEDIATE HOLDING, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RC4 CAPITAL, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DFG2 HOLDINGS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| DFG2, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| PLEXUS GLOBAL FINANCE, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOVG, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| TRAC HOLDINGS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| MANAGED CARE PROFESSIONALS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| FTS PARENT INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| TRANSCENTRA, INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| J & B SOFTWARE, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS HOLDING INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS GROUP LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS GROUP II LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS AMERICA LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| REGULUS INTERGRATED SOLUTIONS LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA RE LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS WEST LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX HOLDINGS, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX INTERMEDIATE, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX GOVERNMENT SOLUTIONS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| EXELA XBP, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC (CANADA), INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV CANADA COMPANY | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| XCV-EMEA, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NEON ACQUISITION, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX ENTERPRISE SOLUTIONS CANADA, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| EXELA ENTERPRISE SOLUTIONS, INC. | |
|---|---|
| By: | /s/ Mayur Joshi |
| Name: Mayur Joshi | |
| Title: Vice President & Treasurer | |
| Services Integration Group, L.P. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SIG-GP, L.L.C. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Indenture]
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | |
|---|---|
| By: | /s/ Joshua A. Hahn |
| Name: Joshua A. Hahn | |
| Title: Vice President |
[Signature Page to Indenture]
| ANKURA TRUST COMPANY, LLC, as Collateral Agent | |
|---|---|
| By: | /s/ Beth Micena |
| Name: Beth Micena | |
| Title: Managing Director |
[Signature Page to Indenture]
APPENDIXA
PROVISIONS RELATING TO INITIAL NOTES AND ADDITIONAL NOTES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix A the following terms shall have the meanings indicated below:
“Definitive Note” means a certificated Initial Note or Additional Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not include the Global Notes Legend.
“Depository” means The Depository Trust Company, its nominees and their respective successors.
“Global Notes Legend” means the legend set forth under that caption in the applicable Exhibit to this Indenture.
“IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the Securities Act.
“IAI Notes” means all Notes offered and sold to IAIs.
“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depository) or any successor Person thereto, who shall initially be the Trustee.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Regulation S” means Regulation S under the Securities Act.
“Regulation S Notes” means all Notes offered and sold outside the United States in reliance on Regulation S.
“Restricted Notes Legend” means the legend set forth in Section 2.2(f)(i) herein.
“Restricted Period,” with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Issuers to the Trustee, and (b) the Issue Date, and with respect to any Additional Notes that are Transfer Restricted Notes, it means the comparable period of 40 consecutive days.
“Rule 144A” means Rule 144A under the Securities Act.
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“Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A.
“Transfer Restricted Definitive Notes” means Definitive Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
“Transfer Restricted Global Notes” means Global Notes that bear or are required to bear or are subject to the Restricted Notes Legend.
“Transfer Restricted Notes” means the Transfer Restricted Definitive Notes and Transfer Restricted Global Notes.
“Unrestricted Definitive Notes” means Definitive Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
“Unrestricted Global Notes” means Global Notes that are not required to bear, or are not subject to, the Restricted Notes Legend.
1.2 Other Definitions.
| Term: | Defined in Section: |
|---|---|
| Agent Members | 2.1(b) |
| Global Notes | 2.1(b) |
| IAI Global Notes | 2.1(b) |
| Regulation S Global Notes | 2.1(b) |
| Regulation S Permanent<br> Global Note | 2.1(b) |
| Regulation S Temporary<br> Global Note | 2.1(b) |
| Rule 144A Global Notes | 2.1(b) |
2. The Notes.
2.1 Form and Dating; Global Notes.
(a) The Initial Notes issued on the date hereof and any Additional Notes issued in respect of the ETI Funding Obligation will be (i) privately placed by the Issuers and (ii) sold, initially only to IAIs in reliance on Section 4(a)(2) of the Securities Act. Such Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and non-US Persons (as defined under Regulation S) in reliance upon applicable exemptions under the Securities Act. Additional Notes offered after the date hereof may be offered and sold by the Issuers from time to time pursuant to one or more agreements in accordance with applicable law.
(b) Global Notes. (i) Except as provided in clause (d) of Section 2.2 below, Rule 144A Notes initially shall be represented by one or more Notes in definitive, fully registered, global form without interest coupons (collectively, the “Rule 144A Global Notes”).
Regulation S Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the “Regulation S Temporary Global Note” and, together with the Regulation S Permanent Global Note (defined below), the “Regulation S Global Notes”), which shall be registered in the name of the Depository or the nominee of the Depository for the accounts of designated agents holding on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear system (“Euroclear”) or Clearstream Banking, societe anonyme (“Clearstream”).
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IAI Notes initially shall be represented by one or more Notes in fully registered, global form without interest coupons (collectively, the “IAI Global Notes”).
Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in a permanent Global Note (the “Regulation S Permanent Global Note”) pursuant to the applicable procedures of the Depository. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.
The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by participants through Euroclear or Clearstream.
The term “Global Notes” means the Rule 144A Global Notes, the Regulation S Global Notes and the IAI Global Notes. The Global Notes shall bear the Global Note Legend. The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear the Restricted Notes Legend.
Members of, or direct or indirect participants in, the Depository (collectively, the “Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes. The Depository may be treated by the Issuers, the Trustee, the Collateral Agent and any agent of the Issuers, the Trustee or the Collateral Agent as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee, the Collateral Agent or any agent of the Issuers, the Trustee or the Collateral Agent from giving effect to any written certification, proxy or other authorization furnished by the Depository, or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any Note.
(ii) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Definitive Notes only in accordance with the applicable rules and procedures of the Depository and the provisions of Section 2.2. In addition, a Global Note shall be exchangeable for Definitive Notes if (x) the Depository (1) notifies the Issuers that it is unwilling or unable to continue as depository for such Global Note and the Issuers thereupon fails to appoint a successor depository or (2) has ceased to be a clearing agency registered under the Exchange Act or (y) there shall have occurred and be continuing an Event of Default with respect to such Global Note and a request has been made for such exchange; provided, that in no event shall the Regulation S Temporary Global Note be exchanged by the Issuers for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act. In all cases, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository in accordance with its customary procedures.
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(iii) In connection with the transfer of a Global Note as an entirety to beneficial owners pursuant to subsection (ii) of this Section 2.1(b), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and, upon written order of each Issuer signed by an Officer, the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.
(iv) Any Transfer Restricted Note delivered in exchange for an interest in a Global Note pursuant to Section 2.2 shall, except as otherwise provided in Section 2.2, bear the Restricted Notes Legend.
(v) Notwithstanding the foregoing, through the Restricted Period, a beneficial interest in a Regulation S Global Note may be held only through Euroclear or Clearstream unless delivery is made in accordance with the applicable provisions of Section 2.2.
(v) The holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes.
2.2 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except as set forth in Section 2.1(b). Global Notes will not be exchanged by the Issuers for Definitive Notes except under the circumstances described in Section 2.1(b)(ii). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Section 2.08 of this Indenture. Beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.2(b).
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(b) Transfer and Exchange of Beneficial Interests in Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the applicable rules and procedures of the Depository. Beneficial interests in Transfer Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Beneficial interests in Global Notes shall be transferred or exchanged only for beneficial interests in Global Notes. Transfers and exchanges of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Transfer Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Transfer Restricted Global Note in accordance with the transfer restrictions set forth in the Restricted Notes Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in a Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. A beneficial interest in an Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.2(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.2(b)(i), the transferor of such beneficial interest must deliver to the Registrar (1) a written order from an Agent Member given to the Depository in accordance with the applicable rules and procedures of the Depository directing the Depository to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the applicable rules and procedures of the Depository containing information regarding the Agent Member account to be credited with such increase. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note pursuant to Section 2.2(g).
(iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in a Transfer Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Transfer Restricted Global Note if the transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in a Rule 144A Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note;
(B) if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note; and
(C) if the transferee will take delivery in the form of a beneficial interest in a IAI Global Note, then the transferor must deliver a certificate in the form attached to the applicable Note.
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(iv) Transfer and Exchange of Beneficial Interests in a Transfer Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in a Transfer Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.2(b)(ii) above and the Registrar receives the following:
(A) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such beneficial interest in a Transfer Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer or exchange is effected pursuant to this subparagraph (iv) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of the Issuers in the form of an Officer’s Certificate in accordance with Section 2.01 of the Indenture, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred or exchanged pursuant to this subparagraph (iv).
(v) Transfer and Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Transfer Restricted Global Note. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
(c) Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes. A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.1(b)(ii). A beneficial interest in a Global Note may not be transferred to a Person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.1(b)(ii). In any such case, beneficial interests in Global Notes shall be transferred or exchanged only for Definitive Notes.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. Transfers and exchanges of Definitive Notes for beneficial interests in the Global Notes also shall require compliance with either subparagraph (i), (ii) or (iii) below, as applicable:
(i) Transfer Restricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes. If any holder of a Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in a Transfer Restricted Global Note or to transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Transfer Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Note for a beneficial interest in a Transfer Restricted Global Note, a certificate from such holder in the form attached to the applicable Note;
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(B) if such Transfer Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(C) if such Transfer Restricted Definitive Note is being transferred to a non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(D) if such Transfer Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate from such holder in the form attached to the applicable Note;
(E) if such Transfer Restricted Definitive Note is being transferred to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate from such holder in the form attached to the applicable Note, including the certifications, certificates and Opinion of Counsel, if applicable; or
(F) if such Transfer Restricted Definitive Note is being transferred to the Company or a Subsidiary thereof, a certificate from such holder in the form attached to the applicable Note;
the Trustee shall cancel the Transfer Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the appropriate Transfer Restricted Global Note.
(ii) Transfer Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A holder of a Transfer Restricted Definitive Note may exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Transfer Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such Transfer Restricted Definitive
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Notes proposes to transfer such Transfer Restricted Definitive Note to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request or if the applicable rules and procedures of the Depository so require, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of this subparagraph (ii), the Trustee shall cancel the Transfer Restricted Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. If any such transfer or exchange is effected pursuant to this subparagraph (ii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of the Company in the form of an Officer’s Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Transfer Restricted Notes transferred or exchanged pursuant to this subparagraph (ii).
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A holder of an Unrestricted Definitive Note may exchange such Unrestricted Definitive Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such transfer or exchange is effected pursuant to this subparagraph (iii) at a time when an Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an written order of the Company in the form of an Officer’s Certificate, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Unrestricted Definitive Notes transferred or exchanged pursuant to this subparagraph (iii).
(iv) Unrestricted Definitive Notes to Beneficial Interests in Transfer Restricted Global Notes. An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a beneficial interest in a Transfer Restricted Global Note.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a holder of Definitive Notes and such holder’s compliance with the provisions of this Section 2.2(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder or by its attorney, duly authorized in writing. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.2(e).
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(i) Transfer Restricted Definitive Notes to Transfer Restricted Definitive Notes. A Transfer Restricted Note may be transferred to and registered in the name of a Person who takes delivery thereof in the form of a Transfer Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the transferor must deliver a certificate in the form attached to the applicable Note;
(C) if the transfer will be made pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate in the form attached to the applicable Note;
(D) if the transfer will be made to an IAI in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, a certificate in the form attached to the applicable Note; and
(E) if such transfer will be made to the Company or a Subsidiary thereof, a certificate in the form attached to the applicable Note.
(ii) Transfer Restricted Definitive Notes to Unrestricted Definitive Notes. Any Transfer Restricted Definitive Note may be exchanged by the holder thereof for an Unrestricted Definitive Note or transferred to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(A) if the holder of such Transfer Restricted Definitive Note proposes to exchange such Transfer Restricted Definitive Note for an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note; or
(B) if the holder of such Transfer Restricted Definitive Note proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form attached to the applicable Note,
and, in each such case, if the Issuers or the Registrar so request, an Opinion of Counsel in form reasonably acceptable to the Issuers and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend are no longer required in order to maintain compliance with the Securities Act.
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(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A holder of an Unrestricted Definitive Note may transfer such Unrestricted Definitive Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note at any time. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the holder thereof.
(iv) Unrestricted Definitive Notes to Transfer Restricted Definitive Notes. An Unrestricted Definitive Note cannot be exchanged for, or transferred to a Person who takes delivery thereof in the form of, a Transfer Restricted Definitive Note.
(f) Legend.
(i) Except as permitted by the following paragraph (iii), (iv) or (v), each Note certificate evidencing the Global Notes and any Definitive Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only):
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3), (7), (8), (9), (12) OR (13) UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, IN A MINIMUM OF $100,000 PRINCIPAL AMOUNT OF THE SECURITIES OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES AND IAI NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, IN A MINIMUM OF $100,000 PRINCIPAL AMOUNT OF THE SECURITIES, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.”
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“THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENTS (AS DEFINED IN THE INDENTURE), AS THE SAME MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.”
Each Regulation S Note shall bear the following additional legend:
“BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.”
Each Definitive Note shall bear the following additional legend:
“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”
(ii) Upon any sale or transfer of a Transfer Restricted Definitive Note, the Registrar shall permit the holder thereof to exchange such Transfer Restricted Note for a Definitive Note that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Definitive Note if the holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Note).
(iii) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note acquired pursuant to Regulation S, all requirements that such Initial Note bear the Restricted Notes Legend shall cease to apply and the requirements requiring any such Initial Note be issued in global form shall continue to apply.
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(iv) Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend (other than the portion thereof relating to the Intercreditor Agreements).
(g) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.10 of this Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.
(h) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Issuers shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Registrar’s request.
(ii) No service charge shall be made for any registration of transfer or exchange of Notes, but the Issuers may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.09, 4.06, 4.08 and 9.04 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of any Note, the Issuers, the Trustee, the Collateral Agent, a Paying Agent or the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuers, the Trustee, the Collateral Agent, the Paying Agent or the Registrar shall be affected by notice to the contrary.
(iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
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(i) No Obligation of the Trustee.
(i) The Trustee and the Collateral Agent shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the holders and all payments to be made to the holders under the Notes shall be given or made only to the registered holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee and the Collateral Agent may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
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EXHIBIT A
[FORM OFFACE OF INITIAL NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3), (7), (8), (9), (12) OR (13) UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, IN A MINIMUM OF $100,000 PRINCIPAL AMOUNT OF THE SECURITIES OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN [IN THE CASE OF RULE 144A NOTES AND THE IAI NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY AFFILIATE OF THE ISSUERS WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE, IN A MINIMUM OF $100,000 PRINCIPAL AMOUNT OF THE SECURITIES, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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THE TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENTS (AS DEFINED IN THE INDENTURE), AS THE SAME MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE INDENTURE.
[Restricted Notes Legend for Notes Offeredin Reliance on Regulation S]
BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON, NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
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[FORM OFINITIAL NOTE]
ExelaTechnologies BPA, LLC
[EXELA FINANCE INC.]
| No. [ ] | RULE<br> 144A CUSIP No. [ ] |
|---|---|
| RULE 144A ISIN No. [ <br> ] | |
| REGULATION S CUSIP No. [ <br> ] | |
| REGULATION S ISIN<br> No. [ ] | |
| IAI CUSIP No. [ <br> ] | |
| IAI ISIN No. [ <br> ] | |
| $[ ] |
12.000%First-Priority Senior Secured Note due 2030
Exela Technologies BPA, LLC, a Delaware limited liability company (together with its successors and assigns under the Indenture (as defined on the reverse hereof)), and Exela Finance Inc., a Delaware corporation (together with its successors and assigns under the Indenture), promise to pay to [Cede & Co.], or registered assigns, the principal sum of [ ] U.S. dollars ($[ ]), as revised by the Schedule of Increases or Decreases in Global Note attached hereto, on July 15, 2030.
Interest Payment Dates: January 15, April 15, July 15 and October 15 commencing January 15, 2026.
Record Dates: January 1, April 1, July 1 and October 1.
Additional provisions of this Note are set forth on the other side of this Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
| Exela Technologies<br> BPA, LLC | |
|---|---|
| By: | |
| Name: | |
| Title: | |
| EXELA FINANCE INC. | |
| By: | |
| Name: | |
| Title: |
Dated: July 29, 2025
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TRUSTEE’S CERTIFICATE OF AUTHENTICATION
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee, certifies that this is one of the Notes referred to in the Indenture.
| By: | |
|---|---|
| Authorized<br> Signatory | |
| Dated:______________ , 2025 |
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[FORM OFREVERSE SIDE OF INITIAL NOTE]
12.000% First-PrioritySenior Secured Note Due 2030
| 1. | Interest |
|---|
Exela Technologies BPA, LLC, a Delaware limited liability company (such entity, and its successors and assigns under the Indenture hereinafter referred to, the “Company”), and EXELA FINANCE INC., a Delaware corporation (such entity, and its successors and assigns under the Indenture hereinafter referred to, the “Co-Issuer” and, together with the Company, the “Issuers”), jointly and severally, promise to pay interest in cash on the principal amount of this Note at the rate per annum shown above. The Issuers shall pay interest, in cash, quarterly on January 15, April 15, July 15 and October 15 of each year (each, an “Interest Payment Date”), commencing January 15, 2026. Interest on the Notes shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from the issue date thereof, until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Issuers shall pay interest on overdue principal at the rate borne by the Notes plus 2.00% and shall pay interest on overdue installments of interest at the same rate to the extent lawful.
| 2. | Method of Payment |
|---|
The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are registered holders at the close of business on January 1, April 1, July 1 or October 1 (each, a “Record Date”) immediately preceding the related Interest Payment Date even if Notes are canceled after the Record Date and on or before the related Interest Payment Date (whether or not a Business Day). Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuers shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depositary. The Issuers shall make all payments in respect of a certificated Note (including principal, premium, if any, and interest) at the office of the Paying Agent, except that, at the option of the Issuers, payment of interest may be made by mailing a check to the registered address of each holder thereof; provided, however, that payments on the Notes may also be made, in the case of a holder of at least $1,000,000 aggregate principal amount of the Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States of America if such holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the related Interest Payment Date (or such other date as the Trustee may accept in its discretion).
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| 3. | Paying Agent and Registrar |
|---|
Initially, U.S. Bank Trust Company, National Association, as trustee under the Indenture (the “Trustee”), will act as Paying Agent and Registrar. The Issuers may appoint and change any Paying Agent or Registrar upon written notice to such Paying Agent or Registrar and to the Trustee. The Issuers or any of its domestically incorporated Subsidiaries may act as Paying Agent or Registrar.
| 4. | Indenture |
|---|
The Issuers issued the Notes under the indenture, dated as of July 29, 2025 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), by and among the Notes Parties party thereto from time to time, the Trustee and Ankura Trust Company, LLC as Collateral Agent. Capitalized terms used and not otherwise defined herein have the respective meanings ascribed to such terms in the Indenture, unless otherwise indicated. The terms of the Notes include those stated in the Indenture. The Notes are subject to all terms and provisions of the Indenture, and the holders (as defined in the Indenture) are referred to the Indenture for a statement of such terms and provisions. If and to the extent that any term or provision of the Notes limits, qualifies or conflicts with a term or provision of the Indenture, such term or provision of the Indenture shall control.
The Notes are senior secured obligations of the Issuers. This Note is one of the Initial Notes referred to in the Indenture. The Notes include the Initial Notes and any Additional Notes. The Initial Notes and any Additional Notes are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of the Notes Parties and their respective Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by Subsidiaries, issue or sell shares of capital stock of Subsidiaries, enter into or permit certain transactions with Affiliates, create or Incur Liens and make Asset Sales.
The Indenture also imposes limitations on the ability of each of the Notes Parties to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property.
To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuers under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, any Guarantor that executes a Guarantee will unconditionally guarantee the Guaranteed Obligations on a senior secured basis pursuant to the terms of the Indenture.
| 5. | Optional Redemption |
|---|
The Issuers may, subject to, if applicable, the satisfaction of the Prepayment Conditions in accordance with the terms of the Indenture, redeem the Notes at their option, in whole at any time or in part from time to time, upon not less than 10 nor more than 30 days’ prior notice mailed by the Issuers by first-class mail to each holder’s registered address, or delivered electronically if held by DTC, at a redemption price of 100.0% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).
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Notice of any redemption upon any corporate transaction or other event may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers’ discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event. If any redemption is so subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers’ discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed. In addition, the Issuers may provide in such notice that payment of the redemption price and performance of the Issuers’ obligations with respect to such redemption may be performed by another Person.
| 6. | Mandatory Redemption |
|---|
The Issuers will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.
| 7. | Notice of Redemption |
|---|
Notices of redemption (other than notices of redemption in connection with the final paragraph of Paragraph 5 of this Note) will be mailed by first class mail at least 10 but not more than 30 days before the redemption date, to each holder of Notes to be redeemed at its registered address (with a copy to the Trustee) or otherwise delivered in accordance with the procedures of The Depository Trust Company (“DTC”), except that redemption notices may be mailed or otherwise delivered more than 60 days prior to the redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture pursuant to Article VIII thereof. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with a Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date, interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
| 8. | Repurchase of Notes at the Option of<br> the Holders upon Change of Control, Asset Sales, Debt Issuances and with Excess Cash Flow. |
|---|
Upon the occurrence of a Change of Control, each holder shall have the right, subject to certain conditions specified in the Indenture, to cause the Issuers to repurchase all or any part of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of the holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), as provided in, and subject to the terms of, the Indenture.
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In accordance with Section 4.06, 4.18 and 4.19 of the Indenture, the Issuers will be required to offer to purchase Notes upon the occurrence of certain events, subject to the conditions in the Indenture.
| 9. | Ranking and Collateral. |
|---|
The Notes and the Guarantees will be secured by a security interest (subject to the Permitted Liens and Liens permitted by Section 4.12 of the Indenture) in the Collateral pursuant to the Security Documents (but subject to the terms and conditions of the Security Documents and the Intercreditor Agreements). The Liens upon any and all Collateral are to the extent and in the manner provided in the Intercreditor Agreements.
| 10. | Denominations; Transfer; Exchange |
|---|
The Notes are in registered form, without coupons, in minimum denominations of $1.00 principal amount and integral multiples of $1.00 in excess thereof. A holder shall register the transfer of or exchange of the Notes in accordance with the Indenture. Upon any registration of transfer or exchange, the Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements or transfer documents and the Issuers may require a holder to pay any taxes required by law or permitted by the Indenture. The Issuers shall not be required to make, and the Registrar need not register, the transfer or exchange of any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or the transfer or exchange of any Notes for a period of 15 days before a selection of Notes to be redeemed or between the Record Date and the related Interest Payment Date.
| 11. | Persons Deemed Owners |
|---|
Except as provided in Paragraph 2 hereof, the registered holder of this Note shall be treated as the owner of it for all purposes.
| 12. | Unclaimed Money |
|---|
Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuers upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, holders entitled to the money must look to the Issuers for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
| 13. | Discharge and Defeasance |
|---|
Subject to certain conditions, the Issuers at any time may terminate some of or all its obligations under the Notes and the Indenture if the Issuers deposit with the Trustee money or U.S. Government Obligations for the payment of principal of and premium (if any) and interest on the Notes to redemption or maturity, as the case may be.
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| 14. | Amendment; Waiver |
|---|
Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Notes, the Guarantees, the Security Documents and the Intercreditor Agreements may be amended with the consent of the holders of at least a majority in principal amount of the Notes then outstanding and (ii) any past default or compliance with any provisions of the Indenture may be waived with the consent of the holders of at least a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without notice to or the consent of any holder, the Issuers, the Collateral Agent and the Trustee may amend the Indenture, the Notes, the Guarantees, the Security Documents and/or the Intercreditor Agreements (i) to cure any ambiguity, omission, mistake, defect or inconsistency; (ii) to provide for the assumption by a Successor Company (with respect to the Company) of the obligations of the Company under the Indenture, the Notes, the Security Documents and the Intercreditor Agreements or to provide for the assumption by a Successor Co-Issuer (with respect to the Co-Issuer) of the obligations of the Co-Issuer under the Indenture, the Notes, the Security Documents and the Intercreditor Agreements; (iii) to provide for the assumption by a Successor Guarantor (with respect to any Guarantor), as the case may be, of the obligations of a Guarantor under the Indenture, its Guarantee, the Security Documents and the Intercreditor Agreements; (iv) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (v) [Reserved]; (vi) to add a Guarantee or collateral with respect to the Notes, (vii) to release or subordinate Collateral as permitted by the Indenture, the Security Documents or the Intercreditor Agreements; (viii) to add additional secured creditors holding other Obligations so long as such obligations are not prohibited by the Indenture; (ix) to comply with any requirement of the SEC in connection with qualifying or maintaining the qualification of the Indenture under the TIA (if the Issuers elect to qualify the Indenture under the TIA); (x) to add to the covenants of the Issuers for the benefit of the holders or to surrender any right or power herein conferred upon the Issuers; (xi) to make any change that does not adversely affect the rights of any holder in any material respect; or (xii) to make changes to provide for the issuance of Additional Notes (to the extent permitted by, and in accordance with the terms of, the Indenture), which shall have terms substantially identical in all material respects to the Initial Notes, and which shall be treated, together with any outstanding Initial Notes, as a single issue of securities.
In addition, the Intercreditor Agreements may be amended (i) without notice to or the consent of any holder, the Trustee or the Collateral Agent in connection with the permitted entry by a joinder into the Intercreditor Agreements of any class of additional secured creditors holding Obligations so long as such Obligations are not prohibited by the Indenture and are permitted by the Intercreditor Agreements and (ii) without notice to or consent of any holder to reflect administrative changes thereto.
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| 15. | Defaults and Remedies |
|---|
If an Event of Default (other than an Event of Default relating to bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, either (i) the Trustee by notice to the Issuers (with a copy to the Collateral Agent) or (ii) the holders of at least 30% in aggregate principal amount of outstanding Notes by notice to the Issuers, with a copy to the Trustee and the Collateral Agent, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable.
Upon such a declaration, such principal, premium and interest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee, the Collateral Agent or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences.
The Trustee and the Collateral Agent shall be under no obligation to exercise any of the rights or powers under the Indenture or the other Notes Documents at the request or direction of any of the holders unless such holders have offered and, if requested, provided to the Trustee and the Collateral Agent indemnity or security satisfactory to the Trustee and the Collateral Agent against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the Notes unless (i) holders of at least 30% in aggregate principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (ii) such holders have offered and, if requested, provided to the Trustee (and if applicable, the Collateral Agent) security or indemnity satisfactory to it against any loss, liability or expense, (iii) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (iv) the holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee and the Collateral Agent or of exercising any trust or power conferred on the Trustee. The Trustee and the Collateral Agent, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee or the Collateral Agent in personal liability. Prior to taking any action under the Indenture or the other Notes Documents, the Trustee and the Collateral Agent shall be entitled to indemnification satisfactory to it against all losses and expenses caused by taking or not taking such action.
| 16. | Trustee Dealings with the Issuers |
|---|
The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of the Notes and may otherwise deal with and collect obligations owed to it by the Issuers or their respective Affiliates and may otherwise deal with the Issuers or their respective Affiliates with the same rights it would have if it were not Trustee.
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| 17. | No Recourse Against Others |
|---|
No director, officer, employee, manager, incorporator or holder of any Equity Interests in an Issuer or any direct or indirect parent companies, as such, will have any liability for any obligations of an Issuer or any Guarantor under the Notes, the Indenture or the Guarantees, as applicable, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of the Notes by accepting a Note waives and releases all such liability.
| 18. | Authentication |
|---|
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.
| 19. | Abbreviations |
|---|
Customary abbreviations may be used in the name of a holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
| 20. | Governing Law |
|---|
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
| 21. | CUSIP Numbers; ISINs |
|---|
The Issuers have caused CUSIP numbers and ISINs to be printed on the Notes and have directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to the holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
The Issuers will furnishto any holder of the Notes upon written request and without charge to the holder a copy of the Indenture which has in it the text ofthis Note.
A-11
ASSIGNMENT FORM
| To assign this Note, fill in the form below: | |
|---|---|
| I or we assign and transfer this Note to: | |
| (Print or type assignee’s name, address and zip code) | |
| (Print or type assignee’s name, address and zip code) |
and irrevocably appoint __________ as agent to transfer this Note on the books of the Issuers. The agent may substitute another to act for him.
| Date: | Your Signature: |
|---|---|
| Sign exactly as your name appears on the other side of this Note. | |
| --- |
Signature Guarantee:
| Date:________________ | |
|---|---|
| Signature<br> must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably<br> acceptable to the Trustee | Signature<br> of Signature Guarantee |
A-12
CERTIFICATE TO BE DELIVERED UPON
EXCHANGE OR REGISTRATION OF TRANSFER
RESTRICTED NOTES
| RULE 144A CUSIP No. [ ] |
|---|
| RULE 144A ISIN No. [ ] |
| REGULATION S CUSIP No. [ ] |
| REGULATION S ISIN No. [ ] |
| IAI CUSIP No. [ ] |
| IAI ISIN No. [ <br> ] |
This certificate relates to $ principal amount of Notes held in (check applicable space) _____ book-entry or ______ definitive form by the undersigned.
The undersigned (check one box below):
| ¨ | has<br> requested the Trustee by written order to deliver in exchange for its beneficial interest<br> in the Global Note held by the Depository a Note or Notes in definitive, registered form<br> of authorized denominations and an aggregate principal amount equal to its beneficial interest<br> in such Global Note (or the portion thereof indicated above); |
|---|---|
| ¨ | has<br> requested the Trustee by written order to exchange or register the transfer of a Note or<br> Notes. |
| --- | --- |
In connection with any transfer of any of the Notes evidenced by this certificate occurring while this Note is still a Transfer Restricted Definitive Note or a Transfer Restricted Global Note, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
| (1) | ¨ | to<br> the Issuers or any Subsidiary thereof; or |
|---|---|---|
| (2) | ¨ | to<br> the Registrar for registration in the name of the holder, without transfer; or |
| (3) | ¨ | pursuant<br> to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); or |
| (4) | ¨ | inside<br> the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act)<br> that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer<br> is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities<br> Act; or |
| (5) | ¨ | outside<br> the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904<br> under the Securities Act and such Note shall be held immediately after the transfer through Euroclear or Clearstream until the expiration<br> of the Restricted Period (as defined in the Indenture); or |
| (6) | ¨ | to<br> an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13)<br> under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements in<br> the form of Exhibit B to the Indenture; or |
| (7) | ¨ | pursuant<br> to another available exemption from registration (including that provided by Rule 144 under the Securities Act). |
A-13
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered holder thereof; provided, however, that if box (3), (5), (6) or (7) is checked, the Issuers or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuers or the Trustee have reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
| Date: | Your Signature: |
|---|
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee:
| Date: | |
|---|---|
| Date: | |
| --- | --- |
| Signature must<br> be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor program reasonably<br> acceptable to the Trustee | Signature of Signature Guarantee |
A-14
TO BE COMPLETED BY PURCHASER IF BOX (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuers as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
| Date: | |
|---|---|
| NOTICE: To be executed by an executive officer |
A-15
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $_____. The following increases or decreases in this Global Note have been made:
| Date of Exchange | Amount of Decrease in Principal Amount of this Global Note | Amount of Increase in Principal Amount of this Global Note | Principal Amount of this Global Note Following Such Increase or Decrease | Signature of Authorized Signatory of Trustee or Notes Custodian |
|---|
A-1
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to, Section 4.06 (Asses Sales), Section 4.08 (Change of Control), Section 4.18 (Offer to Purchase by Application of Debt Proceeds) or 4.19 (Offers to Repurchase by Application of ExcessCash Flow) of the Indenture, check the box:
Asset Sale ¨ Change of Control ¨ Offer to Purchase by Application of Debt Proceeds ¨ Offers to Repurchase by Application of Excess Cash Flow ¨
If you want to elect to have only part of this Note purchased by the Issuers pursuant to Section 4.06 (Asset Sales.), Section 4.08 (Changeof Control), Section 4.18 (Debt Proceeds) or Section 4.19 (Excess Cash Flow) of the Indenture, state the amount (minimum of $1.00 or any integral multiple of $1.00 in excess thereof):
| Date: | _________________________________ | Your<br> Signature: | __________________________________ |
|---|---|---|---|
| (Sign exactly as your<br> name appears on the other side of this note | |||
| Signature Guarantee: | |||
| --- | --- | ||
| Signature must be guaranteed by a participant in a recognized signature guaranty<br> medallion program or other signature guarantor program reasonably acceptable to the Trustee |
A-1
EXHIBIT B
[FORM OFTRANSFEREE LETTER OF REPRESENTATION]
TRANSFEREELETTER OF REPRESENTATION
Exela Technologies BPA, LLC and
EXELA FINANCE INC.
2701 East Grauwyler Road
Irving, Texas 75061
c/o U.S. Bank Trust Company, National Association
West Side Flats
60 Livingston Ave.
St. Paul, MN 55107
Attention: Administrator — Exela Technologies BPA, LLC
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the 12.000% First-Priority Senior Secured Notes due 2030 (the “Notes”) of Exela Technologies BPA, LLC and EXELA FINANCE INC. (collectively, with their successors and assigns, the “Issuers”).
Upon transfer, the Notes will be registered in the name of the new beneficial owner as follows:
| Name: |
|---|
| Address: |
| --- |
| Taxpayer ID Number: |
| --- |
The undersigned represents and warrants to you that:
1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $100,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase securities similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment in the Notes.
B-1
2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing the Notes to offer, sell or otherwise transfer the Notes prior to the date that is one year after the later of the date of original issue and the last date on which either the Issuers or any affiliate of the Issuers was the owner of such Notes (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Issuers or a Subsidiary thereof, (b) in the United States to a person whom we reasonably believe is a “qualified institutional buyer” (as defined in rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (c) outside the United States in an offshore transaction in accordance with Rule 904 of Regulation S under the Securities Act, (d) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3), or (7), (8), (9), (12) or (13) under the Securities Act and that is purchasing for its own account or for the account of another institutional “accredited investor”, in each case, in a minimum of $100,000 principal amount of the securities (e) pursuant to the exemption from registration under the Securities Act provided by Rule 144 thereunder (if applicable), (f) pursuant to another exemption from the registration requirements of the Securities Act or (g) pursuant to an effective registration statement under the Securities Act, in each of cases (a) through (g), in accordance with any applicable securities laws of any state of the United States. In addition, we will, and each subsequent holder is required to, notify any purchaser of the Note evidenced hereby of the resale restrictions set forth above. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made to an institutional “accredited investor” prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuers and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3), (7), (8), (9), (12) or (13) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuers and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (c), (d), (e), (f) or (g) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuers and the Trustee.
| Dated: | |
|---|---|
| TRANSFEREE: | |
| By: |
B-2
EXHIBIT C
FORM OFSUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE, dated as of [ ] (this “Supplemental Indenture”), by and among [GUARANTOR] (the “New Guarantor”), is entered into among EXELA TECHNOLOGIES BPA, LLC, a Delaware limited liability company (or its successor) (the “Company”), EXELA FINANCE INC., a Delaware corporation (the “Co-Issuer” and together with the Company, the “Issuers”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee under the indenture referred to below (the “Trustee”).
W I T N E S S E T H :
WHEREAS, the Issuers, certain Guarantors, the Trustee, and Ankura Trust Company, LLC, as Collateral Agent, have heretofore executed the indenture, dated as of July 29, 2025 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), providing for the issuance of the Issuers’ 12.000% First-Priority Senior Secured Notes due 2030 (the “Notes”), initially in the aggregate principal amount of $200,988,002;
WHEREAS, Section 4.11 and Section 12.07 of the Indenture provide that, under certain circumstances, the Issuers are required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture pursuant to a Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Issuers and the Trustee are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:
1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “holders” in this Supplemental Indenture shall refer to the term “holders” as defined in the Indenture and the Trustee and the Collateral Agent acting on behalf of and for the benefit of such holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular Section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with all existing Guarantors (if any), to unconditionally guarantee all of the Issuers’ Obligations under the Notes, the Indenture and the other Notes Documents on the terms and subject to the conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture, the Notes and the other Notes Documents and to perform all of the obligations and agreements of a Guarantor under the Indenture, the Notes and the other Notes Documents.
C-1
3. Notices. All notices or other communications to the New Guarantor shall be given as provided in Section 14.02 of the Indenture.
4. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all of the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUTREGARD TO PRINCIPLES OF CONFLICTS OF LAW.
6. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture or as to the statements made in the recitals.
7. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Delivery of an executed counterpart of a signature page to this Supplemental Indenture by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) shall be effective as delivery of a manually executed counterpart thereof.
8. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction thereof.
[Remainder of Page Intentionally LeftBlank]
C-2
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
| EXELA TECHNOLOGIES BPA, LLC,<br> as Company |
|---|
| By: |
| Name: |
| Title: |
| EXELA FINANCE INC., as Co-Issuer |
| By: |
| Name: |
| Title: |
| [NEW GUARANTOR], as a Guarantor/ |
| By: |
| Name: |
| Title: |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Trustee |
| By: |
| Name: |
| Title: |
C-3
Exhibit 4.2
_______________________________________________________________
RIGHTS AGREEMENT
DATED AS OF July 29, 2025
BETWEEN
XBP EUROPE HOLDINGS, INC.
AND
CONTINENTAL STOCK TRANSFER & TRUSTCOMPANY,
AS RIGHTS AGENT
_______________________________________________________________
TABLE OF CONTENTS
Page
| 1. | Certain Definitions | 1 |
|---|---|---|
| 2. | Appointment of Rights Agent | 7 |
| 3. | Issuance of Right Certificates | 7 |
| 4. | Form of Right Certificates | 9 |
| 5. | Countersignature and Registration | 9 |
| 6. | Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates | 10 |
| 7. | Exercise of Rights; Purchase Price; Expiration Date of Rights | 11 |
| 8. | Cancellation and Destruction of Right Certificates | 13 |
| 9. | Status and Availability of Preferred Stock | 13 |
| 10. | Preferred Stock Record Date | 13 |
| 11. | Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights | 14 |
| 12. | Certificate of Adjustment | 19 |
| 13. | Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power | 20 |
| 14. | Fractional Rights and Fractional Shares | 21 |
| 15. | Rights of Action | 22 |
| 16. | Agreement of Rights Holders | 22 |
| 17. | Right Certificate Holder Not Deemed a Stockholder | 23 |
| 18. | Concerning the Rights Agent | 23 |
| 19. | Merger or Consolidation or Change of Name of Rights Agent | 24 |
| 20. | Rights and Duties of Rights Agent | 25 |
| 21. | Change of Rights Agent | 28 |
| 22. | Issuance of New Right Certificates | 28 |
i
| 23. | Redemption and Termination | 28 |
|---|---|---|
| 24. | Exchange | 29 |
| 25. | Notice of Certain Events | 31 |
| 26. | Notices | 31 |
| 27. | Supplements and Amendments | 32 |
| 28. | Successors | 32 |
| 29. | Benefits of this Agreement | 32 |
| 30. | Severability | 32 |
| 31. | Governing Law | 32 |
| 32. | Counterparts | 33 |
| 33. | Descriptive Headings and Construction | 33 |
| 34. | Administration | 33 |
| 35. | Force Majeure | 33 |
ii
RIGHTS AGREEMENT
This Rights Agreement (this “Agreement”), dated as of July 29, 2025, is between XBP Europe Holdings, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as rights agent (the “RightsAgent”).
The Board of Directors of the Company (the “Board”) has authorized and declared a dividend of one (1) preferred share purchase right (a “Right”) for each share of Common Stock (as defined) outstanding on the Close of Business on August 15, 2025 (the “Record Date”) and has authorized the issuance of one (1) Right with respect to each additional share of Common Stock issued by the Company between the Record Date and the earliest of (i) the Distribution Date, (ii) the Redemption Date and (iii) the Final Expiration Date, and additional shares of Common Stock that shall become outstanding after the Distribution Date as provided in Section 22 of this Agreement, each Right initially representing the right to purchase one one-thousandth (1/1,000) of a share of Preferred Stock (as defined), subject to adjustment, upon the terms and subject to the conditions hereof.
Accordingly, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:
| 1. | Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: |
|---|---|
| (a) | “Acquiring Person” shall mean any Person who or which, together with any Related Persons<br>of such Party, shall be the Beneficial Owner of thirty percent (30%) or more of the Common Stock then outstanding, but shall not include<br>(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary<br>of the Company duly approved by the Board, (iv) any entity holding Common Stock for or pursuant to the terms of any such employee<br>benefit plan, (v) any person whose beneficial ownership equals or exceeds thirty percent (30%) of the Common Stock then outstanding<br>solely as a result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares of Common Stock<br>by the Company; provided that if a Person would, but for the provisions of this paragraph, become an Acquiring Person by reason<br>of a repurchase of Common Stock by the Company and shall, after such repurchase by the Company, become the Beneficial Owner of any additional<br>Common Stock at any time such that the Person is or thereby becomes the Beneficial Owner of thirty percent (30%) (or their respective<br>Initial Percentage, in the case of a Grandfathered Person) or more of the Common Stock then outstanding (other than Common Stock acquired<br>solely as a result of corporate action of the Company not caused, directly or indirectly, by such Person), then such Person shall be deemed<br>an Acquiring Person, (vi) an Exempt Person or (vii) any Person who or which, together with all Related Persons of such Person,<br>at the Effective Time (after giving effect to any additional shares issuable pursuant to clause (iii) of the definition of Exempt<br>Transaction), is a Beneficial Owner of thirty percent (30%) or more of the Common Stock then outstanding (a “Grandfathered Stockholder”);<br>provided, that if a Grandfathered Stockholder together with any Related Persons becomes, after such time, the Beneficial Owner<br>(other than pursuant to grants or exercise of equity awards to a member of the Board or employee or any dividend or distribution on or<br>reclassification of Company securities) of any additional Common Stock (regardless of whether, thereafter or as a result thereof, there<br>is an increase, decrease or no change in the percentage of Common Stock then outstanding Beneficially Owned by such Grandfathered Stockholder<br>together with any Related Persons) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition<br>of Beneficial Ownership of additional Common Stock, such Person together with any Related Persons is not the Beneficial Owner of greater<br>than such Person’s Initial Percentage; provided, further, that upon the first decrease of a Grandfathered Stockholder’s<br>Beneficial Ownership below thirty percent (30%) (after giving effect to any additional shares issuable pursuant to clause (iii) of<br>the definition of Exempt Transaction), such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder and<br>this clause (vii) shall have no further force or effect with respect to such Person. For the avoidance of doubt, in the event that<br>after the Effective Time, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be<br>the Beneficial Owner of Common Stock expires, is settled in whole or in part, terminates or no longer confers any benefit to or imposes<br>any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement<br>or understanding with respect to the same or different Common Stock that confers Beneficial Ownership of Common Stock shall be considered<br>the acquisition of Beneficial Ownership of additional Common Stock by the Grandfathered Stockholder and render such Grandfathered Stockholder<br>an Acquiring Person for purposes of this Agreement unless, upon such acquisition of Beneficial Ownership of additional Common Stock, such<br>person together with any Related Persons is not the Beneficial Owner of greater than such Person’s Initial Percentage. |
| --- | --- |
Notwithstanding the foregoing, if the Board, with the concurrence of a majority of the members of the Board who are not, and are not representatives, nominees or Related Persons of, such Person or an Acquiring Person (an “Disinterested Board Majority”), determines in good faith that a Person that would otherwise be an Acquiring Person has become such inadvertently (including because (x) such Person was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such Person to be an Acquiring Person or (y) such Person was aware of the extent of its Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing, obtaining, or influencing the control, management or policies of the Company, and such Person divests as promptly as practicable a sufficient number of Common Stock so that such Person would no longer be an Acquiring Person, then such Person shall not be deemed to have become an Acquiring Person. Notwithstanding the foregoing, if a bona fide swaps dealer who would otherwise be an Acquiring Person has become so as a result of its actions in the ordinary course of its business that the Board determines by a Disinterested Board Majority, in its sole discretion, were taken without the intent or effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to control or influence the control, management or policies of the Company, then, and unless and until the Board shall otherwise determine by a Disinterested Board Majority, such Person shall not be deemed to be an Acquiring Person.
Notwithstanding the foregoing, no Person shall become an Acquiring Person solely as a result of an Exempt Transaction.
| (b) | “Act” shall mean the Securities Act of 1933 (or any successor act), as amended and<br>as may be in effect from time to time, and the rules and regulations promulgated thereunder. |
|---|---|
| (c) | “Affiliate” and “Associate” shall have the respective meanings ascribed<br>to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. |
| --- | --- |
2
| (d) | A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially<br>own”: |
|---|---|
| (i) | any securities that such Person or any of such Person’s Related Persons, owns directly or has the<br>right, directly or indirectly, to acquire (whether such right is exercisable immediately, or only after the passage of time, compliance<br>with regulatory requirements, the fulfillment of a condition, or otherwise) pursuant to any agreement, arrangement or understanding (whether<br>or not in writing), or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided,<br>however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (A) securities tendered pursuant<br>to a tender offer or exchange offer made by or on behalf of such Person or any of such Person’s Related Persons until such tendered<br>securities are accepted for purchase or exchange or (B) securities issuable upon exercise of Rights; |
| --- | --- |
| (ii) | any securities that such Person or any of such Person’s Related Persons beneficially owns, directly<br>or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations<br>under the Exchange Act, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided<br>that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this subparagraph (ii) on<br>account of an agreement, arrangement or understanding to vote such security that (X) arises solely from a revocable proxy given to<br>such Person or any of such Person’s Related Persons in response to a public proxy solicitation made pursuant to and in accordance<br>with the applicable provisions of the General Rules and Regulations under the Exchange Act, and (Y) is not also then reportable<br>by such Person or any of such Person’s Related Persons on Schedule 13D under the Exchange Act (or any comparable or successor report); |
| --- | --- |
| (iii) | any securities that are beneficially owned, directly or indirectly, by any other Person (or any Related<br>Persons thereof), if such Person or any of such Person’s Related Persons, has any agreement, arrangement or understanding (whether<br>or not in writing) with such other Person or any of such other Person’s Related Persons for the purpose of acquiring, holding, voting<br>(other than voting pursuant to a revocable proxy as described in the proviso to Section 1(d)(ii) hereof) or disposing<br>of any securities of the Company; or |
| --- | --- |
| (iv) | any securities which are the subject of, or the reference securities for, or that underlie, any Derivative<br>Position of such Person or any of such Person’s Related Persons, with the number of Common Stock deemed Beneficially Owned in respect<br>of a Derivative Position being the notional or other number of Common Stock in respect of such Derivative Position (without regard to<br>any short or similar position) that is specified in (i) one (1) or more filings with the Securities and Exchange Commission<br>by such Person or any of such Person’s Related Persons or (ii) the documentation evidencing such Derivative Position as the<br>basis upon which the value or settlement amount of such Derivative Position, or the opportunity of the holder of such Derivative Position<br>to profit or share in any profit, is to be calculated in whole or in part (whichever of (i) or (ii) is greater), or if no such<br>number of Common Stock is specified in such filings or documentation (or such documentation is not available to the Board), as determined<br>by the Board in its reasonable discretion. |
| --- | --- |
3
The term “Beneficial Ownership” shall have a corresponding meaning. Notwithstanding anything in this definition of Beneficial Owner to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, means the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to Beneficially Own hereunder.
| (e) | “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking<br>institutions in the State of New York are authorized or obligated by law or executive order to close. |
|---|---|
| (f) | “Close of Business” on any given date shall mean 5:00 P.M., New York, New York time,<br>on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 P.M., New York, New York time,<br>on the next succeeding Business Day. |
| --- | --- |
| (g) | “Common Stock” shall mean the common stock of the Company, $0.0001 par value per share,<br>except that “Common Stock” when used with reference to any Person other than the Company shall mean the capital stock of such<br>Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management,<br>of such Person (or, if such Person is a Subsidiary of another Person, the Person or Persons that ultimately control such first mentioned<br>Person). |
| --- | --- |
| (h) | “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii). |
| --- | --- |
| (i) | “Current Per Share Market Price” shall have the meaning set forth in Section 11(d). |
| --- | --- |
| (j) | “Current Value” shall have the meaning set forth in Section 11(a)(iii). |
| --- | --- |
| (k) | “Derivative Position” shall mean any option, warrant, convertible security, stock appreciation<br>right, or other security, contract right or derivative position or similar right (including any “swap” transaction with respect<br>to any security, other than a broad based market basket or index) (any of the foregoing, a “Derivative”), whether or<br>not presently exercisable, that (i) has an exercise or conversion privilege or a settlement payment or mechanism at a price related<br>to the value of the Company’s Common Stock or a value determined in whole or in part with reference to, or derived in whole or in<br>part from, the value of the Company’s Common Stock and that increases in value as the market price or value of the Company’s<br>Common Stock increases or that provides an opportunity, directly or indirectly, to profit or share in any profit derived from any increase<br>in the value of the Company’s Common Stock and (ii) is capable of being settled, in whole or in part, through delivery of cash<br>or the Company’s Common Stock (whether on a required or optional basis, and whether such settlement may occur immediately or only<br>after the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise), in each case regardless<br>of whether (A) it conveys any voting rights in such Common Stock to any Person or (B) any Person (including the holder of such<br>Derivative Position) may have entered into other transactions that hedge its economic effect. |
| --- | --- |
4
| (l) | “Distribution Date” shall mean the earlier of (i) the Close of Business on the<br>tenth (10th) Business Day after the Stock Acquisition Date, or (ii) the Close of Business on the tenth (10th) Business Day (or such<br>later date as the Board shall determine) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary<br>of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person organized, appointed or established<br>by the Company for or pursuant to the terms of any such plan or Exempt Persons) is first published or sent or given within the meaning<br>of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person<br>would become an Acquiring Person. |
|---|---|
| (m) | “Earning Power” shall have the meaning set forth in Section 13(c). |
| --- | --- |
| (n) | “Effective Date” shall have the meaning given to such term in the Plan. |
| --- | --- |
| (o) | “Effective Time” shall mean the occurrence of the issuance of New Parent Interests<br>pursuant to the Plan on the Effective Date. |
| --- | --- |
| (p) | “Exchange Property” shall have the meaning set forth in Section 24(c). |
| --- | --- |
| (q) | “Exchange Ratio” shall have the meaning set forth in Section 24(a). |
| --- | --- |
| (r) | “Exchange Recipients” shall have the meaning set forth in Section 24(c). |
| --- | --- |
| (s) | “Excluded Person” shall have the meaning set forth in Section 11(a)(ii). |
| --- | --- |
| (t) | “Exempt Person” shall mean any Person that the Board determines is exempt from this<br>Agreement, which determination shall be made in the sole and absolute discretion of the Board by a Disinterested Board Majority; provided,<br>that no Person shall qualify as an Exempt Person unless such determination is made prior to such time as any Person becomes an Acquiring<br>Person; provided, further, that any Person will cease to be an Exempt Person if the Board by a Disinterested Board Majority<br>makes a contrary determination with respect to such Person regardless of the reason therefor. |
| --- | --- |
| (u) | “Exempt Transaction” shall mean any transaction that (i) the Board by a Disinterested<br>Board Majority determines is exempt from this Agreement, which determination shall be made in the sole and absolute discretion of such<br>Disinterested Board Majority (provided, that no transaction shall qualify as an Exempt Transaction pursuant to this Section 1(t) unless<br>such determination is made prior to such time as any Person becomes an Acquiring Person), (ii) is (A) a grant of equity awards<br>to a member of the Board or employee (or any exercise thereof), (B) any dividend or distribution on or reclassification of Company<br>securities or (C) any unilateral grant of securities by the Company that is (in the case of this clause (C)) declined by the recipient<br>and returned or (iii) is entered into pursuant to that certain Amended and Restated Plan Support Agreement, dated as of April 24,<br>2025, by and among Exela Technologies, Inc. (“ETI”) and the other persons party thereto, including, without limitation,<br>the “ETI Equity Distribution” as defined in the aforementioned Amended and Restated Plan Support Agreement, the Common Stock<br>Purchase Warrant, dated on or about the date hereof, by and between the Company and affiliates of ETI (including any adjustments to the<br>number of securities purchasable thereunder pursuant to the terms thereof) and the shares issuable thereunder, any purchase of shares<br>pursuant to an “XBP Alternative Funding” as defined in the aforementioned Amended and Restated Plan Support Agreement, and<br>any purchase of shares pursuant to the Tax Funding Agreement, dated on or about the date hereof, by and between the Company and the other<br>parties named therein. |
| --- | --- |
5
| (v) | “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the<br>rules and regulations promulgated thereunder. |
|---|---|
| (w) | “Final Expiration Date” shall mean the Close of Business on January 29, 2027. |
| --- | --- |
| (x) | “Grandfathered Stockholder” shall have the meaning set forth in Section 1(a). |
| --- | --- |
| (y) | “Initial Percentage” in respect of any Person shall mean the percentage of the Common<br>Stock then outstanding represented by the Common Stock that such Person, together with all Related Persons of such Person, at the Effective<br>Time, is a Beneficial Owner of, as increased by the amount of stock issued in any subsequent Exempt Transaction and any Common Stock beneficially<br>owned pursuant to any equity awards granted to a member of the Board or employee. |
| --- | --- |
| (z) | “Lead Independent Director” shall have the meaning set forth in the Lead Independent<br>Director Charter of the Company. |
| --- | --- |
| (aa) | “NASDAQ” shall mean The Nasdaq Stock Market LLC. |
| --- | --- |
| (bb) | “New Parent Interests” shall have the meaning given to such term in the Plan. |
| --- | --- |
| (cc) | “Person” shall mean any individual, firm, corporation, partnership, limited liability<br>company, limited liability partnership, trust, syndicate or other entity. |
| --- | --- |
| (dd) | “Plan” shall mean the Amended Joint Plan of Reorganization of DocuData Solutions, L.C.<br>and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code [Docket No. 826]. |
| --- | --- |
| (ee) | “Preferred Stock” shall mean the Series A Participating Preferred Stock, without<br>par value, of the Company having such rights and preferences as are set forth in the form of Certificate of Designations set forth as<br>Exhibit A hereto, as the same may be amended from time to time. |
| --- | --- |
| (ff) | “Purchase Price” shall have the meaning set forth in Section 7(b). |
| --- | --- |
| (gg) | “Redemption Date” shall have the meaning set forth in Section 23(b). |
| --- | --- |
| (hh) | “Redemption Price” shall have the meaning set forth in Section 23(a). |
| --- | --- |
| (ii) | “Related Persons” shall mean, as to any Person, (a) such Person’s Affiliates<br>or Associates and (b) any Persons with whom such Person is acting (or deemed to be acting) as a “group” as such term<br>is defined in Section 16 of the Exchange Act. |
| --- | --- |
| (jj) | “Spread” shall have the meaning set forth in Section 11(a)(iii). |
| --- | --- |
| (kk) | “Stock Acquisition Date” shall mean the first date of (i) public announcement<br>(which, for purposes of this definition, shall include a report filed or amended pursuant to Section 13(d) under the Exchange<br>Act) by the Company or an Acquiring Person that an Acquiring Person has become such and (ii) the public disclosure of facts by the<br>Company or an Acquiring Person that reveals the existence of an Acquiring Person or indicating that an Acquiring Person has become an<br>Acquiring Person. |
| --- | --- |
6
| (ll) | “Subsidiary” shall mean, with reference to any Person, any corporation or other entity<br>of which an amount of securities or other ownership interests having ordinary voting power sufficient to elect at least a majority of<br>the directors or other Persons having similar functions of such corporation or other entity are at the time, directly or indirectly, beneficially<br>owned, or otherwise controlled by such Person. |
|---|---|
| (mm) | “Summary of Rights” shall mean the Summary of Rights to Purchase shares of Preferred<br>Stock substantially in the form of Exhibit C hereto. |
| --- | --- |
| (nn) | “Trading Day” shall mean a day on which the principal national securities exchange<br>on which a security is listed or admitted to trading is open for the transaction of business or, if a security is not listed or admitted<br>to trading on any national securities exchange, a Business Day. |
| --- | --- |
| (oo) | “Trust” shall have the meaning set forth in Section 24(f). |
| --- | --- |
| 2. | Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the<br>Company in accordance with the express terms and conditions hereof (and no implied terms or conditions), and the Rights Agent hereby accepts<br>such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable. The Rights Agent<br>shall have no duty to supervise, and in no event shall be liable for, the acts or omissions of any such co-rights agent appointed by the<br>Company. |
| --- | --- |
| 3. | Issuance of Right Certificates. |
| --- | --- |
| (a) | On the Record Date, or as soon as practicable thereafter, the Company will send (directly or, at the expense<br>of the Company, through the Rights Agent or its transfer agent if the Rights Agent or transfer agent is directed in writing by the Company<br>and provided with all necessary information and documents) a copy of the Summary of Rights to each record holder of Common Stock as of<br>the Close of Business on the Record Date (other than any Acquiring Person or any Related Persons of any Acquiring Person), at the address<br>of such holder shown on the records of the Company or transfer agent or register for Common Stock. With respect to certificates representing<br>shares of Common Stock (or book entry shares of Common Stock) outstanding as of the Record Date, until the Distribution Date, the Rights<br>shall be evidenced by such shares of Common Stock registered in the names of the holders thereof together with the Summary of Rights,<br>and not by separate Rights Certificates. With respect to book entry shares of Common Stock outstanding as of the Record Date, until the<br>Distribution Date, the Rights shall be evidenced by the balances indicated in the book entry account system of the transfer agent for<br>the Common Stock together with the Summary of Rights. Until the earlier of the Distribution Date and the Expiration Date, the transfer<br>of any shares of Common Stock outstanding on the Record Date (whether represented by certificates or evidenced by the balances indicated<br>in the book entry account system of the transfer agent for the Common Stock, and, in either case, regardless of whether a copy of the<br>Summary of Rights is submitted with the surrender or request for transfer), shall also constitute the transfer of the Rights associated<br>with such shares of Common Stock. |
| --- | --- |
| (b) | Rights shall be issued, without any further action, in respect of all shares of Common Stock that become<br>outstanding (whether originally issued or delivered from the Company’s treasury) after the Record Date but prior to the earlier<br>of the Distribution Date and the Expiration Date; provided, however, that Rights also shall be issued to the extent provided<br>in Section 22 hereof. Confirmation and account statements sent to holders of Common Stock for book entry form or, in<br>the case of certificated shares, certificates, representing such shares of Common Stock, issued after the Record Date shall bear a legend<br>substantially in the following form: |
| --- | --- |
7
“[This certificate] [These shares] also evidence[s] and entitle[s] the holder hereof to certain Rights as set forth in a Rights Agreement between XBP Europe Holdings, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company or any successor Rights Agent (the “Rights Agent”), dated as of July 29, 2025, as the same may be amended or supplemented from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights shall be evidenced by separate certificates and will no longer be evidenced by [this certificate] [these shares]. The Company will mail to the holder of [this certificate] [these shares] a copy of the Rights Agreement as in effect on the date of mailing without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights Agreement, Rights that are Beneficially Owned by any Person who is, was or becomes an Acquiring Person or any Related Persons thereof (as such capitalized terms are defined in the Rights Agreement), or specified transferees of such Acquiring Person (or Related Persons thereof) may become null and void and will no longer be transferable.”
| (c) | With respect to all certificates representing shares of Common Stock containing the foregoing legend,<br>until the earliest of the Distribution Date and the Expiration Date, the Rights associated with the Common Stock represented by such certificates<br>shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated<br>Rights, and the transfer of any such certificate shall also constitute the transfer of the Rights associated with the shares of Common<br>Stock represented by such certificates. |
|---|---|
| (d) | With respect to Common Stock in book entry form for which there has been sent a confirmation or account<br>statement containing the foregoing legend, until the earliest of the Distribution Date and the Expiration Date, the Rights associated<br>with the Common Stock shall be evidenced by such Common Stock alone and registered holders of Common Stock shall also be the registered<br>holders of the associated Rights, and the transfer of any such Common Stock shall also constitute the transfer of the Rights associated<br>with such shares of Common Stock. |
| --- | --- |
| (e) | Notwithstanding paragraph (b), the omission of the legend or the failure to send, deliver<br>or provide the registered owner of shares of Common Stock a copy of the Summary of Rights shall not affect the enforceability of any part<br>of this Agreement or the rights of any holder of the Rights. |
| --- | --- |
| (f) | In the event that the Company purchases or otherwise acquires any shares of Common Stock after the Record<br>Date but prior to the Distribution Date, any Rights associated with such shares of Common Stock shall be cancelled and retired so that<br>the Company is not entitled to exercise any Rights associated with the shares of Common Stock that are no longer outstanding. |
| --- | --- |
8
| (g) | Until the Distribution Date, the Rights shall be transferable only in connection with the transfer of<br>the underlying shares of Common Stock (including a transfer to the Company). |
|---|---|
| (h) | As soon as practicable after the Distribution Date, the Company will prepare and execute, and the Rights<br>Agent will countersign and the Company will send or cause to be sent (and the Rights Agent will, if so requested and provided with all<br>necessary information and documents, at the expense of the Company, send) by first-class, insured, postage-prepaid mail, to each record<br>holder of shares of Common Stock as of the Close of Business on the Distribution Date (other than any Acquiring Person or any Related<br>Persons of an Acquiring Person), at the address of such holder shown on the records of the Company, the Right Certificates, evidencing<br>one Right for each share of Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in the number<br>of Rights per share of Common Stock has been made pursuant to Section 11 hereof, at the time of distribution of the Right<br>Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof)<br>so that Right Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights.<br>As of and after the Distribution Date, the Rights shall be evidenced solely by such Right Certificates, and the Right Certificates and<br>the Rights shall be transferable separately from the transfer of Common Stock. The Company shall promptly notify the Rights Agent in writing<br>upon the occurrence of the Distribution Date and, if such notification is given orally, the Company shall confirm the same in writing<br>on or prior to the next following Business Day. Until such written notice is received by the Rights Agent, the Rights Agent may presume<br>conclusively for all purposes that the Distribution Date has not occurred. |
| --- | --- |
| 4. | Form of Right Certificates. The Right Certificates (and the forms of election to purchase<br>and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto and<br>may have such changes or marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company<br>may deem appropriate and as are not inconsistent with the provisions of this Agreement and which do not affect the rights, duties, liabilities<br>or responsibilities of the Rights Agent, or as may be required to comply with any applicable law or with any rule or regulation made<br>pursuant thereto or with any applicable rule or regulation of any stock exchange on which the Rights may from time to time be listed,<br>or to conform to usage. Subject to the other provisions of this Agreement, the Right Certificates shall entitle the holders thereof to<br>purchase such number of one one-thousandths (1/1,000) of a share of Preferred Stock as shall be set forth therein at the Purchase Price,<br>but the amount and type of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment<br>as provided herein. |
| --- | --- |
| 5. | Countersignature and Registration. |
| --- | --- |
| (a) | The Right Certificates shall be duly executed on behalf of the Company by its Chairperson of the Board,<br>its Chief Executive Officer, its President or any Vice President, either manually or by facsimile signature, and shall have affixed thereto<br>the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either<br>manually or by facsimile signature or by other customary means of electronic transmission. Upon written request by the Company, the Right<br>Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature or by other customary means of electronic<br>transmission, by an authorized signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign all<br>of the Right Certificates hereunder. No Right Certificate shall be valid for any purpose unless so countersigned, either manually or by<br>facsimile or by other customary means of electronic transmission. In case any officer of the Company who shall have signed any of the<br>Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery<br>by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company<br>with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company;<br>and any Right Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right<br>Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement<br>any such person was not such an officer. |
| --- | --- |
9
| (b) | Following the Distribution Date and receipt by the Rights Agent of written notice of such occurrence and<br>of all other necessary information and documentation, as provided in Section 3(a) hereof, the Rights Agent will<br>keep, or cause to be kept, at its office or offices designated as the appropriate place for surrender of Right Certificates upon exercise<br>or transfer, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses<br>of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and<br>the date of each of the Right Certificates. |
|---|---|
| 6. | Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or StolenRight Certificates. |
| --- | --- |
| (a) | Subject to the provisions of Section 14, at any time after the Distribution Date, and<br>prior to the earliest of the Redemption Date and the Final Expiration Date, any Right Certificate (other than a Right Certificate representing<br>Rights that have become null and void pursuant to Section 11(a)(ii) or that have been exchanged pursuant to Section 24)<br>may be transferred, split up, combined or exchanged for another Right Certificate, entitling the registered holder to purchase a like<br>number of shares of Preferred Stock as the Right Certificate surrendered then entitled such holder to purchase. Any registered holder<br>desiring to transfer, split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent,<br>and shall surrender (together with any required form of assignment and certificate duly executed and properly completed) the Right Certificate<br>to be transferred, split up, combined or exchanged at the office or offices of the Rights Agent designated for such purpose, accompanied<br>by a signature guarantee and such other documentation as the Rights Agent may reasonably request. Neither the Rights Agent nor the Company<br>shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered<br>holder shall have properly completed and duly executed the certificate contained in the form of assignment on the reverse side of such<br>Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner)<br>of the Rights represented by such Right Certificate or the Related Persons thereof, or of any other Person with which such Beneficial<br>Owner or any of such Beneficial Owner’s Related Persons has any agreement, arrangement or understanding (whether or not in writing)<br>for the purpose of acquiring, holding, voting or disposing of any securities of the Company, as the Company or the Rights Agent shall<br>reasonably request. Thereupon, the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right<br>Certificates, as the case may be, as so requested. The Company or the Rights Agent may require payment from the holders of the Right Certificates<br>of a sum sufficient for any tax or governmental charge that may be imposed in connection with any transfer, split-up, combination or exchange<br>of Right Certificates. The Rights Agent shall not have any duty or obligation to take any action under any section of this Agreement that<br>requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made. |
| --- | --- |
10
| (b) | Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss,<br>theft, destruction or mutilation of a Right Certificate (other than any Right Certificate representing Rights that have become null and<br>void pursuant to Section 11(a)(ii), that have been redeemed pursuant to Section 23 or that have been<br>exchanged pursuant to Section 24), the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented<br>by such Right Certificate or the Related Persons thereof, or of any other Person with which such Beneficial Owner or any of such Beneficial<br>Owner’s Related Persons has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring,<br>holding, voting or disposing of any securities of the Company, as the Company or the Rights Agent shall request (including a signature<br>guarantee and such other documentation as the Rights Agent may reasonably request), and, in case of loss, theft or destruction, of indemnity<br>or security satisfactory to them, and, at the Company’s or the Rights Agent’s request, reimbursement to the Company and the<br>Rights Agent of all reasonable expenses incidental thereto, and, in case of mutilation, upon surrender to the Rights Agent and cancellation<br>of the Right Certificate, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature<br>and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. |
|---|---|
| (c) | Notwithstanding any other provision hereof, the Company and the Rights Agent may amend this Agreement<br>to provide for uncertificated Rights in addition to or in lieu of Rights evidenced by Right Certificates, to the extent permitted by applicable<br>law. |
| --- | --- |
| 7. | Exercise of Rights; Purchase Price; Expiration Date of Rights. |
| --- | --- |
| (a) | The registered holder of any Right Certificate (other than a holder whose Rights have become void pursuant<br>to Section 11(a)(ii), have been redeemed pursuant to Section 23 or have been exchanged pursuant to Section 24)<br>may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate,<br>with the appropriate form of election to purchase on the reverse side thereof properly completed and duly executed, to the Rights Agent<br>at the offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the<br>Rights Agent may reasonably request, together with payment of the Purchase Price multiplied by the number of one one-thousandths of a<br>share of Preferred Stock for which a Right that is exercised is then exercisable and an amount equal to any applicable transfer tax or<br>charges required to be paid pursuant to Section 9, prior to the earliest of (i) the Final Expiration Date, (ii) the<br>time at which the Rights are redeemed pursuant to Section 23, and (iii) the time at which the Rights are exchanged<br>pursuant to Section 24. |
| --- | --- |
| (b) | The purchase price to be paid upon the exercise of each Right to purchase one one-thousandth (1/1,000)<br>of a share of Preferred Stock represented by a Right shall initially be an amount equal to five (5) times the Current Per Share Market<br>Price of the Common Stock as of the Stock Acquisition Date (the “Purchase Price”) and shall be payable in lawful money<br>of the United States of America in accordance with Section 7(c). Each Right shall initially entitle the holder to acquire<br>one one-thousandth (1/1,000) of a share of Preferred Stock upon exercise of the Right. The Purchase Price and the number of shares Preferred<br>Stock or other securities for which a Right is exercisable shall be subject to adjustment from time to time as provided in Sections 11<br>and 13. |
| --- | --- |
11
| (c) | Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase<br>and certificate properly completed and duly executed, accompanied by payment of the Purchase Price for the number of Rights exercised<br>and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9<br>by cash, certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly<br>(i)(A) requisition from any transfer agent of the Preferred Stock (or from the Company if there shall be no such transfer agent,<br>or make available, if the Rights Agent is the transfer agent) certificates for the number of shares of Preferred Stock to be purchased,<br>and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from any depositary<br>agent for the Preferred Stock depositary receipts representing such number of shares of Preferred Stock as are to be purchased (in which<br>case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary<br>agent), and the Company hereby directs any such depositary agent to comply with such request; (ii) when necessary to comply with<br>this Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares of Preferred Stock<br>in accordance with Section 14 or Section 24; (iii) after receipt of such certificates or depositary receipts,<br>cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names<br>as may be designated in writing by such holder; and (iv) when necessary to comply with this Agreement, after receipt, deliver such<br>cash to or upon the order of the registered holder of such Right Certificate. In the event that the Company is obligated to issue other<br>securities of the Company, pay cash and/or distribute other property pursuant to this Agreement, the Company will make all arrangements<br>necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when necessary<br>to comply with this Agreement. |
|---|---|
| (d) | If the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby,<br>a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered<br>to the registered holder of such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of Section 14. |
| --- | --- |
| (e) | Notwithstanding anything in this Agreement or the Right Certificate to the contrary, neither the Rights<br>Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights or other securities of<br>the Company upon the occurrence of any purported transfer or exercise as set forth in this Section 7 unless such registered<br>holder shall have (i) properly completed and duly executed the certificate contained in the appropriate form of election to purchase<br>set forth on the reverse side of the Right Certificate surrendered for such exercise and (ii) provided such additional evidence of<br>the identity of the Beneficial Owner (or former Beneficial Owner) or Related Persons thereof, as the Company and the Rights Agent shall<br>reasonably request |
| --- | --- |
12
| 8. | Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the<br>purpose of exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or to any of its agents (other than<br>the Rights Agent), be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall<br>be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of<br>this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and<br>retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. At the expense of the<br>Company, the Rights Agent shall deliver all canceled Right Certificates which have been canceled by the Rights Agent to the Company, or<br>shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of<br>destruction thereof to the Company. |
|---|---|
| 9. | Status and Availability of Preferred Stock. |
| --- | --- |
| (a) | The Company covenants and agrees that it will cause to be reserved and kept available, out of its authorized<br>and unissued shares of Preferred Stock or any shares of Preferred Stock held in its treasury, the number of shares of Preferred Stock<br>that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7. |
| --- | --- |
| (b) | The Company covenants and agrees that it will take all such action as may be necessary to ensure that<br>all shares of Preferred Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates (or entry in the book-entry<br>account system of the Company) for such shares of Preferred Stock (subject to payment of the Purchase Price and compliance with all other<br>applicable provisions of this Agreement), be duly and validly authorized and issued and fully paid and non-assessable shares. |
| --- | --- |
| (c) | The Company further covenants and agrees that it will pay when due and payable any and all federal and<br>state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares<br>of Preferred Stock upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable<br>in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary<br>receipts for the shares of Preferred Stock in a name other than that of, the registered holder of the Right Certificate evidencing Rights<br>surrendered for exercise, and shall not be required to issue or to deliver any certificates or depositary receipts for shares of Preferred<br>Stock upon the exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge being payable by the holder<br>of such Right Certificate at the time of surrender) or until it has been established to the Company’s and the Rights Agent’s<br>reasonable satisfaction that no such tax is due. |
| --- | --- |
| 10. | Preferred Stock Record Date. Each Person in whose name any certificate (or entry in the book-entry<br>account system of the Company) for shares of Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to<br>have become the holder of record of the shares of Preferred Stock represented thereby on, and such certificate or book-entry shall be<br>dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any<br>applicable transfer taxes) was made; provided, that, if the date of such surrender and payment is a date upon which the Preferred<br>Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such<br>certificate shall be dated, the next succeeding Business Day on which the shares of Preferred Stock transfer books of the Company are<br>open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of<br>a holder of shares of Preferred Stock for which the Rights shall be exercisable, including the right to vote, to receive dividends or<br>other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company,<br>except as provided herein. |
| --- | --- |
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| 11. | Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. |
|---|---|
| (a) | General. |
| --- | --- |
| (i) | In the event that the Company shall at any time after the date of this Agreement (i) declare a dividend<br>on the Preferred Stock payable in Preferred Stock, (ii) subdivide the outstanding Preferred Stock, (iii) combine the outstanding<br>Preferred Stock into a smaller number of Preferred Stock or (iv) issue any shares of its capital stock in a reclassification of the<br>Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing<br>or surviving Person), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of<br>the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind<br>of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such<br>time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately<br>prior to such date, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,<br>combination or reclassification; provided, that in no event shall the consideration to be paid upon the exercise of one (1) Right<br>be less than the aggregate par value of the Preferred Stock issuable upon exercise of one (1) Right. If an event occurs that would<br>require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment<br>provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, the adjustment required<br>pursuant to Section 11(a)(ii) hereof. |
| --- | --- |
| (ii) | Subject to the second paragraph of this Section 11(a)(ii) and to Section 24,<br>from and after the Stock Acquisition Date, each holder of a Right shall have a right to receive, upon exercise of each Right at a price<br>equal to the then current Purchase Price multiplied by the number of one one-thousandths (1/1,000) of a share of Preferred Stock for which<br>a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Stock, such number of shares of Common<br>Stock as shall equal the result obtained by dividing (A) the product of (x) the current Purchase Price and (y) the number<br>of one one-thousandths (1/1,000) of a share of Preferred Stock for which a Right is then exercisable by (B) fifty percent (50%) of<br>the then Current Per Share Market Price of the Company’s Common Stock (determined pursuant to Section 11(d)) on<br>the Stock Acquisition Date. |
| --- | --- |
From and after the Stock Acquisition Date, any Rights that are or were acquired or Beneficially Owned by (i) an Acquiring Person (or any Related Persons of such Acquiring Person), (ii) a transferee of any Acquiring Person (or of any such Related Persons) who becomes such a transferee after the Acquiring Person becomes an Acquiring Person or (iii) a transferee of an Acquiring Person (or of any such Related Persons) who becomes such a transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and who receives such Rights (A) with actual knowledge that the transferor is or was an Acquiring Person or (B) pursuant to either (x) a transfer (whether or not for consideration) from the Acquiring Person (or any such Related Persons) to holders of equity interests in such Acquiring Person (or any such Related Persons) or to any Person with whom the Acquiring Person (or such Related Persons) has any continuing agreement, arrangement, understanding or relationship (whether or not in writing) regarding the transferred Rights or (y) a transfer which the Board by a Disinterested Board Majority has determined is part of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose or effect of the avoidance of this Section 11(a)(ii), (each such Person described in (i)-(iii) above, an “Excluded Person”) shall, in each such case, be null and void, and any holder of such Rights (whether or not such holder is an Acquiring Person or an Related Persons of an Acquiring Person) shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificates shall be issued pursuant to Sections 3, 6, 7(d) or 11 or otherwise hereof that represents Rights that are or have become null and void pursuant to the provisions of this paragraph and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this paragraph shall, upon receipt of written notice directing it to do so, be canceled by the Rights Agent.
14
| (iii) | If there are not sufficient authorized but unissued shares of Common Stock to permit the exercise in full<br>of the Rights in accordance with Section 11(a)(ii) or the exchange of the Rights in accordance with Section 24,<br>or should the Board so elect, the Company may, upon approval by the Board by a Disinterested Board Majority, with respect to such deficiency,<br>(i) determine the excess (the “Spread”) of (A) the value of the Common Stock issuable upon the exercise of<br>a Right as provided in Section 11(a)(ii) (the “Current Value”) over (B) the Purchase Price,<br>and (ii) with respect to each Right, make adequate provision to substitute for such Common Stock, upon payment of the applicable<br>Purchase Price, any one or more of the following having an aggregate value determined by the Board to be equal to the Current Value: (A) cash,<br>(B) a reduction in the Purchase Price, (C) Common Stock or other equity securities of the Company (including shares, or units<br>of shares, of preferred stock which the Board has determined to have the same value as Common Stock (“Common Stock Equivalents”)),<br>(D) debt securities of the Company or (E) other assets, property or instruments. The Company shall provide the Rights Agent<br>with prompt reasonably detailed written notice of any final determination under the previous sentence. |
|---|
If the Board by a Disinterested Board Majority shall determine in good faith that additional Common Stock should be authorized for issuance upon exercise in full of the Rights, the Company may suspend the exercisability of the Rights in order to seek any authorization of additional shares, decide the appropriate form of distribution to be made, and determine the value thereof. If the exercisability of the Rights is suspended pursuant to this Section 11(a)(iii) the Company shall make a public announcement, and shall promptly deliver to the Rights Agent a statement, stating that the exercisability of the Rights has been temporarily suspended. When the suspension is no longer in effect, the Company shall make another public announcement, and promptly deliver to the Rights Agent a statement, so stating. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the Current Per Share Market Price of the Common Stock (as determined pursuant to Section 11(d)(i)) as of the Stock Acquisition Date, and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.
15
| (b) | If the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred<br>Stock entitling them (for a period expiring within forty-five (45) days after such record date) to subscribe for or purchase Preferred<br>Stock (or shares having the same rights, privileges and preferences as the Preferred Stock (“Equivalent Preferred Stock”))<br>or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per Preferred Stock or Equivalent Preferred Stock<br>(or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent Preferred Stock) less than the then<br>Current Per Share Market Price of the Preferred Stock (as determined pursuant to Section 11(d)(ii)) on such record date,<br>the Purchase Price to be in effect after such record date shall be adjusted by multiplying the Purchase Price in effect immediately prior<br>to such record date by a fraction, (i) the numerator of which shall be (A) the number of Preferred Stock outstanding on such<br>record date plus (B) the number of Preferred Stock which the aggregate offering price of the total number of Preferred Stock or Equivalent<br>Preferred Stock to be offered (or the aggregate initial conversion price of the convertible securities to be offered) would purchase at<br>such Current Per Share Market Price and (ii) the denominator of which shall be (A) the number of Preferred Stock outstanding<br>on such record date plus (B) the number of additional Preferred Stock or Equivalent Preferred Stock to be offered for subscription<br>or purchase (or into which the convertible securities to be offered are initially convertible); provided, that in no event shall<br>the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the<br>Company issuable upon exercise of one (1) Right. If such subscription price may be paid in a consideration part or all of which shall<br>be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board by a Disinterested Board<br>Majority, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.<br>Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.<br>Such adjustment shall be made successively whenever such a record date is fixed. If such rights, options or warrants are not so issued,<br>the Purchase Price shall be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed. |
|---|---|
| (c) | If the Company fixes a record date for the making of a distribution to all holders of the Preferred Stock<br>(including any distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving Person)<br>or evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Stock) or subscription<br>rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record<br>date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the<br>numerator of which shall be the then Current Per Share Market Price of the Preferred Stock (as determined pursuant to Section 11(d)(ii))<br>on such record date, less the fair market value (as determined in good faith by the Board by a Disinterested Board Majority, whose determination<br>shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the assets or<br>evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to one Preferred Stock and (ii) the<br>denominator of which shall be the then Current Per Share Market Price of the Preferred Stock (as determined pursuant to Section 11(d)(ii));<br>provided, that in no event shall the consideration to be paid upon the exercise of one (1) Right be less than the aggregate<br>par value of the Preferred Stock to be issued upon exercise of one (1) Right. Such adjustments shall be made successively whenever<br>such a record date is fixed. If such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price<br>that would then be in effect if such record date had not been fixed. |
| --- | --- |
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| (d) | Current Per Share Market Price. |
|---|---|
| (i) | For the purpose of any computation hereunder, the “Current Per Share Market Price”<br>of any security on any date shall be deemed to be the average of the daily closing prices per share of such security for the thirty (30)<br>consecutive Trading Days immediately prior to such date; provided, that if the Current Per Share Market Price of the security is<br>determined during a period (i) following the announcement by the issuer of such security of (A) a dividend or distribution on<br>such security payable in shares of such security or other securities convertible into such shares, or (B) any subdivision, combination<br>or reclassification of such security, and (ii) prior to the expiration of thirty (30) Trading Days after the ex-dividend date for<br>such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case,<br>the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per share equivalent of such security.<br>The closing price for each day shall be the last sale price or, if no such sale takes place on such day, the average of the closing bid<br>and asked prices, in either case as reported by NASDAQ, or, if on any such date the security is not quoted by NASDAQ, the average of the<br>closing bid and asked prices as furnished by a professional market maker making a market in the security selected by the Board. If on<br>any such date no such market maker is making a market in the security, the fair value of the security on such date as determined in good<br>faith by the Board shall be used. |
| --- | --- |
| (ii) | For the purpose of any computation hereunder, the “Current Per Share Market Price”<br>of the Preferred Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred<br>Stock are not publicly traded, the “Current Per Share Market Price” of the Preferred Stock shall be conclusively deemed<br>to be the Current Per Share Market Price of the Common Stock as determined pursuant to Section 11(d)(i) (appropriately<br>adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof) multiplied by one thousand.<br>If neither the Common Stock nor the Preferred Stock are publicly held or so listed or traded, “Current Per Share Market Price”<br>means the fair value per share as determined in good faith by the Board by a Disinterested Board Majority, whose determination shall be<br>described in a statement filed with the Rights Agent and shall be conclusive for all purposes. |
| --- | --- |
| (e) | No adjustment in the Purchase Price shall be required unless such adjustment would require an increase<br>or decrease of at least one percent (1%) in the Purchase Price; provided, that any adjustments which by reason of this Section 11(e) are<br>not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11<br>shall be made to the nearest cent or to the nearest one one-thousandth (1/1,000) of a share of Preferred Stock or one one-thousandth (1/1,000)<br>of any other share or security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment<br>required by this Section 11 shall be made no later than three (3) years from the date of the transaction which requires<br>such adjustment. |
| --- | --- |
| (f) | If, as a result of an adjustment made pursuant to Section 11(a), the holder of any Right<br>thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Stock, the number<br>of such other shares so receivable upon exercise of any Right shall thereafter be subject to adjustment from time to time in a manner<br>and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a) through<br>11(c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect<br>to the Preferred Stock shall apply on like terms to any such other shares. |
| --- | --- |
17
| (g) | All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder<br>shall evidence the right to purchase, at the adjusted Purchase Price, the number of shares of Preferred Stock purchasable from time to<br>time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. |
|---|---|
| (h) | Unless the Company exercises its election as provided in Section 11(i), upon each adjustment<br>of the Purchase Price as a result of the calculations made in Sections 11(b) and 11(c), each Right outstanding<br>immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that<br>number of one one-thousandth (1/1,000) of a share of Preferred Stock (calculated to the nearest one one-thousandth (1/1,000) of a share<br>of Preferred Stock) obtained by (i) multiplying the number of one one-thousandth (1/1,000) of a share of Preferred Stock covered<br>by a Right immediately prior to this adjustment by the Purchase Price in effect immediately prior to such adjustment of the Purchase Price<br>and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. |
| --- | --- |
| (i) | The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number<br>of Rights in substitution for any adjustment in the number of shares of Preferred Stock purchasable upon the exercise of a Right. Each<br>of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of shares of Preferred Stock<br>for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number<br>of Rights shall become that number of Rights (calculated to the nearest one one-thousandth (1/1,000)) obtained by dividing the Purchase<br>Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of<br>the Purchase Price. The Company shall make a public announcement (with prompt written notice thereof to the Rights Agent) of its election<br>to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment<br>to be made. The record date may be the date on which the Purchase Price is adjusted or any day thereafter but, if the Right Certificates<br>have been distributed, shall be at least ten (10) days after the date of the public announcement. If Right Certificates have been<br>distributed, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly<br>as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing,<br>subject to Section 14, the additional Rights to which such holders shall be entitled as a result of such adjustment or,<br>at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates<br>held by such holders prior to the date of adjustment, and upon surrender thereof if required by the Company, new Right Certificates evidencing<br>all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued,<br>executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates<br>on the record date specified in the public announcement. |
| --- | --- |
| (j) | Irrespective of any adjustment or change in the Purchase Price or the number of shares of Preferred Stock<br>issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase<br>Price and the number of shares of Preferred Stock which were expressed in the initial Right Certificates issued hereunder. |
| --- | --- |
18
| (k) | Before taking any action that would cause an adjustment reducing the Purchase Price below the then par<br>value of the Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion<br>of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Preferred<br>Stock at such adjusted Purchase Price. |
|---|---|
| (l) | If this Section 11 requires that an adjustment in the Purchase Price be made effective<br>as of a record date for a specified event, the Company may defer, until the occurrence of such event, issuing to the holder of any Right<br>exercised after such record date shares of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon<br>such exercise over and above the Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise<br>on the basis of the Purchase Price in effect prior to such adjustment; provided, that the Company shall deliver to such holder<br>a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence<br>of the event requiring adjustment. |
| --- | --- |
| (m) | Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled<br>to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11,<br>as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) combination or subdivision<br>of the Preferred Stock, (ii) issuance wholly for cash of any Preferred Stock at less than the Current Per Share Market Price, (iii) issuance<br>wholly for cash of Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, (iv) dividends<br>on Preferred Stock payable in Preferred Stock, or (v) issuance of any rights, options or warrants referred to in Section 11(b) made<br>by the Company after the date of this Agreement to holders of its Preferred Stock shall not be taxable to such stockholders. |
| --- | --- |
| (n) | If, at any time after the date of this Agreement and prior to the Distribution Date, the Company (i) declares<br>or pays any dividend on the Common Stock payable in Common Stock or (ii) effects a subdivision, combination or consolidation of the<br>Common Stock (by reclassification or otherwise other than by payment of dividends in Common Stock) into a greater or lesser number of<br>Common Stock, then in any such case (A) the number of one one-thousandths (1/1,000) of a share of Preferred Stock purchasable after<br>such event upon exercise of each Right shall be determined by multiplying the number of one one-thousandths (1/1,000) of a Preferred Stock<br>so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Stock outstanding immediately<br>before such event and the denominator of which is the number of Common Stock outstanding immediately after such event, and (B) each<br>Common Stock outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Stock<br>outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall<br>be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is affected. |
| --- | --- |
| 12. | Certificate of Adjustment. Whenever an adjustment or any event affecting the Rights or their exercisability<br>(including an event that causes Rights to become null and void) occurs or is made as provided in Sections 11 and 13,<br>the Company shall promptly (i) prepare a certificate setting forth such adjustment and a reasonably detailed statement of the facts,<br>computation, methodology and accounting for such adjustment, (ii) promptly file with the Rights Agent and with each transfer agent<br>for the Common Stock or the Preferred Stock a copy of such certificate, and (iii) if such adjustment occurs following a Distribution<br>Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25. The Rights Agent<br>shall be entitled to rely on any such certificate and on any adjustment or statement therein contained and shall not be obligated or responsible<br>for calculating any adjustment, nor shall the Rights Agent be deemed to have knowledge of such an adjustment or any such event, unless<br>and until it shall have received such certificate. Notwithstanding the foregoing sentence, but without limiting any of the rights or immunities<br>of the Rights Agent, the failure of the Company to make such certification or give such notice shall not affect the validity of, or the<br>force or effect of, the requirement for such adjustment. Any adjustment to be made pursuant to Section 11 or 13<br>hereof shall be effective as of the date of the event giving rise to such adjustment. |
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19
| 13. | Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power. |
|---|---|
| (a) | If, at any time after a Stock Acquisition Date, (i) the Company consolidates with, or merges with<br>and into, any other Person; (ii) any Person consolidates with the Company, or merges with and into the Company, and the Company is<br>the continuing or surviving Person of such merger and, in connection with such merger, all or part of the Common Stock are or will be<br>changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property; or (iii) the<br>Company sells or otherwise transfers (or one (1) or more of its Subsidiaries sell or otherwise transfer), in one (1) or more<br>transactions, assets or Earning Power aggregating fifty person (50%) or more of the assets or Earning Power of the Company and its Subsidiaries<br>(taken as a whole) to any other Person other than the Company or one (1) or more of its wholly owned Subsidiaries, then proper provision<br>shall be made so that (A) each holder of a Right (except as otherwise provided herein) shall have the right to receive, upon the<br>exercise of each Right at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths (1/1,000) of<br>a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred<br>Stock, such number of Common Stock of such other Person (including the Company as successor thereto or as the surviving Person) equal<br>to the result obtained by dividing (I) the product of (x) the then current Purchase Price and (y) the number of one one-thousandths<br>(1/1,000) of a share of Preferred Stock for which a Right is then exercisable by (II) fifty percent (50%) of the then Current Per<br>Share Market Price of the Common Stock of such other Person (determined pursuant to Section 11(d)) on the date of consummation<br>of such consolidation, merger, sale or transfer; (B) the issuer of such Common Stock shall thereafter be liable for, and shall assume,<br>by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the<br>term “Company” shall thereafter be deemed to refer to such issuer; and (D) such issuer shall take steps (including the<br>reservation of a sufficient number of shares of its common stock in accordance with Section 9) in connection with such<br>consummation as may be necessary to ensure that the provisions hereof shall thereafter be applicable in relation to the common stock thereafter<br>deliverable upon the exercise of the Rights. |
| --- | --- |
| (b) | The Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto<br>the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement providing for such issuer’s<br>compliance with this Section 13. The Company shall not enter into any transaction of the kind referred to in this Section 13<br>if, at the time of such transaction, there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements<br>which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded<br>by the Rights. The provisions of this Section 13 shall apply to successive mergers or consolidations or sales or other<br>transfers. |
| --- | --- |
20
| (c) | For purposes of this Agreement, the “Earning Power” of the Company and its Subsidiaries<br>shall be determined in good faith by the Company’s Board on the basis of the operating earnings of each business operated by the<br>Company and its Subsidiaries during the three (3) fiscal years preceding the date of such determination (or, in the case of any business<br>not operated by the Company or any Subsidiary during three (3) full fiscal years preceding such date, during the period such business<br>was operated by the Company or any Subsidiary). |
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| 14. | Fractional Rights and Fractional Shares. |
| --- | --- |
| (a) | The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which<br>evidence fractional Rights. In lieu of such fractional Rights, the Company may instead pay to the registered holders of the Right Certificates<br>with regard to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the current market<br>value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the<br>closing price of the Rights (as determined pursuant to the second sentence of Section 11(d)(i)) for the Trading Day immediately<br>prior to the date on which such fractional Rights would have been otherwise issuable. |
| --- | --- |
| (b) | The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions<br>which are integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock) upon exercise of the Rights, to distribute<br>certificates which evidence fractional shares of Preferred Stock or to register fractional shares of Preferred Stock in the Company’s<br>share register (other than fractions which are integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock). Fractions<br>of shares of Preferred Stock in integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock may, at the election<br>of the Company, be evidenced by depositary receipts, pursuant to an agreement between the Company and a depositary selected by the Company;<br>provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges<br>and preferences to which they are entitled as Beneficial Owners of the Preferred Stock represented by such depositary receipts. In lieu<br>of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock,<br>the Company shall pay to each registered holder of Right Certificates at the time such Rights are exercised as herein provided an amount<br>in cash equal to the same fraction of the current market value of one (1) share of Preferred Stock as the fraction of one share of<br>Preferred Stock that such holder would otherwise receive upon the exercise of the aggregate number of rights exercised by such holder.<br>For the purposes of this Section 14(b), the current market value of a share of Preferred Stock shall be the closing price<br>of a share of Preferred Stock (pursuant to Section 11(d)(i)) for the Trading Day immediately prior to the date of such<br>exercise. |
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| (c) | For purposes of this Section 14, the closing price for any day shall be the last quoted<br>price or, if not so quoted, the average of the high bid and low asked prices as reported by NASDAQ, or if on any such date the Rights<br>or Preferred Stock, as applicable, are not listed on NASDAQ, the average of the closing bid and asked prices as furnished by a professional<br>market maker making a market in the Rights or Preferred Stock, as applicable, selected by the Board. If on any such date no such market<br>maker is making a market in the Rights or Preferred Stock, as applicable, the fair value of the Rights or Preferred Stock, as applicable,<br>on such date as determined in good faith by the Board shall be used. |
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21
| (d) | The holder of a Right by the acceptance of the Right expressly waives any right to receive fractional<br>Rights or fractional shares upon exercise of a Right (except as provided in this Section 14). |
|---|---|
| (e) | Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under<br>any section of this Agreement, the Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth<br>in reasonable detail the facts related to such payments and the prices and formulas utilized in calculating such payments, and (ii) provide<br>sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected<br>in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of, any payment for<br>fractional Rights or fractional shares under any section of this Agreement relating to the payment of fractional Rights or fractional<br>shares unless and until the Rights Agent shall have received such a certificate and sufficient monies. |
| --- | --- |
| 15. | Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action<br>given to the Rights Agent under Section 18, are vested in the respective registered holders of the Right Certificates<br>(and, prior to the Distribution Date, the registered holders of shares of the Common Stock). Any registered holder of any Right Certificate<br>(or, prior to the Distribution Date, any registered holder of shares of the Common Stock) may, without the consent of the Rights Agent<br>or of the holder of any other Right Certificate, on such holder’s own behalf and for such holder’s own benefit, enforce, and<br>may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s<br>right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement.<br>Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of<br>Rights would not have an adequate remedy at law for any breach of this Agreement by the Company and will be entitled to specific performance<br>of the obligations hereunder, and injunctive relief against actual or threatened violations of the obligations hereunder, of the Company. |
| --- | --- |
| 16. | Agreement of Rights Holders. Every holder of a Right, by accepting the same, consents and agrees<br>with the Company and the Rights Agent and with every other holder of a Right that: |
| --- | --- |
| (a) | prior to the Distribution Date, the Rights shall be evidenced by the balances indicated in the book entry<br>account system of the transfer agent for the Common Stock registered in the names of the holders of Common Stock (which Common Stock shall<br>also be deemed to represent certificates for Rights) or, in the case of certificated shares, the certificates for the Common Stock registered<br>in the names of the holders of the Common Stock (which certificates for shares of Common Stock also constitute certificates for Rights)<br>and each Right is transferable only in connection with the transfer of the Common Stock; |
| --- | --- |
| (b) | after the Distribution Date, the Right Certificates are transferable only on the registry books maintained<br>by the Rights Agent if surrendered at the office or offices of the Rights Agent designated for such purpose, duly endorsed or accompanied<br>by a proper instrument of transfer with the appropriate form of certification, properly completed and duly executed, accompanied by a<br>signature guarantee and such other documentation as the Rights Agent may reasonably request; |
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22
| (c) | the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or,<br>prior to the Distribution Date, the associated Common Stock certificate or, in the case of uncertificated Common Stock, by the book-entry<br>that evidences record ownership of such Common Stock) is registered as the absolute owner thereof and of the Rights evidenced thereby<br>(notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Stock certificate or book-entry<br>made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall<br>be affected by any notice to the contrary; and |
|---|---|
| (d) | notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall<br>have any liability to any holder of a Right or other Person as a result of the inability of the Company or the Rights Agent to perform<br>any of its or their obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree, judgment<br>or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any<br>statute, rule, regulation or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining<br>performance of such obligation. |
| --- | --- |
| 17. | Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate<br>shall be entitled to vote or receive dividends, or be deemed for any purpose the holder of the Preferred Stock or any other securities<br>of the Company that may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained<br>herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder<br>of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof,<br>to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as<br>provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by<br>such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. |
| --- | --- |
| 18. | Concerning the Rights Agent. |
| --- | --- |
| (a) | The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it<br>hereunder in accordance with a fee schedule to be mutually agreed upon, and, from time to time, on demand of the Rights Agent, to reimburse<br>the Rights Agent for all of its reasonable, documented, out-of-pocket expenses and counsel fees and other disbursements incurred in the<br>preparation, delivery, negotiation, administration, execution and amendment, of this Agreement and the exercise and performance of its<br>duties hereunder. The Company also covenants and agrees to indemnify the Rights Agent for, and to hold it harmless against, any and all<br>loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable fees and expenses<br>of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject, without gross negligence, bad faith or<br>willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by a final,<br>non-appealable judgment of a court of competent jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent<br>in connection with the execution, acceptance and, administration of, exercise and performance of its duties under this Agreement, including<br>the costs and expenses of defending against any claim or liability arising therefrom or in connection therewith, directly or indirectly.<br>The provisions under this Section 18 and Section 20 below shall survive the expiration of the Rights<br>and the termination of this Agreement and the resignation, replacement or removal of the Rights Agent. The Rights Agents’ reasonable,<br>documented, out-of-pocket costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company to the extent<br>that the Rights Agent is successful in so enforcing its right of indemnification. |
| --- | --- |
23
| (b) | The Rights Agent shall be fully authorized and protected and shall incur no liability for or in respect<br>of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Agreement and the exercise<br>and performance of its duties hereunder, in each case in reliance upon any Right Certificate or certificate for Preferred Stock or for<br>other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction,<br>direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where<br>necessary, verified or acknowledged by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20.<br>The Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and<br>the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith, unless and<br>until it has received such notice in writing. |
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| (c) | Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent be liable<br>for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including lost profits), even if the<br>Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. |
| --- | --- |
| (d) | The Company hereby authorizes the Rights Agent to deduct from all payments disbursed by the Rights Agent<br>to the holders of the Rights, if applicable, the tax required to be withheld pursuant to the Internal Revenue Code of 1986, as amended,<br>or by any other applicable federal or state statutes in effect as of the date hereof or subsequently enacted, and to make the necessary<br>returns and payments of such tax to the relevant taxing authority. The Company will provide withholding and reporting instructions in<br>writing to the Rights Agent from time to time as relevant, and upon request of the Rights Agent. The Rights Agent shall have no responsibilities<br>with respect to tax withholding, reporting or payment except as specifically instructed by the Company. |
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| 19. | Merger or Consolidation or Change of Name of Rights Agent. |
| --- | --- |
| (a) | Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may<br>be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall<br>be a party, or any Person succeeding to the stockholder services, stock transfer or corporate trust business of the Rights Agent or any<br>successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or<br>any further act on the part of any of the parties hereto; but only if such Person would be eligible for appointment as a successor Rights<br>Agent under the provisions of Section 21 hereof. The purchase of all or substantially all of the Rights Agent’s<br>assets employed in the performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 19.<br>In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall<br>have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent<br>and deliver such Right Certificates so countersigned, and if at that time any of the Right Certificates shall not have been countersigned,<br>any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor or in the name of the successor<br>Rights Agent. In all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. |
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24
| (b) | If at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates<br>shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right<br>Certificates so countersigned; and if at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may<br>countersign such Right Certificates either in its prior name or in its changed name. In all such cases such Right Certificates shall have<br>the full force provided in the Right Certificates and in this Agreement. |
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| 20. | Rights and Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations<br>expressly imposed by this Agreement (and no implied duties) upon the following terms and conditions, by all of which the Company and the<br>holders of Right Certificates, by their acceptance thereof, shall be bound: |
| --- | --- |
| (a) | The Rights Agent may consult with legal counsel (who may be legal counsel for the Company or an employee<br>of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights<br>Agent as to, and the Rights Agent shall incur no liability for or in respect of, any action taken, suffered or omitted to be taken by<br>it in the absence of gross negligence, bad faith and willful misconduct (which gross negligence, bad faith or willful misconduct must<br>be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) and in accordance with<br>such advice or opinion. |
| --- | --- |
| (a) | Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary<br>or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current<br>Market Price) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or<br>matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established<br>by a certificate signed by the Chairperson of the Board, Chief Executive Officer or Lead Independent Director, provided that such Chairperson,<br>Chief Executive Officer or Lead Independent Director shall not have a conflict with respect to the matters being certified, and delivered<br>to the Rights Agent, and such certificate shall be full and complete authorization and protection to the Rights Agent for, and the Rights<br>Agent shall incur no liability for or in respect of, any action taken, suffered or omitted to be taken by it in the absence of gross negligence,<br>bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable<br>order, judgment, decree or ruling of a court of competent jurisdiction) under the provisions of this Agreement in reliance upon such certificate. |
| --- | --- |
| (b) | The Rights Agent shall be liable hereunder only for its and its directors’, officers’, employees’<br>and representatives’ own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct<br>must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Anything to the<br>contrary in this Agreement notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect, consequential<br>or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised<br>of the likelihood of such loss or damage. Any liability of the Rights Agent under this Agreement will be limited to the amount of annual<br>fees paid by the Company to the Rights Agent. |
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25
| (c) | The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained<br>in this Agreement or in the Right Certificates or be required to verify the same (except as to its countersignature on such Right Certificates),<br>but all such statements and recitals are and shall be deemed to have been made by the Company only. |
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| (d) | The Rights Agent shall not have any liability for or be under any responsibility in respect of the validity<br>of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity<br>or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company<br>of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the<br>exercisability of the Rights (including the Rights becoming null and void pursuant to Section 11 hereof) or any change<br>or adjustment in the terms of the Rights required under the provisions of Sections 3, 11, 23 or 24<br>hereof (provided, that the foregoing does not nullify any express duties the Rights Agent may have in such Sections herein) or<br>responsible for the manner, method or amount thereof or the ascertaining of the existence of facts that would require any such change<br>or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of the certificate described<br>in Section 12 hereof, upon which the Rights Agent may rely); nor shall it by any act hereunder be deemed to make any<br>representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant<br>to this Agreement or any Right Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly<br>authorized and issued, fully paid and nonassessable. |
| --- | --- |
| (e) | The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed,<br>acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent<br>for the carrying out or performing by the Rights Agent of the provisions of this Agreement. |
| --- | --- |
| (f) | The Rights Agent is hereby authorized and directed to accept written instructions with respect to the<br>performance of its duties hereunder from the Chair of the Board, and to apply to such officers for advice or written instructions in connection<br>with its duties, and such instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall not be<br>liable for or in respect of any action taken, suffered or omitted by it in accordance with written instructions of any such officer or<br>for any delay in acting while waiting for such instructions. The Rights Agent shall be fully authorized and protected in relying upon<br>the most recent written instructions received by any such officer. Any application by the Rights Agent for written instructions from the<br>Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted by the Rights<br>Agent under this Agreement and the date on and/or after which such action shall be taken or suffered or such omission shall be effective.<br>The Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with a proposal included<br>in any such application on or after the date specified in such application (which date shall not be less than five (5) Business Days<br>after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing<br>to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall<br>have received written instructions in response to such application specifying the action to be taken, suffered or omitted. |
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26
| (g) | The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may<br>buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which<br>the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though the Rights<br>Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent or any such stockholder, affiliate, director,<br>officer or employee from acting in any other capacity for the Company or for any other Person. |
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| (h) | The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any<br>duty hereunder either itself (through its directors, officers and employees) or by or through its attorneys or agents, and the Rights<br>Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss<br>to the Company or any other Person resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or<br>willful misconduct in the selection and continued employment thereof (which gross negligence, bad faith or willful misconduct must be<br>determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). |
| --- | --- |
| (i) | No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise<br>incur any financial liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent<br>in providing services to the Company in the ordinary course of its business as Rights Agent) or in the exercise of its rights if the Rights<br>Agent reasonably believes, after consultation with counsel, that repayment of such funds or adequate indemnification against such risk<br>or liability is not reasonably assured to it. |
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| (j) | If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the<br>certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates<br>an affirmative response to clause (1) and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested<br>exercise or transfer without first consulting with the Board. |
| --- | --- |
| (k) | The provisions of this Section 20 are solely for the benefit of the Rights Agent, the<br>Board or the Company and any failure or omission under this Section 20 shall not affect the rights of the Company or<br>the Board under this Agreement and none of the Rights Agent, the Board nor the Company shall have any liability to any holder of Rights<br>or other Person on account of such failure or omission. |
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27
| 21. | Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged<br>from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company, and in the event that the Rights<br>Agent or one or more of its Affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Stock and<br>Preferred Stock, by registered or certified mail, and, if such resignation occurs after the Distribution Date, to the registered holders<br>of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30)<br>days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of<br>the Common Stock and Preferred Stock, by registered or certified mail, and, if such removal occurs after the Distribution Date, to the<br>holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable<br>of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period<br>of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by<br>the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (which holder shall, with such notice, submit such<br>holder’s Right Certificate for inspection by the Company), then any registered holder of any Right Certificate may apply to any<br>court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company<br>or by such a court, shall be (a) a Person (other than a natural person) organized and doing business in good standing under the laws<br>of the United States or of the State of New York or of any other state of the United States, having an office in the State of New York<br>or authorized under such laws to exercise corporate trust, stock transfer or stockholder services powers and which has at the time of<br>its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a Person described<br>in clause (a) of this sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties<br>and responsibilities as if it had been originally named as Rights Agent without further act or deed, and the predecessor Rights Agent<br>shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further<br>assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall<br>file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock,<br>and, if such appointment occurs after the Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates.<br>Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality<br>or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. |
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| 22. | Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or<br>of the Right Certificates to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form<br>as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or<br>other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition,<br>in connection with the issuance or sale of Common Stock following the Distribution Date and prior to the earliest of the Redemption Date,<br>or the Final Expiration Date, the Company may, with respect to Common Stock so issued or sold, issue Right Certificates representing the<br>appropriate number of Rights in connection with such issuance or sale. |
| --- | --- |
| 23. | Redemption and Termination. |
| --- | --- |
| (a) | The Board may, at its option, at any time prior to such time as any Person becomes an Acquiring Person,<br>redeem all, but not less than all, of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to<br>reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”).<br>The redemption of the Rights by the Board may be made effective at such time, on such basis and subject to such conditions as the Board<br>in its sole discretion may establish. |
| --- | --- |
28
| (b) | Immediately upon the time of the effectiveness of the redemption of the Rights or such earlier time as<br>may be determined by the Board in the action ordering such redemption (although not earlier than the time of such action) (the “RedemptionDate”), and without any further action and without any notice, the right to exercise the Rights shall terminate and the only<br>right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any<br>such redemption (with prompt written notice to the Rights Agent); provided, that the failure to give, or any defect in, any such<br>notice shall not affect the validity of such redemption. Within ten (10) Business Days after action of the Board ordering the redemption<br>of the Rights, the Company shall mail, or cause the Rights Agent to mail (at the expense of the Company), a notice of redemption to the<br>holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to<br>the Distribution Date, on the registry books of the transfer agent for the Common Stock. Any notice mailed in the manner herein provided<br>shall be deemed given, whether or not the holder receives the notice. If the payment of the Redemption Price is not included with such<br>notice, each such notice shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any<br>of its Related Persons may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set<br>forth in this Section 23 or in Section 24, other than in connection with the purchase of Common Stock<br>prior to the Distribution Date. |
|---|---|
| 24. | Exchange. |
| --- | --- |
| (a) | The Board may, at its option, at any time after the Stock Acquisition Date, exchange all or part of the<br>then-outstanding and exercisable Rights (which will not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii))<br>for Common Stock at an exchange ratio of one share of Common Stock per one one-thousandths (1/1,000) of a share of Preferred Stock represented<br>by a Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date of this<br>Agreement (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). From and after the occurrence<br>of an event specified in Section 13(a), any Right that theretofore has not been exchanged pursuant to this Section 24<br>shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24.<br>The exchange of the Rights by the Board may be made effective at such time, on such basis and with such conditions as the Board in its<br>sole discretion may establish. |
| --- | --- |
| (b) | Immediately upon the action of the Board ordering the exchange of any Rights pursuant to Section 24(a),<br>and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter<br>of a holder of such Rights shall be to receive that number of Common Stock equal to the number of such Rights held by such holder multiplied<br>by the Exchange Ratio. The Company shall promptly give reasonably detailed written notice of any such exchange to the Rights Agent and<br>shall promptly give public notice of any such exchange; provided, that the failure to give, or any defect in, any such notice shall<br>not affect the validity of such exchange. Within ten (10) Business Days after action by the Board ordering the exchange of any Rights<br>pursuant to Section 24(a), the Company shall mail, or cause the Rights Agent to mail, a notice of any such exchange to<br>the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice mailed in the<br>manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the<br>method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of<br>Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which<br>have become void pursuant to the provisions of Section 11(a)(i)) held by each holder of Rights. |
| --- | --- |
| (c) | In any exchange pursuant to this Section 24, the Company, at its option, may substitute<br>Preferred Stock or Common Stock Equivalents for Common Stock exchangeable for Rights, at the initial rate of one one-thousandth of a share<br>of Preferred Stock (or an appropriate number of Common Stock Equivalents) for each Common Stock, as appropriately adjusted. |
| --- | --- |
29
| (d) | If there shall not be sufficient Common Stock, Preferred Stock or Common Stock Equivalents authorized<br>but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall use<br>its reasonable efforts to authorize additional Common Stock, Preferred Stock or Common Stock Equivalents for issuance upon exchange of<br>the Rights |
|---|---|
| (e) | The Company shall not be required to issue fractions of Common Stock or to distribute certificates which<br>evidence fractional Common Stock. In lieu of issuing fractional Common Stock, the Company may instead pay to the registered holders of<br>the Right Certificates with regard to which such fractional Common Stock would otherwise be issuable an amount in cash equal to the same<br>fraction of the current per share market value of a whole Common Stock. For the purposes of this Section 24(e), the current<br>per share market value of a whole Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second<br>sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. |
| --- | --- |
| (f) | Notwithstanding anything in this Section 24 to the contrary, the exchange of the Rights<br>may be made effective at such time, on such basis and subject to such conditions as the Board in its sole discretion may establish. Without<br>limiting the preceding sentence, the Board may (i) in lieu of issuing Common Stock or any other securities contemplated by this Section 24<br>to the Persons entitled thereto in connection with the exchange (such Persons, the “Exchange Recipients,” and such<br>shares and other securities, together with any dividends or distributions made on such shares or other securities, the “ExchangeProperty”) issue, transfer or deposit the Exchange Property to or into a trust or other entity (the “Trust”)<br>created upon such terms as the Board may determine to hold all or a portion of the Exchange Property for the benefit of the Exchange Recipients,<br>(ii) permit the Trust to exercise all of the rights that a stockholder of record would possess with respect to any shares deposited<br>in the Trust and (iii) direct that all holders of Rights entitled to receive Exchange Property shall be entitled to receive such<br>Exchange Property only from the Trust and only upon compliance with the relevant terms and provisions of the Trust and subject to such<br>conditions as the Board in its sole discretion may establish. Prior to effecting an exchange of Rights, the Company may require (or cause<br>the trustee or other governing body of the Trust to require), as a condition thereof, that any Exchange Recipient provide evidence that<br>it is not an Acquiring Person, including evidence of the identity of the current or former Beneficial Owners thereof and their Related<br>Persons. If any Person shall fail to comply with any request to provide such evidence, the Company shall be entitled conclusively to deem<br>the Rights held by such Person to be null and void pursuant to Section 11(a)(ii) and not transferable or exercisable<br>or exchangeable in connection herewith. In the event that the Board determines, before the Distribution Date, to effect an exchange, the<br>Board may delay the occurrence of the Distribution Date to such time as the Board deems advisable. |
| --- | --- |
30
| 25. | Notice of Certain Events. |
|---|---|
| (a) | If the Company shall after the Distribution Date propose (i) to pay any dividend payable in stock<br>of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred Stock (other than<br>a regular quarterly cash dividend); (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to<br>purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options; (iii) to<br>effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding Preferred<br>Stock); (iv) to effect any consolidation or merger into or with any other Person, or to effect any sale or other transfer (or to<br>permit one (1) or more of its Subsidiaries to effect any sale or other transfer), in one (1) or more transactions, of fifty<br>percent (50%) or more of the assets or Earning Power of the Company and its Subsidiaries (taken as a whole) to any other Person; (v) to<br>effect the liquidation, dissolution or winding-up of the Company; or (vi) to declare or pay any dividend on the Common Stock payable<br>in Common Stock, or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by<br>payment of dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate and the Rights<br>Agent, in accordance with Section 26, a reasonably detailed notice of such proposed action, which shall specify the record<br>date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation,<br>merger, sale, transfer, liquidation, dissolution or winding-up is to take place and the date of participation therein by the holders of<br>the Common Stock or Preferred Stock or both, if any such date is to be fixed, and such notice shall be so given in the case of any action<br>covered by clause (i) or (ii) above at least ten (10) Business Days prior to the record date for determining holders of<br>the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten (10) Business Days prior<br>to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Stock or Preferred<br>Stock or both, whichever shall be the earlier. |
| --- | --- |
| (b) | The Company shall, as soon as practicable after a Stock Acquisition Date, give to the Rights Agent and<br>each holder of a Right Certificate, in accordance with Section 26, a notice that describes the transaction in which a<br>Person became an Acquiring Person and the consequences of the transaction to holders of Rights under Section 11(a)(ii). |
| --- | --- |
| 26. | Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent<br>or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if in writing and when sent by overnight<br>delivery service or first-class mail, postage prepaid, properly addressed (until another address is filed in writing with the Rights Agent)<br>as follows: |
| --- | --- |
XBP Europe Holdings, Inc.
2701 East Grauwyler Rd.
Irving, Texas 75061
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be deemed given upon receipt and shall be sufficiently given or made if in writing when sent by overnight delivery service or registered or certified mail properly addressed (until another address is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Compliance Department
31
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if in writing, when sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.
| 27. | Supplements and Amendments. The Company may from time to time, and the Rights Agent shall if the<br>Company so directs in writing, supplement or amend this Agreement without the approval of any holders of Right Certificates in order to<br>cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions<br>herein, or to make any change to or delete any provision hereof or to adopt any other provisions with respect to the Rights which the<br>Company may deem necessary or desirable; provided, that, from and after such time as any Person becomes an Acquiring Person, this<br>Agreement shall not be amended or supplemented in any manner which would adversely affect the interests of the holders of Rights (other<br>than an Acquiring Person and its Related Persons). For the avoidance of doubt, the Company shall be entitled to adopt and implement such<br>procedures and arrangements (including with third parties) as it may deem necessary or desirable to facilitate the exercise, exchange,<br>trading, issuance or distribution of the Rights (and Preferred Stock) as contemplated hereby and to ensure that an Excluded Person does<br>not obtain the benefits thereof, and amendments in respect of the foregoing shall not be deemed to adversely affect the interests of the<br>holders of Rights. Any supplement or amendment authorized by this Section 27 will be evidenced by a writing signed by<br>the Company and the Rights Agent, subject to certification by any of the officers of the Company listed in Section 20(a) that<br>any such supplement or amendment complies with this Section 27. Notwithstanding anything in this Agreement to the contrary,<br>the Rights Agent shall not be required to execute any supplement or amendment to this Agreement that it has reasonably determined would<br>adversely affect its own rights, duties, obligations or immunities hereunder. No supplement or amendment to this Agreement shall be effective<br>unless duly executed by the Rights Agent. |
|---|---|
| 28. | Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company<br>or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. |
| --- | --- |
| 29. | Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person<br>or entity other than the Company, the Rights Agent and the registered holders of the Right Certificates any legal or equitable right,<br>remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and<br>the registered holders of the Right Certificates. |
| --- | --- |
| 30. | Severability. If any term, provision, covenant or restriction of this Agreement is held by a court<br>of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and<br>restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided,<br>that if such excluded provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights<br>Agent shall be entitled to resign immediately upon written notice to the Company. |
| --- | --- |
| 31. | Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be<br>a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the<br>laws of the State of Delaware applicable to contracts to be made and performed entirely within the State of Delaware; provided,<br>that all provisions regarding the rights, duties, liabilities and obligations of the Rights Agent shall be governed by and construed in<br>accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within the State of New York. |
| --- | --- |
32
| 32. | Counterparts. This Agreement may be executed in any number of counterparts, and each of such counterparts<br>shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.<br>A signature to this Agreement transmitted electronically shall have the same authority, effect and enforceability as an original signature. |
|---|---|
| 33. | Descriptive Headings and Construction. Descriptive headings of the sections of this Agreement are<br>inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. In this Agreement,<br>(i) the word “including” (in its various forms) means “including, without limitation,” and (ii) the<br>words “hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement<br>as a whole and not to any particular provision of this Agreement. |
| --- | --- |
| 34. | Administration. Other than with respect to rights, duties, obligations and immunities of the Rights<br>Agent, the Board (or a duly authorized committee of the Board) shall have the exclusive power and authority by a Disinterested Board Majority<br>to administer and interpret the provisions of this Agreement and to exercise all rights and powers specifically granted to the Board or<br>the Company or as may be necessary or advisable in the administration of this Agreement. All such actions, calculations, determinations<br>and interpretations which are done or made by the Board (or a duly authorized committee of the Board) by a Disinterested Board Majority<br>in good faith shall be final, conclusive and binding on the Company, the Rights Agent, holders of the Rights and all other parties and<br>shall not subject the Board (or a duly authorized committee of the Board) to any liability to the holders of the Rights. The Rights Agent<br>is entitled always to assume that the Board (or a duly authorized committee of the Board) acted in good faith and shall be fully protected<br>and incur no liability in reliance thereon. |
| --- | --- |
| 35. | Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall<br>not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including acts of God, terrorist<br>acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of any utilities, communications, or computer facilities,<br>or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war,<br>or civil unrest. |
| --- | --- |
[Signature Page Follows]
33
The parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.
XBP EUROPE HOLDINGS, INC.
| By | /s/ Dejan Avramovic |
|---|---|
| Name: | Dejan Avramovic |
| Title: | Chief Financial Officer |
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
| By | /s/ Steven Vacante |
|---|---|
| Name: | Steven Vacante |
| Title: | Vice President |
[Signature Page to Rights Agreement]
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A PARTICIPATING PREFERRED STOCK
of
XBP EUROPE HOLDINGS, INC.
_______________________________________________________________
(Pursuant to Section 151 of the Delaware General Corporation Law)
_______________________________________________________________
XBP Europe Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation (the “Board”) as required by Section 151 of the General Corporation Law on July 29, 2025:
RESOLVED, that pursuant to the authority vested in the Board in accordance with the provisions of the Second Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), a series of Preferred Stock, without par value, of the Corporation (“Preferred Stock”) be and it hereby is created, and that the designation and amount thereof and the powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of this series shall be designated as Series A Participating Preferred Stock (the “Series APreferred Stock”), and the number of shares constituting the Series A Preferred Stock shall be 60,000. Such number of shares may be increased or decreased by resolution of the Board; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.
Exhibit A-1
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any other stock of the Corporation) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of common stock, par value $0.0001 per share, of the Corporation (the “Common Stock”), and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date a “QuarterlyDividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount (if any) per share (rounded to the nearest cent), equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 1,000 multiplied by the aggregate per share amount of all cash dividends, and 1,000 multiplied by the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise) declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Dividends due pursuant to paragraph (A) of this Section 2 shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Exhibit A-2
(B) Except as otherwise provided in the Certificate of Incorporation, including any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein or in the Certificate of Incorporation, or as otherwise required by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding-up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. The Corporation shall take all such actions as are necessary to cause all such shares to become authorized but unissued shares of Preferred Stock that may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in the Certificate of Incorporation, including any Certificate of Designations creating a series of Preferred Stock or any similar stock, or as otherwise required by law.
Exhibit A-3
Section 6. Liquidation, Dissolution or Winding-Up.
(A) Upon any liquidation, dissolution or winding-up of the Corporation, voluntary or otherwise, no distribution shall be made to the holders of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock unless, prior thereto, the holders of Series A Preferred Stock shall have received an amount per share (the “Series A LiquidationPreference”) equal to $1,000 per share, plus an amount equal to any accrued and unpaid dividends thereon; provided, that the holders of Series A Preferred Stock shall be entitled to receive an aggregate an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount to be distributed per share to holders of shares of Common Stock. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) If there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series A Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably to the holders of the Series A Preferred Stock and the holders of such parity shares in proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or with the Corporation shall be deemed to be a liquidation, dissolution or winding-up of the Corporation within the meaning of this Section 6.
Section 7. Consolidation, Merger, Etc. If the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 multiplied by the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event that the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Exhibit A-4
Section 8. Amendment. While any Series A Preferred Stock is issued and outstanding, the Certificate of Incorporation shall not be amended in any manner, including in a merger or consolidation, which would alter, change or repeal the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. In addition to the rights, preferences and privileges accorded to the Series A Preferred Stock herein, the Series A Preferred Stock shall have the rights, privileges and preferences, and be subject to the limitations, accorded generally to the Preferred Stock in the Certificate of Incorporation of the Corporation.
Section 9. Rank. The Series A Preferred Stock shall be of equal rank with respect to the payment of dividends and upon liquidation, dissolution and winding-up, to all other series of Preferred Stock, unless the terms of any such series shall provide otherwise, and shall rank senior to the Common Stock as to such matters.
Section 10. No Redemption. The shares of Series A Preferred Stock shall not be redeemable.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its duly authorized officer this 29th day of July 2025.
| XBP EUROPE HOLDINGS, INC. | |
|---|---|
| By: | |
| --- | --- |
| Name: | Andrej Jonovic |
| Title: | Chief Executive Officer |
Exhibit A-5
EXHIBIT B
FORM OF RIGHT CERTIFICATE
| Certificate No. R-______________ | Rights______________ |
|---|
NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE OR EARLIER IF REDEMPTION, EXCHANGE OR TERMINATION OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY RELATED PERSONS THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, MAY BECOME NULL AND VOID.
Right Certificate
XBP EUROPE HOLDINGS, INC.
This certifies that ___________________________, or his, her or its registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement (as may be amended from time to time, the “RightsAgreement”), dated as of July 29, 2025, between XBP Europe Holdings, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as rights agent (or any successor rights agent) (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to the Final Expiration Date (as such term is defined in the Rights Agreement) or earlier under certain circumstances set forth in the Rights Agreement, at the office or offices of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Participating Preferred Stock, without par value, of the Company (the “Preferred Stock”), at a purchase price equal to five (5) times the Current Per Share Market Price of the Common Stock as of the Stock Acquisition Date per one one-thousandth of a share of Preferred Stock (the “PurchasePrice”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase properly completed and duly executed, accompanied by such documentation as the Rights Agent may reasonably request. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of [▪], 2025, based on the Preferred Stock as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths of a Preferred Stock which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.
From and after the occurrence of a Stock Acquisition Date (as defined in the Rights Agreement), if the Rights evidenced by this Right Certificate are or were acquired or Beneficially Owned by an Acquiring Person or a Related Person of an Acquiring Person, such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights.
This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are incorporated herein by this reference and made a part hereof, and to which Rights Agreement reference is made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the office or offices of the Rights Agent designated for such purpose.
Exhibit B-1
This Right Certificate, with or without other Right Certificates, upon surrender at the office or offices of the Rights Agent designated for such purpose, accompanied by such documentation as the Rights Agent may reasonably request, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, at the Company’s option, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or in part for shares of the Company’s Common Stock, Preferred Stock, cash, debt securities, or other assets, property or instruments. The shares and other securities transferred as part of the exchange may be transferred to a trust created upon such terms as the Board may determine.
No fractional Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of ____________.
| Attest: | XBP EUROPE HOLDINGS, INC. |
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| By: | |
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Countersigned:
Rights Agent
| By: |
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| Authorized Signature |
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Exhibit B-2
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED, _____________________ hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _______________________________, Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
| Date | Signature |
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Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (bank, stockbroker or savings and loan association with membership in an approved signature medallion program).
The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or a Related Person thereof and are not issued with respect to Common Stock underlying a Derivative Position described in the definition of Beneficial Owner (as such terms are defined in the Rights Agreement).
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Form of Reverse Side of Right Certificate – continued
Exhibit B-3
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate.)
TO XBP EUROPE HOLDINGS, INC.:
The undersigned hereby irrevocably elects to exercise _______________ Rights represented by this Right Certificate to purchase the Preferred Stock issuable upon the exercise of such Rights and requests that certificates for such Preferred Stock be issued in the name of:
| Please insert Social Security or other identifying number: | . |
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(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:
| Please insert Social Security or other identifying number: | . |
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(Please print name and address)
| Dated: |
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| Signature |
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(Signature must conform to the holder specified on the Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (bank, stockbroker or savings and loan association with membership in an approved signature medallion program).
Form of Reverse Side of Right Certificate – continued
The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by the undersigned from, and are not being assigned to an Acquiring Person or a Related Person thereof and are not issued with respect to Common Stock underlying a Derivative Position described in the definition of Beneficial Owner (as such terms are defined in the Rights Agreement).
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Exhibit B-4
NOTICE
The signature in the foregoing Forms of Assignment and Election to Purchase must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
In the event that the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, such assignment or election to purchase will not be honored.
Exhibit B-5
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY RELATED PERSONS THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, MAY BECOME NULL AND VOID
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On July 29, 2025, the Board of XBP Europe Holdings, Inc. (the “Company”) declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.0001 per share, of the Company (the “CommonStock”), outstanding on August 15, 2025 (the “Record Date”) to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock, without par value, of the Company (the “Preferred Stock”), at a price equal to five (5) times the Current Per Share Market Price of the Common Stock as of the Stock Acquisition Date per one one-thousandth of a share of Preferred Stock represented by a Right (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”), dated as of July 29, 2025, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as rights agent (or any successor rights agent), as it may from time to time be amended or supplemented pursuant to its terms. Capitalized terms used but not defined in this summary have the meanings ascribed to such terms in the Rights Agreement.
Until the earlier of (i) the Close of Business on the tenth (10th) Business Day after the Stock Acquisition Date, or (ii) the Close of Business on the tenth (10th) Business Day (or such later date as the Board shall determine) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or Exempt Persons) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would become an Acquiring Person (the earlier of such dates, the “Distribution Date”), the Rights will be evidenced by Common Stock certificates with a copy of this Summary of Rights attached thereto (unless such Rights are recorded in book-entry); provided, that each certificate (or other evidence of book-entry or other uncertificated ownership) representing Common Stock outstanding as of the Close of Business on the Record Date evidencing the Rights shall be deemed to incorporate by reference the terms of the Rights Agreement.
A Person shall not be deemed to be an Acquiring Person if such Person, together with all Related Persons of such Person, at the Effective Time (after giving effect to any additional shares issuable pursuant to clause (iii) of the definition of Exempt Transaction), is a Beneficial Owner of thirty percent (30%) or more of the Common Stock then outstanding (a “Grandfathered Stockholder”); provided, that if a Grandfathered Stockholder together with any Related Persons becomes, after such time, the Beneficial Owner (other than pursuant to grants or exercise of equity awards to a member of the Board or employee or any dividend or distribution on or reclassification of Company securities) of any additional Common Stock (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of Common Stock then outstanding Beneficially Owned by such Grandfathered Stockholder together with any Related Persons) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Stock, such Person together with any Related Persons is not the Beneficial Owner of greater than such Person’s Initial Percentage; provided, further, that upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below thirty percent (30%) (after giving effect to any additional shares issuable pursuant to clause (iii) of the definition of Exempt Transaction), such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder. For the avoidance of doubt, in the event that after the Effective Time, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of Common Stock expires, is settled in whole or in part, terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement or understanding with respect to the same or different Common Stock that confers Beneficial Ownership of Common Stock shall be considered the acquisition of Beneficial Ownership of additional Common Stock by the Grandfathered Stockholder and render such Grandfathered Stockholder an Acquiring Person for purposes of the Rights Agreement unless, upon such acquisition of Beneficial Ownership of additional Common Stock, such Person together with any Related Persons is not the Beneficial Owner of greater than such Person’s Initial Percentage.
Exhibit C-1
A Person shall be deemed the “BeneficialOwner” of, and shall be deemed to “beneficially own”:
| (i) | any securities that such Person or any of such Person’s Related Persons, owns directly or has the<br>right, directly or indirectly, to acquire (whether such right is exercisable immediately, or only after the passage of time, compliance<br>with regulatory requirements, the fulfillment of a condition, or otherwise) pursuant to any agreement, arrangement or understanding (whether<br>or not in writing), or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided,<br>however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (A) securities tendered pursuant<br>to a tender offer or exchange offer made by or on behalf of such Person or any of such Person’s Related Persons until such tendered<br>securities are accepted for purchase or exchange or (B) securities issuable upon exercise of Rights; |
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| (ii) | any securities that such Person or any of such Person’s Related Persons beneficially owns, directly<br>or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 of the General Rules and Regulations<br>under the Exchange Act, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided<br>that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security under this subparagraph (ii) on<br>account of an agreement, arrangement or understanding to vote such security that (X) arises solely from a revocable proxy given to<br>such Person or any of such Person’s Related Persons in response to a public proxy solicitation made pursuant to and in accordance<br>with the applicable provisions of the General Rules and Regulations under the Exchange Act, and (Y) is not also then reportable<br>by such Person or any of such Person’s Related Persons on Schedule 13D under the Exchange Act (or any comparable or successor report); |
| --- | --- |
| (iii) | any securities that are beneficially owned, directly or indirectly, by any other Person (or any Related<br>Persons thereof), if such Person or any of such Person’s Related Persons, has any agreement, arrangement or understanding (whether<br>or not in writing) with such other Person or any of such other Person’s Related Persons for the purpose of acquiring, holding, voting<br>(other than voting pursuant to a revocable proxy as described in the proviso to Section 1(d)(ii) of the Rights Agreement)<br>or disposing of any securities of the Company; or |
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Exhibit C-2
| (iv) | any securities which are the subject of, or the reference securities for, or that underlie, any Derivative<br>Position of such Person or any of such Person’s Related Persons, with the number of Common Stock deemed Beneficially Owned in respect<br>of a Derivative Position being the notional or other number of Common Stock in respect of such Derivative Position (without regard to<br>any short or similar position) that is specified in (i) one (1) or more filings with the Securities and Exchange Commission<br>by such Person or any of such Person’s Related Persons or (ii) the documentation evidencing such Derivative Position as the<br>basis upon which the value or settlement amount of such Derivative Position, or the opportunity of the holder of such Derivative Position<br>to profit or share in any profit, is to be calculated in whole or in part (whichever of (i) or (ii) is greater), or if no such<br>number of Common Stock is specified in such filings or documentation (or such documentation is not available to the Board), as determined<br>by the Board in its reasonable discretion. |
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The Rights Agreement provides that, until the Distribution Date (or the earlier expiration or redemption of the Rights), the Rights will be transferred with and only with the Common Stock. New Rights will accompany any new Common Stock issued by the Company after the Record Date, until the Distribution Date (or the earlier expiration or redemption of the Rights). Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock certificates issued after the Record Date or upon transfer or new issuance of Common Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for Common Stock outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“RightCertificates”) will be mailed to holders of record of the Common Stock as of the Distribution Date, and such separate Right Certificates alone will evidence the Rights (unless such Rights are recorded in book-entry).
The Rights are not exercisable until the Distribution Date. The Rights will expire on the Close of Business on January 29, 2027 (the “Final ExpirationDate”).
The Purchase Price payable, and the number of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock; (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then current market price of the Preferred Stock; or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends paid out of earnings or retained earnings or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend on the Common Stock payable in Common Stock or subdivisions, consolidations or combinations of the Common Stock occurring, in any such case, prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each Preferred Stock will be entitled to a minimum preferential quarterly dividend payment of $1 per share but will be entitled to an aggregate dividend of 1,000 multiplied by the dividend declared per Common Stock. In the event of liquidation, the holders of the Preferred Stock will be entitled to a minimum preferential liquidation payment of $1,000 per share but will be entitled to an aggregate payment of 1,000 multiplied by the payment made per Common Stock. Each Preferred Stock will have 1,000 votes, voting together with the Common Stock. In the event of any merger, consolidation or other transaction in which Common Stock are exchanged, each Preferred Stock will be entitled to receive 1,000 multiplied by the amount received per Common Stock.
Exhibit C-3
From and after the time any Person becomes an Acquiring Person, if the Rights evidenced by this Right Certificate are or were acquired or Beneficially Owned by an Acquiring Person or a Related Person of an Acquiring Person, such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights.
If any Person becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other than Rights Beneficially Owned by the Acquiring Person and its Related Persons (all of which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Stock having a market value of two (2) times the exercise price of the Right. If the Board so elects, the Company may deliver upon payment of the exercise price of a Right an amount of cash, securities, or other property equivalent in value to the Common Stock issuable upon exercise of a Right.
If, at any time after a Person becomes an Acquiring Person, the Company is acquired in a merger or other business combination transaction or fifty percent (50%) or more of its consolidated assets or Earning Power (as defined in the Rights Agreement) are sold, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right.
At any time after any Person becomes an Acquiring Person and prior to the acquisition by any Person or group of a majority of the outstanding Common Stock, the Board may exchange the Rights (other than Rights owned by such Person or group which have become void), in whole or in part, at an exchange ratio of one Common Stock per Right (subject to adjustment). The shares and other securities transferred as part of the exchange may be transferred to a trust created upon such terms as the Board may determine.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least one percent (1%) in such Purchase Price. No fractional Preferred Stock will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading day prior to the date of exercise.
At any time prior to the time any Person becomes an Acquiring Person, the Board may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board without the consent of the holders of the Rights. However, from and after such time as any Person becomes an Acquiring Person, the Rights Agreement shall not be amended or supplemented in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person and its Related Persons).
Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement is available free of charge from the Company. The foregoing summary of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference.
Exhibit C-4
Exhibit 4.3
COMMON STOCK PURCHASE WARRANTXBP EUROPE HOLDINGS, INC.
| Warrant Shares: | Initial Exercise Date: July 29, 2025 |
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THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [ ]^1^ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [▪] (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [▪], 2030^2^ (the “Termination Date”) but not thereafter, to subscribe for and purchase from XBP Europe Holdings, Inc., a Delaware corporation (the “Company”), up to ______ shares (as subject to adjustment hereunder, the “Warrant Shares”) of common stock, par value $0.0001 per share of the Company (the “Common Stock”)^3^. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth on Exhibit A attached hereto.
2. Exercise.
(a) Exerciseof Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in substantially the form attached hereto as Exhibit B (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
^1^ NTD: Names of ETI Noteholders to be inserted in respective warrants.
^2^ NTD: Five year term from the Plan Effective Date.
^3^ NTD: Equal to 7.5% of the number of Exchanged New Parent Interests on a fully diluted basis (after dilution by the Premiums and Fees).
(b) ExercisePrice. The exercise price per share of Common Stock under this Warrant shall be $[▪]^4^, subject to adjustment hereunder (the “Exercise Price”).
(c) CashlessExercise. If at any time after the Initial Exercise Date, there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of, the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
The parties acknowledge and agree that in accordance with Section 1145(a)(2) of the United States Bankruptcy Code, the Warrant Shares shall be unrestricted securities. The Company agrees not to take any position contrary to this Section 2(c).
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
To the extent the Holder elects to exercise this Warrant via cashless exercise and a related trading price (under Item (A)) is to be determined at a time (and using a VWAP or Bid Price, as applicable) after 9:30am on the ex-date on the trading market referenced in determining item (A) for an event which would require an adjustment to the Exercise Price under Section 3(b), but such adjustment to the Exercise Price has not yet become effective pursuant to the to the terms of Section 3(b), such adjustment shall, for purposes of such cashless exercise, be deemed applied to the Exercise Price used in item (B). For the avoidance of doubt, in any such event where the above-noted adjustment to the Exercise Price is so made pursuant to the terms hereof in connection with a cashless exercise, the Holder shall not be entitled to participate in the event triggering the adjustment under Section 3(b), on account of the Warrant Shares issuable in connection with such cashless exercise. Furthermore, to the extent the Holder elects to exercise this Warrant via cashless exercise at any time following an adjustment having been made to the Exercise Price pursuant to Section 3(b) hereof but before the ex date for the related event causing such adjustment (or using a VWAP or Bid Price related to a time or date prior to such ex date), the Exercise Price in item (B) shall be determined assuming no such adjustment has occurred for purposes of such cashless exercise and the Warrant Shares received by the Holder shall be entitled to participate in the event otherwise triggering the adjustment.
^4^ NTD: Equal to Plan Equity Value.
(d) Mechanicsof Exercise.
(i) Deliveryof Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $5.00 per Trading Day (increasing to $10.00 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
(ii) Deliveryof New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) RescissionRights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensationfor Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
(v) NoFractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either (x) pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of such fractional share based on the value of one share as determined under Section 2(c)(A) or (y) round up to the next whole share.
(vi) Charges,Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form in substantially the form attached hereto as Exhibit C duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii) Closingof Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
3. CertainAdjustments.
(a) StockDividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. If the Company, at any time while this Warrant is outstanding, issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, references herein to the Common Stock shall be deemed to be to the securities a holder of Common Stock would have received in such reclassification. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. A distribution to holders of Common Stock of rights entitling such holders to purchase shares of Common Stock at a price per share less than the market price as of the record date fixed for the determination of holders of Common Stock entitled to receive such rights (as determined reasonably and in good faith by the board of directors of the Company, the "Market Price") shall be deemed a dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock actually issued under any issued rights that are convertible into or exercisable for the Common Stock multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid to exercise such rights divided by (y) the Market Price on such record date, and the amount of Common Stock issuable for each Warrant and the Exercise Price will be adjusted in accordance with the foregoing sentence, with the foregoing adjustments to be measured following the expiration of the conversion or exercise period of the related rights and the consummation of the issuance of the underlying shares related thereto, provided that if an exercise entitled to receive such adjustment is to be settled prior to the measurement time, such exercise shall be initially settled without such adjustment and any incremental consideration resulting from such adjustment shall be delivered following such measurement. For purposes of this Section 3(a), any rights distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s capital stock, including Common Stock (either initially or under certain circumstances), which rights, until the occurrence of a specified event or events (each a “Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 3(a) until the occurrence of the earliest Trigger Event. Upon any Trigger Event in respect of any such rights at any time while this Warrant is outstanding, they shall be deemed to have been distributed and appropriate adjustments, to the extent applicable, shall be made under this Section 3(a).
(b) Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options (excluding rights that are the subject of Section 3(a)) by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) which does not trigger an adjustment pursuant to Section 3(a) above (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Exercise Price in effect immediately prior to 5:00 p.m. Eastern time on the date for the determination of the holders of outstanding shares of Common Stock entitled to receive such Distribution shall be decreased by the quotient of (i) the fair market value of the applicable Distribution as determined at the Company’s expense by an independent nationally recognized investment banking, accounting or valuation firm selected in good faith by the Company and the Holder (provided, if the applicable Distribution consists solely of cash, then the fair market value of such Distribution shall be the total amount of cash distributed in connection therewith and not require the engagement of any independent appraiser), divided by (ii) the total number of outstanding shares of Common Stock held by the holders entitled to receive such Distribution, each to be determined as of the record date for such Distribution so distributed. Any adjustment pursuant to this Section 3(b) shall become effective immediately following 5:00 p.m. Eastern time on the date for determination of the holders of shares of Common Stock entitled to receive such Distribution. For purposes of this Section 3(b) any options or warrants distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s capital stock, including Common Stock (either initially or under certain circumstances), which options or warrants, until the occurrence of a specified event or events (each a “Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 3(b), until the occurrence of the earliest Trigger Event. Upon any Trigger Event in respect of any such options or warrants at any time while this Warrant is outstanding, they shall be deemed to have been distributed and appropriate adjustments shall be made under this Section 3(b), provided that to the extent any such options or warrants expire unexercised, the adjustment made under this Section 3(b) shall be reversed at the time of such expiration to the extent of the unexercised options or warrants. Further, to the extent any distribution is declared but not made or paid, the Exercise Price will not be adjusted pursuant to the provision above.
(c) FundamentalTransaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the consolidated assets of the Company in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
(d) Calculations/Adjustments. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding. To the extent the application of any provision in this Section 3 would result in a deviation from, or a result inconsistent with, the intent of the parties hereto, as reflected herein, the Company and the Holder shall cooperate in good faith to make appropriate and equitable adjustments thereto to effectuate the intent of the parties hereto.
(e) Noticeto Holder.
(i) Adjustmentto Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment and related calculations.
(ii) Noticeof Certain Events. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register (as defined below) of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
(iii) VoluntaryAdjustment by Company. Subject to the rules and regulations of the Trading Market and applicable law, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
4. Transferof Warrant.
(a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto as Exhibit C duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) NewWarrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original issuance date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c) WarrantRegister. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
(d) TransferRestrictions. Neither this Warrant nor the Warrant Shares are subject to transfer restrictions.
(e) Representationby the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
5. Miscellaneous.
(a) NoRights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
(b) Loss,Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of an affidavit of the Holder or other evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
(c) Saturdays,Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
(d) AuthorizedShares.
(i) The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant (assuming no utilization of the cashless exercise procedures in Section 2(c)). The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
(ii) Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
(iii) Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
(e) GoverningLaw. All questions concerning the construction, validity, enforcement, and interpretation of this Warrant shall be determined in accordance with the laws of the state of New York applicable to contracts entered into and to be performed solely within such state.
(f) Nonwaiverand Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(g) Notices. All notices, requests, demands, and other communications required or permitted to be given under this Warrant shall be in writing and shall be deemed to have been duly given if delivered personally, sent by registered or certified mail (return receipt requested and postage prepaid), sent by a nationally recognized overnight courier service, or sent by electronic mail (with confirmation of receipt). Notices shall be sent to the parties at their last known address or email address as recorded in the Company’s records or as otherwise designated by a party in writing. Notices shall be deemed to have been given and received: (i) if personally delivered, on the date of delivery; (ii) if mailed, on the third Business Day after being deposited in the mail, postage prepaid; (iii) if sent by overnight courier, on the next Business Day after being sent; and (iv) if sent by electronic mail, on the date of transmission if sent during normal business hours, and on the next Business Day if sent after normal business hours.
(h) Limitationof Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
(i) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
(j) Successorsand Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
(k) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(l) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(m) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
XBP EUROPE HOLDINGS, INC.
| By: | /s/ |
|---|
Name:
Title:
EXHIBIT A
ADDITIONAL DEFINITIONS
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed on a Trading Market but is then listed or quoted for trading on OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on a Trading Market or OTCQB or OTCQX and if prices for the Common Stock are then reported on the OTCID Basic Market or Pink Limited, the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and the Holder, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, references to exchanges and quotation systems in this paragraph include any similar organization or agency succeeding to such exchange’s or quotation system’s functions of reporting prices.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally are open for use by customers on such day.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary” means any subsidiary of the Company.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means the Nasdaq Capital Market if the Common Stock is listed on such exchange on the date in question or, if not, any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Continental Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 1 State Street Plaza, New York, New York 10004, and any successor transfer agent of the Company.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed on a Trading Market but is then listed or quoted for trading on OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on a Trading Market or OTCQB or OTCQX and if prices for the Common Stock are then reported in the OTCID Basic Market or Pink Limited (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company and the Holder, the fees and expenses of which shall be paid by the Company. For the avoidance of doubt, references to exchanges and quotation systems in this paragraph include any similar organization or agency succeeding to such exchange’s or quotation system’s functions of reporting prices.
EXHIBIT B
NOTICE OF EXERCISE
To: XBP EUROPE HOLDINGS, INC.
| (1) | The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only<br>if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. |
|---|---|
| (2) | Payment shall take the form of (check applicable box): |
| --- | --- |
¨ in lawful money of the United States; or
¨ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
| (3) | Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below: |
|---|
_______________________________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________________________
Name of Investing Entity: _______________________________________________
Signature of Authorized Signatory of Investing Entity___________________________
Name of Authorized Signatory: _______________________________
Title of Authorized Signatory: _______________________________
Date: _______________________________
EXHIBIT C
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply the required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:
| Name: |
|---|
| Address: |
| --- |
| Phone Number: |
| --- |
| Email Address: |
| --- |
| Dated: |
| --- |
| Holder’s Signature: |
| --- |
| Holder’s Address: |
| --- |
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
byand among
XBP EUROPE HOLDINGS,INC.
and
THE HOLDERS
Dated as of July 29, 2025
Table of Contents
Page
| 1. | Definitions | 1 |
|---|---|---|
| 2. | Shelf Registrations | 5 |
| --- | --- | --- |
| 3. | Demand Registrations | 6 |
| --- | --- | --- |
| 4. | Piggyback Takedowns | 9 |
| --- | --- | --- |
| 5. | Priority | 9 |
| --- | --- | --- |
| 6. | Suspension Period | 11 |
| --- | --- | --- |
| 7. | Lock-Up Agreement | 11 |
| --- | --- | --- |
| 8. | Company Undertakings | 12 |
| --- | --- | --- |
| 9. | Registration Expenses | 17 |
| --- | --- | --- |
| 10. | Indemnification; Contribution | 18 |
| --- | --- | --- |
| 11. | Participation in Underwritten Offering/Sale of Registrable Securities | 21 |
| --- | --- | --- |
| 12. | Rule 144 | 21 |
| --- | --- | --- |
| 13. | Private Placement | 22 |
| --- | --- | --- |
| 14. | Transfer of Registration Rights | 22 |
| --- | --- | --- |
| 15. | Amendment; Waivers; Further Assurances | 22 |
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| 16. | Miscellaneous | 23 |
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of July 29, 2025 (the "EffectiveDate") by and among XBP Europe Holdings, Inc., a Delaware corporation (the "Company"), and the parties identified as "Holders" on the signature pages hereto and any parties identified on the signature page of any joinder agreements executed and delivered pursuant to Section 14 hereof (each a "Holder" and, collectively, the "Holders"). Capitalized terms used but not otherwise defined herein are defined in Section 1 hereof.
RECITALS:
WHEREAS, on March 3, 2025, DocuData Solutions, L.C. and certain of its affiliates filed voluntary cases under chapter 11 of title 11 of the United States Code, §§ 101-1532, as amended, in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) (the cases commenced, captioned In re DocuData Solutions, L.C., Case No. 25-90023 (CML)), in regards to effectuating certain restructuring transactions as contemplated in a chapter 11 plan of reorganization filed with the Bankruptcy Court on June 23, 2025 (as amended from time to time, the “Plan”), pursuant to which new shares of Common Stock have been issued or existing shares of Common Stock have been distributed to the Holders on the Effective Date as part of a debt for equity exchange; and
WHEREAS, the Holders and the Company desire to enter into this Agreement to provide the Holders with certain rights relating to the registration of such Common Stock as contemplated by the Plan.
NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Holders hereby agree as follows:
**1.**Definitions.
"Affiliate" of any particular Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person.
"Agreement" has the meaning specified in the first paragraph hereof.
"AutomaticShelf Registration Statement" means an "automatic shelf registration statement" as defined in Rule 405 promulgated under the Securities Act.
"beneficiallyown", "beneficial ownership" and any similar phrase as such terms are used in Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act, except that in calculating the beneficial ownership of any Holder, such Holder shall be deemed to have beneficial ownership of all securities that such Holder has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition.
"Board" means the Board of Directors of the Company.
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"BusinessDay" means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by applicable law or executive order to close.
"Commission" means the United States Securities and Exchange Commission or any successor governmental agency.
"CommonStock" means the shares of common stock, par value $0.0001 per share, of the Company.
"Company" has the meaning specified in the first paragraph hereof.
"CompanyDemand Registration Notice" has the meaning specified in Section 3(b).
"CompanyShelf Takedown Notice" has the meaning specified in Section 2(d).
"control" (including the terms "controlling," "controlled by" and "under common control with") means, unless otherwise noted, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting shares, by contract, or otherwise.
"Counselto the Holders" means, with respect to any offering of Registrable Securities hereunder, one firm of counsel, plus any local or foreign counsel, selected by the Holders of a majority of the Registrable Securities requested to be included in such offering.
"DemandHolders" shall mean a Holder or group of Holders representing at least ten percent (10%) of the Registrable Securities.
"DemandRegistration" has the meaning specified in Section 3(a).
"DemandRegistration Notice" has the meaning specified in Section 3(b).
"DemandShelf Takedown Notice" has the meaning specified in Section 2(d).
"DisclosurePackage" means, with respect to any offering of securities, (i) the preliminary Prospectus, (ii) the price to the public and the number of securities included in the offering; (iii) each Free Writing Prospectus and (iv) all other information that is deemed, under Rule 159 promulgated under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including a contract of sale).
"EffectiveDate" has the meaning specified in the first paragraph hereof.
"ExchangeAct" means the Securities Exchange Act of 1934, as amended from time to time.
"FINRA" means the Financial Industry Regulatory Authority.
"Form S-1Shelf’ has the meaning specified in Section 2(a).
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"Form S-3Shelf’ has the meaning specified in Section 2(a).
"FreeWriting Prospectus" means any "free writing prospectus" as defined in Rule 405 promulgated under the Securities Act.
"Holder" and "Holders" have the meanings given to those terms in the first paragraph hereof.
"HolderFree Writing Prospectus" means each Free Writing Prospectus prepared by or on behalf of the relevant Holder or used or referred to by such Holder in connection with the offering of Registrable Securities.
"Lock-UpPeriod" has the meaning specified in Section 7(a).
"Long-Form Registration" has the meaning specified in Section 3(a).
"Losses" has the meaning specified in Section 10(a).
"NASDAQ" means the NASDAQ Stock Market.
"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity.
"PiggybackRegistration" has the meaning specified in Section 4(a).
"PiggybackTakedown" has the meaning specified in Section 4(a).
"Prospectus" means the prospectus used in connection with a Registration Statement.
"RegistrableSecurities" means at any time any shares of Common Stock held or beneficially owned by any Holder; provided, however, that as to any Registrable Securities, such securities shall cease to constitute Registrable Securities upon the earliest to occur of: (x) the date on which such securities are disposed of pursuant to an effective registration statement under the Securities Act; (y) the date on which such securities are disposed of pursuant to Rule 144 (or any successor provision) promulgated under the Securities Act; and (z) the date on which such securities cease to be outstanding.
"RegistrationExpenses" means all expenses (other than underwriting discounts and commissions) arising from or incident to the registration of Registrable Securities in compliance with this Agreement, including:
(i) stock exchange, Commission, FINRA and other registration and filing fees,
(ii) all fees and expenses incurred in connection with complying with any securities or blue sky laws (including fees, charges and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities ),
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(iii) all printing, messenger and delivery expenses,
(iv) the fees, charges and disbursements of counsel to the Company and of its independent public accountants and any other accounting and legal fees, charges and expenses incurred by the Company (including any expenses arising from any special audits or "comfort letters" required in connection with or incident to any sale of Registrable Securities pursuant to a registration),
(v) the fees and expenses incurred in connection with the listing of the Registrable Securities on NASDAQ (or any other national securities exchange),
(vi) the fees and expenses incurred in connection with any "road show" for underwritten offerings, including travel expenses, and
(vii) reasonable and documented out-of-pocket fees, charges and disbursements of Counsel to the Holders, including, for the avoidance of doubt, any expenses of Counsel to the Holders in connection with the filing or amendment of any Registration Statement, Prospectus or Free Writing Prospectus hereunder;
Provided that, in no instance shall Registration Expenses include Selling Expenses.
"RegistrationStatement" means any registration statement filed hereunder or in connection with a Piggyback Takedown.
"RequestingHolder" has the meaning specified in Section 3(a).
"RestrictedShares" has the meaning specified in Section 7(a).
"SecuritiesAct" means the Securities Act of 1933, as amended from time to time.
"SellingExpenses" means the underwriting fees, discounts, selling commissions and stock transfer taxes applicable to all Registrable Securities registered by the Holders and legal expenses not included within the definition of Registration Expenses.
"Shelf" has the meaning specified in Section 2(a).
"ShelfRegistration" means a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
"ShelfTakedown" means either an Underwritten Shelf Takedown or a Piggyback Takedown.
"Short-Form Registration" has the meaning specified in Section 3(a).
"SubsequentShelf Registration" has the meaning specified in Section 2(b).
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"SuspensionPeriod’ has the meaning specified in Section 6(a).
"Transfer" has the meaning specified in Section 7(a).
"UnderwrittenShelf Takedown" has the meaning specified in Section 2(c).
"Well-KnownSeasoned Issuer" means a "well-known seasoned issuer" as defined in Rule 405 promulgated under the Securities Act and which (i) is a "well-known seasoned issuer" under paragraph (1 )(i)(A) of such definition or (ii) is a "well-known seasoned issuer" under paragraph (1 )(i)(B) of such definition and is also eligible to register a primary offering of its securities relying on General Instruction I.B. 1 of Form S-3 or Form F-3 under the Securities Act.
**2.**ShelfRegistrations.
(a) Filing. The Company shall file as promptly as practicable, and in no event later than forty-five (45) days after the Effective Date, a Registration Statement for a Shelf Registration on Form S-3 (the "Form S-3 Shelf") or, if the Company is ineligible to use a Form S-3 Shelf, a Registration Statement for a Shelf Registration on Form S-1 (the "Form S-1 Shelf" and together with the Form S-3 Shelf (and any Subsequent Shelf Registration), the "Shelf") covering the resale of the Registrable Securities on a delayed or continuous basis. The Company shall use reasonable best efforts to cause the Shelf to become effective as soon as practicable after such filing. The Shelf shall provide for the resale of Registrable Securities from time to time, and pursuant to any method or combination of methods legally available to, and requested by, the Holders. The Company shall maintain the Shelf in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep such Shelf effective and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Form S-1 Shelf, the Company shall use its reasonable best efforts to convert the Form S-1 Shelf (and any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as practicable after the Company is eligible to use Form S-3.
(b) Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall use its commercially reasonable efforts to as promptly as practicable cause such Shelf to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a "Subsequent Shelf Registration") registering the resale from time to time by the Holders thereof of all securities that are Registrable Securities as of the time of such filing. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an Automatic Shelf Registration Statement if the Company is a Well-Known Seasoned Issuer) and (ii) keep such Subsequent Shelf Registration continuously effective and usable until there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form and shall provide for the registration of such Registrable Securities for resale by the Holders in accordance with any method or combination of methods legally available to, and requested by the Holders.
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(c) Requests for Underwritten Shelf Takedowns. At any time and from time to time after the Shelf has been declared effective by the Commission, any Demand Holder may request to sell all or any portion of their Registrable Securities in an underwritten offering that is registered pursuant to the Shelf (each, an "Underwritten Shelf Takedown").
(d) Demand Notices. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company (the "DemandShelf Takedown Notice"). Each Demand Shelf Takedown Notice shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. Within three (3) days after receipt of any Demand Shelf Takedown Notice, the Company shall give written notice of such requested Underwritten Shelf Takedown to all other Holders of Registrable Securities (the "Company ShelfTakedown Notice") and, subject to the provisions of Section 5 below, shall include in such Underwritten Shelf Takedown all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after sending the Company Shelf Takedown Notice.
(e) Selection of Underwriters. The Holders of a majority of the Registrable Securities requested to be included in a Underwritten Shelf Takedown, shall have the right to select the investment banker(s) and manager(s) to administer the offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the approval of the Company, which shall not be unreasonably withheld, conditioned or delayed.
(f) Other Registration Rights. The Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any other Person with respect to any securities of the Company, including securities convertible, exercisable or exchangeable into or for shares of any equity securities of the Company, except for the Amended and Restated Registration Rights Agreement, dated as of November 29, 2023, by and among the Company, CFAC Holdings VIII, LLC and BTC International Holdings, Inc. (as in effect on the date hereof, the “Existing RRA”).
**3.**DemandRegistrations.
(a) Requests for Registration. At any time after the Effective Date, any Demand Holder (in such capacity, the "Requesting Holder") may request (i) registration under the Securities Act of all or any portion of the Registrable Securities held by such Requesting Holder on Form S-3 or any similar short-form registration (a "Short-Form Registration"), if available, and (ii) registration under the Securities Act of all or any portion of the Registrable Securities held by such Requesting Holder on Form S-1 or similar long-form registration (a "Long-Form Registration") if Short-Form Registration is not available (any registration under this Section 3(a), a "Demand Registration"); provided that, in the case of a Demand Registration, such Demand Holder will be entitled to make such demand only if (1) the total offering price of the Registrable Securities to be sold in such offering (including piggyback shares and before deduction of underwriting discounts) is reasonably expected to exceed, in the aggregate, ten million dollars ($10,000,000) or (2) the total number of securities to be sold in such offering (including Registrable Securities and any piggyback shares) is at least ten percent (10%) of the total outstanding shares of Common Stock and the total offering price thereof (before deduction of underwriter discounts) is reasonably expected to exceed, in the aggregate, seven million and five hundred thousand dollars ($7,500,000). Any Requesting Holder may request that any offering conducted under a Long-Form Registration or a Short-Form Registration be underwritten.
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(b) Demand Registration Notices. All requests for Demand Registrations shall be made by giving written notice to the Company (the "DemandRegistration Notice"). Each Demand Registration Notice shall specify (i) whether such Demand Registration shall be an underwritten offering, (ii) the approximate number of Registrable Securities proposed to be sold in the Demand Registration and (iii) the expected price range (net of underwriting discounts and commissions) of such Demand Registration. Within five (5) days after receipt of any Demand Registration Notice, the Company shall give written notice of such requested Demand Registration to all other Holders of Registrable Securities (the "Company Demand Registration Notice") and, subject to the provisions of Section 5 below, shall include in such Demand Registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after sending the Company Demand Registration Notice.
(c) Demand Registration Effectiveness. A registration shall not count as a Demand Registration until both (i) it has become effective (unless such Demand Registration has not become effective due solely to the fault of the Demand Holder requesting such registration) and (ii) the Demand Holder initially requesting such registration is able to register and sell pursuant to such registration at least eighty percent (80%) of the Registrable Securities requested to be included in such registration either at the time of the registration or within ninety (90) days thereafter; provided that if the Holders of the majority of the Registrable Securities requested to be included in such Demand Registration request the withdrawal of such Demand Registration, such Demand Registration will count as a Demand Registration unless the Company is reimbursed by such Holder for all reasonable out-of-pocket expenses incurred by the Company in connection with such registration, including reasonable attorney and accounting fees; provided, however, that the Company shall not withdraw such Demand Registration if the Demand Registration continues to satisfy either of the conditions in Section 3(a)(ii)(1) or (2).
(d) Short-Form Registrations. Demand Registrations shall be Short-Form Registrations whenever the Company is permitted to use an applicable short form. The Company shall use its reasonable best efforts to make Short-Form Registrations on Form S-3 (or any successor form) available for the sale of Registrable Securities.
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(e) Restrictions on Demand Registrations.
(i) The Company shall not be obligated to effect (a) any Long-Form Registration within ninety (90) days or (b) any Short-Form Registration within forty-five (45) days, in each case, after the effective date of a previous Demand Registration or a previous registration in which the Holders of Registrable Securities were given piggyback rights pursuant to Section 4 of this Agreement and in which such Holders were able to register and sell at least eighty percent (80%) of the number of Registrable Securities requested to be included therein. In addition, the Company shall not be obligated to effect any Demand Registration during the period starting with the date that is up to sixty (60) days prior to the Board’s good faith estimate of the date of filing of, and ending on the date that is up to one hundred and twenty (120) days (unless the underwriting agreement requires a longer period of time) after the effective date of, a Company initiated registration statement, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration to become effective and the Holders are entitled to participate, through the exercise of piggyback rights pursuant to Section 4 hereof, in such registration, and provided further that the aggregate number of days that any one or more Demand Registrations are suspended or delayed by operation of this Section 3(e) shall not exceed ninety (90) days in any twelve (12) month period, and such suspensions or delays shall not occur more than two (2) times in any twelve (12) month period. In the event of any such suspension or delay, the Holder of Registrable Securities initially requesting a Demand Registration that is suspended by operation of this Section 3(e) shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as a Demand Registration hereunder, and, notwithstanding the proviso in Section 3(c), the Company shall pay all Registration Expenses in connection with such registration.
(ii) In addition, the Company shall not be obligated to effect (ii) more than two (2) Demand Registrations pursuant to Section 3(a) using Long-Form Registrations or (iii) more than three (3) Demand Registrations pursuant to Section 3(a) using Short Form Registrations within any twelve (12) month period.
(f) Selection of Underwriters. The Holders of a majority of the Registrable Securities requested to be included in a Demand Registration which is an underwritten offering shall have the right to select the investment banker(s) and manager(s) to administer the offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the approval of the Company, which shall not be unreasonably withheld, conditioned or delayed.
(g) Transfer of Demand Rights. The rights of a Holder under this Section 3 may be transferred, assigned or otherwise conveyed in whole or in part, to (A) any transferee or assignee (other than a transfer pursuant to a registration statement or under Rule 144 promulgated under the Securities Act) who, following such transfer, assignment or conveyance, (i) holds at least twenty percent (20%) of the outstanding Common Stock held by such Holder as of the Effective Date and (ii) holds at least ten percent (10%) of the Company’s total outstanding Common Stock, as reported in the Company’s most recent SEC filings, in each case, provided that the requirements of Section 14 are satisfied or (B) any of its Affiliates. For the avoidance of doubt, and subject to Section 16 hereof, following any such transfer, assignment or other conveyance of such rights pursuant to this clause (g), the transferring Holder shall remain entitled to all rights of a Holder under this Section 3 to the extent it continues to hold Registrable Securities.
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**4.**PiggybackTakedowns.
(a) Right to Piggyback. Whenever the Company proposes to register any of its securities (whether or not following a request by a Demand Holder), including a registration pursuant to any registration rights agreement not prohibited by this agreement (a "PiggybackRegistration"), or proposes to offer any Common Stock pursuant to a registration statement in an underwritten offering of Common Stock under the Securities Act (whether or not following a request by a Demand Holder) (together with a Piggyback Registration, a "Piggyback Takedown"), the Company shall give prompt written notice to all Holders of Registrable Securities of its intention to effect such Piggyback Takedown. In the case of a Piggyback Takedown that is an underwritten offering under a shelf registration statement, such notice shall be given not less than ten (10) Business Days prior to the expected date of commencement of marketing efforts for such Piggyback Takedown. In the case of a Piggyback Takedown that is an underwritten offering under a registration statement that is not a shelf registration statement, or that is not an underwritten offering, such notice shall be given not less than ten (10) Business Days prior to the expected date of filing of such registration statement. The Company shall, subject to the provisions of Section 5 below, include in such Piggyback Takedown, as applicable, all Registrable Securities with respect to which the Company has received written requests for inclusion therein within five (5) Business Days after sending the Company’s notice. Notwithstanding anything to the contrary contained herein, (i) the Company may determine not to proceed with any Piggyback Takedown upon written notice to the Holders of Registrable Securities requesting to include their Registrable Securities in such Piggyback Takedown; provided, however, that nothing in this clause (i) shall impair the right of any Demand Holder to request that such registration be effected pursuant to Section 2 or Section 3; and (ii) any Holder of Registrable Securities may withdraw its request for inclusion by giving written notice to the Company of its intention to withdraw that registration; provided, however, that the withdrawal shall be irrevocable and after making the withdrawal, a Holder shall no longer have any right to include its Registrable Securities in that Piggyback Takedown.
(b) Selection of Underwriters. If any Piggyback Takedown is an underwritten offering, the Company will have the sole right to select the investment banker(s) and manager(s) for the offering.
**5.**Priority.
(a) Priority on Primary Offerings. If the Company determines, after consultation with the managing underwriter in any primary underwritten Piggyback Takedown initiated by the Company for its own account that less than all of the Registrable Securities requested to be included in such underwritten offering can be sold in an orderly manner within a price range acceptable to the Company, then the Company shall include in such underwritten Piggyback Registration the number which can be so sold in the following order of priority:
(i) first, the securities the Company proposes to sell;
(ii) second, the securities requested to be included in such Piggyback Takedown pursuant to the Existing RRA pursuant to the terms thereof;
(iii) third, the Registrable Securities requested to be included in such Piggyback Takedown by the Holders entitled to participate in such Piggyback Takedown, pro rata on the basis of the number of shares of Common Stock requested to be included therein by such Holders; and
(iv) fourth, other securities requested to be included in such underwritten Piggyback Takedown pursuant to a registration rights agreement not prohibited by this Agreement.
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(b) Priority on Offerings Initiated by Demand Holders. If the Holders of a majority of the Registrable Securities requested to be included in any underwritten offering initiated by Demand Holders pursuant to this Agreement determine, after consultation with the Company and the managing underwriter in such offering, that less than all of the Registrable Securities requested to be included in such underwritten offering can be sold in an orderly manner within a price range acceptable to such Holders, then the Company shall include in such underwritten offering the number which can be so sold in the following order of priority:
(i) first, the Registrable Securities requested to be included by the Holders entitled to participate in such underwritten offering, pro rata on the basis of the number of shares of Common Stock requested to be included therein by such Holders;
(ii) second, the securities requested to be included in such underwritten offering pursuant to the exercise of piggyback rights under the Existing RRA;
(iii) third, the securities the Company proposes to sell; and
(iv) fourth, other securities requested to be included in such underwritten offering pursuant to a registration rights agreement not prohibited by this Agreement.
(c) Priority on Offerings Initiated by Holders of Other Registration Rights. If the Company determines, after consultation with the managing underwriter in any underwritten Piggyback Takedown that was not initiated by the Company or Demand Holders pursuant to this Agreement, that less than all of the Registrable Securities requested to be included in such underwritten offering can be sold in an orderly manner within a price range acceptable to the holders of the Company’s securities demanding such Piggyback Takedown pursuant to a registration rights agreement not prohibited by this agreement, then the Company shall include in such Piggyback Registration the number which can be so sold in the following order of priority:
(i) first, the Registrable Securities requested to be included by holders initiating such offering pursuant to a registration rights agreement not prohibited by this Agreement;
(ii) second, the Registrable Securities requested to be included in such Piggyback Takedown pursuant to the exercise of piggyback rights under the Existing RRA;
(iii) third, the Registrable Securities requested to be included in such Piggyback Takedown by the Holders entitled to participate in such Piggyback Takedown, pro rata on the basis of the number of shares of Common Stock requested to be included therein by such Holders;
(iv) fourth, the securities the Company proposes to sell; and
(v) fifth, other securities requested to be included in such Piggyback Takedown pursuant to a registration rights agreement not prohibited by this Agreement.
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**6.**SuspensionPeriod.
(a) Suspension Period. Notwithstanding any provision of this Agreement to the contrary, if the Board determines in good faith that the registration and distribution of Registrable Securities (i) would reasonably be expected to materially impede, delay or interfere with, or require premature disclosure of, any material financing, offering, acquisition, merger, corporate reorganization, segment reclassification or discontinuance of operations that is required to be reflected in pro forma or restated financial statements that amends historical financial statement of the Company, or other significant transaction or any negotiations, discussions or pending proposals with respect thereto, involving the Company or any of its subsidiaries, or (ii) would require disclosure of non-public material information, the disclosure of which would reasonably be expected to materially and adversely affect the Company, the Company shall be entitled to suspend, for not more than forty-five (45) days (a "Suspension Period") the use of any Registration Statement or Prospectus and shall not be required to amend or supplement the Registration Statement, any related Prospectus or any document incorporated therein by reference. The Company promptly will give written notice of any such Suspension Period to each Person that has securities registered on a Registration Statement filed hereunder.
(b) Limitations on Suspension Periods. Notwithstanding anything contained in this Section 6 to the contrary, the Company shall not be entitled to more than two (2) Suspension Periods in any 12-month period.
**7.**Lock-UpAgreement.
(a) Holders of Registrable Securities. In connection with any Shelf Takedown or other underwritten public offering of equity securities by the Company, subject to Section 7(b), no Holder (inclusive of its Affiliates) of more than ten percent (10%) of the outstanding equity securities of the Company, including through any securities convertible into or exchangeable or exercisable for such securities, whether now owned or hereinafter acquired (including securities held as a custodian) or with respect to which the Holder (inclusive of its Affiliates) has beneficial ownership within the rules and regulations of the Commission (collectively, "RestrictedShares") shall offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of or distribute ("Transfer") such Restricted Shares (other than those Registrable Securities included in such registration pursuant to this Agreement), without the prior written consent of the Company, during the seven (7) days prior to and the ninety (90) day period beginning on the date of pricing of such underwritten public offering (or such shorter period as requested by the underwriters managing such underwritten public offering, the "Lock-Up Period"), except pursuant to a Transfer permitted by Section 7(b) or other customary exceptions to lock-ups as agreed to by the underwriters managing such underwritten public offering, and each such Holder agrees to execute a lock-up agreement in favor of the Company’s underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders) and, in any event, that the Company’s underwriters in any relevant underwritten public offering shall be third party beneficiaries of this Section 7(a); provided that each such Holder shall only be required to execute such lock-up if the directors and executive officers of the Company have executed a lock-up, in each case on terms at least as restrictive with respect to the relevant underwritten public offering, and provided further that if any such Holder, or any director or executive officer of the Company is released by the Company or the relevant underwriters, in whole or in part, from its obligations under its lock-up agreement, all Holders shall be deemed released from their respective obligations under their respective lock-up agreements. The provisions of this Section 7(a) will no longer apply to a Holder once such Holder (inclusive of its Affiliates) owns Restricted Shares representing less than ten percent (10%) of the outstanding equity securities of the Company.
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(b) Permitted Transfers. Notwithstanding anything to the contrary set forth in this Section 7, a Holder may Transfer Restricted Shares (i) as a bona fide gift; (ii) to any trust or entity wholly owned by one or more trusts for the direct or indirect benefit of (A) the Holder or its stockholders, partners, members or beneficiaries or (B) of any individual related to such Holder or to the stockholders, partners, members or beneficiaries of such Holder, by blood, marriage or adoption and not more remote than first cousin; (iii) if a Holder is a corporation, limited liability company, partnership or trust, such Holder may Transfer Restricted Shares to any wholly-owned subsidiary thereof, or to the Affiliates, stockholders, partners, members or beneficiaries of such Holder; (iv) pursuant to any take-over bid, acquisition, sale or merger involving the Company; (v) with the prior written consent of the Company and each other Holder or (vi) pursuant to a pledge in connection with a bona fide financing with a third party financing source engaged in the business of lending in the ordinary course of its business; provided that in each case such distributees, transferees or pledgees agree to be bound by the restrictions set forth in this Section 7.
(c) The Company. In connection with any Shelf Takedown or other underwritten offering, the Company shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities (except pursuant to registrations on Form S-8 or Form S-4 under the Securities Act), during the seven (7) days prior to and the ninety (90) day period beginning on the date of pricing of such Shelf Takedown or such other period provided in the underwriting, placement or similar agreement executed in connection with such Shelf Takedown.
(d) At the Market Offering. Notwithstanding any other provision of this Agreement, the Company may conduct at-the-market offerings of its Common Stock pursuant to Rule 415(a)(4) under the Securities Act ("ATM Offerings") without (i) such ATM Offerings being subject to the Lock-Up Period or (ii) providing Holders with the opportunity to include their Registrable Securities in such ATM Offerings pursuant to Section 4.
**8.**CompanyUndertakings.
Whenever Registrable Securities are registered pursuant to this Agreement, the Company shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities as soon as reasonably practicable in accordance with the intended method of disposition thereof and pursuant thereto the Company shall as expeditiously as possible:
(a) before filing a Registration Statement or Prospectus or any amendments or supplements thereto, at the Company’s expense, furnish to the Holders whose securities are covered by the Registration Statement copies of all such documents, other than documents that are incorporated by reference, proposed to be filed and such other documents reasonably requested by such Holders, which documents shall be subject to the review and comment of the counsel to such Holders;
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(b) notify each Holder of Registrable Securities of the effectiveness of each Registration Statement and prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period ending on the date on which all Registrable Securities have been sold under such Registration Statement or have otherwise ceased to be Registrable Securities, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish to each seller of Registrable Securities, and the managing underwriters, without charge, such number of copies of the applicable Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus, final Prospectus, and any other Prospectus (including any Prospectus filed under Rule 424, Rule 430A or Rule 430B promulgated under the Securities Act and any “issuer free writing prospectus” as such term is defined under Rule 433 promulgated under the Securities Act)), all exhibits and other documents filed therewith and such other documents as such seller or such managing underwriters may reasonably request including in order to facilitate the disposition of the Registrable Securities owned by such seller, and upon request, a copy of any and all transmittal letters or other correspondence to or received from, the Commission or any other governmental authority relating to such offer;
(d) use its commercially reasonable efforts (i) to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests, (ii) to keep such registration or qualification in effect for so long as such Registration Statement remains in effect, and (iii) to do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction);
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(e) notify each seller of such Registrable Securities, Counsel to the Holders and the managing underwriters: (i) at any time when a Prospectus relating to the applicable Registration Statement is required to be delivered under the Securities Act, (A) upon discovery that, or upon the happening of any event as a result of which, such Registration Statement, or the Prospectus or Free Writing Prospectus relating to such Registration Statement, or any document incorporated or deemed to be incorporated therein by reference contains an untrue statement of a material fact or omits any fact necessary to make the statements in the Registration Statement or the Prospectus or Free Writing Prospectus relating thereto not misleading or otherwise requires the making of any changes in such Registration Statement, Prospectus, Free Writing Prospectus or document, and, at the request of any such seller and subject to Section 6(a) hereof, the Company shall promptly prepare a supplement or amendment to such Prospectus or Free Writing Prospectus, furnish a reasonable number of copies of such supplement or amendment to each seller of such Registrable Securities, Counsel to the Holders and the managing underwriters and file such supplement or amendment with the Commission so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus or Free Writing Prospectus as so amended or supplemented shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading, (B) as soon as the Company becomes aware of any comments or inquiries by the Commission or any requests by the Commission or any Federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or Free Writing Prospectus covering Registrable Securities or for additional information relating thereto, (C) as soon as the Company becomes aware of the issuance or threatened issuance by the Commission of any stop order suspending or threatening to suspend the effectiveness of a Registration Statement covering the Registrable Securities or (D) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Security for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; (ii) when each Registration Statement or any amendment thereto has been filed with the Commission and when each Registration Statement or the related Prospectus or Free Writing Prospectus or any Prospectus supplement or any post effective amendment thereto has become effective; and (iii) if at any time the Company has reason to believe that the representations and warranties of the Company contained in any agreement contemplated by Section 8(h) below relating to any applicable offering cease to be true and correct.
(f) use its best efforts to cause all such Registrable Securities (i) to be listed on the NASDAQ Capital Market (or such other NASDAQ market on which shares of then Common Stock are then listed), (ii) if the Common Stock is not then listed on NASDAQ, to, as promptly as practicable, be listed on NASDAQ, the New York Stock Exchange or another national securities exchange, and (iii) to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the sellers thereof to consummate the disposition of the Registrable Securities;
(g) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities from and after the effective date of the applicable Registration Statement;
(h) enter into and perform under such customary agreements (including underwriting agreements in customary form, including customary representations and warranties and provisions with respect to indemnification and contribution) and take all such other actions as the Holders of a majority of the Registrable Securities included in such Shelf Takedown or Demand Registration or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including effecting a stock split, a combination of shares, or other recapitalization) and provide reasonable cooperation, including causing appropriate officers to attend and participate in “roadshows” and analyst or investor presentations and such other selling or other informational meetings organized by the underwriters, if any, to the extent reasonably requested by the lead or managing underwriters, with all out of pocket costs and expenses incurred by the Company or such officers in connection with such attendance and participation to be paid by the Company;
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(i) for a reasonable period prior to the filing of any Registration Statement or the commencement of marketing efforts for a Shelf Takedown or Demand Registration, as applicable, pursuant to this Agreement, make available for inspection and copying by any Holder of Registration Securities, Counsel to the Holders, any underwriter participating in any disposition pursuant to such Registration Statement, Shelf Takedown or Demand Registration, as applicable, and any other attorney, accountant or other agent retained by any such Holder or underwriter, all financial and other records and pertinent corporate documents of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information and participate in any due diligence sessions reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such Registration Statement, Shelf Takedown or Demand Registration, as applicable, provided that recipients of such financial and other records and pertinent corporate documents agree in writing to keep the confidentiality thereof pursuant to a written agreement reasonably acceptable to the Company and the applicable underwriter (which shall contain customary exceptions thereto);
(j) permit any Holder of Registrable Securities, Counsel to the Holders, any underwriter participating in any disposition pursuant to a Registration Statement, and any other attorney, accountant or other agent retained by such Holder of Registrable Securities or underwriter, to participate (including, but not limited to, reviewing, commenting on and attending all meetings) in the preparation of such Registration Statement and any Prospectus supplements relating to a Shelf Takedown or Demand Registration, if applicable;
(k) in the event of the issuance or threatened issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any Common Stock included in such Registration Statement for sale in any jurisdiction, the Company shall use its commercially reasonable efforts promptly to (i) prevent the issuance of any such stop order, and in the event of such issuance, to obtain the withdrawal of such order and (ii) obtain the withdrawal of any order suspending or preventing the use of any related Prospectus or Free Writing Prospectus or suspending qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction at the earliest practicable date;
(l) obtain and furnish to each such Holder of Registrable Securities, including Registrable Securities in a Shelf Takedown or underwritten offering, a signed counterpart of (i) a customary cold comfort and bring down letter from the Company’s independent public accountants, (ii) a customary legal opinion of counsel to the Company addressed to the relevant underwriters and/or such Holders of Registrable Securities, in each case in customary form and covering such matters of the type customarily covered by such letters as the managing underwriters and/or Holders of a majority of the Registrable Securities included in such Shelf Takedown or Demand Registration reasonably request, (iii) a negative assurances letter of counsel to the Company in customary form and covering such matters of the type customarily covered by such letters as the managing underwriters and/or Holders of a majority of the Registrable Securities included in such Shelf Takedown or Demand Registration reasonably request, and (iv) customary certificates executed by authorized officers of the Company as may be requested by any Holder or any underwriter of such Registrable Securities included in such Shelf Takedown or Demand Registration;
(m) with respect to each Free Writing Prospectus or other materials to be included in the Disclosure Package, ensure that no Registrable Securities be sold “by means of” (as defined in Rule 159A(b) promulgated under the Securities Act) such Free Writing Prospectus or other materials without the prior written consent of a majority of the Holders of the Registrable Securities that are being sold pursuant to such Free Writing Prospectus, which Free Writing Prospectuses or other materials shall be subject to the review of Counsel to the Holders; provided, however, the Company shall not be responsible or liable for any breach by a Holder that has not obtained the prior written consent of the Company pursuant to Section 16(1);
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(n) provide or maintain a CUSIP number for the Registrable Securities prior to the effective date of the first Registration Statement including Registrable Securities;
(o) promptly notify in writing the Holders, the sales or placement agent, if any, therefor and the managing underwriters of the securities being sold, (i) when such Registration Statement or related Prospectus or Free Writing Prospectus or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to any such Registration Statement or any post-effective amendment, when the same has become effective and (ii) of any written comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto;
(p) (i) prepare and file with the Commission such amendments and supplements to each Registration Statement as (A) reasonably requested by any Holder (to the extent such request related to information relating to such Holder) or (B) may be necessary to comply with the provisions of the Securities Act, including post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable time period required hereunder, and if applicable, file any Registration Statements pursuant to Rule 462(b) promulgated under the Securities Act; (ii) cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) comply with the provisions of the Securities Act and the Exchange Act and any applicable securities exchange or other recognized trading market with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; (iv) provide additional information related to each Registration Statement as requested by, and obtain any required approval necessary from, the Commission or any Federal or state governmental authority; and (v) respond promptly to any comments received from the Commission and request acceleration of effectiveness promptly after it learns that the Commission will not review the Registration Statement or after it has satisfied comments received from the Commission;
(q) cooperate with each Holder of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and underwriters’ counsel in connection with any findings required to be made with FINRA, including using commercially reasonable efforts to obtain FINRA’s pre-clearance and pre-approval of the Registration Statement and applicable Prospectus upon filing with the Commission;
(r) within the deadlines specified by the Securities Act, make all required filing fee payments in respect of any Registration Statement or Prospectus used under this Agreement (and any offering covered thereby);
(s) if requested by any participating Holder of Registrable Securities or the managing underwriters, promptly include in a Prospectus supplement or amendment such information as the Holder or managing underwriters may reasonably request, including in order to permit the intended method of distribution of such securities, and make all required filings of such Prospectus supplement or such amendment as soon as reasonably practicable after the Company has received such request;
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(t) cooperate with the participating Holders of Registrable Securities and the managing underwriters to facilitate the timely preparation and delivery of Common Stock in book entry form through the facilities of the Depository Trust Company (or, if requested by a Holder, in certificated form), in each case not bearing any legends, representing Registrable Securities to be sold after receiving written representations from each participating Holder that the Registrable Securities so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and delivered to or registered in such names as the Holders or managing underwriters may reasonably request at least two (2) Business Days prior to any sale of Registrable Securities;
(u) pay the fees of the Company’s transfer agent and any reasonable, documented legal fees of outside counsel to the Company to provide an opinion to the effect that such transfer is permitted under the Securities Act and applicable state laws (or if outside counsel to the Company is unwilling or unavailable to provide such opinion, the reasonable, documented legal fees of one outside counsel to the Holders to provide such opinion) to effectuate the transfer of Registrable Securities from Holders to other Persons, as permitted by Section 7(b); provided, in each case, that such Holders shall provide such certificates and other documentation as the Company shall reasonably request in connection with such opinions and transfers; and
(v) use its commercially reasonable efforts to take all other actions necessary to effect the registration and sale of the Registrable Securities contemplated hereby.
**9.**RegistrationExpenses.
All Registration Expenses shall be borne by the Company. For the avoidance of doubt, subject to the proviso in Section 3(c) of this Agreement, all Registration Expenses in connection with any registration initiated as a Demand Registration shall be borne by the Company regardless of whether or not such registration has become effective and whether or not such registration has counted as one of the permitted Long-Form Registrations pursuant to Section 3(c) of this Agreement. All Selling Expenses relating to Registrable Securities registered shall be borne by the selling Holders of such Registrable Securities pro rata on the basis of the number of Registrable Securities sold.
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**10.**Indemnification;Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless each Holder of Registrable Securities, the Affiliates, directors, officers, employees, members, managers and agents of each such Holder and each Person who controls any such Holder within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable law, from and against any losses, claims, expenses, damages and liabilities or whatever kind (including legal or other expenses reasonably incurred in connection with investigating, preparing or defending same and the cost of enforcing any right to indemnification hereunder) (collectively, "Losses") to which they or any of them may become subject insofar as such Losses (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement as originally filed or in any amendment thereof, or the Disclosure Package, or any preliminary, final or summary Prospectus or Free Writing Prospectus included in any such Registration Statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other federal law, any state or foreign securities law, or any rule or regulation promulgated under of the foregoing laws, relating to the offer or sale of the Registrable Securities, and in any such case, the Company agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such Loss, claim, damage, liability, action or investigation (whether or not the indemnified party is a party to any proceeding); provided, however, that the Company will not be liable in any case to the extent that any such Loss arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information relating to such Holder furnished to the Company by or on behalf of any such Holder specifically for inclusion therein, including any notice and questionnaire. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Indemnification by the Holders. Each Holder severally (and not jointly) agrees to indemnify and hold harmless the Company and each of its Affiliates, directors, employees, members, managers and agents and each Person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable law, from and against any and all Losses to which they or any of them may become subject insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement as originally filed or in any amendment thereof, or in the Disclosure Package or any Holder Free Writing Prospectus, preliminary, final or summary Prospectus included in any such Registration Statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission is contained in any written information relating to such Holder furnished to the Company by or on behalf of such Holder specifically for inclusion therein; provided, however, that the total amount to be indemnified by such Holder pursuant to this Section 10(b) shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Holder in the offering to which such Registration Statement or Prospectus relates; provided, further, that a Holder shall not be liable in any case to the extent that prior to the filing of any such Registration Statement or Disclosure Package, or any amendment thereof or supplement thereto, such Holder has furnished in writing to the Company, information expressly for use in, and within a reasonable period of time prior to the effectiveness of such Registration Statement or Disclosure Package, or any amendment thereof or supplement thereto which corrected or made not misleading information previously provided to the Company. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.
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(c) Conduct of Indemnification Proceedings. Promptly after receipt by an indemnified party under this Section 10 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 10, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve the indemnifying party from liability under Section 10(a) or Section 10(b) above unless and to the extent such action and such failure results in material prejudice to the indemnifying party and forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in Section 10(a) or Section 10(b) above. The indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, except as provided in the next sentence, after notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. Notwithstanding the indemnifying party’s rights in the prior sentence, the indemnified party shall have the right to employ one firm of separate counsel (and one local counsel), and the indemnifying party shall bear the reasonable, documented fees, costs and expenses of such separate counsel if:
(i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with an actual or potential conflict of interest;
(ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party;
(iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within ten (10) days after notice of the institution of such action or such earlier time as may be necessary to pursue appropriate defenses, rights, and remedies; or
(iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party.
No indemnifying party shall, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general circumstances or allegations, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties. An indemnifying party shall not be liable under this Section 10 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by such indemnifying party, which consent shall not be unreasonably withheld. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement or compromise that (x) does not include as an unconditional term thereof the giving by the claimant or plaintiff therein, to such indemnified party, of a full and final release from all liability in respect to such claim or litigation or (y) includes a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of such indemnified party.
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(d) Contribution.
(i) In the event that the indemnity provided in Section 10(a) or Section 10(b) above is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party agrees to contribute to the aggregate Losses to which such indemnifying party may be subject in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and by the indemnified party on the other from the offering of the Common Stock. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions which resulted in such Losses (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party on the one hand or the indemnified party on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(ii) The parties agree that it would not be just and equitable if contribution pursuant to this Section 10(d) were determined by pro rata allocation (even if the Holders of Registrable Securities or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 10(d). The amount paid or payable by an indemnified party as a result of the Losses (or actions in respect thereof) referred to above in this Section 10(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing or defending any such action or claim.
(iii) For purposes of this Section 10, each Person who controls any Holder of Registrable Securities, agent or underwriter within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee and agent of any such Holder, agent or underwriter shall have the same rights to contribution as such Holder, agent or underwriter, and each Person who controls the Company within the meaning of either the Securities Act or the Exchange Act and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Section 10(d).
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(e) The provisions of this Section 10 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder of Registrable Securities or the Company or any of the officers, directors or controlling Persons referred to in this Section 10 hereof, and will survive the transfer of Registrable Securities.
(f) To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 10 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Shelf Registration.
**11.**Participationin Underwritten Offering/Sale of Registrable Securities.
(a) No Person may participate in any underwritten offering hereunder unless such Person (i) agrees to enter into an underwriting agreement in customary form and provide the representations and warranties, and indemnities to the underwriters and the Company and to sell such Person’s securities on the basis provided in any such underwriting agreement and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements; provided that no Holder of Registrable Securities included in any underwritten offering shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding (A) such Holder’s ownership of its Registrable Securities to be sold or transferred free and clear of liens, (B) such Holder’s power and authority to effect, and lack of conflicts in effecting, such transfer and (C) such matters pertaining to compliance with securities laws as may be reasonably requested) or to undertake any indemnification obligations to the Company, except as otherwise provided in Section 10(b) hereof, or to the underwriters, except to the extent of the indemnification being given to the Company and its controlling persons in Section 10(b) hereof.
(b) Each Holder agrees that, upon receipt of any notice contemplated in Section 6(a), such Holder will promptly discontinue the disposition of its Registrable Securities pursuant to the applicable Registration Statement.
**12.**Rule 144.
With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 promulgated under the Securities Act, the Company covenants that it will (a) make available information necessary to comply with Rule 144 (so long as such rule remains in effect, or any successor rule thereto) at all times, and (b) take such further action as such Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (so long as such rule remains in effect, or any successor rule thereto), as such rule may be amended from time to time. Upon the reasonable request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such information requirements, and, if not, the specific reasons for non-compliance.
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**13.**PrivatePlacement
Except for Section 7(a), the Company agrees that nothing in this Agreement shall prohibit the Holders, at any time and from time to time, from selling or otherwise transferring Registrable Securities pursuant to a private placement or other transaction which is not registered pursuant to the Securities Act. To the extent requested by a Holder, the Company shall take all reasonable steps to assist and cooperate with such Holder to facilitate such sale or transfer, including providing reasonable due diligence access to potential purchasers.
**14.**Transferof Registration Rights.
The rights of a Holder hereunder may be transferred, assigned, or otherwise conveyed on a pro rata basis in connection with any transfer, assignment, or other conveyance of Registrable Securities to any transferee or assignee (other than a transfer pursuant to a registration statement or under Rule 144 promulgated under the Securities Act, and except with respect to transfers of Demand Registration rights which may be transferred as provided in Section 3(g)); provided that all of the following additional conditions are satisfied with respect to any transfer, assignment or conveyance of rights hereunder: (a) such transfer or assignment is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement by executing a joinder or similar document; and (c) the Company is given written notice by such Holder of such transfer or assignment, stating the name and address of the transferee or assignee, identifying the Registrable Securities with respect to which such rights are being transferred or assigned and specifying whether or not Demand Registration rights have been assigned pursuant to Section 3(g). Any transfer, assignment or other conveyance of the rights of a Holder in breach of this Agreement shall be void and of no effect.
**15.**Amendment; Waivers; Further Assurances.
(a) Amendment. This Agreement may be amended with the consent of the Company and the Holders of a majority of the Registrable Securities then outstanding; provided that no such amendment, action or omission that adversely affects, alters or changes the rights of any Holder or group of Holders in a manner disproportionate to other similarly situated Holders shall be effective against such Holder or group of Holders without the prior written consent of each such affected Holder.
(b) Effect of Waiver. No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision. The failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of such provision and shall not affect the right of such party thereafter to enforce each provision of this Agreement in accordance with its terms.
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(c) Further Assurances. Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement.
**16.**Miscellaneous.
(a) Adjustments. If, and as often as, there are any changes in the Common Stock by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization, recapitalization or sale, or by any other means, appropriate adjustment shall be made in the provisions of this Agreement, as may be required, so that the rights, privileges, duties and obligations hereunder shall continue with respect to the Common Stock as so changed.
(b) Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including any trustee in bankruptcy) whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of purchasers or Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent Holder of Registrable Securities. No assignment or delegation of this Agreement by the Company, or any of the Company’s rights, interests or obligations hereunder, shall be effective against any Holder without the prior written consent of such Holder.
(c) Remedies; Specific Performance. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically, to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement and shall not be required to prove irreparable injury to such party or that such party does not have an adequate remedy at law with respect to any breach of this Agreement (each of which elements the parties admit). The parties hereto further agree and acknowledge that each and every obligation applicable to it contained in this Agreement shall be specifically enforceable against it and hereby waives and agrees not to assert any defenses against an action for specific performance of their respective obligations hereunder. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies available under this Agreement or otherwise.
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(d) Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand, electronic mail or postage prepaid mail (registered or certified) or nationally recognized overnight courier service and shall be deemed given when so delivered by hand, or electronic mail, or if mailed, three (3) days after mailing (one (1) Business Day in the case of overnight courier service), and shall be given to such party at the address specified for such party in the Company’s records. If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the State of New York or the jurisdiction in which the Company’s principal office is located, the time period shall automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.
(e) No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement.
(f) Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by electronic transmission in portable document format, each of which shall be deemed to be an original and shall be binding upon the party who executed the same, but all of such counterparts shall constitute the same agreement.
(g) Descriptive Headings; Interpretation; No Strict Construction. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and, if applicable, hereof. The words "include," "includes" or "including" in this Agreement shall be deemed to be followed by "without limitation." The use of the words "or" "either" or "any" shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor thereto in effect at the time. All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be references to the comparable successors thereto from time to time.
(h) Delivery by Electronic Means. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by electronic means, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of electronic means to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of electronic means as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
24
(i) Arm’s Length Agreement. Each of the parties to this Agreement agrees and acknowledges that this Agreement has been negotiated in good faith, at arm’s length, and not by any means prohibited by law.
(j) Sophisticated Parties; Advice of Counsel. Each of the parties to this Agreement specifically acknowledges that (i) it is a knowledgeable, informed, sophisticated Person capable of understanding and evaluating the provisions set forth in this Agreement and (ii) it has been fully advised and represented by legal counsel of its own independent selection and has relied wholly upon its independent judgment and the advice of such counsel in negotiating and entering into this Agreement.
(k) Attorneys’ Fees. In the event of litigation or other proceedings in connection with or related to this Agreement, the prevailing party in such litigation or proceeding shall be entitled to reimbursement from the opposing party of all reasonable expenses, including reasonable attorneys’ fees and expenses of investigation in connection with such litigation or proceeding.
(l) FWP Consent. No Holder shall use a Holder Free Writing Prospectus without the prior written consent of the Company, which consent shall not be unreasonably withheld.
(m) Notification of Status. Each Holder shall provide written notice to the Company within ten (10) Business Days from the first day on which the Holder no longer holds Registrable Securities.
(n) Governing Law. This Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of New York.
(o) Submission to Jurisdiction. Any action, suit or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby must be brought and determined in the Supreme Court of the State of New York (or, solely if such courts decline jurisdiction, in United States District Court for the Southern District of New York), and each party hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, in any such action, suit or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such, action, suit or proceeding in any such court or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
25
(p) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 16(p).
(q) Complete Agreement. This Agreement and any certificates, documents, instruments and writings that are delivered pursuant hereto, represent the complete agreement between the parties hereto as to all matters covered hereby, and supersedes any prior agreements or understandings among the parties.
(r) Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
(s) Termination. The obligations of any Holder and of the Company with respect to such Holder, other than those obligations contained in Section 10, shall terminate as soon as (i) such Holder no longer holds any Registrable Securities or (ii) such Holder (inclusive of its Affiliates) owns less than four percent (4%) of the outstanding Common Stock of the Company and all Registrable Securities held by such Holder (inclusive of its Affiliates) may be sold without volume or manner of sale limitations under Rule 144 promulgated under the Securities Act.
* * * * *
26
IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above.
| XBP OPE HOLDINGS, INC. | |
|---|---|
| By: | |
| Dejan Avramovic | |
| Chief Financial Officer |
All values are in Euros.
Signature Page for RegistrationRights Agreement
| HOLDERS | |
|---|---|
| ECF Value Fund, L.P. | |
| By: | /s/ Marc Blatter |
| Name: Marc Blatter | |
| Title: Chief Financial Officer | |
| Address: 1177 Avenue<br> of the Americas | |
| 46th Floor | |
| New York, NY 10036 | |
| ECF Value Fund II, L.P. | |
| By: | /s/ Marc Blatter |
| Name: Marc Blatter | |
| Title: Chief Financial Officer | |
| Address: 1177 Avenue<br> of the Americas | |
| 46th Floor | |
| New York, NY 10036 | |
| ECF Value Fund<br> International Master L.P. | |
| By: | /s/ Marc Blatter |
| Name: Marc Blatter | |
| Title: Chief Financial Officer | |
| Address: 1177 Avenue of the Americas | |
| --- | |
| 46th Floor | |
| New York, NY 10036 |
Signature Page for RegistrationRights Agreement
| HOLDERS | |
|---|---|
| AVENUE RP OPPORTUNITIES<br> FUND, L.P. | |
| By: Avenue RP Opportunities<br> Fund GenPar, LLC, | |
| its general partner, | |
| By: GL RP Partners,<br> LLC, | |
| its managing member, | |
| By: | /s/<br> Sonia Gardner |
| Name: Sonia<br> Gardner | |
| Title: Member | |
| Address: 11 W. 42nd<br> St., 9th Fl. | |
| New York, NY 10036 | |
| AVENUE GLOBAL<br> DISLOCATION OPPORTUNITIES FUND, L.P. | |
| By: Avenue Global<br> Dislocation Opportunities GenPar, LLC, | |
| its general partner, | |
| By: GL Global Dislocation<br> Opportunities Partners, LLC, | |
| its managing member, | |
| By: | /s/<br> Sonia Gardner |
| Name: Sonia<br> Gardner | |
| Title: Member | |
| Address: 11 W. 42nd<br> St., 9th Fl. | |
| New York, NY 10036 | |
| AVENUE GLOBAL<br> OPPORTUNITIES MASTER FUND LP | |
| By: Avenue Global<br> Opportunities GenPar Holdings Ltd, | |
| its general partner, | |
| By: | /s/<br> Sonia Gardner |
| Name: Sonia<br> Gardner | |
| Title: Member | |
| Address: 11 W. 42nd<br> St., 9th Fl. | |
| New York, NY 10036 |
Signature Page for RegistrationRights Agreement
| HOLDERS | |
|---|---|
| GP 3XCV LLC | |
| By ETI-MNA, LLC | |
| In its capacity<br> as Manager of GP 3XCV LLC | |
| By: | /s/<br> Par Chadha |
| Name: Par Chadha | |
| Title: Authorized Signatory | |
| Address: | 8550 West Desert Inn Road |
| --- | --- |
| Suite 102-452 | |
| Las Vegas NV 89117 |
Signature Page for Registration Rights Agreement
| HOLDERS | |
|---|---|
| XCV-STS, LLC | |
| By ETI-MNA, LLC | |
| In its capacity as Manager of<br> XCV-STS, LLC | |
| By: | /s/ Par Chadha |
| Name: Par Chadha | |
| Title: Authorized Signatory | |
| Address: | 8550 West Desert Inn Road |
| --- | --- |
| Suite 102-452 | |
| Las Vegas NV 89117 |
Signature Page for Registration Rights Agreement
Exhibit 10.3
Execution Version
FINANCING AGREEMENT
Dated as of July 29, 2025
by and among
ExelaTechnologies BPA, LLC and
EXELA FINANCE INC.,
as Borrowers,
EACH SUBSIDIARY OF BORROWERSLISTED AS A GUARANTOR ON THE SIGNATURE PAGES HERETO,as Guarantors,
THE LENDERS FROM TIME TO TIME PARTY HERETO,as Lenders,
and
ANKURA TRUST COMPANY, LLC,as Administrative Agent and Collateral Agent
Table of Contents
Page
| Article I<br> DEFINITIONS; CERTAIN TERMS | 2 | |
|---|---|---|
| Section 1.01 | Definitions | 2 |
| Section 1.02 | Terms Generally | 70 |
| Section 1.03 | Certain Matters of Construction | 71 |
| Section 1.04 | Accounting and Other Terms | 72 |
| Section 1.05 | Time References | 72 |
| Section 1.06 | Obligation to Make Payments in Dollars | 73 |
| Section 1.07 | Rates. | 73 |
| Section 1.08 | Exchange Rates | 73 |
| Section 1.09 | Quebec Interpretation | 74 |
| Article II<br> THE LOANS | 75 | |
| Section 2.01 | Commitments | 75 |
| Section 2.02 | Making the Loans | 76 |
| Section 2.03 | Repayment of Loans; Evidence of Debt | 77 |
| Section 2.04 | Interest | 77 |
| Section 2.05 | Reduction of Commitment; Prepayment of Loans | 79 |
| Section 2.06 | Fees | 82 |
| Section 2.07 | SOFR Option | 83 |
| Section 2.08 | Funding Losses | 84 |
| Section 2.09 | Taxes | 85 |
| Section 2.10 | Increased Costs and Reduced Return | 88 |
| Section 2.11 | Inability to Determine Rates | 90 |
| Section 2.12 | Illegality | 90 |
| Section 2.13 | Benchmark Replacement Setting | 91 |
| Section 2.14 | Incremental Facility | 93 |
| Article III<br> [RESERVED] | 95 | |
| Article IV<br> APPLICATION OF PAYMENTS; DEFAULTING<br> LENDERS; JOINT AND SEVERAL LIABILITY OF BORROWERS | 95 | |
| Section 4.01 | Payments; Computations and Statements | 95 |
| Section 4.02 | Sharing of Payments | 96 |
| Section 4.03 | Apportionment of Payments | 96 |
| Section 4.04 | Defaulting Lenders | 98 |
| Section 4.05 | Administrative Borrower; Joint and Several Liability<br> of the Borrowers | 99 |
| Article V<br> CONDITIONS TO LOANS | 100 | |
| Section 5.01 | Conditions Precedent to Effectiveness | 100 |
| Article VI<br> REPRESENTATIONS AND WARRANTIES | 105 | |
| Section 6.01 | Representations and Warranties | 105 |
| Article VII<br> COVENANTS OF THE LOAN PARTIES<br> AND OTHER COLLATERAL MATTERS | 113 | |
| --- | --- | --- |
| Section 7.01 | Affirmative Covenants | 113 |
| Section 7.02 | Negative Covenants | 124 |
| Section 7.03 | Financial Covenants | 146 |
| Article VIII<br> [RESERVED] | 146 | |
| Article IX<br> EVENTS OF DEFAULT | 146 | |
| Section 9.01 | Events of Default | 146 |
| Section 9.02 | Cure Right | 150 |
| Article X<br> AGENTS | 151 | |
| Section 10.01 | Appointment | 151 |
| Section 10.02 | Nature of Duties; Delegation | 152 |
| Section 10.03 | Rights, Exculpation, Etc. | 154 |
| Section 10.04 | Reliance | 156 |
| Section 10.05 | Indemnification | 156 |
| Section 10.06 | [Reserved] | 157 |
| Section 10.07 | Successor Agent | 157 |
| Section 10.08 | Collateral Matters | 157 |
| Section 10.09 | Agency for Perfection | 159 |
| Section 10.10 | No Reliance on any Agent’s Customer Identification<br> Program | 160 |
| Section 10.11 | No Third-Party Beneficiaries | 160 |
| Section 10.12 | No Fiduciary Relationship | 160 |
| Section 10.13 | Reports; Confidentiality; Disclaimers | 160 |
| Section 10.14 | Collateral Custodian | 161 |
| Section 10.15 | Intercreditor Agreements; Authorization to Execute<br> Other Loan Documents | 161 |
| Section 10.16 | [Reserved]. | 162 |
| Section 10.17 | Administrative Agent May File Proofs of Claim | 162 |
| Section 10.18 | Erroneous Payment | 163 |
| Section 10.19 | Appointment as Hypothecary Representative | 165 |
| Section 10.20 | Survival | 165 |
| Article XI<br> GUARANTY | 165 | |
| Section 11.01 | Guaranty | 165 |
| Section 11.02 | Guaranty Absolute | 166 |
| Section 11.03 | Waiver | 167 |
| Section 11.04 | Continuing Guaranty; Assignments | 167 |
| Section 11.05 | Subrogation | 168 |
| Section 11.06 | Contribution | 169 |
| Article XII<br> MISCELLANEOUS | 170 | |
| Section 12.01 | Notices, Etc. | 170 |
| Section 12.02 | Amendments, Etc. | 171 |
| Section 12.03 | No Waiver; Remedies, Etc. | 173 |
| Section 12.04 | Expenses; Attorneys’ Fees | 174 |
ii
| Section 12.05 | Right of Set-off | 175 |
|---|---|---|
| Section 12.06 | Severability | 175 |
| Section 12.07 | Assignments and Participations. | 176 |
| Section 12.08 | Counterparts | 180 |
| Section 12.09 | Governing Law | 180 |
| Section 12.10 | Consent to Jurisdiction;<br> Service of Process and Venue | 180 |
| Section 12.11 | Waiver of Jury Trial, Etc. | 181 |
| Section 12.12 | Consent by the Agents and Lenders | 182 |
| Section 12.13 | No Party Deemed Drafter | 182 |
| Section 12.14 | Reinstatement; Certain Payments | 182 |
| Section 12.15 | Indemnification; Limitation of Liability for Certain<br> Damages | 183 |
| Section 12.16 | Records | 184 |
| Section 12.17 | Binding Effect | 184 |
| Section 12.18 | Highest Lawful Rate | 184 |
| Section 12.19 | Confidentiality | 185 |
| Section 12.20 | Platform; Borrower Materials | 186 |
| Section 12.21 | Public Disclosure | 188 |
| Section 12.22 | Integration | 188 |
| Section 12.23 | USA PATRIOT Act | 189 |
| Section 12.24 | Judgment Currency | 189 |
| Section 12.25 | Waiver of Immunity | 190 |
| Section 12.26 | English Language | 190 |
| Section 12.27 | Parent | 190 |
iii
SCHEDULE AND EXHIBITS
| Schedule 1.01(A) | Lenders and Lenders’ Commitments |
|---|---|
| Schedule 1.01(B) | Facilities |
| Schedule 1.01(C) | Investments |
| Schedule 6.01(e) | Capitalization; Subsidiaries |
| Schedule 6.01(f) | Litigation |
| Schedule 6.01(i) | ERISA |
| Schedule 6.01(l) | Nature of Business |
| Schedule 6.01(q) | Labor Matters |
| Schedule 6.01(q) | Environmental Matters |
| Schedule 6.01(r) | Insurance |
| Schedule 6.01(u) | Intellectual Property |
| Schedule 7.01(r) | Post-Effective Date |
| Schedule 7.02(a) | Existing Liens |
| Schedule 7.02(h) | Intellectual Property Licenses |
| Schedule 7.02(k)(iii)(1) | Contractual Encumbrances or Restrictions |
| Schedule 7.02(v) | Existing Indebtedness |
| Exhibit A | Form of Joinder Agreement |
| Exhibit B | Form of Assignment and Acceptance |
| Exhibit C | Restructuring Plan |
| Exhibit D | Form of Notice of Borrowing |
| Exhibit E | Form of SOFR Notice |
| Exhibit F | Form of Compliance Certificate |
| Exhibit G | Form of ABL Intercreditor Agreement |
| Exhibit H | Form of Super Senior Intercreditor Agreement |
| Exhibit 2.09(d) | Forms of U.S. Tax Compliance Certificate |
iv
FINANCING AGREEMENT
Financing Agreement, dated as of July 29, 2025, by and among Exela Technologies BPA, LLC, a Delaware limited liability company (the “Lead Borrower”), Exela Finance Inc., a Delaware corporation (“Exela Finance” and together with the Lead Borrower, each a “Borrower” and collectively, the “Borrowers”), each subsidiary of the Lead Borrower listed as a “Guarantor” on the signature pages hereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” hereunder, each a “Guarantor” and collectively, the “Guarantors”), the lenders from time to time party hereto (each a “Lender” and collectively, the “Lenders”), Ankura Trust Company, LLC, a New Hampshire limited liability company (“Ankura”), as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), and Ankura, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent” and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”).
RECITALS
WHEREAS, the Loan Parties (as defined herein) have commenced voluntary cases (the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code (as defined herein) in the United States Bankruptcy Court for the Southern District of Texas (Houston Division) (the “Bankruptcy Court”), and the Loan Parties continue to operate their businesses and manage their properties as debtors and debtors-in-possession (collectively, the “Debtors”) pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, on June 23, 2025 the Bankruptcy Court entered the Confirmation Order (as defined herein) approving the Restructuring Plan (as defined herein) of the Debtors, and concurrently with the making (and/or deemed making) of the Loans (as defined herein) hereunder, the effective date with respect to the Restructuring Plan has occurred;
WHEREAS, the Borrowers have asked the Lenders to extend credit to the Borrowers in the form of a new money term loan in the aggregate principal amount of $40,000,000, the proceeds of which shall be used to repay in full all obligations under the Prepetition Financing Agreement (as defined herein) and to pay fees and expenses related in connection therewith;
WHEREAS, pursuant to the terms of the Restructuring Plan, the Sub-Group DIP Lenders (as defined herein) holding DIP Claims (as defined herein) are entitled to receive on a pro rata basis on account of the aggregate principal amount of such claims, Loans provided for hereunder in the aggregate principal amount of $6,000,000, and upon the deemed funding of such Loans in accordance with Section 2.01(a)(i), DIP Claims held by the Sub-Group DIP Lenders in an aggregate amount equal to $10,000,000 will automatically be deemed satisfied, compromised, settled, released and discharged in full pursuant to and in accordance with the Restructuring Plan; and
WHEREAS, the Lenders are severally, and not jointly, willing to extend such credit to the Borrowers subject to the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto agree as follows:
Article I
DEFINITIONS;CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following terms shall have the respective meanings indicated below:
“ABL Agent” means MidCap Funding IV Trust, as administrative agent and collateral agent under the ABL Facility or any Person who acts as administrative agent and/or collateral agent under the ABL Facility.
“ABL Credit Agreement” means that certain Credit and Security Agreement, dated as of July 29, 2025, by and among the Lead Borrower, as borrower, the ABL Agent and the lenders from time to time party thereto.
“ABL Facility” means indebtedness incurred pursuant to the ABL Credit Agreement, and any other asset-based revolving credit facility (a) made available to the Loan Parties by commercial banks and other financial institutions that customarily provide asset-based revolving loan financing in the ordinary course of business, (b) providing for revolving credit loans in the ordinary course of business with availability based upon a customary borrowing base formula calculated by the value of ABL Priority Collateral, (c) secured by Liens only on the Collateral (which Liens may be senior in priority to the Liens securing the Obligations with respect to Collateral that constitutes ABL Priority Collateral and shall be junior in priority as to all other Collateral) and subject to the ABL Intercreditor Agreement, and (d) subject to terms, conditions, covenants and events of default that are (x) not materially more restrictive than those set forth in this Agreement, taken as a whole (other than with respect to provisions customarily included in an asset-based revolving credit facility, including borrowing base formulas representations and warranties, grace periods, cross-default instead of cross-acceleration, financial covenants and other provisions that are customarily more restricted in asset-based lending facilities or that are customarily absent in high yield debt securities) or (y) on customary market terms and conditions for asset-based lending facilities for comparable borrowers.
“ABL Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the ABL Agent, B. Riley Agent, the Agents, the Trustee, the Exit Notes Collateral Agent, or any other intercreditor agreement in substantially the same form attached hereto as Exhibit G.
“ABL Priority Collateral” has the meaning set forth in the ABL Intercreditor Agreement.
“Account” means an account (as that term is defined in the UCC or in the PPSA, as applicable).
“Account Debtor” means, with respect to any Person, each debtor, customer or obligor in any way obligated on or in connection with any Account of such Person.
2
“Acquired Indebtedness” means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Subsidiary of such specified Person, so long as no such Indebtedness was created or incurred in connection with, or in contemplation of, such merger, consolidated or amalgamation, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person, so long as such Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the asset being acquired on the date of acquisition.
Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.
“Action” has the meaning specified therefor in Section 12.12.
“Additional Amount” has the meaning specified therefor in Section 2.09(a).
“Additional Lender” shall have the meaning set forth in Section 2.14(b).
“Additional Notes” means the Notes issued under the terms of the Exit Notes Indenture subsequent to the Effective Date.
“Additional Refinancing Amount” means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest, premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.
“Administrative Agent” has the meaning specified therefor in the preamble hereto.
“Administrative Agent’s Accounts” means one or more accounts designated by the Administrative Agent at a bank designated by the Administrative Agent from time to time as the accounts into which the Loan Parties shall make all payments to the Administrative Agent for the benefit of the Secured Parties under this Agreement and the other Loan Documents.
“Administrative Borrower” has the meaning specified therefor in Section 4.05.
“Administrative Questionnaire” means an administrative questionnaire in a form supplied by or acceptable to the Administrative Agent.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of members of the Board of Directors of such Person or (b) direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Notwithstanding anything herein to the contrary, in no event shall any Agent or any Lender that is a Lender on the Effective Date (in each of such Lender’s capacities) be considered an “Affiliate” of any Loan Party.
3
“Affiliate Transaction” shall have the meaning set forth in Section 7.02(j).
“After-Acquired Property” means any property or assets (other than Excluded Property) of the Borrowers or any Guarantor that secures or is required to secure any Obligations (including any Funded Debt) that is not already subject to the Lien under the Collateral Documents.
“Agent” and “Agents” have the respective meanings specified therefor in the preamble hereto.
“Agreement” means this Financing Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.
“Ankura” has the meaning specified therefor in the preamble hereto.
“Anti-Corruption Laws” means all Requirements of Law concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act of 2010, Canadian Economic Sanctions and Export Control Laws, and the anti-bribery and anti-corruption laws and regulations of those jurisdictions in which the Loan Parties do business.
“Anti-Money Laundering Laws” means all Requirements of Law concerning or relating to terrorism or money laundering, including, without limitation, the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956-1957), the USA PATRIOT Act and the Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5332 and 12 U.S.C. §§ 1818(s), 1820(b) and §§ 1951-1959) and the rules and regulations thereunder, Canadian Anti-Money Laundering & Anti-Terrorism Legislation, and any law prohibiting or directed against the financing or support of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B).
“Applicable Margin” means, as of any date of determination, with respect to the interest rate of (a) any Reference Rate Loan or any portion thereof, (x) prior to the date any Incremental Facility is established in accordance with Section 2.14 hereof, 10.65161% per annum and (y) from and after the date any Incremental Facility is established in accordance with Section 2.14 hereof, 7.26161% per annum and (b) any SOFR Rate Loan or any portion thereof, (x) prior to the date any Incremental Facility is established in accordance with Section 2.14 hereof, 11.65161% per annum and (y) from and after the date any Incremental Facility is established in accordance with Section 2.14 hereof, 8.26161% per annum.
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“Applicable Premium” means, as of the date of the occurrence of an Applicable Premium Trigger Event:
(a) during the period from and including the Effective Date up to and including the date that is the one-year anniversary of the Effective Date (the “First Period”), an amount equal to 2.00% times the aggregate principal amount of the Term Loan outstanding on the date of such Applicable Premium Trigger Event;
(b) during the period from and including the first day immediately following the First Period up to and including the date that is the two-year anniversary of the Effective Date, an amount equal to 1.00% times the aggregate principal amount of the Term Loan outstanding on the date of such Applicable Premium Trigger Event; and
(c) thereafter, zero.
“Applicable Premium Trigger Event” means
(a) any payment by any Loan Party of all, or any part, of the principal balance of any Term Loan for any reason (including, without limitation, any optional prepayment or mandatory prepayment other than any mandatory prepayment pursuant to Section 2.05(c)(i)) whether before or after (i) the occurrence of an Event of Default, or (ii) the commencement of any Insolvency Proceeding, and notwithstanding any acceleration (for any reason) of the Obligations;
(b) the acceleration of the Obligations for any reason, including, without limitation, acceleration in accordance with Section 9.01, including as a result of the commencement of an Insolvency Proceeding;
(c) the satisfaction, release, payment, restructuring, reorganization, replacement, reinstatement, defeasance or compromise of any of the Obligations in any Insolvency Proceeding, foreclosure (whether by power of judicial proceeding or otherwise) or deed in lieu of foreclosure or the making of a distribution of any kind in any Insolvency Proceeding to any Agent, for the account of the Secured Parties in full or partial satisfaction of the Obligations; or
(d) the termination of this Agreement for any reason.
“Assignment and Acceptance” means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by the Administrative Agent, in accordance with Section 12.07 hereof and substantially in the form of Exhibit B hereto or such other form acceptable to the Administrative Agent.
“Authorized Officer” means, with respect to any Person, the chief executive officer, chief operating officer, chief financial officer, treasurer or other financial officer performing similar functions, president or executive vice president of such Person.
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“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.13(d).
“B. Riley Credit Agreement” means that certain Amended and Restated Credit Agreement, dated July 29, 2025 among BRF Finance Co. LLC, as administrative agent (the “B. Riley Agent”), the lenders party thereto from time to time, the Company and other entities party thereto, as borrowers, and the guarantors party thereto from time to time, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Bank Indebtedness” means any and all amounts payable under or in respect of one or more (a) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, reserve-based loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (b) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (c) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
“Bankruptcy Code” means, as applicable, Title 11 of the U.S. Code (11 U.S.C. § 101 et seq), as now and hereafter in effect, or any successor statute, and any rule or regulation issued thereunder.
“Bankruptcy Court” has the meaning specified therefor in the recitals hereto.
“Benchmark” means, initially, the Term SOFR Reference Rate; provided, that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.13(a).
“Benchmark Replacement” means with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Administrative Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided, that, if such Benchmark Replacement as so determined would be less than 4.00%, such Benchmark Replacement will be deemed to be 4.00% for the purposes of this Agreement and the other Loan Documents.
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“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment for each applicable Interest Period, 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 Administrative Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided, that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
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(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the 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 all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided, that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that all Available Tenors of such Benchmark (or the published component used in the calculation) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.13 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.13.
“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Board of Directors” means with respect to (a) any corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) a partnership, the board of directors of the general partner of the partnership, (c) a limited liability company, the managing member or members or any controlling committee or board of directors of such company or the sole member or the managing member thereof, and (d) any other Person, the board or committee of such Person serving a similar function.
“Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble hereto.
“Borrower Materials” has the meaning specified therefor in Section 12.20.
“Business Day” means any day that is not a Saturday, Sunday or any day which is a federal holiday or any other day on which banks are authorized or required by any Requirement of Law to close in New York , except that, if a determination of a Business Day shall relate to a SOFR Rate Loan, the term “Business Day” also shall exclude any 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.
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“Canadian Anti-Money Laundering & Anti-Terrorism Legislation” means, collectively, the Criminal Code, R.S.C. 1985, c. C-46, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the United Nations Act, R.S.C. 1985, c. U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al Qaida and Taliban Regulations promulgated under the United Nations Act.
“Canadian Defined Benefit Plan” means a Canadian Pension Plan which contains a “defined benefit provision,” as defined in subsection 147.1(1) of the Income Tax Act (Canada).
“Canadian Economic Sanctions and Export Control Laws” means any Canadian Laws, regulations or orders governing transactions in controlled goods or technologies or dealings with countries, entities, organizations, or individuals subject to economic sanctions and similar measures, including the Special Economic Measures Act (Canada), the United Nations Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), the Corruption of Foreign Public Officials Act (Canada), Part II.1 of the Criminal Code (Canada), and the Export and Import Permits Act (Canada), and the Foreign Extraterritorial Measures Act (Canada), and any related regulations.
“Canadian Loan Party” means each Loan Party which is incorporated, formed or organized under the laws of Canada or any province or territory thereof.
“Canadian Pension Event” means the earlier of (a) the whole or partial withdrawal of a Loan Party from a Canadian Pension Plan during a plan year; (b) the filing of a notice of intent to terminate in whole or in part a Canadian Pension Plan or the treatment of a Canadian Pension Plan amendment as a termination or partial termination; (c) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer a Canadian Pension Plan; (d) any statutory deemed trust or Lien, other than a Permitted Lien, arises in connection with a Canadian Pension Plan; or (e) any other event or condition which might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of trustee to administer, any Canadian Pension Plan.
“Canadian Pension Plan” means a pension plan that is covered by the applicable pension standards laws of any jurisdiction in Canada including the Pension Benefits Act (Ontario) and the Income Tax Act (Canada) and that is maintained or sponsored by a Loan Party for employees or former employees.
“Canadian Security Agreement” means the Canadian Pledge and Security Agreement, dated as of the date hereof, made by each Canadian Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties securing the Obligations in accordance with the terms thereof.
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“Cancellation Condition” shall have the meaning set forth in Section 2.01(c).
“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance that are properly charged to current operations).
“Capital Stock” means:
(1) in the case of a corporation, corporate stock or shares;
(2) in the case of an association or business entity, any and all shares,
(3) interests, participations, rights or other equivalents (however designated) of corporate stock;
(4) in the case of a partnership or limited liability company, partnership or
(5) membership interests (whether general or limited); and
(6) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Capitalized Lease Obligations” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided, that obligations of the Borrowers or their Subsidiaries, or of a special purpose or other entity not consolidated with the Borrowers or their Subsidiaries, either existing on the Effective Date or created thereafter that (a) initially were not included on the consolidated balance sheet of the Borrowers as capital lease obligations and were subsequently recharacterized as capital lease obligations or, in the case of such a special purpose or other entity becoming consolidated with the Borrowers and their respective Subsidiaries were required to be characterized as capital lease obligations upon such consolidation, in either case, due to a change in accounting treatment or otherwise, or (b) did not exist on the Effective Date and were required to be characterized as capital lease obligations but would not have been required to be treated as capital lease obligations on the Effective Date had they existed at that time, shall for all purposes not be treated as Capitalized Lease Obligations or Indebtedness.
“Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Subsidiaries.
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“Cash Equivalents” means:
(1) U.S. Dollars, pounds sterling, euros, the national currency of any member state in the European Union or such local currencies held by an entity from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000 and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);
(4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;
(5) commercial paper issued by a corporation (other than an Affiliate of the Borrower) rated at least “A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;
(6) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(7) Indebtedness issued by Persons with a rating of “A” or higher from S&P or “A-2” or higher from Moody’s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;
(8) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and
(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States of America to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.
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“Cash Management Agreement” means any agreement to provide to the Lead Borrower or any of its Subsidiaries cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy 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 shall, in each case, be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Borrowers and their respective Subsidiaries, taken as a whole, to a Person;
(2) the Borrowers become aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the direct or indirect acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of the Lead Borrower or the Parent; or
(3) a Change in Control (as defined in the ABL Credit Agreement) under the ABL Credit Agreement.
“Chapter 11 Cases” has the meaning specified therefor in the recitals hereto.
“Claims Administration Arrangements” means any and all arrangements entered into by any Borrower or any of its Subsidiaries and any Claims Administration Bank whereby short-term loans (which loans shall be secured solely by Claim Administration Liens) are made by such Claims Administration Bank to any Borrower or any of its Subsidiaries; provided, that the proceeds of such loans are deposited in one or more segregated deposit or securities accounts and are solely used to purchase Claims Administration Investments (which shall be held in such segregated accounts) and pay transaction costs in connection therewith.
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“Claims Administration Bank” means any third-party financial institution meeting the qualifications specified in clause (3) of the definition of “Cash Equivalents” that is designated by any Borrower or any of its Subsidiaries to hold and distribute certain legal settlement funds administered by any Borrower or its Subsidiaries in connection with the Borrowers’ claims administration business.
“Claims Administration Indebtedness” means Indebtedness for borrowed money of any Borrower or any of its Subsidiaries in favor of the Claims Administration Bank in respect of loans made pursuant to Claims Administration Arrangements.
“Claims Administration Investments” means Cash Equivalents invested with proceeds of Claims Administration Indebtedness.
“Claims Administration Liens” means Liens in favor of the Claims Administration Bank on Claims Administration Investments and related segregated deposit and securities accounts securing Claims Administration Indebtedness solely to the extent the amount of such Claims Administration Investment equals or exceeds the amount of such Claims Administration Indebtedness.
“Collateral” means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations pursuant to the Collateral Documents.
“Collateral Agent” has the meaning specified therefor in the preamble hereto.
“Collateral Agent Advances” has the meaning specified therefor in Section 10.08(a).
“Collateral Document” has the meaning specified therefor in Section 12.02(b)(iii).
“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).
“Commitments” means, with respect to each Lender, such Lender’s Term Loan Commitment.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means a Compliance Certificate, substantially in the form of Exhibit F, duly executed by an Authorized Officer of the Lead Borrower.
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“Confirmation Order” means the Order (I) Approving Debtors’ Disclosure Statement and (II) Confirming Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code [Docket No. 834] entered by the Bankruptcy Court on June 23, 2025.
“Conforming Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Reference Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.08 and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the 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 any such rate 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).
“Consolidated Current Assets” means, as of any date of determination, the total assets of the Borrowers and their Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding cash and Cash Equivalents, amounts related to current or deferred taxes based on income or profits, assets held for sale, loans (permitted) to third parties, pension assets, deferred bank fees and derivative financial instruments, and excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of the Borrowers and their Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding (a) the current portion of any Funded Debt, (b) the current portion of interest, (c) accruals for current or deferred taxes based on income or profits, (d) accruals of any costs or expenses related to restructuring reserves, (e) without duplication of clause (a), all obligations owing with respect to the ABL Facility, any other revolving facility, the B. Riley Credit Agreement or any Permitted Securitization Financing to the extent such Permitted Securitization Financing is a liability of the Borrowers and/or their Subsidiaries, (f) the current portion of any Capitalized Lease Obligation, (g) deferred revenue arising from cash receipts that are earmarked for specific projects, (h) liabilities in respect of unpaid earn-outs and (i) the current portion of any other long-term liabilities, and, furthermore, excluding the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.
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“Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including, without limitation, the amortization of intangible assets, deferred financing fees, capitalized contract incentives, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
“Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Subsidiaries for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Fixed Charges and costs of surety bonds in connection with financing activities; plus
(3) Consolidated Depreciation and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) any expenses or charges (other than Consolidated Depreciation and Amortization Expense) (i) related to any issuance of Equity Interests, Investment, acquisition, New Project, disposition, loan origination, recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by this Agreement (including a refinancing thereof) (whether or not successful) or (ii) incurred in connection with the Transactions, including (A) such fees, expenses or charges related to the Obligations or any Bank Indebtedness, (B) any amendment or other modification of the Obligations or other Indebtedness and (C) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Permitted Securitization Financing; plus
(6) business optimization expenses and other restructuring charges, reserves or expenses not related to the Transactions (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, severance, systems establishment costs, contract termination costs, future lease commitments and excess pension charges) and Pre-Opening Expenses; plus
(7) the amount of loss or discount on sale of assets to a Special Purpose Securitization Subsidiary in connection with a Permitted Securitization Financing, including amortization of loan origination costs and amortization of portfolio discounts; plus
(8) any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of a Borrower or a Guarantor or net cash proceeds of an issuance of Equity Interests of the Borrowers (other than Disqualified Stock); plus
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(9) the amount of any loss attributable to a New Project, until the date that is 12 months after the date of completing the construction, acquisition, assembling or creation of such New Project, as the case may be; provided, that (a) such losses are reasonably identifiable and factually supportable and certified by a responsible financial or accounting officer of the Borrowers and (b) losses attributable to such New Project after 12 months from the date of completing such construction, acquisition, assembling or creation, as the case may be, shall not be included in this clause (9); plus
(10) [reserved]; plus
(11) with respect to any joint venture that is not a Subsidiary and solely to the extent relating to any net income referred to in clause (7) of the definition of “Consolidated Net Income” an amount equal to the proportion of those items described in clauses (1) and (2) above relating to such joint venture corresponding to the Borrower’s and the Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Subsidiary); plus
(12) [reserved]; plus
(13) [reserved]; and
less, without duplication, to the extent the same increased Consolidated Net Income,
(14) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period and any items for which cash was received in a prior period).
“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including the interest component of Capitalized Lease Obligations and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees and original issue discount, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Hedging Obligations or other derivatives (in each case permitted hereunder) under GAAP); plus
(2) consolidated capitalized interest of such Person and its Subsidiaries for such period, whether paid or accrued; minus
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(3) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrowers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) any net after-tax extraordinary, nonrecurring or unusual gains or losses (less all fees and expenses relating thereto) or expenses or charges, any severance expenses, relocation expenses, restructuring expenses, curtailments or modifications to pension and post- retirement employee benefit plans, excess pension charges, any expenses related to any New Project or any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facility closing costs, facility rebranding costs, acquisition integration costs, facility opening costs, project and contract start- up costs, business optimization costs, recruiting costs, signing, retention or completion bonuses, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or Incurrence, issuance, repayment, refinancing, amendment or modification of Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the Transactions (including any costs relating to auditing prior periods, any transition-related expenses, and transaction expenses incurred before, on or after the Effective Date), in each case, shall be excluded;
(2) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Subsidiaries and including, without limitation, the effects of adjustments to (A) deferred rent, (B) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending funds with suppliers or (C) any other deferrals of income) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded;
(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets shall be excluded;
(5) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Borrower) shall be excluded;
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(6) any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) (a) the Net Income for such period of any Person that is not a Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Subsidiary thereof in respect of such period and (b) the Net Income for such period shall include any dividend, distribution or other payment in cash (or to the extent converted into cash) received by the referent Person or a Subsidiary thereof from any Person in excess of, but without duplication of, the amounts included in subclause (a);
(8) [reserved];
(9) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with Section7.02(h)(ii)(L) shall be included as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles and other fair value adjustments arising pursuant to GAAP shall be excluded;
(11) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights shall be excluded;
(12) any (a) non-cash compensation charges, (b) costs and expenses after the Effective Date related to employment of terminated employees, or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Effective Date of officers, directors and employees, in each case of such Person or any Subsidiary, shall be excluded;
(13) accruals and reserves that are established or adjusted within 12 months after the Effective Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(14) (a)(i) the non-cash portion of “straight-line” rent expense shall be excluded, (ii) the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense shall be included, (iii) the non-cash amortization of tenant allowances shall be excluded, (iv) cash received from landlords for tenant allowances shall be included and (v) to the extent not already included in Net Income, the cash portion of sublease rentals received shall be included (for the avoidance of doubt, the net effect of the adjustments in this clause (14)(a) as well as any related adjustments pursuant to clause (2) above shall be to compute rent expense and rental income on a cash basis for purposes of determining Consolidated Net Income) and (b) non cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
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(15) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded;
(16) (a) to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded and (b) amounts estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts actually received up to such estimated amount to the extent included in Net Income in a future period);
(17) Capitalized Software Expenditures shall be excluded;
(18) non-cash charges for deferred tax asset valuation allowances shall be excluded;
(19) any other costs, expenses or charges resulting from facility closures or sales, including income (or losses) from such facility closures or sales, shall be excluded;
(20) any deductions attributable to minority interests shall be excluded; and
(21) any gain, loss, income, expense or charge resulting from the application of any LIFO shall be excluded.
“Consolidated Non-Cash Charges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided, that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, federal, state, provincial, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and any Tax Distributions taken into account in calculating Consolidated Net Income.
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“Consolidated Total Indebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Indebtedness of the Borrowers and their respective Subsidiaries (excluding letters of credit or bank guarantees, to the extent undrawn, cash collateralized or backstopped) consisting of Capitalized Lease Obligations and Indebtedness for borrowed money, plus (2) the aggregate amount of all outstanding Disqualified Stock of the Borrowers and their respective Subsidiaries and all Preferred Stock of the Subsidiaries, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
“Consolidated Working Capital” means, as of any date of determination, the excess of Consolidated Current Assets over Consolidated Current Liabilities.
“Contingent Indemnity Obligations” means any Obligation constituting a contingent, unliquidated indemnification obligation of any Loan Party, in each case, to the extent (a) such obligation has not accrued and is not yet due and payable and (b) no claim has been made or is reasonably anticipated to be made with respect thereto.
“Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control Agreement” means, with respect to any deposit account, any securities account, commodity account, futures account, securities entitlement, commodity contract or futures entitlement, an agreement, in form and substance satisfactory to the Collateral Agent and the Required Lenders, among the Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account, effective to grant “control” (as defined under the applicable UCC or PPSA) over such account, or otherwise providing for administrative control, to the Collateral Agent.
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“Covenant Consolidated EBITDA” means, with respect to any Person for any period:
(a) the Consolidated Net Income of such Person for such period,
plus
(b) without duplication, the sum of the following amounts for such period to the extent deducted in the calculation of Consolidated Net Income for such period:
(i) any provision for United States federal income taxes or other taxes measured by net income,
(ii) Consolidated Net Interest Expense,
(iii) any expenses or charges incurred in connection with the Transactions on or prior to December 31, 2025,
(iv) any depreciation and amortization expense,
(v) any aggregate net loss on any Disposition (other than accounts and Inventory) outside the ordinary course of business, and
(vi) any other non-cash expenditure, charge or loss for such period (other than any non-cash expenditure, charge or loss relating to write-offs, write-downs or reserves with respect to accounts and Inventory),
minus
(c) without duplication, the sum of the following amounts for such period to the extent included in the calculation of such Consolidated Net Income for such period:
(i) any credit for United States federal income taxes or other taxes measured by net income,
(ii) any gain from extraordinary items,
(iii) any aggregate net gain from Dispositions (other than accounts and Inventory) outside the ordinary course of business, and
(iv) any other non-cash gain, including any reversal of a charge referred to in clause (b)(vi) above by reason of a decrease in the value of any Equity Interest;
in each case, determined on a consolidated basis in accordance with GAAP.
Notwithstanding the foregoing, for purposes of determining Covenant Consolidated EBITDA for the fiscal quarters ended September 30, 2024, December 31, 2024, March 31, 2025, and June 30, 2025, Covenant Consolidated EBITDA for such quarters shall be deemed to be $18,173,000, $28,359,000, $21,916,000 and $17,724,000, respectively.
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“Cure Right” has the meaning specified in Section 9.02.
“Debtor Relief Law” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada), any corporate statute which is used by a Person to propose an arrangement in connection with a compromise of such Person’s debt obligations each as now and hereafter in effect, any successors to such statutes, and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States, Canada or other applicable jurisdiction from time to time in effect.
“Debtors” has the meaning specified in the recitals hereto.
“Deemed Date” has the meaning specified in Section 7.02(v)(iii)(C).
“Default” means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of its Loans within 2 Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within 2 Business Days of the date when due, (b) has notified the Administrative Borrower and the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a 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 Administrative Borrower, to confirm in writing to the Administrative Agent and the Administrative 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 Administrative 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, or (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. Notwithstanding anything to the contrary herein, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permits such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Administrative Borrower and each Lender.
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“Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith by the Borrowers) of non-cash consideration received by the Borrowers or a Subsidiary in connection with a Disposition that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate, setting forth such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
“DIP Claims” has the meaning specified in the Restructuring Plan.
“Disbursement Letter” means the disbursement letter, in form and substance reasonably satisfactory to the Required Lenders and the Agents, by and among the Loan Parties, the Agents, and the other Persons party thereto, and the related funds flow memorandum describing the sources and uses of all cash payments in connection with the transactions contemplated to occur on the Effective Date.
“Discharge of the ABL Priority Obligations” has the meaning specified in the ABL Intercreditor Agreement.
“Disclosure Statement Date” means the date of approval by the Bankruptcy Court of the disclosure statement delivered in connection with the Restructuring Plan, which date is May 8, 2025.
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells, assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts, (b) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification) or (c), any sale of merchant accounts (or any rights thereto (including, without limitation, any rights to any residual payment stream with respect thereto)) by any Loan Party.
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“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Subsidiaries, or
(3) is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale),
in each case prior to 91 days after the earlier of the Final Maturity Date or the date the Obligations are no longer outstanding; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Borrowers or their Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United States of America.
“Domestic Subsidiary” means a Subsidiary that is not a Foreign Subsidiary.
“ECF Due Date” has the meaning specified therefor in Section 2.05(c)(i).
“ECF Prepayment Period” means the applicable fiscal year and the period following the end of such fiscal year and prior to the date of such prepayment pursuant to Section 2.05(c)(i) (provided that, with respect to any such amount following the end of such fiscal year, such amount is not included in any calculation pursuant to the definition of Excess Cash Flow or Section 2.05(c)(i) for the subsequent ECF Prepayment Period).
“Effective Date” has the meaning specified therefor in Section 5.01.
“Effective Date Term Loan” has the meaning specified therefor in the definition of “Term Loan”.
“Employee Plan” means an employee benefit plan within the meaning of Section 3(3) of ERISA (other than a Multiemployer Plan), regardless of whether subject to ERISA, that any Loan Party or any of its ERISA Affiliates maintains, sponsors or contributes to or is obligated to contribute to.
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“Environmental Claim” means any action, suit, complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication, from any Person or Governmental Authority relating to or arising out of any threatened, alleged or actual (a) violation of, non-compliance with, or liability under, any Environmental Law, or (b) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Law” means any Requirement of Law relating to, regulating or governing (i) the pollution or protection of the environment, any environmental media, natural resources, human health or safety, or (ii) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Liability” means all liabilities (contingent or otherwise, known or unknown), monetary obligations, losses (including monies paid in settlement), damages, natural resource damages, costs and expenses (including all reasonable fees, costs, client charges and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest arising directly or indirectly as a result of, from, or based upon (a) any Environmental Claim, (b) any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, (c) any actual, alleged or threatened Release of, or exposure to, Hazardous Materials, (d) any Remedial Action, (e) any adverse environmental condition or (f) any contract, agreement or other arrangement pursuant to which liability is assumed or imposed contractually or by operation of law with respect to any of the foregoing (a)-(f).
“Environmental Lien” means any Lien in favor of any Governmental Authority arising out of any Environmental Liability.
“Environmental Permit” means any permit, license, authorization, approval, registration or entitlement required by or issued pursuant to any Environmental Law or by any Governmental Authority pursuant to Environmental Law.
“Equity and Debt Prepayment Percentage” means (i) until the Discharge of Riley Priority Obligations (as defined in the ABL Intercreditor Agreement), 80% and (ii) after the Discharge of Riley Priority Obligations (as defined in the ABL Intercreditor Agreement), 100%.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Equity Issuance” means either (a) the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by the Lead Borrower of any cash capital contributions.
“Equivalent Amount” means, on any date of determination, with respect to obligations or valuations denominated in one currency (the “first currency”), the amount of another currency (the “second currency”) which would result from the Administrative Agent converting the first currency into the second currency at the Spot Rate on the applicable date of determination, or at such other rate as the Administrative Agent may determine in its sole discretion.
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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case, as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.
“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” or under “common control” within the meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” means (a) the occurrence of a Reportable Event with respect to any Pension Plan; (b) the failure to meet the minimum funding standards of Section 412 or 430 of the Internal Revenue Code or Section 302 or 303 of ERISA with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA) or the failure to make a contribution or installment required under Section 412 or Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) a determination that any Pension Plan is, or is expected to be, in “at risk” status (as defined in Section 430 of the Internal Revenue Code or Section 303 of ERISA); (d) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or “endangered” status under Section 432 of the Internal Revenue Code or Section 305 of ERISA; (e) the filing of a notice of intent to terminate a Pension Plan or the treatment of an amendment to a Pension Plan as a termination under Section 4041 of ERISA; (f) the withdrawal by any Loan Party or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any Loan Party or any of its ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (g) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition that might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (h) the imposition of liability on any Loan Party or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069(a) of ERISA or by reason of the application of Section 4212(c) of ERISA; (i) the withdrawal of any Loan Party or any of its ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan or the receipt by any Loan Party or any of its ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (j) the occurrence of an act or omission which could give rise to the imposition on any Loan Party or any of its ERISA Affiliates of fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Plan; (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent, upon any Loan Party or any of its ERISA Affiliates; (l) the assertion of a claim (other than routine claims for benefits) against any Employee Plan or the assets thereof, or against any Loan Party or any of its ERISA Affiliates in connection with any Employee Plan or Multiemployer Plan; (m) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any such Pension Plan (or such other Employee Plan) to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (n) the imposition on any Loan Party of any material fine, excise tax or penalty with respect to any Employee Plan or Multiemployer Plan resulting from any noncompliance with any Requirements of Law; (o) the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan; or (p) the occurrence of any Foreign Plan Event.
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“Erroneous Payment” has the meaning specified therefor in Section 10.18.
“Erroneous Payment Subrogation Rights” has the meaning specified therefor in Section 10.18.
“ETI” means Exela Technologies, Inc.
“ETI Funding Obligation” has the meaning assigned to it in the Restructuring Plan.
“ETI Litigation Extraordinary Receipts” means the net proceeds received by ETI or any of its affiliates arising out of or in connection with the claims made under that certain litigation pending in the Superior Court of the State of Delaware captioned Exela Technologies, Inc. v. ColumbiaCasualty Co., et al., C.A. No. N24C-04-162 SKR CCLD.
“Event of Default” has the meaning specified therefor in Section 9.01.
“Exar Facility” means the receivables purchase facility established pursuant to that certain Receivables Purchase Agreement, dated as of February 12, 2024, among Exela BR SPV LLC, a Delaware limited liability company (“Exar SPV”), as seller, BR EXAR, LLC, a Delaware limited liability company (as successor by assignment to B. Riley Securities, Inc., as buyer (the “Exar Buyer”), and the originators party thereto as of the Effective Date (the “Exar Originators”), as amended, restated, amended and restated, supplemented or otherwise modified from time to time (for the avoidance of doubt, other than with respect to amendments, restatements amendments and restatements, supplements or modifications which change the identities of the Exar Originators).
“Excess Cash Flow” means, for any period, an amount equal to the excess of:
(a) the sum, without duplication, of:
(i) Consolidated Net Income of the Borrowers and their Subsidiaries for such period, plus
(ii) an amount equal to the amount of all non-cash charges (including depreciation and amortization) for such period to the extent deducted in arriving at such Consolidated Net Income, but excluding any such non-cash charges representing an accrual or reserve for potential cash items in any future period and excluding amortization of a prepaid cash item that was paid in a prior period, plus
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(iii) decreases in Consolidated Working Capital for such period (other than any such decreases arising from acquisitions or Dispositions by the Borrowers and their Subsidiaries completed during such period, the application of purchase accounting or the reclassification of items from short term to long term or vice versa), plus
(iv) an amount equal to the aggregate net non-cash loss on Dispositions by the Borrowers and their Subsidiaries during such period (other than Dispositions in the ordinary course of business) to the extent deducted in arriving at such Consolidated Net Income, plus
(v) the amount deducted as tax expense in determining Consolidated Net Income to the extent in excess of cash taxes paid in such period, plus
(vi) cash receipts in respect of Hedging Obligations during such period to the extent not otherwise included in such Consolidated Net Income; over
(b) the sum, without duplication, of:
(i) an amount equal to the amount of all non-cash credits included in arriving at such Consolidated Net Income (but excluding any non-cash credit to the extent representing the reversal of an accrual or reserve described in clause (a)(ii) above) and cash charges excluded by virtue of clauses (1) through (15) and (17) through (21) of the definition of “Consolidated Net Income”, plus
(ii) without duplication of amounts deducted pursuant to clause (xi) below or this clause (ii) in prior periods, the amount of Capital Expenditures or acquisitions of Intellectual Property accrued or made in cash during the applicable ECF Prepayment Period to the extent not financed with the proceeds of Funded Debt, plus
(iii) the aggregate amount of all principal payments of Indebtedness (including the principal component of payments in respect of Capitalized Leases) of the Borrowers and their Subsidiaries during the applicable ECF Prepayment Period to the extent such prepayments or repayments are not funded with the proceeds of Funded Debt, excluding all payments of Indebtedness described in Section 2.05(c)(i) to the extent such payments reduce the repayment of Term Loans that would otherwise be required by Section 2.05(c)(i), plus
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(iv) an amount equal to the aggregate net non-cash gain on Dispositions by the Borrowers and their Subsidiaries during the applicable ECF Prepayment Period (other than Dispositions in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income and the net cash loss on Dispositions to the extent otherwise added to arrive at Consolidated Net Income, plus
(v) increases in Consolidated Working Capital for such period (other than any such increases arising from acquisitions or Dispositions by the Borrowers and their Subsidiaries completed during such period, the application of purchase accounting or the reclassification of items from short term to long term or vice versa), plus
(vi) cash payments by the Borrowers and their Subsidiaries actually made during the applicable ECF Prepayment Period to the extent not financed with the proceeds of Funded Debt in respect of any purchase price holdbacks, earn-out obligations, long-term liabilities of the Borrowers and their Subsidiaries (other than Indebtedness) to the extent such payments are not expensed during such period or are not deducted in calculating Consolidated Net Income for such period (and so long as there has not been any reduction in respect of such payments in arriving at Consolidated Net Income for such fiscal year), plus
(vii) without duplication of amounts deducted pursuant to clauses (viii) and (xi) below in prior periods, the amount of Investments made during the applicable ECF Prepayment Period to the extent that such Investments were not financed with the proceeds of Funded Debt, not deducted in calculating Consolidated Net Income, plus
(viii) the amount of Restricted Payments actually paid (and permitted to be paid) during the applicable ECF Prepayment Period pursuant to Sections 7.02(h)(ii)(M), (R), (S) and (V), in each case to the extent such Restricted Payments were not financed with the proceeds of Funded Debt, not deducted in calculating Consolidated Net Income, plus
(ix) the aggregate amount of expenditures actually made by the Borrowers and their Subsidiaries to the extent not financed with the proceeds of Funded Debt during such period (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such fiscal year or are not deducted in calculating Consolidated Net Income (and so long as there has not been any reduction in respect of such expenditures in arriving at Consolidated Net Income for such period), plus
(x) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash by the Borrower or any of the Subsidiaries pursuant to binding contracts, commitments, or binding purchase orders (to the extent not financed with the proceeds of Funded Debt, the “Contract Consideration”) entered into prior to or during such ECF Prepayment Period relating to Permitted Investments, Capital Expenditures or acquisitions of Intellectual Property to be consummated; provided that, to the extent the aggregate amount actually utilized to finance such Permitted Investments, Capital Expenditures or acquisitions of intellectual property during any period is less than the Contract Consideration that reduced Excess Cash Flow for the prior period, the amount of such shortfall shall be added to the calculation of Excess Cash Flow for such period, plus
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(xi) the amount of cash taxes (including penalties and interest) and tax distributions paid pursuant to Sections 7.02(h)(ii)(L), or tax or tax distribution reserves set aside or payable (without duplication) in such period, to the extent they exceed the amount of tax expense deducted in calculating Consolidated Net Income for such period, plus
(xii) cash expenditures in respect of Hedging Obligations during such period to the extent not deducted in calculating Consolidated Net Income, plus
(xiii) cash payments by the Borrowers and their Subsidiaries actually made during the applicable ECF Prepayment Period to their Parent in satisfaction of Equity Issuance costs or issuance costs related to Funded Debt incurred by Parent on behalf of the Borrowers and their Subsidiaries, plus
(xiv) fees or expenses paid in cash during such period in connection with any Investment, Disposition, incurrence or repayment of Indebtedness, issuance of Equity Interests or amendment or modification of any debt instrument (including any amendment or other modification of this Agreement or the other Loan Documents) and including, in each case, any such transaction consummated on or immediately prior to the Closing Date and any such transaction undertaken but not completed to the extent not deducted in calculating Consolidated Net Income for such period.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Equity Issuance” means (a) in the event that the Lead Borrower or any of its Subsidiaries forms any Subsidiary in accordance with this Agreement, the issuance by such Subsidiary of Equity Interests to the Lead Borrower or such Subsidiary, as applicable, (b) the issuance of Equity Interests by the Lead Borrower to any Person that is an equity holder of the Lead Borrower prior to such issuance (an “Equity Holder”) so long as such Equity Holder did not acquire any Equity Interests of the Lead Borrower so as to become an Equity Holder concurrently with, or in contemplation of, the issuance of such Equity Interests to such Equity Holder, (c) [reserved], (d) the issuance of Equity Interests of the Lead Borrower to directors, officers and employees of the Lead Borrower and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors of the Lead Borrower, (e) [reserved], and (f) the issuance of Equity Interests by a Subsidiary of the Lead Borrower to its parent or member in connection with the contribution by such parent or member to such Subsidiary of the proceeds of an issuance described in clauses (a) – (d) above.
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“Excluded Property” has the meaning specified therefor in the Security Agreement or the Canadian Security Agreement, as applicable.
“Excluded Subsidiary” means, with respect to any Subsidiary of the Borrowers, (a) each Subsidiary that is prohibited from guaranteeing the Obligations by any Requirement of Law or that would require consent, approval, license or authorization of a governmental (including regulatory) authority to guarantee the Obligations (unless such consent, approval, license or authorization has been received); provided, that, for the avoidance of doubt, such Subsidiary shall have no obligation to seek such consent, approval, license or authorization, (b) each Subsidiary that is prohibited by any applicable contractual requirement from guaranteeing the Obligations on the Effective Date or at the time such Subsidiary becomes a Subsidiary (in each case for so long as such restriction or any replacement or renewal thereof is in effect and only to the extent that such prohibition was not implemented or consented to with the intent of evading the requirements of Section 7.01(b)), (c) any Special Purpose Securitization Subsidiary, (d) any Subsidiary (other than a Significant Subsidiary) that (i) did not, as of the last day of the fiscal quarter of the Borrowers most recently ended, have assets with a value in excess of 5.0% of the Total Assets or revenues representing in excess of 5.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries being excluded pursuant to this clause (d), as of the last day of the fiscal quarter of the Borrowers most recently ended, did not have assets with a value in excess of 10.0% of the Total Assets or revenues representing in excess of 10.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date, and (e) any Subsidiary for which providing a Guaranty or granting Liens required by the Collateral Documents to secure Indebtedness could reasonably be expected to result in material tax consequences as determined in good faith by the Borrowers in consultation with the Required Lenders, in each case pursuant to clauses (a) through (e) hereof, only for so long as it remains as such; provided, that any Subsidiary that incurs or provides a guaranty under (or has pledged its assets to secure the obligations of) any Indebtedness for borrowed money shall not be an Excluded Subsidiary.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the guarantee of such Guarantor becomes effective with respect to such related Swap Obligation.
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“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.09, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.09(d) or (g) any U.S. federal withholding Taxes imposed under FATCA.
“Exela Finance” has the meaning specified therefor in the preamble hereto.
“Exit Notes” means the notes under the Exit Notes Indenture.
“Exit Notes Collateral Agent” means the Ankura as collateral agent under the Exit Notes Indenture.
“Exit Notes Indenture” means the indenture dated as of the date hereof among the Lead Borrower, Exela Finance, the guarantors named therein, the financial institutions named therein, the Trustee and the Exit Notes Collateral Agent, as in effect on the date hereof.
“Extraordinary Receipts” means any cash received by the Lead Borrower or any of its Subsidiaries not in the ordinary course of business (and not consisting of (x) proceeds described in Section 2.05(c)(ii) or (iii) hereof, (y) proceeds constituting, or from, ABL Priority Collateral prior to the Discharge of ABL Priority Obligations or (z) the ETI Litigation Extraordinary Receipts), including, without limitation, (a) foreign, United States, state or local tax refunds, (b) pension plan reversions, (c) proceeds of insurance (other than to the extent such insurance proceeds are (i) immediately payable to a Person that is not the Lead Borrower or any of its Subsidiaries in accordance with applicable Requirements of Law or with Contractual Obligations entered into in the ordinary course of business or (ii) received by the Lead Borrower or any of its Subsidiaries as reimbursement for any out-of-pocket costs incurred or made by such Person prior to the receipt thereof directly related to the event resulting from the payment of such proceeds), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) condemnation awards (and payments in lieu thereof), (f) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of the Lead Borrower or any of its Subsidiaries or (ii) received by the Lead Borrower or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person) and (g) any purchase price adjustment received in connection with any purchase agreement.
“Facility” means the real property identified on Schedule 1.01(B) and any new Facility hereafter acquired by the Lead Borrower or any of its Subsidiaries, including, without limitation, the land on which each such facility is located, all buildings and other improvements thereon, and all fixtures located thereat or used in connection therewith.
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“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any fiscal, tax or regulatory legislation, rules or official practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of Sections 1471 through 1474 of the Internal Revenue Code and the Treasury Regulations thereunder.
“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Letter” means the agency fee letter, dated as of the date hereof, among the Borrowers and the Agents, as may be amended, restated, supplemented or otherwise modified from time to time.
“Final Maturity Date” means July 28, 2028.
“Financial Statements” means (a) the audited consolidated balance sheet of the Lead Borrower and its Subsidiaries and certain Affiliates for the Fiscal Year ended December 31, 2024, and the related consolidated statement of operations, shareholders’ equity and cash flows for the Fiscal Year then ended, and (b) the unaudited consolidated balance sheet of the Parent and its Subsidiaries for the fiscal quarter ended March 31, 2025, and the related consolidated statement of operations, shareholder’s equity and cash flows for the quarter then ended.
“Fiscal Quarter” means any of the quarterly accounting periods of the Parent and its Subsidiaries ending on March 31, June 30, September 30 and December 31 of each year.
“Fiscal Year” means the fiscal year of the Parent and its Subsidiaries ending on December 31 of each year.
“Fixed Charge Calculation Date” has the meaning assigned in the “Fixed Charge Coverage Ratio” definition.
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“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Borrowers or any of its Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Lead Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in an Officer’s Certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided that for all purposes of determining Consolidated EBITDA hereunder adjustments for operating expense reductions and other operating improvements, synergies or cost savings shall not be more than 20% of Consolidated EBITDA for the most recently ended four fiscal quarter period (calculated prior to giving effect to such capped adjustments (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
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If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating Consolidated EBITDA for the applicable period.
“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (1) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, and (2) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Subsidiaries.
“Foreign Lender” has the meaning specified therefor in Section 2.09(d).
“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party or any of its ERISA Affiliates that is subject to any Requirements of Laws other than, or in addition to, the laws of the United States or any state thereof or the laws of the District of Columbia.
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“Foreign Plan Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any Requirement of Law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make any required contribution or payment under any Requirement of Law within the time permitted by any Requirement of Law for such contributions or payments, (c) the receipt of a notice from a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any liability by any Loan Party or any Subsidiary under any law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, or (e) the occurrence of any transaction with respect to a Foreign Plan that is prohibited under any Requirement of Law and that could reasonably be expected to result in the incurrence of any liability by any Loan Party or any Subsidiary, or the imposition on any Loan Party or any Subsidiary of any fine, excise tax or penalty with respect to a Foreign Plan resulting from any noncompliance with any Requirement of Law.
“Foreign Sovereign Immunities Act” means the US Foreign Sovereign Immunities Act of 1976 (28 U.S.C. Sections 1602-1611), as amended.
“Foreign Subsidiary” means a Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia.
“Funded Debt” means all Indebtedness of the Borrowers and their Subsidiaries for borrowed money that (i) matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or (ii) arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date.
“Funding Losses” has the meaning specified therefor in Section 2.08.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Effective Date. For the purposes of this Agreement, the term “consolidated” with respect to any Person shall mean such Person consolidated with its Subsidiaries.
“Governing Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization, governance and capitalization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization.
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“Governmental Authority” means any nation or government, any foreign, federal, state, territory, provincial, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency 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).
“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.
“Guarantor” and “Guarantors” have the respective meanings specified therefor in the preamble hereto.
“Guaranty” means (a) the guaranty of each Guarantor party hereto contained in Article XI hereof and (b) each other guaranty entered into after the Effective Date, in form and substance satisfactory to the Agents and the Required Lenders, made by any other Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties guaranteeing all or part of the Obligations.
“GUC Payment Obligations” means the outstanding obligations of the Company to holders of Allowed General Unsecured Claims (as defined and described in the Restructuring Plan), which obligations are required to be paid out on the schedule set forth in the Restructuring Plan and the Confirmation Order.
“Hazardous Material” means any element, material, substance, waste, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic or hazardous substance, hazardous waste, universal waste, special waste, or solid waste or is otherwise characterized by words of similar import under any Environmental Law or that is regulated under, or for which liability or standards of care are imposed, pursuant to any Environmental Law, including, without limitation, petroleum, polychlorinated biphenyls; asbestos-containing materials, lead or lead-containing materials, urea formaldehyde-containing materials, radioactive materials, radon, per- and polyfluoroalkyl substances and mold.
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
“Highest Lawful Rate” means, with respect to any Agent or any Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such Lender which are currently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.
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“Incremental Effective Date” shall have the meaning set forth in Section 2.14(a).
“Incremental Facility” shall have the meaning set forth in Section 2.14(a).
“Incremental Facility Amendment” shall have the meaning set forth in Section 2.14(b).
“Incremental Facility Request” shall have the meaning set forth in Section 2.14(a).
“Incremental Term Loan” shall have the meaning set forth in Section 2.14(a).
“Incremental Term Loan Commitment” shall` have the meaning set forth in Section 2.14(a).
“Incur” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. “Incurred” and “Incurrence” shall have correlative meanings.
“Indebtedness” means, with respect to any Person:
(1) the principal of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) liabilities accrued in the ordinary course of business), which purchase price is due more than twelve months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and
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(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by the Borrower) of such asset at such date of determination, and (b) the principal amount of such Indebtedness of such other Person; provided, however, that, notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Permitted Securitization Financings; (5) trade and other ordinary course payables, accrued expenses and intercompany liabilities, including with respect to working capital advancements, arising in the ordinary course of business; (6) [reserved]; (7) obligations in respect of Third Party Funds; (8) in the case of the Borrowers and their respective Subsidiaries (x) all intercompany Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business and (y) intercompany liabilities in connection with cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries; (9) [reserved]; (10) any obligations under Hedging Obligations; and (11) any Claims Administration Indebtedness of the Borrowers and Subsidiaries (except to the extent that any such Claims Administration Indebtedness exceeds the Claims Administration Investments of such Person); provided, that such agreements are entered into for bona fide hedging purposes of the Borrowers or their respective Subsidiaries (as determined in good faith by the Board of Directors or senior management of the Lead Borrower, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of the Borrowers or their Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of the Borrowers or their Subsidiaries Incurred without violation of this Agreement.
Notwithstanding anything in this Agreement to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Agreement but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Agreement.
“Indemnified Matters” has the meaning specified therefor in Section 12.15.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any Obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitees” has the meaning specified therefor in Section 12.15.
“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is independent of the Borrowers and any Affiliate thereof and, in the good faith determination of the Borrowers, qualified to perform the task for which it has been engaged.
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“Initial Cashless Term Commitment” means as to any Lender, the commitment (if any) of such Lender to be deemed to have made a Loan to the Borrowers pursuant to Section 2.01(a)(i) in the principal amount set forth under the heading “Initial Cashless Term Commitment” opposite such Lender’s name on Schedule 1.01(A). The aggregate principal amount of the Initial Cashless Term Commitments as of the Effective Date is $6,000,000.
“Initial Funded Term Commitment” means as to any Lender, the obligation of such Lender to make a Loan to the Borrowers pursuant to Section 2.01(a)(ii) in the principal amount set forth under the heading “Initial Funded Term Commitment” opposite such Lender’s name on Schedule 1.01(A). The aggregate principal amount of the Initial Funded Term Commitments as of the Effective Date is $40,000,000.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of any Debtor Relief Law.
“Intellectual Property” has the meaning specified therefor in the Security Agreement or the Canadian Security Agreement, as applicable.
“Intellectual Property Contracts” means all agreements concerning Intellectual Property, including without limitation license agreements, technology consulting agreements, confidentiality agreements, co-existence agreements, consent agreements and non-assertion agreements.
“Intercompany Subordination Agreement” means an Intercompany Subordination Agreement, dated as of the date hereof, made by the Lead Borrower and its Subsidiaries in favor of the Collateral Agent for the benefit of the Secured Parties.
“Intercreditor Agreements” means the Super Senior Intercreditor Agreement and the ABL Intercreditor Agreement and any other junior lien intercreditor agreement in form and substance satisfactory to the Agents and the Required Lenders, in each case entered into on the Effective Date or pursuant to Section 10.15.
“Interest Payment Date” means as to any SOFR Rate Loan, the last day of each Interest Period therefor and the Final Maturity Date.
“Interest Period” means, with respect to each SOFR Rate Loan, a period commencing on the date of the making of such SOFR Rate Loan (or the continuation of a SOFR Rate Loan or the conversion of a Reference Rate Loan to a SOFR Rate Loan) and ending 3 months thereafter; provided, that the initial Interest Period shall be from and after the Effective Date until October 15, 2025; provided, further, that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the Term SOFR from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 3 months after the date on which the Interest Period began, as applicable, and (e) the Borrowers may not elect an Interest Period which will end after the Final Maturity Date.
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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Inventory” means, with respect to any Person, all goods and merchandise of such Person leased or held for sale or lease by such Person, including, without limitation, all raw materials, work-in-process and finished goods, and all packaging, supplies and materials of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to an Account or cash.
“Investment Grade Securities” means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moody’s and BBB- (or equivalent) by S&P, but excluding any debt securities or loans or advances between and among the Borrowers and their respective Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees of loans), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property.
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“Joinder Agreement” means a Joinder Agreement, substantially in the form of Exhibit A, duly executed by a Subsidiary of a Loan Party made a party hereto pursuant to Section 7.01(b).
“Junior Lien Obligations” means the obligations with respect to Indebtedness permitted to be incurred under this Agreement and the Exit Notes Indenture, which is by its terms intended to be secured by the Collateral on a basis junior to the Obligations and the Notes Obligations under the Exit Notes Indenture, excluding the ABL Facility and the B. Riley Credit Agreement.
“Lease” means any lease, sublease or license of, or other agreement granting a possessory interest in, real property to which any Loan Party or any of its Subsidiaries is a party as lessor, lessee, sublessor, sublessee, licensor or licensee.
“Lead Borrower” has the meaning specified therefor in the preamble hereto.
“Lender” has the meaning specified therefor in the preamble hereto.
“Liability Management Transaction” means, other than a transaction undertaken in good faith for a bona fide business purpose and not designed primarily to implement any of the transactions described in clauses (i) through (vi) hereof, any transaction or series of related transactions that is designed primarily to restructure or otherwise impact the Loan Parties’ capital structure in a manner that improves the prospects of a class or subset of stakeholders (including any equityholder, and any debt financing providers (including any class or subset of Lenders)) that is pari passu with or junior to the Lenders by elevating such stakeholder’s payment or lien priority (whether effectively, structurally or contractually) or ability to direct actions under the Loan Documents, or by introducing any new Indebtedness that is effectively, structurally or contractually senior to the Loans in payment or lien priority except as explicitly permitted pursuant to the terms of the Loan Documents as of the Issue Date, including any of the following: (i) any Indebtedness issued in exchange for, or the net proceeds (or deemed net proceeds in the event of a cashless transaction) of which are used, in whole or in part, to modify, extend, refinance, renew, replace, retire or refund (or any other transaction that would have the effect of circumventing the restrictions set forth in the covenants hereof or achieve the same effect as the foregoing) any existing Indebtedness of the Lead Borrower or any of its Subsidiaries (the “Existing LMT Debt”) with any other Indebtedness or debt-like instruments (including preferred Equity Interests) of the Lead Borrower or any of its Subsidiaries (the “New LMT Debt”) in a transaction the result of which is to ‘uptier’ holders of such Existing LMT Debt on a non-pro rata basis into New LMT Debt that is effectively (including as to security or recourse to additional assets or through a ‘double dip or ‘pari plus’ structure), contractually or structurally senior (in right of payment or security) to the Existing LMT Debt, (ii) any Investment, Asset Sale, Restricted Payment or other transfer or disposition (including any indirect transfers effectuated through a release of a Guarantor, a merger, amalgamation, division, or similar undertaking) of assets constituting Collateral immediately prior to such Investment, Asset Sale, Restricted Payment or other transfer or disposition to an Affiliate of the Lead Borrower or any of its Subsidiaries that is not a Loan Party (including any non-Loan Party Subsidiary or Affiliate that is not a Loan party), in each case, to (a) facilitate a new financing of Indebtedness or debt-like instruments (including the issuance of any preferred Equity Interests) incurred by such non-Loan Party Person under such Indebtedness or debt-like instruments, or otherwise undertakes a transaction that monetizes such property, the result of which raises, directly or indirectly, liquidity for the Loan Parties or to provide cash flow assistance to the Loan Parties (including in furtherance of exchanging, modifying, extending, refinancing, renewing, replacing, retiring or refunding, in whole or in part, Existing LMT Debt), (b) guarantee any existing Indebtedness or debt-like instrument, or (c) transfer (whether by a distribution, dividend, or otherwise) such property to an Affiliate of a Loan Party the primary purpose of which preserves the value of such property for such Affiliate, (iii) any release of the Guarantee of a Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) or of a Guarantor who owns any Material Property, or of a material portion of the Collateral, in each case the results of which is intended to secure or serve as support for new Indebtedness or Refinancing Indebtedness, a new equity issuance, or to otherwise raise liquidity or to provide cash flow assistance, (iv) any transaction whereby an obligation of a Loan Party owed to an Affiliate of a Loan Party (other than another Loan Party) would directly or indirectly be pari passu or senior (in right of payment or security) to the Obligations, (v) any Loan Party incurring any Indebtedness for borrowed money, or granting a Lien on its assets securing Indebtedness for borrowed money, on a senior basis (in right of payment or security) to the Obligations or the Liens securing the Obligations (other than Liens which are explicitly permitted to be incurred on a senior basis under the Loan Documents as in effect as of the Closing Date), or (vi) incurring any indebtedness for the primary purpose of, or that has the effect of, influencing the provision of, or in connection with, obtaining any modification, amendment, release or waiver under this Agreement. Notwithstanding any of the foregoing, the incurrence of any Refinancing Indebtedness permitted to be incurred under this Agreement shall not constitute a Liability Management Transaction.
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“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or any lease in the nature thereof); provided, that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
“Liquidity” means, as of any date of determination, the aggregate amount of unrestricted cash on-hand of the Loan Parties maintained in deposit accounts in the name of a Loan Party in the United States or Canada as of such date, which deposit or other accounts are subject to Control Agreements plus the aggregate indebtedness permitted to be borrowed and available to be drawn at such time under the ABL Facility.
“Loan” means any Term Loan made by a Lender to the Borrowers pursuant to Article II hereof.
“Loan Document” means this Agreement, any Control Agreement, the Disbursement Letter, the Fee Letter, any Guaranty, the Intercompany Subordination Agreement, each Intercreditor Agreement, any Joinder Agreement, any Mortgage, the Security Agreement, the Canadian Security Agreement, any landlord waiver, any collateral access agreement, any Perfection Certificate, any Incremental Facility Amendment and any other agreement, instrument, certificate, report and other document executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation.
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“Loan Party” means any Borrower and any Guarantor.
“Material Adverse Effect” means a material adverse effect on any of (a) the operations, assets, liabilities, financial condition or prospects of the Loan Parties taken as a whole, (b) the ability of the Loan Parties taken as a whole to perform any of their obligations under any Loan Document, (c) the legality, validity or enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of any Agent or any Lender under any Loan Document, or (e) the validity, perfection or priority of a Lien in favor of the Collateral Agent for the benefit of the Secured Parties on Collateral having a fair market value in excess of $25,000,000.
“Material Contract” means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $10,000,000 or more in any Fiscal Year (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium) and (b) all other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“Material Property” means any asset (or group of assets), including intellectual property owned by the Loan Parties or their respective Subsidiaries that is material to the business, operations, assets, or financial condition of the Lead Borrower and its Subsidiaries, taken as a whole.
“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.
“Mortgage” means a mortgage, charge, deed of hypothec, deed of trust or deed to secure debt, in form and substance satisfactory to the Collateral Agent and the Required Lenders, made by a Loan Party in favor of the Collateral Agent for the benefit of the Secured Parties, securing the Obligations and delivered to the Collateral Agent.
“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed, or has been obligated to contribute, to at any time during the preceding the six calendar years.
“Natural Person” means (a) any natural person or (b) a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person.
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“Net Cash Proceeds” means the aggregate cash proceeds received by the Borrowers or any Subsidiary in respect of any Disposition (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Disposition and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Disposition and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (including, without duplication, Tax Distributions and after taking into account any available tax credits or deduction), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Borrowers as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Borrowers after such sale or other disposition thereof, including, without limitation, pension and other post- employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction, and payments made to holders of minority interests in Subsidiaries that are joint ventures as a result of such Disposition.
“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Subsidiaries, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
“New Project” means (x) each contract or project with respect to new customers and any expansions of contracts or projects with respect to existing customers and (y) each creation (in one or a series of related transactions) of a business unit to the extent such business unit commences operations or each expansion (in one or a series of related transactions) of business into a new market.
“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).
“Obligations” means all present and future indebtedness, obligations, and liabilities of each Loan Party to the Secured Parties arising under or in connection with this Agreement or any other Loan Document, whether or not the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 9.01. Without limiting the generality of the foregoing, the Obligations of each Loan Party under the Loan Documents include (a) the obligation (irrespective of whether a claim therefor is allowed in an Insolvency Proceeding) to pay principal, interest, charges, expenses, fees, premiums (including the Applicable Premium), attorneys’ fees (including the Specified Professional Fees) and disbursements, indemnities and other amounts payable by such Person under the Loan Documents, and (b) the obligation of such Person to reimburse any amount in respect of any of the foregoing that any Secured Party (in its sole discretion) may elect to pay or advance on behalf of such Person. Notwithstanding any of the foregoing, Obligations shall not include any Excluded Swap Obligations.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.
“Parent” means XBP Europe Holdings Inc., a Delaware corporation, and any successor thereto.
“Participant Register” has the meaning specified therefor in Section 12.07(i).
“Payment Recipient” has the meaning specified therefor in Section 12.07(i).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means an Employee Plan that is subject to Section 412 of the Internal Revenue Code, Section 302 of ERISA or Title IV of ERISA maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party or any of its ERISA Affiliates at any time during the preceding six calendar years.
“Perfection Certificate” means a certificate, dated as of the Effective Date, providing information with respect to the property of each Loan Party.
“Periodic Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Permitted Cure Equity” means Qualified Equity Interests of the Parent.
“Permitted Disposition” means:
(a) sale of Inventory in the ordinary course of business of the Borrowers or any Subsidiary of the Borrowers;
(b) licensing, on a non-exclusive basis, Intellectual Property rights in the ordinary course of business of the Borrowers or any Subsidiary of the Borrowers;
(c) leasing or subleasing assets in the ordinary course of business of the Borrowers or any Subsidiary of the Borrowers;
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(d) (i) the lapse of Registered Intellectual Property of the Borrowers or any Subsidiary of the Borrowers to the extent not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of their business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Secured Parties;
(e) any involuntary loss, damage or destruction of property;
(f) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;
(g) so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from the Borrowers or any Subsidiary of the Borrowers (other than the Borrowers) to a Loan Party (other than the Lead Borrower), and (ii) from any Subsidiary of the Lead Borrower that is not a Loan Party to any other Subsidiary of the Lead Borrower; and
(h) any disposition occurring in accordance with the terms of the Tax Funding Agreement; and
(i) sales and contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility in effect as of the date hereof; provided that certain of the proceeds from such sale and contribution are used to repay the B. Riley Credit Agreement (which may be by way of a purchase of a participation interest, so long as such participation interest is purchased by a Loan Party or immediately transferred to a Loan Party) in accordance with the terms of the Exar Facility as in effect as of the date hereof.
“Permitted Investments” means:
(1) any Investment in the Borrowers or any of its Subsidiaries that is Guarantor;
(2) any Investment by the Borrowers or any Subsidiary in Cash Equivalents or Investment Grade Securities for the account of such Person;
(3) any Investment by the Borrowers or any of its Subsidiaries in a Person if as a result of such Investment (a) such Person becomes a Subsidiary of the Borrowers that is a Guarantor, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Borrowers or a Subsidiary of the Borrowers that is a Guarantor;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received by the Borrowers or any Subsidiary in connection with a Disposition made by such respective Person pursuant to Section 7.02(c)(ii) or any other disposition of assets not constituting a Disposition;
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(5) any Investment existing on, or made pursuant to binding commitments existing on, the Effective Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Effective Date, in each case, that is disclosed on Schedule 1.01(C) hereto; provided, that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Effective Date or (y) as otherwise permitted under this Agreement;
(6) advances of payroll payments, business related travel expenses, moving expenses and other similar expenses and expenses to employees in the ordinary course of business;
(7) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business of the Borrowers, any Subsidiary or Investments acquired by the Borrowers or any of its Subsidiaries as a result of a foreclosure by the Borrowers or any of its Subsidiaries, respectively, with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(8) Hedging Obligations permitted under Section 7.02(v)(ii)(J);
(9) Investments in any Subsidiary that is not a Guarantor not to exceed, at any one time in the aggregate outstanding under this clause (9), $3,000,000;
(10) any Investment occurring in accordance with the terms of the Tax Funding Agreement;
(11) additional Investments by the Borrowers or any Subsidiary of the Borrowers having an aggregate Fair Market Value (as determined in good faith by the Borrowers at the time of the making thereof, and without giving effect to any subsequent changes in value), taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed $500,000; provided, however, that if any Investment pursuant to this clause (11) is made in any Person that is not the Borrowers or a Subsidiary of the Borrowers that is a Guarantor at the date of the making of such Investment and such Person becomes the Borrowers or a Subsidiary of the Borrowers that is a Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (11) for so long as such Person continues to be the Borrowers or a Subsidiary of the Borrowers that is a Guarantor;
(12) Investments the payment for which consists of Equity Interests of the Borrowers (other than Disqualified Stock) or any direct or indirect parent of the Borrowers, as applicable;
(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 7.02(j)(ii) (except transactions described in clauses (D), (I)(2) and (P) of Section 7.02(j)(ii));
(14) guarantees issued in accordance with Section 7.01(b) and Section 7.02(v);
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(15) (i) Investments consisting of the licensing or contribution of intellectual property (on a non-exclusive basis) pursuant to joint marketing arrangements with other Persons in the ordinary course of business; (ii) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property (on a non-exclusive basis) in each case in the ordinary course of business;
(16) Investments consisting of Securitization Assets in connection with a Permitted Securitization Financing or arising as a result of Permitted Securitization Financings;
(17) additional Investments in joint ventures (as determined in good faith by the Borrowers at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed, at any one time in the aggregate outstanding under this clause (17), $3,000,000; provided, that if any Investment pursuant to this clause (17) is made in any Person that is not the Borrowers or a Subsidiary of the Borrowers that is a Guarantor at the date of the making of such Investment and such Person becomes the Borrowers or a Subsidiary of the Borrowers that is a Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (17) for so long as such Person continues to be the Borrowers or a Subsidiary of the Borrowers that is a Guarantor;
(18) Investments of a Subsidiary acquired after the Effective Date or of an entity merged into, amalgamated with, or consolidated with the Borrowers or a Subsidiary of the Borrowers that is a Guarantor in a transaction that is not prohibited by Section 7.02(c)(i) after the Effective Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(19) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(20) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrowers or their Subsidiaries in the ordinary course of business;
(21) any Investment consisting of intercompany current liabilities in connection with the cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries;
(22) any Investment in the form of a participation interest in the B. Riley Credit Agreement which the Borrower and its Subsidiaries are required to make pursuant to the Exar Facility in effect as of the date hereof, so long as such Investment is immediately contributed to the Loan Parties and is not transferred to any Person other than a Loan Party;
(23) any Investments pursuant to clause (i) of the definition of “Permitted Disposition”;
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(24) Investments resulting from pledges and deposits referred to in clauses (1), (4), (21), (34) and (35) of the definition of “Permitted Liens”;
(25) (i) accounts receivable, security deposits and prepayments arising, and trade credit granted, in the ordinary course of business and (ii) any securities received in satisfaction or partial satisfaction of defaulted accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; and
(26) guarantees by the Borrowers or any Subsidiary of the Borrowers of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case, entered into by the Borrowers or any Subsidiary of the Borrowers in the ordinary course of business.
“Permitted Liens” means, with respect to any Person:
(1) (i) pledges and deposits and other Liens made in the ordinary course of business in compliance with the Federal Employers Liability Act or any other workers’ compensation, unemployment insurance and other social security laws or regulations and deposits securing liability to insurance carriers under insurance or self-insurance arrangements in respect of such obligations and (ii) pledges and deposits and other Liens securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to such Person;
(2) Liens imposed by law, such as landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, supplier’s, construction or other like Liens securing obligations of the Borrowers or any Subsidiary that are not overdue by more than 30 days or that are being contested in good faith by appropriate proceedings and in respect of which, if applicable, the Borrowers or any Subsidiary of the Borrowers, respectively, shall have set aside on its books reserves in accordance with GAAP;
(3) Liens for taxes, assessments or other governmental charges or levies not yet overdue by more than 30 days or that are being contested in good faith by appropriate proceedings;
(4) deposits and other Liens by the Borrowers or any Subsidiary to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capitalized Lease Obligations), statutory obligations, surety and appeal bonds, performance and return of money bonds, bids, leases, government contracts, trade contracts, agreements with public utilities, and other obligations of a like nature (including letters of credit in lieu of any such bonds or to support the issuance thereof) incurred by such Person in the ordinary course of business, including those incurred to secure health, safety, insurance and environmental obligations in the ordinary course of business;
(5) zoning restrictions, building codes and laws, survey exceptions, easements, trackage rights, leases (other than Capitalized Lease Obligations), licenses, special assessments, rights-of-way, covenants, conditions, restrictions and declarations on or with respect to the use of real property, servicing agreements, development agreements, site plan agreements and other similar encumbrances, in each case, incurred in the ordinary course of business and title defects or irregularities that are of a minor nature and that, in the aggregate, do not interfere in any material respect with the ordinary conduct of the business of the Borrowers or any Subsidiary of the Borrowers;
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(6) (A) [reserved];
(B) Liens securing obligations in respect of Permitted Securitization Financings and pursuant to clause (3) of Section 7.02(v)(ii)(A) and Section 7.02(v)(ii)(B); provided, that such Liens referred to in this clause (B) other than Liens securing Permitted Securitization Financings and the Liens on ABL Priority Collateral securing the ABL Facility and the B. Riley Credit Agreement shall be subordinated to the Liens securing the Obligations on terms acceptable to the Agents and the Required Lenders; provided, further*,*that (x) Liens securing the ABL Facility and the B. Riley Credit Agreement shall be subject to the ABL Intercreditor Agreement and (y) Liens in respect of Permitted Securitization Financings shall extend only to the assets subject thereto and Equity Interests of Special Purpose Securitization Subsidiaries; and
(C) Liens securing obligations in respect of Indebtedness permitted to be Incurred pursuant to clause (D), (L) (or (N) to the extent it guarantees any such Indebtedness), (P), (T) or (W) of Section 7.02(v)(ii) (provided, that (i) in the case of clause (T), such Lien does not extend to the property or assets of the Borrowers or any Subsidiary of the Borrowers other than a Subsidiary that is not a Borrower or a Guarantor, (ii) in the case of clause (D), such Liens do not extend to any property or assets that are not being acquired, leased, constructed, repaired, replaced or improved with the proceeds of such Indebtedness being incurred pursuant to clause (D) (or the indebtedness refinanced thereby) or sold in the applicable sale and lease back transaction and accessions and additions thereto, proceeds and products thereof, customary security deposits and related property; provided, that individual financings provided by one lender may be cross-collateralized to other financings provided by such lender (and its Affiliates) (it being understood that with respect to any Liens on the Collateral being incurred under this clause (C)(ii) to secure Refinancing Indebtedness, if Liens on the Collateral securing the Indebtedness being refinanced (if any) constituted Junior Lien Obligations, then any Liens on such Collateral being incurred under this clause (C)(ii) to secure Refinancing Indebtedness shall also constitute Junior Lien Obligations), (iii) in the case of clause (P), such Liens securing Indebtedness Incurred pursuant to clause (P) shall only be permitted under this clause (C) if such Liens secure Indebtedness not created or Incurred in connection with, or in contemplation of, the acquisition and only extend to the property or assets acquired in such acquisition (and accessions and additions thereto and proceeds and products thereof)), and (iv) in the case of clause (W), it being understood that with respect to any Liens on the Collateral being incurred under this clause (C)(iv) to secure Refinancing Indebtedness, if Liens on the Collateral securing the Indebtedness being refinanced (if any) constituted Junior Lien Obligations, then any Liens on such Collateral being incurred under this clause (C)(iv) to secure Refinancing Indebtedness shall also constitute Junior Lien Obligations;
(7) Liens existing on the Effective Date and disclosed on Schedule 7.02(a) hereto (other than Liens in favor of the Secured Parties under this Agreement);
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(8) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary of the Borrower; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary of the Borrower; provided, further, however, that such Liens may not extend to any other property owned by the Borrowers or any Subsidiary of the Borrowers (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(9) Liens on assets or property at the time the Borrowers or any Subsidiary of the Borrowers acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Borrowers or any Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other property owned by the Borrowers or any Subsidiary of the Borrowers (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(10) [reserved];
(11) Liens (i) on not more than $2,000,000 of deposits securing Hedging Obligations entered into for non-speculative purposes and (ii) on cash or Cash Equivalents securing Hedging Obligations in the ordinary course of business submitted for clearing in accordance with applicable Requirements of Law;
(12) Liens by the Borrowers or any Subsidiary of the Borrowers on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit, bank guarantee or bankers’ acceptance issued or created for the account of the Borrowers or any Subsidiary of the Borrowers in the ordinary course of business; provided, that such Lien secures only the obligations of the Borrowers or such Subsidiaries in respect of such letter of credit, bank guarantee or banker’s acceptance to the extent permitted under this Agreement;
(13) leases and subleases not constituting Capitalized Lease Obligations of real property not material to the conduct of any business line of the Borrowers or any Subsidiary of the Borrowers granted to others in the ordinary course of business that do not materially interfere with the ordinary conduct of the business of the Borrowers or any Subsidiary of the Borrowers;
(14) Liens arising from precautionary Uniform Commercial Code financing statements or consignments entered into in connection with any transaction otherwise permitted under this Agreement;
(15) Liens in favor of a Borrower or any Guarantor;
(16) [reserved];
(17) Liens securing the Obligations;
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(18) licenses of intellectual property and software that are not material to the conduct of any of the business lines of the Borrowers or any Subsidiary of the Borrowers and the value of which does not constitute a material portion of the assets of the Borrowers and their respective Subsidiaries, taken as a whole, respectively, and such license does not materially interfere with the ordinary course of conduct of the business of the Borrowers or any of their Subsidiaries;
(19) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (6), (7), (8), (9), (10), (11), (15), (24) and (32) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Indebtedness being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the applicable Indebtedness described under clauses (6), (7), (8), (9), (10), (11), (15), (24) and (32) of this definition at the time the original Lien became a Permitted Lien under this Agreement, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any underwriting discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement; provided, further, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clause (6)(B) or (6)(C) of this definition, the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (6)(B) or (6)(C) of this definition and not this clause (19) of this definition for purposes of determining the principal amount of Indebtedness outstanding under clause (6)(B) or (6)(C) of this definition; provided, further, however, that any Lien securing any refinancing of any Indebtedness secured by a Lien referred to in clause (32) shall be a junior Lien subject to an Intercreditor Agreement and any Lien securing any refinancing of any Indebtedness referenced to in clause (6)(B) other than Liens securing Indebtedness pursuant to clause (2) of Section 7.02(v)(ii)(A) and the Liens on ABL Priority Collateral securing the ABL Facility and the B. Riley Credit Agreement shall be subordinated to the Liens securing the Obligations on terms acceptable to the Agents and the Required Lenders; provided, further*,* that Liens securing the ABL Facility and the B. Riley Credit Agreement shall be subject to the ABL Intercreditor Agreement;
(20) non-consensual Liens (not incurred in connection with borrowed money) on equipment of any of the Lead Borrower or any of its Subsidiaries not exceeding $5,000,000 in value and granted in the ordinary course of business to any client of the Lead Borrower or such Subsidiary at which such equipment is located;
(21) judgment and attachment Liens not exceeding $15,000,000 in value and not giving rise to an Event of Default;
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(22) Liens arising out of consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
(23) Liens that (i) are contractual rights of set-off (and related pledges) (a) relating to the establishment of depository relations with banks and other financial institutions not given in connection with the issuance of Indebtedness or (b) relating to pooled deposits, sweep accounts, reserve accounts or similar accounts of the Borrowers or any Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrowers or any Subsidiary, including with respect to credit card charge-backs and similar obligations, or (ii) relate to purchase orders and other agreements entered into with customers, suppliers or service providers of the Borrowers or any Subsidiary (a) in the ordinary course of business or (b) in connection with implementation of business optimization programs;
(24) other Liens of the Borrowers or any Subsidiary securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (24) that are at that time outstanding, exceed (i) in the event such Liens incurred under this clause (24) are subordinated to the Liens securing the Obligations on terms acceptable to the Agents and the Required Lenders, $15,000,000 or (ii) otherwise, $1,000,000;
(25) [reserved];
(26) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code in effect in the State of New York or similar provisions in similar codes, statutes or laws in other jurisdictions on items in the course of collection, (ii) attaching to commodity trading accounts, other commodity brokerage accounts or securities incurred in the ordinary course of business, (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, (iv) encumbering customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes, (v) in respect of Third Party Funds or (vi) in favor of credit card companies pursuant to agreements therewith;
(27) Liens disclosed by the Title Insurance Policies delivered on (with respect to any Mortgages delivered on the Effective Date) or subsequent to the Effective Date and any replacement, extension or renewal of any such Lien; provided, that such replacement, extension or renewal Lien shall not cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal; provided, further, that the Indebtedness and other obligations secured by such replacement, extension or renewal Lien are permitted under this Agreement;
(28) any interest or title of a lessor or sublessor under any leases or subleases entered into by the Borrowers or any Subsidiary in the ordinary course of business;
(29) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights;
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(30) Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents under clause (4) of the definition of “Cash Equivalents”;
(31) Liens securing insurance premium financing arrangements; provided, that such Liens are limited to the applicable unearned insurance premiums;
(32) Liens on the Collateral securing Junior Lien Obligations (subject to an Intercreditor Agreement) in an aggregate amount not to exceed $3,000,000; provided, that the Obligations are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien;
(33) Liens on non-Collateral assets in an aggregate amount not to exceed $5,000,000;
(34) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(35) Liens solely on any cash earnest money deposits made by the Borrowers or any of their Subsidiaries in connection with any letter of intent or purchase agreement in respect of any Investment permitted under this Agreement;
(36) Liens to secure cash management services in the ordinary course of business; provided, that such Liens are not incurred in connection with, and do not secure, any borrowings or Indebtedness;
(37) Liens granted by (i) each Exar Originator in favor of Exar SPV and (ii) Exar SPV to the Exar Buyer, in each case, in Receivables Assets, pursuant to the Exar Facility in effect as of the date hereof and solely to the extent that such Lien is in respect of a backup security interest granted in connection with the Exar Facility;
(38) Claims Administration Liens;
(39) Liens on cash and Cash Equivalents on deposit with lenders and affiliates of lenders securing obligations owing to such Persons under any treasury, depository, overdraft or other cash management services agreements or arrangements with the Borrowers or any of their Subsidiaries; and
(40) in the case of real property that constitutes a leasehold interest, any Lien to which the fee simple interest (or any superior leasehold interest) is subject.
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“Permitted Securitization Financing” means one or more transactions pursuant to which (a) Securitization Assets or interests therein are sold or transferred to or financed by one or more Special Purpose Securitization Subsidiaries, and (b) such Special Purpose Securitization Subsidiaries finance (or refinance) their acquisition of such Securitization Assets or interests therein, or the financing thereof, by selling or borrowing against Securitization Assets, and any Hedging Obligations entered into in connection with such Securitization Assets; provided, that, recourse to the Borrowers or any Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to the extent customary (as determined by the Borrowers in good faith) for similar transactions in the applicable jurisdictions (including, to the extent applicable, in a manner consistent with the delivery of a “true sale”/“absolute transfer” opinion with respect to any transfer by the Borrowers or any Subsidiary (other than a Special Purpose Securitization Subsidiary)), it being understood and agreed that such transactions may be either on-balance sheet or off-balance sheet arrangements; provided, further, that, Permitted Securitization Financings shall be limited such that, at the time of incurrence of such securitization financings, the sum of the maximum amount of indebtedness that could be outstanding at any time under the ABL Facility, the B. Riley Credit Agreement, the Exar Facility and all Permitted Securitization Financings then in effect shall not exceed 90% of the Receivables Assets as of the most recent date for which financial statements have been delivered to the Administrative Agent immediately preceding the date on which such securitization financings Incurred.
“Permitted Specified Liens” means Permitted Liens described in clauses (2), (3), and (17) of the definition of Permitted Liens, and, solely in the case of Section 7.01(b)(i), including clauses (2), (5) and (28) of the definition of Permitted Liens.
“Person” means an individual, corporation, limited liability company, unlimited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.
“Platform” has the meaning specified therefor in Section 12.20.
“Post-Default Rate” means (a) with respect to a principal of a Loan, a rate of interest per annum equal to the rate of interest otherwise in effect from time to time therefor pursuant to the terms of this Agreement plus 2.00%, or (b) otherwise interest at the highest rate specified herein for any Loan then outstanding prior to an Event of Default plus 2.00%.
“PPSA” means the Personal Property Security Act (Ontario) (or any successor statute) and the regulations thereunder; provided that if validity, perfection and effect of perfection and non-perfection and opposability of the Collateral Agent’s Lien in any Collateral are governed by the personal property security laws of any Canadian jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code of Quebec) of such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.
“Pre-Opening Expenses” means, with respect to any fiscal period, the amount of expenses (other than interest expense) incurred with respect to facilities which are classified as “pre-opening expenses” (or any similar or equivalent caption) on the applicable financial statements of the Borrowers and their respective Subsidiaries for such period, prepared in accordance with GAAP.
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“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.
“Prepayment Conditions” means the “Payment Conditions” (as defined in the ABL Credit Agreement (as in effect on the date of such calculation; provided, that the prepayment condition shall be no more restrictive than the Prepayment Condition on the date hereof)); provided, further, that, (i) for purposes of the calculation of the ratio thereunder, such ratio shall be determined on a pro forma basis (including a pro forma application of the prepayment and Equity Issuance (if applicable)) and (ii) for purposes of the Excess Availability (as defined in the ABL Credit Agreement) any required period shall be with respect to the date of such prepayment.
Upon request by the Administrative Agent in connection with a voluntary or mandatory prepayment by the Borrowers under Section 2.05(b), (c)(i), or (c)(iii), the Borrowers shall provide an officer’s certificate to the Administrative Agent, certifying that the Prepayment Conditions have been met (upon which the Administrative Agent may conclusively rely without further inquiry).
After the Discharge of ABL Obligations (in respect of the ABL Obligations existing on the Effective Date under the ABL Credit Agreement, and not any refinancing thereof), the Prepayment Conditions shall no longer apply for purposes of this Agreement (including, without limitation, with respect to any prepayment hereunder).
“Prepetition Financing Agreement” means that certain term financing agreement, dated as of July 11, 2023 (as amended, supplemented or otherwise modified on or prior to the date hereof), by and among the Borrowers, the guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, in its capacities as administrative agent and collateral agent.
“Pro Rata Share” means, with respect to:
(a) a Lender’s obligation to make the Term Loan or be deemed to make the Term Loan, and the right to receive payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing (i) such Lender’s Term Loan Commitment, by (ii) the Total Term Loan Commitment, provided, that if the Total Term Loan Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan and the denominator shall be the aggregate unpaid principal amount of the Term Loan, and
(b) all other matters (including, without limitation, the indemnification obligations arising under Section 10.05), the percentage obtained by dividing (i) the unpaid principal amount of such Lender’s portion of the Term Loan, by (ii) the sum of the aggregate unpaid principal amount of the Term Loan.
“Public Lender” has the meaning specified therefor in Section 12.20.
“Public Reporting Entity” has the meaning specified therefor in Section 7.01(a)(ii).
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“Qualified Equity Interests” means, with respect to any Person, all Equity Interests of such Person that are not Disqualified Stock.
“Rating Agency” means (1) each of Moody’s and S&P (and their respective successors and assigns) and (2) if Moody’s or S&P ceases to rate the Exit Notes for reasons outside of the Borrower’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act selected by the Borrowers or any direct or indirect parent of the Borrowers as a replacement agency for Moody’s or S&P, as the case may be.
“Real Property Deliverables” means each of the following agreements, instruments and other documents in respect of each Facility, each in form and substance reasonably satisfactory to the Collateral Agent and the Required Lenders:
(a) a Mortgage duly executed by the applicable Loan Party,
(b) evidence of the recording of each Mortgage in such office or offices as may be necessary or, in the reasonable opinion of the Collateral Agent or the Required Lenders, desirable to perfect the Lien purported to be created thereby or to otherwise protect the rights of the Secured Parties thereunder;
(c) a Title Insurance Policy or bring-down of the existing Title Insurance Policy with respect to each Mortgage;
(d) a current ALTA survey and a surveyor’s certificate, certified to the Collateral Agent and to the issuer of the Title Insurance Policy with respect thereto by a professional surveyor licensed in the state in which such Facility is located and reasonably satisfactory to the Collateral Agent and the Required Lenders;
(e) in the case of a leasehold interest, (i) a certified copy of the Lease between the landlord and such Person with respect to such real property in which such Person has a leasehold interest, and the certificate of occupancy with respect thereto, and (ii) an attornment and nondisturbance agreement between the landlord (and any fee mortgagee) and the applicable Loan Party with respect to such leasehold interest and the Collateral Agent, in form and substance satisfactory to the Collateral Agent and the Required Lenders;
(f) a zoning report issued by a provider reasonably satisfactory to the Collateral Agent and the Required Lenders or a copy of each letter issued by the applicable Governmental Authority, evidencing each Facility’s compliance with all applicable Requirements of Law, together with a copy of all certificates of occupancy issued with respect to each Facility;
(g) an opinion of counsel, satisfactory to the Collateral Agent and the Required Lenders, in the state where such Facility is located with respect to the enforceability of the Mortgage to be recorded and such other matters as the Collateral Agent or the Required Lenders may reasonably request;
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(h) a Phase I Environmental Site Assessment prepared in accordance with the United States Environmental Protection Agency Standards and Practices for “All Appropriate Inquiries” under Section 101(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act as referenced in 40 CFR Part 312 and ASTM E-1527-13 “Standard Practice for Environmental Assessments” “Phase I ESA” (and if reasonably requested by the Collateral Agent or the Required Lenders based upon the results of such Phase I ESA, a Phase II Environmental Site Assessment), by a nationally-recognized environmental consulting firm, reasonably satisfactory to the Collateral Agent and the Required Lenders; and
(i) such other agreements, instruments, appraisals and other documents (including guarantees and opinions of counsel) as the Collateral Agent or the Required Lenders may reasonably require.
“Receivables Assets” means accounts receivable (including any bills of exchange) from time to time originated, acquired or otherwise owned by the Borrowers or any Subsidiary and all right, title and interests in and to (i) all security interests or liens securing payment of such accounts receivable, (ii) any obligations supporting such accounts receivable, including all guarantees, insurance and other agreements or arrangements supporting or securing payment of such accounts receivable, (iii) all books and records relating to such accounts receivables and the related obligor and (iv) all payments and collections with respect to, and other proceeds of, such accounts receivable.
“Recipient” means any Agent or any Lender, as applicable.
“Reference Rate” means, for any period, the greatest of (a) 4.00% per annum, (b) the Federal Funds Rate plus 0.50% per annum, (c) Term SOFR (which rate shall be calculated based upon an Interest Period of 1 month and shall be determined on a daily basis) plus 1.00% per annum, and (d) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent) (the “Prime Rate”). Each change in the Reference Rate shall be effective from and including the date such change is publicly announced as being effective.
“Reference Rate Loan” means each portion of a Loan that bears interest at a rate determined by reference to the Reference Rate.
“Reference Rate Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Register” has the meaning specified therefor in Section 12.07(f).
“Registered Intellectual Property” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.
“Registered Loans” has the meaning specified therefor in Section 12.07(f).
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“Regulation T”, “Regulation U”, and “Regulation X” mean, respectively, Regulation T, U and X of the Board or any successor, as the same may be amended or supplemented from time to time.
“Related Fund” means, with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and their respective direct and indirect equityholders, partners, directors, officers, employees, agents (including sub-agents and co-agents), consultants, trustees, administrators, managers, members, attorneys, attorneys-in-fact, advisors and representatives of such Person and of such Person’s Affiliates.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in any environmental media, including the indoor or outdoor air, soil, surface or ground water, sediments or property.
“Remedial Action” means any action (a) to correct, mitigate, or address any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, or (b) to clean up, remove, remediate, mitigate, abate, contain, treat, monitor, assess, evaluate, investigate, prevent, minimize or in any other way address any environmental condition or the actual, alleged or threatened presence, Release or threatened Release of any Hazardous Materials (including the performance of pre-remedial studies and investigations and post-remedial operation and maintenance activities).
“Reportable Event” means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).
“Required Lenders” means a Lender or Lenders whose Pro Rata Shares (calculated in accordance with clause (b) of the definition thereof) aggregate at least 50.1%; provided, that, to the extent set forth in Section 12.02, whenever there are one or more Defaulting Lenders, the total outstanding principal amount of the Term Loans and unused Term Commitments of each Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Required Supermajority Lenders” means a Lender or Lenders whose Pro Rata Shares (calculated in accordance with clause (b) of the definition thereof) aggregate at least 66.67%; provided, that, to the extent set forth in Section 12.02, whenever there are one or more Defaulting Lenders, the total outstanding principal amount of the Term Loans and unused Term Commitments of each Defaulting Lender shall be excluded for purposes of making a determination of Required Supermajority Lenders.
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“Required Prepayment Date” has the meaning specified therefor in Section 2.05(g).
“Requirements of Law” means, with respect to any Person, collectively, the common law and any and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities), and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Restricted Cash” means (i) cash and Cash Equivalents held by Subsidiaries of the Borrowers that would appear as “restricted” on a consolidated balance sheet of the Borrowers or any of their respective Subsidiaries and (ii) cash and Cash Equivalents not available to be distributed to the Borrowers or a Subsidiary thereof (other than a Special Purpose Securitization Subsidiary) from issuers of Permitted Securitization Financings.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Payments” has the meaning specified therefor in Section 7.02(h).
“Restructuring Plan” means the Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code, attached to the Confirmation Order as Exhibit A, and all exhibits, supplements, appendices, and schedules thereto, as may be altered, amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
“S&P” means S&P Global Ratings or any successor to the rating agency business thereof.
“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by the Borrowers or a Subsidiary whereby the Borrowers or such Subsidiary transfers such property to a Person and the Borrowers or such Subsidiary leases it from such Person, other than leases between the Borrowers and a Subsidiary or between Subsidiaries.
“Sanctioned Country” means, at any time, a country or territory that is the subject or target of any Sanctions that broadly prohibit dealings with that country or territory (which, as of the Effective Date, include Crimea, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in OFAC’s Specially Designated Nationals and Blocked Persons List, OFAC’s Sectoral Sanctions Identification List, any Person that is a “designated person”, “politically exposed foreign person” or “terrorist group” as described in any Canadian Economic Sanctions and Export Control Laws, and any other Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, or His Majesty’s Treasury of the United Kingdom, Germany, Canada, Australia, or other relevant sanctions authority, (b) a Person that resides in, is organized in or located in, or has a place of business in, a country or territory named on any list referred to in clause (a) of this definition or a country or territory that is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through any such jurisdiction (each of the foregoing in this clause (b), a “Sanction Target”), or a Person that owns 50% or more of the Equity Interests of, or is otherwise controlled by, or is acting on behalf of, one or more Sanction Targets, (c) any Person with whom or with which a U.S. Person is prohibited from dealing under any of the Sanctions, or (d) any Person owned or controlled by any Person or Persons described in clause (a) or (b).
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“Sanctions” means Requirements of Law concerning or relating to economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by OFAC, the U.S. Department of State, the government of Canada, the European Union, or His Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.
“Secured Indebtedness” means any Consolidated Total Indebtedness secured by a Lien.
“Secured Parties” means, collectively, the Agents the Lenders, and each co-agent, sub-agent and attorney-in-fact appointed by any Agent from time to time pursuant to Section 10.02.
“Securities Act” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same shall be in effect from time to time.
“Securitization” has the meaning specified therefor in Section 12.07(l).
“Securitization Assets” means any of the following assets (or interests therein) from time to time originated, acquired or otherwise owned by the Borrowers or any Subsidiary or in which the Borrowers or any Subsidiary has any rights or interests, in each case, without regard to where such assets or interests are located: (1) Receivables Assets and (2) any Equity Interests of any Special Purpose Securitization Subsidiary or any Subsidiary of a Special Purpose Securitization Subsidiary and any rights under any limited liability company agreement, trust agreement, shareholders agreement, organizational or formation documents or other agreement entered into in furtherance of the organization of such entity.
“Security Agreement” means the Pledge and Security Agreement, dated as of the date hereof, made by each Loan Party in favor of the Collateral Agent, for the benefit of the Secured Parties securing the Obligations in accordance with the terms thereof.
“Senior Leverage Ratio” means, with respect to any Person and its Subsidiaries for any period, the ratio of (a) Indebtedness of such Person and its Subsidiaries constituting Obligations as of such date of calculation (determined on a consolidated basis in accordance with GAAP) to (b) Covenant Consolidated EBITDA of such Person and its Subsidiaries for such period.
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“Senior Secured Leverage Calculation Date” has the meaning assigned in the “Senior Secured Leverage Ratio” definition.
“Senior Secured Leverage Ratio” means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Subsidiaries constituting Obligations hereunder, Notes Obligations (as defined in the Exit Notes Indenture), obligations in respect of the ABL Facility and obligations under the B. Riley Credit Agreement, in each case as of such date of calculation (determined on a consolidated basis in accordance with GAAP), less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Subsidiaries and held by such Person and its Subsidiaries as of such date of determination to (ii) Consolidated EBITDA of such Person for the four full fiscal quarters for which financial statements have been delivered to the Administrative Agent immediately preceding such date on which such additional Indebtedness is Incurred. In the event that the Borrowers or any Subsidiary Incurs, repays, repurchases or redeems any Indebtedness subsequent to the commencement of the period for which the Senior Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Senior Secured Leverage Ratio is made (the “Senior Secured Leverage Calculation Date”), then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Lead Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in an Officer’s Certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided, that for all purposes of determining Consolidated EBITDA hereunder adjustments for operating expense reductions and other operating improvements, synergies or cost savings shall not be more than 20% of Consolidated EBITDA for the most recently ended four fiscal quarter period (calculated prior to giving effect to such capped adjustments (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Senior Secured Leverage Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight-line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating Consolidated EBITDA for the applicable period.
“Significant Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the Borrowers within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
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“Similar Business” means any business, the majority of whose revenues are derived from (i) the business or activities of the Borrowers and their respective Subsidiaries as of the Effective Date, (ii) any business that is a natural outgrowth or a reasonable extension, development or expansion of any such business or any business similar, reasonably related, incidental, complementary or ancillary to any of the foregoing or (iii) any business that in the Borrowers’ good faith business judgment constitutes a reasonable diversification of business conducted by the Borrowers and their respective Subsidiaries.
“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Borrowing” means, as to any borrowing, the SOFR Rate Loans comprising such borrowing.
“SOFR Deadline” has the meaning specified therefor in Section 2.07(a).
“SOFR Notice” means a written notice substantially in the form of Exhibit E.
“SOFR Option” has the meaning specified therefor in Section 2.07(a).
“SOFR Rate Loan” means a Loan that bears interest at a rate based on Term SOFR, other than pursuant to clause (c) of the definition of “Reference Rate”.
“Solvent” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is not less than the total amount of the liabilities of such Person, (b) the present fair salable 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 existing debts as they become absolute and matured, (c) 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, (d) 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, (e) 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, and (f) with respect to any Canadian Person, such Person is not an “insolvent person” within the meaning of the Bankruptcy and Insolvency Act (Canada).
“Special Purpose Securitization Subsidiary” means (i) a direct or indirect Subsidiary of the Borrowers established in connection with a Permitted Securitization Financing for the acquisition of Securitization Assets or interests therein, and which is organized in a manner (as determined by the Borrowers in good faith) intended to reduce the likelihood that it would be substantively consolidated with the Borrowers or any of its Subsidiaries (other than Special Purpose Securitization Subsidiaries) in the event the Borrowers or any such Subsidiary becomes subject to a proceeding under the Bankruptcy Code (or other Debtor Relief Law) and (ii) any subsidiary of a Special Purpose Securitization Subsidiary.
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“Specified Professional Fees” means the professional fees and expenses of Ropes & Gray LLP, as counsel to the Required Lenders, and Cleary Gottlieb Steen & Hamilton LLP in connection with the Transactions to the extent incurred in connection with the Transactions.
“Spot Rate” means, on any date, as determined by the Administrative Agent, the spot selling rate posted by Reuters on its website for the sale of the applicable currency for Dollars at approximately 11:00 a.m., New York City time, on such date; provided, that if, for any reason, no such spot rate is being quoted, the spot selling rate shall be determined by reference to such publicly available services for displaying exchange rates as may be reasonably selected by the Administrative Agent, or, in the event no such service is selected, such spot selling rate shall instead be the rate reasonably determined by the Administrative Agent as the spot rate of exchange in the market where its foreign currency exchange operations in respect of the applicable currency are then being conducted, at or about 11:00 a.m., New York City time, on the applicable date for the purchase of the relevant currency for delivery two Business Days later; provided, that, the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Administrative Agent does not have a spot rate for any such currency as of the date of determination.
“Sub-Group DIP Lenders” has the meaning set forth in the Restructuring Plan.
“Subordinated Indebtedness” means (a) any Indebtedness provided for under the Exit Notes Indenture and the Exit Notes issued thereunder, (b) with respect to a Borrower, any Indebtedness of such Borrower which is subordinated in right of payment to the Obligations on terms acceptable to the Agents and the Required Lenders, (c) with respect to any Guarantor, any Indebtedness of such Guarantor which is subordinated in right of payment to its Guaranty on terms acceptable to the Agents and the Required Lenders and (d) unsecured Indebtedness.
“Subsidiary” means, with respect to any Person, (1) any corporation, unlimited liability company, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity. Unless otherwise indicated in this Agreement or the context requires otherwise, all references to Subsidiaries shall mean Subsidiaries of the Borrowers.
“Super Senior Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the Loan Parties, the Administrative Agent, the Trustee, the Collateral Agent and the Exit Notes Collateral Agent.
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“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Tax Distributions” means any distributions described in Section 7.02(h)(ii)(L).
“Tax Funding Agreement” means that certain Tax Funding Agreement, dated as of the date hereof, by and among the Exela Technologies BPA, LLC and each of its debtor affiliates, Exela Technologies BPA, LLC, in its capacity as agent, Parent, ETI, GP 3XCV LLC and XCV-STS, LLC.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” means, collectively, (x) the loans made by the Term Loan Lenders to the Borrowers on the Effective Date pursuant to Section 2.01(a)(i) and Section 2.01(a)(ii) (each, an “Effective Date Term Loan”), and (y) any Incremental Term Loan made pursuant to Section 2.14 hereof.
“Term Loan Commitment” means, with respect to each Lender, (x) such Lender’s Initial Cashless Term Commitment and/or Initial Funded Term Commitment, as the case may be, or (y) the commitment of such Lender to make an Incremental Term Loan to the Borrowers in connection with any Incremental Facility Amendment, or, in each case, in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as the same may be terminated or reduced from time to time in accordance with the terms of this Agreement.
“Term Loan Lender” means a Lender with a Term Loan Commitment or a Term Loan.
“Term Loan Obligations” means any Obligations with respect to the Term Loan (including, without limitation, the principal thereof, the interest thereon, and the fees and expenses specifically related thereto).
“Term Priority Collateral” has the meaning set forth in the ABL Intercreditor Agreement.
“Term SOFR” means:
(a) for any calculation with respect to a SOFR Rate Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 4:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day; and
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(b) for any calculation with respect to a Reference Rate Loan on any day, the Term SOFR Reference Rate for a tenor of three (3) months on the day (such day, the “Reference Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 4:00 p.m. (New York City time) on any Reference Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Reference Rate Term SOFR Determination Day;
provided, further, that if Term SOFR as so determined shall ever be less than 4.00%, then Term SOFR shall be deemed to be 4.00%.
“Term SOFR Administrator” means the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its sole discretion).
“Term SOFR Borrowing” means, as to any borrowing, the Loans bearing interest at a rate based on Term SOFR comprising such borrowing.
“Term SOFR Reference Rate” means the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR.
“Third Party Funds” means any accounts or funds, or any portion thereof, received by the Borrowers or any of its Subsidiaries as agent on behalf of third parties in accordance with a written agreement that imposes a duty upon the Borrowers or one or more of its Subsidiaries to collect and remit those funds to such third parties.
“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance satisfactory to the Collateral Agent and the Required Lenders, together with all endorsements made from time to time thereto, issued to the Collateral Agent by or on behalf of a title insurance company selected by or otherwise satisfactory to the Required Lenders, insuring the Lien created by a Mortgage in an amount and on terms and with such endorsements satisfactory to the Collateral Agent and the Required Lenders, delivered to the Collateral Agent.
“Total Assets” means the total consolidated assets of the Borrowers and their respective Subsidiaries, as shown on the most recent balance sheet of the Borrowers calculated on a pro forma basis after giving effect to any subsequent acquisition or disposition of a Person or business.
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“Total Commitment” means the sum of the Total Term Loan Commitment.
“Total Term Loan Commitment” means the sum of the amounts of the Lenders’ Term Loan Commitments.
“Transactions” means the transactions under or pursuant to or contemplated by the Restructuring Plan, including the Restructuring Transactions (as defined in the Restructuring Plan).
“Transfer” has the meaning specified in Section 7.02(c).
“Trustee” means U.S. Bank Trust Company, National Association, as trustee under the Exit Notes Indenture.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Uniform Commercial Code” or “UCC” has the meaning specified therefor in Section 1.04.
“U.S. Government Obligations” means securities that are:
(1) direct obligations of the United States of America denominated in U.S. dollars for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.
“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) 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” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code.
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of 2001 (Title III of Pub. L. 107-56, Oct. 26, 2001) as amended by the USA Patriot Improvement and Reauthorization Act of 2005 (Pub. L. 109-177, March 9, 2006) and as the same may have been or may be further renewed, extended, amended, or replaced.
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“Voting Stock” of any Person as of any date means the Equity Interests of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
“Waivable Mandatory Prepayment” has the meaning specified therefor in Section 2.05(g).
“WARN” has the meaning specified therefor in Section 6.01(p).
“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
“Wholly Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required pursuant to applicable law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
“Withholding Agent” means any Loan Party and the Administrative Agent.
Section 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
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Section 1.03 Certain Matters of Construction.
(a) References in this Agreement to “determination” by any Agent include good faith estimates by such Agent (in the case of quantitative determinations) and good faith beliefs by such Agent (in the case of qualitative determinations). A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders. Any Lien referred to in this Agreement or any other Loan Document as having been created in favor of any Agent, any agreement entered into by any Agent pursuant to this Agreement or any other Loan Document, any payment made by or to or funds received by any Agent pursuant to or as contemplated by this Agreement or any other Loan Document, or any act taken or omitted to be taken by any Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of the Secured Parties. Wherever the phrase “to the knowledge of any Loan Party” or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or any other Loan Document, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained if such officer had engaged in good faith and diligent performance of such officer’s duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Loan Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.
(b) Any reference herein to a merger, consolidation, amalgamation, liquidation, winding up, dissolution, assignment, sale, lease, Investment, disposition, Restricted Payment, conveyance or transfer, or similar term, shall be deemed to apply to a division (whether pursuant to a divisive merger, plan of division, or other comparable event under any jurisdiction’s law) of or by a Person, or an allocation of assets to any Person or series of Persons, as if it were a merger, consolidation, amalgamation, liquidation, winding up, dissolution, assignment, sale, lease, Investment, disposition, Restricted Payment, conveyance or transfer, or similar term, as applicable, to, of or with a separate Person. Any division (whether pursuant to a divisive merger, plan of division, or other comparable event under any jurisdiction’s law) of a Person shall constitute a separate Person hereunder (and each division of any, and such separate Person shall be deemed to have been organized on the first date of its existence by the holders of its stock at such time.
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Section 1.04 Accounting and Other Terms.
(a) Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP. For purposes of determining compliance with any incurrence or expenditure tests set forth in Section 7.01, Section 7.02 and Section 7.03, any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence or expenditure test regulates the aggregate amount outstanding at any time and it is expressed in terms of Dollars, all outstanding amounts originally incurred or spent in currencies other than Dollars shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of any new incurrence or expenditures made under any provision of any such Section that regulates the Dollar amount outstanding at any time). Notwithstanding the foregoing, (i) with respect to the accounting for leases as either operating leases or capital leases and the impact of such accounting in accordance with FASB ASC 842 on the definitions and covenants herein, GAAP as in effect on December 31, 2018 shall be applied, (ii) for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Lead Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded and (iii) with respect to revenue recognition and the impact of such accounting in accordance with FASB ASC 606 on the definitions and covenants herein, GAAP as in effect on December 31, 2017 shall be applied.
(b) All terms used in this Agreement which are defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “Uniform Commercial Code” or the “UCC”) and which are not otherwise defined herein shall have the same meanings herein as set forth therein, provided, that terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute.
Section 1.05 Time References. Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight-saving time, as in effect in New York City on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; provided, however, that with respect to a computation of fees or interest payable to any Secured Party, such period shall in any event consist of at least one full day.
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Section 1.06 Obligation to Make Payments in Dollars. All payments to be made by any Loan Party of principal, interest, fees and other Obligations under any Loan Document shall be made in Dollars in same day funds, and no obligation of any Loan Party to make any such payment shall be discharged or satisfied by any payment other than payments made in Dollars in same day funds.
Section 1.07 Rates.
The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Reference Rate, the Term SOFR Reference Rate or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement) or any relevant adjustments thereto (including any Benchmark Replacement Adjustment), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto (including any Benchmark Replacement Adjustment) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Reference Rate, the Term SOFR Reference Rate, Term SOFR or any other 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 the Reference Rate, the Term SOFR Reference Rate, Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto (including any Benchmark Replacement Adjustment), in each case in a manner adverse to the Borrowers. The Administrative Agent may select information sources or services in its sole discretion to ascertain the Reference Rate, the Term SOFR Reference Rate, Term SOFR or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrowers, any Lender or any other Person 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. Under no circumstances will the Administrative Agent be responsible for selecting or determining any Benchmark Replacement if Term SOFR or any other Benchmark will no longer be available past the Benchmark Replacement Date. No such replacement (including any Benchmark Replacement Conforming Changes) shall affect the Administrative Agent’s own rights, privileges, protections, indemnities, duties or immunities under the Loan Documents or otherwise.
Section 1.08 Exchange Rates.
Principal, interest, reimbursement obligations, fees, and all other amounts payable under this Agreement and the other Loan Documents to the Agents and the other Secured Parties shall be payable in Dollars. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Agreement shall be made in Dollars. For the purpose of such calculations, comparisons, measurements or determinations, amounts or proceeds denominated in other currencies shall be converted to the Equivalent Amount of Dollars on the date of calculation, comparison, measurement or determination. Unless expressly provided otherwise, where a reference is made to a Dollar amount, the amount is to be considered as the amount in Dollars and, therefore, each other currency shall be converted into the Equivalent Amount thereof in Dollars.
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Section 1.09 Quebec Interpretation.
For purposes of the interpretation or construction of this Agreement pursuant to the laws of the Province of Quebec, for purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of any other Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, a "reservation of ownership", “prior claim” and a “resolutory clause,” (f) all references to filing, registering or recording under the PPSA or the UCC shall be deemed to include publication under the Civil Code of Québec, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary,” (k) “construction liens” shall be deemed to include “legal hypothecs in favour of persons having taken part in the construction or renovation of an immovable”, (l) “joint and several” shall be deemed to include “solidary” and “jointly and severally” shall be deemed to include “solidarily” (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “legal title” shall be deemed to include “holding title on behalf of an owner as mandatary or prête-nom”, (p) “easement” shall be deemed to include “servitude”, (q) “priority” shall be deemed to include “prior claim” or "rank", as applicable, (r) “survey” shall be deemed to include “certificate of location and plan”, (s) “fee simple title” and "fee title" shall be deemed to include “right of ownership”, (t) “foreclosure” shall be deemed to include “the exercise of a hypothecary right”, (u) “leasehold interest” shall be deemed to include “valid rights resulting from a lease”, (v) “lease” for personal or movable property shall be deemed to include a “contract of leasing (crédit-bail)”, (x) “deposit account” shall include a “financial account” as defined in Article 2713.6 of the Civil Code of Québec, and (y) “guarantee” and “guarantor” shall include “suretyship” and “surety”, respectively. The parties hereto confirm that it is their wish that this Agreement and any other Loan Document be drawn up in the English language only and that all other documents contemplated hereunder or relating hereto, including notices, shall also be drawn up in the English language only. Les parties aux présentes confirment que c’est leur volontéque cette convention et les autres documents de credit soient rédigés en langue anglaise seulement et que tous les documents,y compris tous avis, envisages par cette convention et les autres documents peuvent être rédigés en langue anglaiseseulement.
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Article II
THELOANS
Section 2.01 Commitments. (a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth:
(i) to give effect to the satisfaction of DIP Claims in the aggregate amount of $10,000,000, and subject to the Cancellation Condition, held by the Sub-Group DIP Lenders in accordance with the Restructuring Plan, each Lender with an Initial Cashless Term Commitment as of the Effective Date shall (i) be automatically deemed to have made an Effective Date Term Loan in Dollars to the Borrowers on the Effective Date in an amount equal to the amount of the Initial Cashless Term Commitment of such Lender and (ii) be bound by the provisions of this Agreement as a Lender hereunder and shall have the obligations of a Lender hereunder by its acceptance of the benefits of this Agreement and the other Loan Documents, and be deemed to have executed and delivered this Agreement, regardless of whether such Lender has executed and delivered a signature page hereto; and
(ii) each Term Loan Lender with an Initial Funded Term Commitment severally agrees to make the Effective Date Term Loan to the Borrowers on the Effective Date, in an aggregate principal amount not to exceed the amount of such Lender’s Initial Funded Term Commitment.
(b) Notwithstanding the foregoing, the aggregate principal amount of the Effective Date Term Loan made on the Effective Date shall not exceed the Total Term Loan Commitment. After giving effect to the deemed funding of Loans pursuant to Section 2.01(a)(i) and the funding of Loans pursuant to Section 2.01(a)(ii) the aggregate outstanding principal amount of Loans shall be $46,000,000. Any principal amount of the Term Loan which is repaid or prepaid may not be reborrowed. For the avoidance of doubt, the Term Loan Commitments of each Lender shall be automatically and permanently reduced to $0 upon the making (or deemed making) of such Lender’s Loans pursuant to Section 2.01(a)(i) and Section 2.01(a)(ii) on the Effective Date.
(c) On the Effective Date, DIP Claims held by the Sub-Group DIP Lenders in an aggregate amount equal to $10,000,000 will automatically be deemed satisfied, compromised, settled, released and discharged in full pursuant to and in accordance with the Restructuring Plan (the “Cancellation Condition”).
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Section 2.02 Making the Loans. (a) The Administrative Borrower shall give the Administrative Agent prior written notice, in substantially the form of Exhibit D hereto (a “Notice of Borrowing”), appropriately completed and executed by an Authorized Officer of the Administrative Borrower, not later than 12:00 noon (New York City time) on the date which is 1 Business Day prior to the date of the proposed Loan (or such shorter period as the Administrative Agent is willing to accommodate from time to time, but in no event later than 12:00 noon (New York City time) on the borrowing date of the proposed Loan). Such Notice of Borrowing shall be irrevocable and shall specify (i) the aggregate principal amount of the proposed Loan, (ii) Borrower’s wiring instructions, (iii) whether the Loan is requested to be a Reference Rate Loan or a SOFR Rate Loan and, in the case of a SOFR Rate Loan, the initial Interest Period with respect thereto, (iv) the use of the proceeds of such proposed Loan, (v) the proposed borrowing date, which must be a Business Day, and, with respect to the Effective Date Term Loan, must be the Effective Date, and (vi) the Administrative Borrower’s wiring instructions. The Administrative Agent and the Lenders may act without liability upon the basis of written notice believed by the Administrative Agent in good faith to be from the Administrative Borrower (or from any Authorized Officer thereof designated in writing purportedly from the Administrative Borrower to the Administrative Agent). Each Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such Notice of Borrowing. The Administrative Agent and each Lender shall be entitled to rely conclusively on any Authorized Officer’s authority to request a Loan on behalf of the Borrowers until the Administrative Agent receives written notice to the contrary. The Administrative Agent and the Lenders shall have no duty to verify the authenticity of the signature appearing on any written Notice of Borrowing.
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable and the Borrowers shall be bound to make a borrowing in accordance therewith. Each Term Loan Lender with an Initial Funded Term Commitment shall make each Loan to be made by it hereunder on the Effective Date by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate from time to time not later than 11:00 a.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to the account specified by the Administrative Borrower in the applicable Notice of Borrowing or, if a borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Term Loan Lenders within 2 Business Days.
(c) (i)All Loans under this Agreement shall be made (or deemed made) by the Lenders simultaneously and proportionately to their Pro Rata Shares of the Total Term Loan Commitment, as the case may be, it being understood that no Lender shall be responsible for any default by any other Lender in that other Lender’s obligations to make (or be deemed to make) a Loan requested hereunder, nor shall the Commitment of any Lender be increased or decreased as a result of the default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder, and each Lender shall be obligated to make (or be deemed to make) the Loans required to be made by it by the terms of this Agreement regardless of the failure by any other Lender.
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Section 2.03 Repayment of Loans; Evidence of Debt.
(a) [Reserved].
(b) Neither the Effective Date Term Loan nor any Incremental Term Loans shall amortize. The outstanding unpaid principal amount of the Term Loan, and all accrued and unpaid interest thereon, shall be due and payable on the earliest of (i) the Final Maturity Date and (ii) the date on which the Term Loan is declared due and payable pursuant to the terms of this Agreement.
(c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain a Register in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(e) The entries made in the Register and accounts maintained pursuant to Section 2.03(c) or Section 2.03(d) shall be prima facie evidence of the existence and amounts of the Obligations recorded therein; provided, that (i) the failure of any Lender or the Administrative Agent to maintain such accounts or such Register or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement and (ii) in the event of any conflict between the entries made in the accounts maintained pursuant to Section 2.03(c) and the Register maintained pursuant to Section 2.03(d), the Register maintained pursuant to Section 2.03(d) shall govern and control.
(f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers shall execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in a form furnished by such Lender and reasonably acceptable to the Administrative Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 12.07) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
Section 2.04 Interest.
(a) [Reserved].
(b) Term Loan. Subject to the terms of this Agreement, at the option of the Administrative Borrower, the Term Loan or any portion thereof shall be either a Reference Rate Loan or a SOFR Rate Loan. Each portion of the Term Loan that is a Reference Rate Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of the Reference Rate Loan until repaid, at a rate per annum equal to the Reference Rate plus the Applicable Margin, and each portion of the Term Loan that is a SOFR Rate Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of the SOFR Rate Loan until repaid, at a rate per annum equal to Term SOFR for the Interest Period in effect for the SOFR Rate Loan (or such portion thereof) plus the Applicable Margin.
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(c) Default Interest. To the extent permitted by law and notwithstanding anything to the contrary in this Section, upon the occurrence and during the continuance of an Event of Default, the principal of, and all accrued and unpaid interest on, all Loans, fees, indemnities or any other Obligations of the Loan Parties under this Agreement and the other Loan Documents, shall bear interest, from the date such Event of Default occurred until the date such Event of Default is cured or waived in writing in accordance herewith, at a rate per annum equal at all times to the Post-Default Rate.
(d) Interest Payment. Interest on each Loan shall be payable in cash (i) in the case of a Reference Rate Loan, monthly, in arrears, on the first Business Day of each month, commencing on the first Business Day of the month following the month in which such Loan is made, (ii) in the case of a SOFR Rate Loan, on the last day of each Interest Period applicable to such Loan, and (iii) in the case of each Loan, at maturity (whether upon the Final Maturity Date, upon demand, by acceleration or otherwise. Interest at the Post-Default Rate shall be payable on demand.
(e) General. All computations of interest and fees for Reference Rate Loans, when based on the Prime Rate, shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days, including the first day but excluding the last day, elapsed. All other computations of interest and fees shall be made on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed.
(f) Conforming Changes. In connection with the use or administration of Term SOFR, 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. The Administrative Agent will promptly notify the Borrowers and the Lenders prior to the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
(g) Canadian Interest Act Disclosure. For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid under any Loan Document is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.
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Section 2.05 Reduction of Commitment; Prepayment of Loans.
(a) Reduction of Commitments.
(i) [Reserved].
(ii) Term Loan. The Total Term Loan Commitment shall terminate at 5:30 p.m. (New York City time) on the Effective Date.
(b) Optional Prepayment.
(i) [Reserved].
(ii) Term Loan. The Borrowers may, at any time and from time to time so long as the Prepayment Conditions are satisfied, upon at least 5 Business Days’ prior written notice by 11:00 a.m. to the Administrative Agent, prepay the principal of the Term Loan, in whole or in part, which written notice shall specify the date (which shall be a Business Day) and amount of such prepayment. Each prepayment made pursuant to this Section 2.05(b)(ii) shall be accompanied by the payment of (A) accrued interest to the date of such payment on the amount prepaid and (B) the Applicable Premium, if any, payable in connection with such prepayment of the Term Loan.
(iii) Termination of Agreement. The Borrowers may, upon at least 30 days prior written notice to the Administrative Agent, terminate this Agreement by paying to the Administrative Agent, in cash, the Obligations in full, including the Applicable Premium.
(c) Mandatory Prepayment.
(i) Subject to the Intercreditor Agreements and satisfaction of the Prepayment Conditions, within ten (10) Business Days after financial statements have been delivered pursuant to Section 7.01(a)(i)(A) (the “ECF Due Date”), but in any event not later than 120 calendar days plus ten (10) Business Days after the end of each Fiscal Year of the Lead Borrower beginning with the Fiscal Year ended December 31, 2026 (the “ECF Trigger Date”), the Borrowers shall prepay an aggregate principal amount of Loans in an amount equal to 25% of Excess Cash Flow for the Fiscal Year covered by such financial statements; provided that such amount shall, at the option of the Lead Borrower, be reduced on a dollar-for dollar basis by the aggregate amount of voluntary principal prepayments (other than prepayments financed with any long-term Indebtedness or any Equity Issuance of the Loans pursuant to Section 2.05(b)), to the extent permitted to be made hereunder and made during such Fiscal Year or, at the option of the Borrower, made during the period following the end of such Fiscal Year and prior to the ECF Due Date (without duplication in the next Fiscal Year). The Borrower shall promptly (and in any event, no later than five (5) Business Days after the ECF Trigger Date) determine whether the Prepayment Conditions will be satisfied on such prepayment date and if the Borrowers determine that, as of the prepayment date, the Prepayment Conditions will not be satisfied, the Borrowers shall deliver a certificate of an Authorized Officer of the Borrowers to the Administrative Agent attaching supporting calculations in respect of the Prepayment Conditions and determining the aggregate principal amount of Loans the Borrowers can prepay in satisfaction of the Prepayment Conditions on a pro forma basis, and such amount shall be prepaid on the date specified above.
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(ii) Subject to the Intercreditor Agreements, immediately upon any Disposition (excluding Dispositions which qualify as Permitted Dispositions) by any Loan Party or its Subsidiaries, the Borrowers shall prepay the outstanding principal amount of the Loans in accordance with Section 2.05(d) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such Dispositions to the extent that the aggregate amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Administrative Agent as a prepayment of the Loans) shall exceed for all such Dispositions $500,000 any Fiscal Year. Nothing contained in this Section 2.05(c)(ii) shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 7.02(c)(ii).
(iii) Subject to the Intercreditor Agreements and solely, with respect to an Equity Issuance, satisfaction of the Prepayment Conditions, upon the issuance or incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), or upon an Equity Issuance (other than any Excluded Equity Issuances), the Borrowers shall prepay the outstanding principal amount of the Loans in accordance with Section 2.05(d) in an amount equal to the Equity and Debt Prepayment Percentage of the Net Cash Proceeds received by such Person in connection therewith. The Borrower shall promptly (and in any event, no later than five (5) Business Days prior to the Equity Issuance) determine whether the Prepayment Conditions will be satisfied on the date of the Equity Issuance and if the Borrowers determine that, as of the date of the Equity Issuance, the Prepayment Conditions will not be satisfied, the Borrowers shall deliver a certificate of an Authorized Officer of the Borrowers to the Administrative Agent attaching supporting calculations in respect of the Prepayment Conditions and determining the aggregate principal amount of Loans the Borrowers can prepay in satisfaction of the Prepayment Conditions on a pro forma basis, and such amount shall be prepaid upon the issuance of such Equity Interests. The provisions of this Section 2.05(c)(iii) shall not be deemed to be implied consent to any such issuance, incurrence or sale otherwise prohibited by the terms and conditions of this Agreement.
(iv) Subject to the Intercreditor Agreements, upon the receipt by any Loan Party or any of its Subsidiaries of (i) any Extraordinary Receipts, the Borrowers shall prepay the outstanding principal amount of the Loans in accordance with Section 2.05(d) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith and (ii) any ETI Litigation Extraordinary Receipts, the Borrowers shall prepay the outstanding principal amount of the Loans in accordance with Section 2.05(d) in an amount equal to 50% of the Net Cash Proceeds received by such Person in connection therewith.
(v) Subject to the Intercreditor Agreements, immediately upon receipt by the Borrowers of the proceeds of any Permitted Cure Equity pursuant to Section 9.02, the Borrowers shall prepay the outstanding principal amount of the Loans in accordance with Section 2.05(d) in an amount equal to 100% of such proceeds.
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(vi) Subject to the Intercreditor Agreements, notwithstanding the foregoing, with respect to Net Cash Proceeds received by any Loan Party or any of its Subsidiaries in connection with a Disposition or the receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards that are required to be used to prepay the Obligations pursuant to Section 2.05(c)(ii) or Section 2.05(c)(iv), as the case may be, up to (x) with respect to Net Cash Proceeds from all such Dispositions, $5,000,000 in the aggregate in any Fiscal Year and (y) with respect to Net Cash Proceeds from all such Extraordinary Receipts, $20,000,000 in the aggregate in any Fiscal Year shall, in each case, not be required to be so used to prepay the Obligations to the extent that such Net Cash Proceeds are used to replace, repair or restore properties or assets (other than current assets) used in such Person’s business, provided, that, (A) no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds, (B) the Administrative Borrower delivers a certificate to the Administrative Agent within 5 days after such Disposition or loss, destruction or taking, as the case may be, stating that such Net Cash Proceeds shall be used to replace, repair or restore properties or assets used in such Person’s business within a period specified in such certificate not to exceed 180 days after the date of receipt of such Net Cash Proceeds (which certificate shall set forth estimates of the Net Cash Proceeds to be so expended and state that no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds), (C) such Net Cash Proceeds are deposited in an account subject to a Control Agreement, and (D) upon the earlier of (1) the expiration of the period specified in the relevant certificate furnished to the Administrative Agent pursuant to clause (B) above or (2) the occurrence of a Default or an Event of Default, such Net Cash Proceeds, if not theretofore so used, shall be used to prepay the Obligations in accordance with Section 2.05(c)(ii) or Section 2.05(c)(iv) as applicable.
(d) Application of Payments. Subject to the Intercreditor Agreements, each prepayment pursuant to subsections (c)(i), (c)(ii), (c)(iii), (c)(iv) and (c)(v) above shall be applied ratably to the outstanding principal balance of the Term Loan, until paid in full. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default, if the Administrative Agent has elected or has been directed by the Required Lenders to so elect, to apply payments in respect of any Obligations in accordance with Section 4.03(b), prepayments required under Section 2.05(c) shall be applied in the manner set forth in Section 4.03(b).
(e) Interest and Fees. Any prepayment made pursuant to this Section 2.05 shall be accompanied by (i) accrued interest on the principal amount being prepaid to the date of prepayment, (ii) any Funding Losses payable pursuant to Section 2.08, (iii) the Applicable Premium, if any, payable in connection with such prepayment of the Loans to the extent required under Section 2.06(b) and (iv) if such prepayment would reduce the amount of the outstanding Loans to zero, such prepayment shall be accompanied by the payment of all other outstanding Obligations.
(f) Cumulative Prepayments. Except as otherwise expressly provided in this Section 2.05, payments with respect to any subsection of this Section 2.05 are in addition to payments made or required to be made under any other subsection of this Section 2.05.
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(g) Waivable Mandatory Prepayments. Anything contained herein to the contrary notwithstanding, in the event that the Borrowers are required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Loans pursuant to Section 2.05(c), not less than 3 Business Days by 11:00 a.m. prior to the date on which the Borrowers are required to make such Waivable Mandatory Prepayment (the “Required Prepayment Date”), the Administrative Borrower shall notify the Administrative Agent in writing of the date on which the Borrowers to make such mandatory prepayment, the amount of such mandatory prepayment, and the basis for such mandatory prepayment and include a reasonably detailed calculation of the amount of such mandatory prepayment. The Administrative Agent will promptly thereafter notify each Lender of the amount of such Lender’s Pro Rata Share of such Waivable Mandatory Prepayment and such Lender’s option to refuse such amount. Each such Lender may exercise such option by giving written notice to the Administrative Borrower and the Administrative Agent of its election to do so on or before 12:00 noon (New York City time) one Business Day prior to the Required Prepayment Date (it being understood that any Lender that does not notify the Administrative Borrower and the Administrative Agent of its election to exercise such option on or before 12:00 noon (New York City time) one Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrowers shall pay to the Administrative Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied (i) in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Lenders that have elected not to exercise such option, to prepay the Loans of such Lenders (which prepayment shall be applied to prepay the outstanding principal amount of the Obligations in accordance with Section 2.05(d)) and (ii) to the extent of any excess, to the Borrowers for working capital and general corporate purposes.
Section 2.06 Fees.
(a) Fee Letter. As and when due and payable under the terms of the Fee Letter, the Borrowers shall pay to the Agents the fees set forth in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
(b) Applicable Premium.
(i) Upon the occurrence of an Applicable Premium Trigger Event, the Borrowers shall pay to the Administrative Agent, for the account of the Lenders in accordance with their Pro Rata Shares, the Applicable Premium.
(ii) Any Applicable Premium payable in accordance with this Section 2.06(b) shall be presumed to be equal to the liquidated damages sustained by the Lenders as the result of the occurrence of the Applicable Premium Trigger Event and the Loan Parties agree that it is reasonable under the circumstances currently existing. THE LOAN PARTIES EXPRESSLY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING APPLICABLE PREMIUM IN CONNECTION WITH ANY ACCELERATION.
(iii) The Loan Parties expressly agree that: (A) the Applicable Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Lenders and the Loan Parties giving specific consideration in this transaction for such agreement to pay the Applicable Premium; (D) the Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this paragraph; (E) their agreement to pay the Applicable Premium is a material inducement to Lenders to provide the Commitments and make the Loans, and (F) the Applicable Premium represents a good faith, reasonable estimate and calculation of the lost profits or damages of the Agents and the Lenders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Agents and the Lenders or profits lost by the Agents and the Lenders as a result of such Applicable Premium Trigger Event.
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(iv) Nothing contained in this Section 2.06(b) shall permit any prepayment of the Loans or reduction of the Commitments not otherwise permitted by the terms of this Agreement or any other Loan Document.
(c) Audit and Collateral Monitoring Fees. The Borrowers acknowledge that pursuant to Section 7.01(f), representatives and advisors of the Agents may visit any or all of the Loan Parties and/or conduct inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations of any or all of the Loan Parties at any time and from time to time. The Borrowers agree to pay (i) $1,500 per day per examiner plus the examiner’s out-of-pocket costs and reasonable expenses incurred in connection with all such visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations and (ii) the cost of all visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations conducted by a third party on behalf of the Agents.
Section 2.07 SOFR Option.
(a) The Borrowers (or the Administrative Borrower on behalf of the Borrowers) may, at any time and from time to time, so long as no Default or Event of Default has occurred and is continuing, elect to have interest on all or a portion of the Loans be charged at a rate of interest based upon Term SOFR (the “SOFR Option”) by notifying the Administrative Agent in writing prior to 11:00 a.m. (New York City time) at least 3 U.S. Government Securities Business Days prior to (or such shorter period as may be agreed by the Administrative Agent) (i) the proposed borrowing date of a Loan (as provided in Section 2.02), (ii) in the case of the conversion of a Reference Rate Loan to a SOFR Rate Loan, the commencement of the proposed Interest Period or (iii) in the case of the continuation of a SOFR Rate Loan as a SOFR Rate Loan, the last day of the then current Interest Period (the “SOFR Deadline”). Notice of the Borrowers’ election of the SOFR Option for a permitted portion of the Loans and an Interest Period pursuant to this Section 2.07(a) shall be made by delivery to the Administrative Agent of (A) a Notice of Borrowing (in the case of the initial making or deemed making of a Loan) in accordance with Section 2.02 or (B) a SOFR Notice prior to the SOFR Deadline (or such shorter period as may be agreed by the Administrative Agent). Promptly upon its receipt of each such SOFR Notice, the Administrative Agent shall provide a copy thereof to each of the Lenders. Each SOFR Notice shall be irrevocable and binding on the Borrowers.
(b) Interest on SOFR Rate Loans shall be payable in accordance with Section 2.04(d). On the last day of each applicable Interest Period, unless the Borrowers properly have exercised the SOFR Option with respect thereto, the interest rate applicable to such SOFR Rate Loans automatically shall convert to the rate of interest then applicable to Reference Rate Loans of the same type hereunder. At any time that a Default or an Event of Default has occurred and is continuing, the Borrowers no longer shall have the option to request that any portion of the Loans bear interest at Term SOFR and the Required Lenders shall have the right upon written notice to the Administrative Agent and the Administrative Borrower, to convert the interest rate on all outstanding SOFR Rate Loans to the rate of interest then applicable to Reference Rate Loans of the same type hereunder prior to the last day of the then current Interest Period.
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(c) Notwithstanding anything to the contrary contained in this Agreement, the Borrowers (i) shall have not more than five (5) SOFR Rate Loans in effect at any given time, and (ii) only may exercise the SOFR Option for SOFR Rate Loans of at least $500,000 and integral multiples of $100,000 in excess thereof.
(d) The Borrowers may prepay SOFR Rate Loans at any time; provided, however, that in the event that SOFR Rate Loans are prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any mandatory prepayment pursuant to Section 2.05(c) or any application of payments or proceeds of Collateral in accordance with Section 4.03 or Section 4.04 or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, the Borrowers shall indemnify, defend, and hold the Secured Parties and their participants harmless against any and all Funding Losses in accordance with Section 2.08.
Section 2.08 Funding Losses. In connection with each SOFR Rate Loan, the Borrowers shall indemnify, defend, and hold the Secured Parties harmless against any loss, cost, or expense incurred by any Secured Party as a result of (a) the payment of any principal of any SOFR Rate Loan other than on the last day of the Interest Period applicable thereto (including as a result of a Default or an Event of Default or any mandatory prepayment required pursuant to Section 2.05(c)), (b) the conversion of any SOFR Rate Loan other than on the last day of the Interest Period applicable thereto (including as a result of a Default or an Event of Default) or (c) the failure to borrow, convert, continue or prepay any SOFR Rate Loan on the date specified in any Notice of Borrowing, SOFR Notice or prepayment notice delivered pursuant hereto (such losses, costs, and expenses, collectively, “Funding Losses”). Funding Losses shall, with respect to any Secured Party, be deemed to equal the amount reasonably determined by such Secured Party to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such SOFR Rate Loan had such event not occurred, at the Term SOFR that would have been applicable thereto, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Secured Party would be offered were it to be offered, at the commencement of such period, Dollar deposits of a comparable amount and period in the applicable interbank market. A certificate of a Secured Party setting forth any amount or amounts that such Secured Party is entitled to receive pursuant to this Section 2.08 shall be delivered to the Administrative Borrower and shall be conclusive absent manifest error. The Borrowers shall pay such Secured Party the amount shown as due on any such certificate within 10 days after receipt thereof.
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Section 2.09 Taxes.
(a) Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any and all Taxes, except as required by applicable Requirements of Law. If any applicable Requirements of Law (as determined in the good faith discretion of any Withholding Agent) requires the deduction or withholding of any Taxes from or in respect of any such payment, (i) the applicable Withholding Agent shall make such deduction or withholding, (ii) the applicable Withholding Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Requirements of Law and (iii) if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased by the amount (an “Additional Amount”) necessary such that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 2.09) the applicable Recipient receives the amount equal to the sum it would have received had no such deduction or withholding been made.
(b) In addition, each Loan Party shall pay to the relevant Governmental Authority in accordance with applicable Requirements of Law any Other Taxes, or at the option of any Secured Party timely reimburse it for the payment of any Other Taxes by such Secured Party. Each Loan Party shall deliver to each applicable Secured Party, upon such Secured Party’s request, official receipts (or other evidence of payment reasonably satisfactory to such Secured Party) in respect of any such Taxes or Other Taxes payable hereunder promptly after payment of such Taxes or Other Taxes by such Loan Party.
(c) The Loan Parties hereby jointly and severally indemnify and agree to hold each Secured Party harmless from and against Indemnified Taxes (including, without limitation, Indemnified Taxes imposed on any amounts payable under this Section 2.09) paid or payable by such Secured Party or required to be withheld or deducted from a payment to such Secured Party and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which any such Person makes written demand therefor specifying in reasonable detail the nature and amount of such Indemnified Taxes. A certificate as to the amount of such payment or liability delivered to the Borrowers by a Secured Party (with a copy to the Administrative Agent) or by any Agent on its own behalf or on behalf of another Secured Party shall be conclusive absent manifest error.
(d) (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 2.09(d)(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.
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(ii) Without limiting the generality of the foregoing,
(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 copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B) any Lender that is not a U.S. Person (a “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 reasonably 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:
(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E 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 or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed copies of IRS Form W-8ECI or W-8EXP;
(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal Revenue Code, (x) a certificate substantially in the form of Exhibit 2.09(d)-1 hereto to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or
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(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, , IRS Form W-8EXP, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.09(d)-2 or Exhibit 2.09(d)-3, IRS Form W-9, 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 2.09(d)-4 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 reasonably 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 copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue 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 Internal Revenue 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 Administrative Agent in writing of its legal inability to do so.
(e) Each Lender shall severally indemnify each Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified such Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 12.07(i) 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 such Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by such Agent shall be conclusive absent manifest error. Each Lender hereby authorizes each 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 such Agent to the Lender from any other source against any amount due to such Agent under this paragraph (e).
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(f) 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 2.09 (including by the payment of Additional Amounts pursuant to this Section 2.09), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.09 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) 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.
(g) The Administrative Agent, and any sub-agent and any successor or supplemental Administrative Agent, shall deliver to the Borrowers on or prior to the date on which such Person becomes the Administrative Agent, sub-agent or successor or supplemental Administrative Agent hereunder (and from time to time thereafter upon the reasonable request of a Borrower) an executed copy of its IRS Form W-9. The Administrative Agent and any sub-agent and successor or supplemental Administrative Agent agree 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 in writing of its legal inability to do so.
(h) The agreements in this Section 2.09 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
Section 2.10 Increased Costs and Reduced Return. (a) If any Secured Party shall have determined that any Change in Law shall (i) subject such Secured Party, or any Person controlling such Secured Party to any Tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender, or change the basis of taxation of payments to such Secured Party or any Person controlling such Secured Party of any amounts payable hereunder (except for taxes on the overall net income of such Secured Party or any Person controlling such Secured Party), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrowers shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.
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(b) If any Secured Party shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Secured Party or any Person controlling such Secured Party, and such Secured Party determines that the amount of such capital is increased as a direct or indirect consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party’s or such other controlling Person’s other obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such Secured Party’s or such other controlling Person’s capital to a level below that which such Secured Party or such controlling Person could have achieved but for such circumstances as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party’s or such other controlling Person’s other obligations hereunder (in each case, taking into consideration, such Secured Party’s or such other controlling Person’s policies with respect to capital adequacy), then, upon demand by such Secured Party, the Borrowers shall pay to such Secured Party from time to time such additional amounts as will compensate such Secured Party for such cost of maintaining such increased capital or such reduction in the rate of return on such Secured Party’s or such other controlling Person’s capital.
(c) All amounts payable under this Section 2.10 shall bear interest from the date that is 10 days after the date of demand by any Secured Party until payment in full to such Secured Party at the Reference Rate. A certificate of such Secured Party claiming compensation under this Section 2.10 (with a copy to the Administrative Agent), specifying the event herein above described and the nature of such event shall be submitted by such Secured Party to the Administrative Borrower (with a copy to the Administrative Agent), setting forth the additional amount due and an explanation of the calculation thereof, and such Secured Party’s reasons for invoking the provisions of this Section 2.10, and shall be final and conclusive absent manifest error.
(d) Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section 2.10 shall not constitute a waiver of such Lender’s right to demand such compensation; provided, that the Borrowers shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section 2.10 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Administrative Borrower of the Change in Law giving rise to such increased costs or reductions and of such 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 nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
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(e) The obligations of the Loan Parties under this Section 2.10 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
Section 2.11 Inability to Determine Rates.
(a) Subject to Section 2.13, if Administrative Agent shall have determined in good faith that for any reason adequate and reasonable means do not exist for ascertaining the Term SOFR for any requested Interest Period with respect to a proposed SOFR Rate Loan or that the Term SOFR applicable pursuant to Section 2.04 for any requested Interest Period with respect to a proposed SOFR Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding or maintaining such Loan, Administrative Agent will forthwith give notice of such determination to the Borrowers and each Lender. Thereafter, the obligation of the Lenders to make or maintain SOFR Rate Loans hereunder shall be suspended (to the extent of the affected SOFR Rate Loans or, in the case of a Term SOFR Borrowing, the affected Interest Periods), and in the event of a determination described in the preceding sentence with respect to the Term SOFR component of the Reference Rate, the utilization of the Term SOFR component in determining the Reference Rate shall be suspended, until Administrative Agent revokes such notice in writing. Upon receipt of such notice, the Borrowers may revoke any pending Notice of Borrowing or notice of conversion or continuation of SOFR Rate Loans (to the extent of the affected SOFR Rate Loans or, in the case of a Term SOFR Borrowing, the affected Interest Periods) then submitted by it. If the Borrowers does not revoke such notice, the Lenders shall make, convert or continue the Loans, as proposed by the Borrowers in the amount specified in the applicable notice submitted by the Borrowers but such Loans shall be made, converted or continued as Reference Rate Loans immediately or, in the case of a Term SOFR Borrowing, at the end of the applicable Interest Period.
(b) The obligations of the Loan Parties under this Section 2.11 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
Section 2.12 Illegality. If any Lender determines that any law has made it unlawful or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to SOFR, the Term SOFR Reference Rate or Term SOFR, or to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate or Term SOFR, then, upon notice thereof by such Lender to the Administrative Borrower (with a copy to the Administrative Agent), (a) any obligation of the Lenders to make SOFR Rate Loans, and any right of the Administrative Borrower to continue SOFR Rate Loans or to convert Reference Rate Loans to SOFR Rate Loans, shall be suspended, and (b) the interest rate on which Reference Rate Loans shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (c) of the definition of “Reference Rate”, in each case until such Lender notifies the Administrative Agent and the Administrative Borrower in writing that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Administrative Borrower shall, if necessary to avoid such illegality, upon demand from any Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all SOFR Rate Loans to Reference Rate Loans (the interest rate on which Reference Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (c) of the definition of “Reference Rate”), either on the last day of the Interest Period therefor, if all affected Lenders may lawfully continue to maintain such SOFR Rate Loans to such day, or immediately, if any Lender may not lawfully continue to maintain such SOFR Rate Loans to such day, and (ii) if necessary to avoid such illegality, the Administrative Agent shall during the period of such suspension compute the Reference Rate without reference to clause (c) of the definition of “Reference Rate,” in each case until the Administrative Agent is advised in writing by each affected Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate or Term SOFR. Upon any such prepayment or conversion, the Borrowers shall also pay any additional amounts required pursuant to Section 2.08.
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Section 2.13 Benchmark Replacement Setting.
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, the Administrative Agent and the Administrative Borrower may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. (New York City time) on the fifth (5^th^) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Administrative Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.13(a) will occur prior to the applicable Benchmark Replacement Date.
(b) Benchmark Replacement Conforming Changes. In connection with the 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. The Administrative Agent will promptly notify the Borrowers and the Lenders prior to the effectiveness of any Conforming Changes.
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(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes. The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.13(d). 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 2.13, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.13.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the 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 (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will no longer 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.
(e) Benchmark Unavailability Period. Upon the Administrative Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Administrative Borrower may revoke any pending request for a SOFR Borrowing of, conversion to or continuation of SOFR Rate Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Administrative Borrower will be deemed to have converted any such request into a request for a SOFR Borrowing of or conversion to Reference Rate Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Reference Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Reference Rate.
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(f) [Reserved].
(g) Reserves on SOFR Rate Loans. The Borrowers shall pay to each Lender, as long as such Lender shall be required under regulations of the Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or including SOFR funds or deposits, additional costs on the unpaid principal amount of each SOFR Rate Loan equal to actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), payable on each date on which interest is payable on such Loan provided the Borrowers shall have received at least 15 days’ prior written notice (with a copy to Administrative Agent) of such additional interest from the Lender. If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be payable 15 days from receipt of such notice. Notwithstanding anything to the contrary contained in this Section 2.13(g), Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section 2.13(g) for any additional interest incurred, or relating to Loans made, more than nine (9) months prior to the date that such Lender notifies the Borrowers of the requirement to pay such additional interest (except that, if the requirements under the regulations of the Federal Reserve Board giving rise to such additional interest is retroactive, then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).
Section 2.14 Incremental Facility.
(a) Requests. At any time, the Borrowers may, by written notice to the Administrative Agent (each, an “Incremental Facility Request”), request an increase in the Term Loan Commitments and/or to establish a tranche of new term loans (each, whether or not a separate tranche, an “Incremental Term Loan Commitment” and the loans thereunder, “Incremental Term Loans”; sometimes referred to herein individually as an “Incremental Facility” and collectively as the “Incremental Facilities”) in Dollars in an aggregate amount of up to $10,000,000; provided, that, unless the Administrative Agent otherwise agrees in its sole and absolute discretion, there may be only one drawing of Incremental Facilities following the Effective Date. Such Incremental Facility Request shall set forth (A) the Business Day (an “Incremental Effective Date”) on which such Incremental Facility is requested to become effective (which, unless otherwise agreed by the Administrative Agent, shall not be less than ten (10) Business Days after the date of such notice), (B) the requested amount of the Incremental Term Loan Commitment, and (C) whether the Incremental Term Loans shall initially consist of Reference Rate Loans and/or SOFR Rate Loans and, if the Loans are to include SOFR Rate Loans, the Interest Period to be initially applicable thereto.
(b) Lenders. Incremental Facilities may only be provided by Term Loan Lenders as of the Incremental Effective Date, Affiliates of Term Loan Lender as of the Incremental Effective Date or Related Funds of Term Loan Lender as of the Incremental Effective Date; provided, that no existing Lender will have any obligation to provide all or any portion of such Incremental Facilities. Each lender in connection with an Incremental Facility that is not an existing Lender (which lender, for the avoidance of doubt, shall be an Affiliate of a Lender or Related Fund of a Lender) (such lender, an “Additional Lender”) shall (i) become a Lender under this Agreement pursuant to an amendment (such amendment, an “Incremental Facility Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, such Additional Lender and the Administrative Agent and (ii) deliver to the Administrative Agent, a completed Administrative Questionnaire, all tax forms required under Section 2.09 and all documentation and other information that each Agent reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the USA PATRIOT Act. An Incremental Facility Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.14. The effectiveness of any Incremental Facility Amendment shall, unless otherwise agreed to by the Administrative Agent and the applicable Additional Lenders, be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 2.14(c) below.
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(c) Conditions. No Incremental Facility shall become effective under this Section 2.14 unless, immediately after giving effect to such Incremental Facility, the Loans to be made thereunder (and assuming, that the entire amount of such Incremental Term Loan Commitment is funded), and the application of the proceeds therefrom (including any acquisition or investment consummated in connection therewith):
(i) no Default or Event of Default shall have occurred or be continuing;
(ii) the Loan Parties shall be in pro forma compliance with the financial covenants set forth in Section 7.03 hereof;
(iii) the Administrative Borrower shall have submitted a Notice of Borrowing with respect to such Incremental Facility in the same form contemplated by Section 2.02(a) hereof;
(iv) the representations and warranties contained in Article VI and in each other Loan Document, certificate or other writing delivered to any Secured Party pursuant hereto or thereto on or prior to the date of such Loan are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to materiality or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct on and as of such earlier date),
(v) the Borrowers shall have paid all fees, costs and expenses and taxes then payable by the Borrowers pursuant to this Agreement and the other Loan Documents;
(vi) the Administrative Agent and the Required Lenders shall have provided their written consent to the incurrence of such Incremental Facility;
(vii) the Administrative Agent shall have received a certificate of an Authorized Officer of the Borrowers certifying as to the foregoing and with respect to clause (ii), attaching supporting calculations; and
(viii) the Lenders shall have been afforded a bona fide opportunity to provide a pro rata share of any such Incremental Facility.
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(d) Terms. Unless otherwise agreed by the Administrative Agent in its sole and absolute discretion, the terms of any Incremental Facility (including, without limitation, pricing, upfront and closing fees and final maturity) shall be consistent with the Effective Date Term Loan. The outstanding unpaid principal amount of the Incremental Term Loan shall be due and payable set forth in Section 2.03(b) hereof.
(e) Required Amendments. Each of the parties hereto hereby agrees that, upon the effectiveness of any Incremental Facility, this Agreement may be amended to the extent (but only to the extent, as reasonably determined by the Administrative Agent) necessary to reflect the existence of such Incremental Facility and the Loans evidenced thereby, and any joinder agreement or amendment may without the consent of the 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, to effectuate the provisions of this Section 2.14, and, for the avoidance of doubt, this Section 2.14(e) shall supersede any provisions in Section 12.02. From and after the Incremental Effective Date, the Loans and Commitments established pursuant to this Section 2.14 shall constitute Loans and Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from the guarantees and security interests created by the applicable Loan Documents. The Loan Parties shall take any actions reasonably required by the Collateral Agent to ensure and/or demonstrate that the Liens and security interests granted by the applicable Loan Documents continue to be perfected under the UCC, the PPSA or otherwise after giving effect to the establishment of any such new Loans and Commitments.
Article III
[RESERVED]
Article IV
APPLICATION OF PAYMENTS; DEFAULTING LENDERS;JOINT AND SEVERAL LIABILITY OF BORROWERS
Section 4.01 Payments; Computations and Statements. (a) The Borrowers will make each payment under this Agreement not later than 12:00 noon (New York City time) on the day when due, in lawful money of the United States of America and in immediately available funds, to the Administrative Agent’s Accounts. All payments received by the Administrative Agent after 12:00 noon (New York City time) on any Business Day may, in Administrative Agent’s sole discretion, be deemed received on the next succeeding Business Day. All payments shall be made by the Borrowers without set-off, counterclaim, recoupment, deduction or other defense to the Agents and the Lenders. Except as provided in Section 2.02, after receipt, the Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal ratably to the Lenders in accordance with their Pro Rata Shares and like funds relating to the payment of any other amount payable to any Lender to such Lender, in each case to be applied in accordance with the terms of this Agreement. Whenever any payment to be made under any such Loan Document shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day (unless otherwise provided herein) and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. Each determination by the Administrative Agent of an interest rate or fees hereunder shall be conclusive and binding for all purposes in the absence of manifest error.
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Section 4.02 Sharing of Payments. Except as provided in Section 2.02 hereof, if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in such similar obligations held by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that (a) if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and each Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid by the purchasing Lender in respect of the total amount so recovered and (b) the provisions of this Section shall not be construed to apply to (i) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender and any payment of an amendment, consent or waiver fee to consenting Lenders pursuant to an effective amendment, consent or waiver with respect to this Agreement), or (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to any Loan Party or any Subsidiary thereof (as to which the provisions of this Section shall apply). The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all of its rights (including the Lender’s right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.
Section 4.03 Apportionment of Payments. Subject to Section 2.02 hereof and to any written agreement among the Agents and/or the Lenders:
(a) All payments of principal and interest in respect of outstanding Loans, all payments of fees (other than the fees set forth in Section 2.06 hereof to the extent set forth in any written agreement among the Lenders) and all other payments in respect of any other Obligations, shall be allocated by the Administrative Agent among such of the Lenders as are entitled thereto, in proportion to their respective Pro Rata Shares or otherwise as provided herein or, in respect of payments not made on account of Loans, as designated by the Person making payment when the payment is made.
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(b) After the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and upon the direction of the Required Lenders shall, apply all payments in respect of any Obligations, including without limitation, all proceeds of the Collateral, subject to the provisions of this Agreement, (i) first, ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due and payable to the Agents until paid in full; (ii) second, to pay interest then due and payable in respect of the Collateral Agent Advances until paid in full; (iii) third, to pay principal of the Collateral Agent Advances until paid in full; (iv) fourth, ratably to pay the Specified Professional Fees; (v) fifth, ratably to pay the Term Loan Obligations in respect of any fees (other than any Applicable Premium), expense reimbursements, indemnities and other amounts then due and payable to the Term Loan Lenders until paid in full; (vi) sixth, ratably to pay interest then due and payable in respect of the Term Loan until paid in full; (vii) seventh, ratably to pay principal of the Term Loan until paid in full; (viii) eighth, ratably to pay the Obligations in respect of any Applicable Premium then due and payable to the Lenders until paid in full; and (ix) ninth, to the ratable payment of all other Obligations then due and payable.
(c) For purposes of Section 4.03(b) (other than clause (viii) thereof), “paid in full” means payment in cash of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding, except to the extent that default or overdue interest (but not any other interest) and loan fees, each arising from or related to a default, are disallowed in any Insolvency Proceeding; provided, however, that for the purposes of clause (viii), “paid in full” means payment in cash of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
(d) In the event of a direct conflict between the priority provisions of this Section 4.03 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that both such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of Section 4.03 shall control and govern.
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Section 4.04 Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement, 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:
(a) Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 12.02.
(b) The Administrative Agent shall not be obligated to transfer to such Defaulting Lender any payments made by any Borrower to the Administrative Agent for such Defaulting Lender’s benefit, and, in the absence of such transfer to such Defaulting Lender, the Administrative Agent shall transfer any such payments to each other non-Defaulting Lender ratably in accordance with their Pro Rata Shares (without giving effect to the Pro Rata Shares of such Defaulting Lender) (but only to the extent that such Defaulting Lender’s Loans were funded by the other Lenders) or, if so directed by the Administrative Borrower and if no Default or Event of Default has occurred and is continuing (and to the extent such Defaulting Lender’s Loans were not funded by the other Lenders), retain the same to be re-advanced to the Borrowers as if such Defaulting Lender had made such Loans to the Borrowers. Subject to the foregoing, the Administrative Agent may hold and, in its discretion, re-lend to the Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by the Administrative Agent for the account of such Defaulting Lender.
(c) Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle the Borrowers to replace the Defaulting Lender with one or more substitute Lenders, and the Defaulting Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Defaulting Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given. Prior to the effective date of such replacement, the Defaulting Lender shall execute and deliver an Assignment and Acceptance, subject only to the Defaulting Lender being repaid its share of the outstanding Obligations without any premium or penalty of any kind whatsoever. If the Defaulting Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, the Defaulting Lender shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Defaulting Lender shall be made in accordance with the terms of Section 12.07.
(d) The operation of this Section shall not be construed to increase or otherwise affect the Commitments of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to any Agent or to the Lenders other than such Defaulting Lender.
(e) This Section shall remain effective with respect to such Lender until either (i) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable or (ii) the non-Defaulting Lenders, the Agents, and the Borrowers shall have waived such Defaulting Lender’s default in writing, and the Defaulting Lender makes its Pro Rata Share of the applicable defaulted Loans and pays to the Administrative Agent all amounts owing by such Defaulting Lender in respect thereof; provided, that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting Lender; 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 such Lender’s having been a Defaulting Lender.
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Section 4.05 Administrative Borrower; Joint and Several Liability of the Borrowers.
(a) Each Borrower hereby irrevocably appoints the Lead Borrower as the borrowing agent and attorney-in-fact for the Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until the Agents shall have received prior written notice signed by all of the Borrowers that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide to the Agents and receive from the Agents all notices with respect to Loans obtained for the benefit of any Borrower and all other notices, certificates and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Loans and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Collateral of the Borrowers in a combined fashion, as more fully set forth herein, is done solely as an accommodation to the Borrowers in order to utilize the collective borrowing powers of the Borrowers in the most efficient and economical manner and at their request, and that none of the Secured Parties shall incur liability to the Borrowers as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group.
(b) Each Borrower hereby accepts joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Agents and the Lenders under this Agreement and the other Loan Documents, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations. Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including, without limitation, any Obligations arising under this Section 4.05), it being the intention of the parties hereto that all of the Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them. If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will make such payment with respect to, or perform, such Obligation. Subject to the terms and conditions hereof, the Obligations of each of the Borrowers under the provisions of this Section 4.05 constitute the absolute and unconditional, full recourse Obligations of each of the Borrowers, enforceable against each such Person to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement, the other Loan Documents or any other circumstances whatsoever.
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(c) The provisions of this Section 4.05 are made for the benefit of the Secured Parties and their successors and assigns, and may be enforced by 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 Secured Parties or such successors or assigns 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 4.05 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied.
(d) Each of the Borrowers hereby agrees that it will not enforce any of its rights of contribution or subrogation against the other Borrowers with respect to any liability incurred by it hereunder or under any of the other Loan Documents, or any payments made by it to the Secured Parties with respect to any of the Obligations or any Collateral, until such time as all of the Obligations have been paid in full in cash. Any claim which any Borrower may have against any other Borrower with respect to any payments to the Secured Parties hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations.
Article V
CONDITIONSTO LOANS
Section 5.01 Conditions Precedent to Effectiveness. The effectiveness of this Agreement and the agreement of each Lender to make the initial extension of credit requested to be made (or to be deemed to be made) by it on the Business Day (the “Effective Date”) is subject to the satisfaction (or waiver by the Required Lenders or the Agents, as applicable), prior to or concurrently with the making of such extension of credit on the Effective Date, of the following conditions in a manner satisfactory to the Agents and the Required Lenders:
(a) Payment of Fees, Etc. The Borrowers shall have paid on or before the Effective Date all fees, costs, expenses, and taxes then payable pursuant to the Restructuring Plan, Section 2.06 and Section 12.04 (provided that, on the Effective Date, the Borrowers shall be required to pay to each legal advisor owed Specified Professional Fees a sum equal to (i) a third of the estimated amount of such advisor’s Specified Professional Fees plus (ii) 50% of any amount that is in excess of $25,900,000 retained by the Borrowers on the Effective Date (provided that such excess amount shall not exceed $1,000,000)).
(b) Representations and Warranties; No Event of Default. The following statements shall be true and correct: (i) the representations and warranties contained in Article VI and in each other Loan Document, certificate or other writing delivered to any Secured Party pursuant hereto or thereto on or prior to the Effective Date are true and correct on and as of the Effective Date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct on and as of such earlier date) and (ii) no Default or Event of Default shall have occurred and be continuing on the Effective Date or would result from this Agreement or the other Loan Documents becoming effective in accordance with its or their respective terms.
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(c) Legality. The making of the initial Loans shall not contravene any law, rule or regulation applicable to any Secured Party.
(d) Delivery of Documents. The Administrative Agent and the Lenders (or their respective counsel) shall have received on or before the Effective Date the following, each in form and substance satisfactory to the Agents and the Required Lenders, unless indicated otherwise, dated the Effective Date and, if applicable, duly executed by the Persons party thereto:
(i) a Security Agreement and a Canadian Security Agreement, together with the original stock certificates representing all of the Equity Interests and all promissory notes required to be pledged thereunder, accompanied by undated stock powers executed in blank and other proper instruments of transfer;
(ii) the results of searches for any effective UCC financing statements, PPSA financing statements, filings under the Bank Act (Canada), tax Liens or judgment Liens filed against any Loan Party or its property, which results shall not show any such Liens (other than Permitted Liens acceptable to the Required Lenders);
(iii) a Perfection Certificate;
(iv) the Disbursement Letter;
(v) the Fee Letter;
(vi) the Intercompany Subordination Agreement;
(vii) the Super Senior Intercreditor Agreement;
(viii) the ABL Intercreditor Agreement;
(ix) the Exit Notes Indenture;
(x) the ABL Credit Agreement;
(xi) the B. Riley Credit Agreement;
(xii) the Exar Facility;
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(xiii) a certificate of an Authorized Officer of each Loan Party, certifying (A) as to copies of the Governing Documents of such Loan Party, together with all amendments thereto (including, without limitation, a true and complete copy of the charter, certificate of formation, certificate of limited partnership or other publicly filed organizational document of each Loan Party, in the case of non-Canadian Loan Parties, certified as of a recent date not more than 30 days prior to the Effective Date by an appropriate official of the jurisdiction of organization of such Loan Party which shall set forth the same complete name of such Loan Party as is set forth herein and the organizational number of such Loan Party, if an organizational number is issued in such jurisdiction), (B) the names and true signatures of the representatives of such Loan Party authorized to sign each Loan Document (in the case of a Borrower, including, without limitation, Notices of Borrowing, SOFR Notices and all other notices under this Agreement and the other Loan Documents) to which such Loan Party is or will be a party and the other documents to be executed and delivered by such Loan Party in connection herewith and therewith, together with evidence of the incumbency of such Authorized Officers, (C) resolutions (or equivalent authorization) of the board of directors (or equivalent body) of each Loan Party authorizing, among other things, the execution, delivery and performance of this Agreement, the other Loan Documents and the consummation of the transactions contemplated hereby, (D) in the case of Canadian Loan Parties, a true and correct copy of the shareholders register of such Canadian Loan party, and (E) as to the matters set forth in Section 5.01(b);
(xiv) a certificate of the chief financial officer of the Lead Borrower (A) setting forth in reasonable detail the calculations required to establish compliance, on a pro forma basis after giving effect to the Loans, with the financial covenant contained in Section 7.03(a) (as if the covenants applicable to the fiscal quarter ending September 30, 2025 applied on the Effective Date) and (B) certifying that after giving effect to all Loans to be made on the Effective Date the Liquidity is not less than $2,000,000, (C) certifying that all tax returns required to be filed by the Loan Parties have been filed and all taxes upon the Loan Parties or their properties, assets, and income (including real property taxes and payroll taxes) have been paid, except for those Taxes which will be treated as general unsecured claims in accordance with the Restructuring Plan or otherwise satisfied in the accordance with the Restructuring Plan and (D) setting forth a list of all Subsidiaries which meet the criteria set forth in clause (d) of the definition of Excluded Subsidiaries as of the Effective Date;
(xv) a certificate of the chief financial officer of each Loan Party, certifying that such Loan Party is Solvent (after giving effect to the Loans made on the Effective Date);
(xvi) a certificate of an Authorized Officer of the Administrative Borrower certifying that (A) the attached copies of all Material Contracts as in effect on the Effective Date are true, complete and correct copies thereof and (B) such agreements remain in full force and effect and that none of the Loan Parties has breached or defaulted in any of its obligations under such agreements;
(xvii) a certificate of the appropriate official(s) of the jurisdiction of organization and, except to the extent such failure to be so qualified could not reasonably be expected to have a Material Adverse Effect, each jurisdiction of foreign qualification of each Loan Party certifying as of a recent date not more than 30 days prior to the Effective Date (or, in the case of a Canadian Loan Party, not more than 2 Business Days prior to the Effective Date) as to the subsistence in good standing of, and the payment of taxes by, such Loan Party in such jurisdictions;
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(xviii) opinions of Latham & Watkins LLP, counsel to the Loan Parties, Maynard Nexsen, South Carolina counsel to the Loan Parties, Faegre Drinker Biddle & Reath LLP, Iowa counsel to the Loan Parties, Cox & Palmer, Nova Scotia counsel to the Loan Parties and Gowling WLG (Canada) LLP, Ontario counsel to the Loan Parties, as to such matters as the Agents or the Required Lenders may reasonably request;
(xix) a certificate of an Authorized Officer of the Parent certifying that neither XCV-EMEA, LLC nor BTC Int’l Holdings, Inc. (i) conduct, transact or otherwise engage in any business or operations other than those incidental to its ownership of the Equity Interests of their Subsidiaries, (ii) own any assets (other than the Equity Interests of their respective Subsidiaries, if any, and cash and Cash Equivalents), (iii) incur any Indebtedness (other than intercompany Indebtedness which constitute Permitted Investments hereunder) or (iv) make any Investments;
(xx) the historical Financial Statements requested by the Required Lenders prior to the Effective Date; and
(xxi) such other agreements, instruments, approvals, opinions and other documents, each satisfactory to the Agents and the Required Lenders in form and substance, as any Agent or the Required Lenders may reasonably request.
(e) Material Adverse Effect. The Required Lenders shall have determined, in their sole judgment, that no event or development shall have occurred since the Disclosure Statement Date which could reasonably be expected to have a Material Adverse Effect.
(f) [Reserved].
(g) Approvals. All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person required in connection with the making of the Loans, or the conduct of the Loan Parties’ business, or the consummation of any of the underlying transactions, shall have been obtained and shall be in full force and effect.
(h) Proceedings; Receipt of Documents. All proceedings in connection with the making of the Effective Date Term Loans and the other transactions contemplated by this Agreement and the other Loan Documents, and all documents incidental hereto and thereto, shall be satisfactory to the Agents, the Required Lenders, and their respective counsel, and the Agents, the Required Lenders, and such counsel shall have received all such information and such counterpart originals or certified or other copies of such documents as the Agents, the Required Lenders, or such counsel may reasonably request.
(i) Restructuring Plan Effective Date; Confirmation Order. (i) All conditions precedent to the confirmation and occurrence of the effectiveness of the Restructuring Plan, as set forth in the Restructuring Plan, shall have been satisfied or waived in accordance with the terms thereof, and (ii) effectiveness of the Restructuring Plan shall have occurred (or occur contemporaneously with the Effective Date).
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(j) Due Diligence. The Agents and the Required Lenders shall have completed their business, legal and collateral due diligence with respect to each Loan Party and the results thereof shall be acceptable to the Agents and the Required Lenders, in their sole and absolute discretion.
(k) Security Interests. Other than with respect to the documents and actions set forth in Section 7.01(r), the Loan Documents shall create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable first priority security interest in the Term Priority Collateral and a security interest in the ABL Priority Collateral with the priority set forth in the ABL Intercreditor Agreement, in each case secured thereby (subject only to Permitted Liens).
(l) Litigation. There shall exist no claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or derivative litigation) pending or threatened in any court or before any arbitrator or Governmental Authority which relates to the Loans or which, in the opinion of the Required Lenders, is reasonably likely to be adversely determined, and that, if adversely determined, would reasonably be expected to have a Material Adverse Effect.
(m) Notice of Borrowing. The Administrative Agent shall have received a Notice of Borrowing pursuant to Section 2.02 hereof.
(n) Payment of DIP Claims. The Debtors shall have satisfied all DIP Claims in accordance with the Restructuring Plan (including through (i) the Exit Notes, (ii) the issuance of the Loans and (iii) the Cancellation Condition).
(o) Repayment of Prepetition Indebtedness. The Debtors shall have repaid in full all obligations under the Prepetition Financing Agreement and the Prepetition Securitization Programs (as defined in the Restructuring Plan) (including through the incurrence of the Exar Facility, the B. Riley Credit Agreement and the ABL Facility).
(p) B. Riley Credit Agreement. The Loan Parties covenant and agree to the extent and at the time such Loan Party received a participation interest in the B. Riley Credit Agreement, such participation interest shall be immediately cancelled and extinguished. The aggregate principal amount outstanding under the B. Riley Credit Agreement, after giving effect to the Transactions, shall not exceed $19,750,000.00, and no Affiliate of the Loan Parties that is not a Loan Party shall hold any participation interest of the B. Riley Credit Agreement;
(q) Stock Certificates. The Borrowers shall deliver or cause to be delivered to the Collateral Agent any original stock certificates (or replacement stock certificates to the extent originals cannot be located, together with corresponding affidavits of loss in form and substance reasonably satisfactory to the Collateral Agent), and corresponding stock powers with respect to such Equity Interests.
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For purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed, is deemed to sign, or has authorized the signing of this Agreement shall be deemed to have consented to, approved, accepted or be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Effective Date specifying its objection thereto.
Article VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Loan Party hereby represents and warrants to the Secured Parties as follows:
(a) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and, in the case of the Borrowers, to make the borrowings hereunder, and to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could not reasonably be expected to have a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery and performance by each Loan Party of each Loan Document to which it is or will be a party, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable Requirement of Law or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties, except, in the case of clauses (ii)(B), (ii)(C) and (iv), to the extent where such contravention, default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably be expected to have a Material Adverse Effect.
(c) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of any Loan Document to which it is or will be a party other than filings and recordings with respect to Collateral to be made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Effective Date.
(d) Enforceability of Loan Documents. This Agreement is, and each other Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
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(e) Capitalization. On the Effective Date, after giving effect to the transactions contemplated hereby to occur on the Effective Date, the authorized Equity Interests of the Lead Borrower and each of its Subsidiaries and the issued and outstanding Equity Interests of the Lead Borrower and each of its Subsidiaries are as set forth on Schedule 6.01(e). All of the issued and outstanding shares of Equity Interests of the Lead Borrower and each of its Subsidiaries have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. All Equity Interests of such Subsidiaries of the Lead Borrower are owned by the Lead Borrower free and clear of all Liens (other than Permitted Specified Liens). Except as described on Schedule 6.01(e), there are no outstanding debt or equity securities of the Lead Borrower or any of its Subsidiaries and no outstanding obligations of the Lead Borrower or any of its Subsidiaries convertible into or exchangeable for, or warrants, options or other rights for the purchase or acquisition from the Lead Borrower or any of its Subsidiaries, or other obligations of the Lead Borrower or any of its Subsidiaries to issue, directly or indirectly, any shares of Equity Interests of the Lead Borrower or any of its Subsidiaries.
(f) Litigation. Except as set forth in Schedule 6.01(f), there is no pending or, to the best knowledge of any Loan Party, threatened action, suit or proceeding affecting any Loan Party or any of its properties before any court or other Governmental Authority or any arbitrator that (i) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (ii) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby.
(g) Financial Statements. The Financial Statements, copies of which have been delivered to each Lender, fairly present the consolidated financial condition of the Lead Borrower and its Subsidiaries as at the respective dates thereof and the consolidated results of operations of the Lead Borrower and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP. All material indebtedness and other liabilities (including, without limitation, Indebtedness, liabilities for taxes, long-term leases and other unusual forward or long-term commitments), direct or contingent, of the Lead Borrower and its Subsidiaries are set forth in the Financial Statements. Since the Disclosure Statement Date, no event or development has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
(h) Compliance with Law, Etc. No Loan Party or any of its Subsidiaries is in violation of (i) any of its Governing Documents, (ii) any Requirement of Law, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect, or (iii) any material term of any Contractual Obligation (including, without limitation, any Material Contract) binding on or otherwise affecting it or any of its properties, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect, and no default or event of default has occurred and is continuing thereunder.
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(i) ERISA and Canadian Pensions. Except as set forth on Schedule 6.01(i), (i) each Loan Party and each Employee Plan is in compliance with all Requirements of Law in all material respects, including ERISA, the Internal Revenue Code and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, (ii) no ERISA Event has occurred nor is reasonably expected to occur with respect to any Employee Plan or Multiemployer Plan, (iii) the most recent annual report (Form 5500 Series) with respect to each Pension Plan, including any required Schedule B (Actuarial Information) thereto, copies of which have been filed with the Internal Revenue Service and delivered to the Required Lenders ((or their counsel), is complete and correct and fairly presents the funding status of such Pension Plan, and since the date of such report, there has been no material adverse change in such funding status, (iv) copies of each agreement entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue Service with respect to any Employee Plan have been delivered to the Required Lenders (or their counsel), and (v) each Employee Plan that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Internal Revenue Code and the trust related thereto is exempt from federal income tax under Section 501(a) of the Internal Revenue Code. No Loan Party or any of its ERISA Affiliates has incurred any liability to the PBGC which remains outstanding other than the payment of premiums, and there are no premium payments which have become due which are unpaid. There are no pending or, to the best knowledge of any Loan Party, threatened claims, actions, proceedings or lawsuits (other than claims for benefits in the normal course) asserted or instituted against (A) any Employee Plan or its assets, (B) any fiduciary with respect to any Employee Plan, or (C) any Loan Party or any of its ERISA Affiliates with respect to any Employee Plan. Except as required by Section 4980B of the Internal Revenue Code, no Loan Party or any of its ERISA Affiliates maintains an employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides health benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Party or any of its ERISA Affiliates or has any obligation to provide any such benefits for any current employee after such employee’s termination of employment. All obligations of the Loan Parties (including fiduciary, funding, investment and administration obligations) required to be performed in connection with any Canadian Pension Plan and the funding agreements relating thereto have been performed on a timely basis. All contributions or premiums required to be made or paid by the Loan Parties to any Canadian Pension Plan have been made on a timely basis in accordance with the terms of such plans and all applicable laws. No event has occurred which could cause the loss of registered status of any Canadian Pension Plan. No fact or situation that may reasonably be expected to result in a Material Adverse Effect exists in connection with any Canadian Pension Plan. No Loan Party nor any of its Subsidiaries has any withdrawal liability in connection with a Canadian Pension Plan which could reasonably be expected to have a Material Adverse Effect. No Lien has arisen, choate or inchoate, in respect of any Loan Party or its Subsidiaries or its or their property in connection with any Canadian Pension Plan (save for contribution amounts not yet due). No Loan Party contributes to, sponsors or maintains, or has contributed to, sponsored or maintained (in the last 5 years), a Canadian Defined Benefit Plan. No Canadian Pension Event has occurred or is reasonably likely to occur.
(j) Taxes, Etc. (i) All Tax returns and other reports required by applicable Requirements of Law to be filed by any Loan Party have been timely filed and (ii) all Taxes imposed upon any Loan Party or any property of any Loan Party which have become due and payable on or prior to the date hereof have been paid, except (A) for those Taxes which will be treated as general unsecured claims in accordance with the Restructuring Plan or otherwise satisfied in accordance with the Restructuring Plan, and (B) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof on the Financial Statements in accordance with GAAP.
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(k) Regulations T, U and X. No Loan Party is or will be engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U and X.
(l) Nature of Business.
(i) No Loan Party is engaged in any business other than as set forth on Schedule 6.01(l).
(ii) The Lead Borrower does not have any material liabilities (other than liabilities arising under the Loan Documents), own any material assets (other than the Equity Interests of its Subsidiaries) or engage in any operations or business (other than the ownership of its Subsidiaries).
(m) Adverse Agreements, Etc. No Loan Party or any of its Subsidiaries is a party to any Contractual Obligation or subject to any restriction or limitation in any Governing Document or any judgment, order, regulation, ruling or other requirement of a court or other Governmental Authority, which (either individually or in the aggregate) has, or in the future could reasonably be expected (either individually or in the aggregate) to have, a Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations, including Environmental Permits, required for such Person lawfully to own, lease, manage or operate, or to acquire, each business and Facility currently owned, leased, managed or operated, or to be acquired, by such Person, except to the extent the failure to have or be in compliance therewith could not reasonably be expected to have a Material Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation, including any such Environmental Permit, and there is no claim that any of the foregoing is not in full force and effect.
(o) Properties. Each Loan Party has good and marketable title to, valid leasehold interests in, or valid licenses to use, all property and assets material to its business, free and clear of all Liens, except Permitted Liens. All such properties and assets are in good working order and condition, ordinary wear and tear excepted.
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(p) Employee and Labor Matters. Except as set forth on Schedule 6.01(p), (i) each Loan Party and its Subsidiaries is in compliance with all Requirements of Law in all material respects pertaining to employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health, (ii) no Loan Party or any Subsidiary is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of the employees of any Loan Party of Subsidiary, (iii) there is no unfair labor practice complaint pending or, to the best knowledge of any Loan Party, threatened against any Loan Party or any Subsidiary before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or any Subsidiary which arises out of or under any collective bargaining agreement, (iv) there has been no strike, work stoppage, slowdown, lockout, or other labor dispute pending or threatened against any Loan Party or any Subsidiary, and (v) to the best knowledge of each Loan Party, no labor organization or group of employees has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. No Loan Party or Subsidiary has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar Requirement of Law, which remains unpaid or unsatisfied. All payments due from any Loan Party or Subsidiary on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such Loan Party or Subsidiary except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Environmental Matters. Except as set forth on Schedule 6.01(q) hereto, (i) no Loan Party or any of its Subsidiaries is in violation of any Environmental Law, (ii) each Loan Party and each of its Subsidiaries has, and is in compliance with, all Environmental Permits for its respective operations and businesses, except to the extent any failure to have or be in compliance therewith could not reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iii) there has been no Release or threatened Release of Hazardous Materials on, in, at, under or from any properties currently or formerly owned, leased or operated by any Loan Party, its Subsidiaries or a respective predecessor in interest or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party, its Subsidiaries or any respective predecessor in interest, which in any case of the foregoing could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iv) there are no pending or threatened Environmental Claims against, or Environmental Liability of, any Loan Party, its Subsidiaries or any respective predecessor in interest that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (v) neither any Loan Party nor any of its Subsidiaries is performing or responsible for any Remedial Action that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; and (vi) the Loan Parties have made available to the Required Lenders (or their counsel) true and complete copies of all material environmental reports, audits and investigations in the possession or control of any Loan Party or any of its Subsidiaries with respect to the operations and business of the Loan Parties and its Subsidiaries.
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(r) Insurance. Each Loan Party maintains all insurance required by Section 7.01(h). Schedule 6.01(r) sets forth a list of all such insurance maintained by or for the benefit of each Loan Party on the Effective Date.
(s) Use of Proceeds. The proceeds of (i) the Loans deemed to have been made on the Effective Date pursuant to Section 2.01(a)(i) shall be used to effect the Transactions in accordance with the Restructuring Plan, including to satisfy $10,000,000 of DIP Claims held by the Sub-Group DIP Lenders in exchange for the Initial Cashless Term Commitments, and (ii) the Loans funded on the Effective Date pursuant to Section 2.01(a)(ii) shall be used to make payments and distributions under the Restructuring Plan, to repay in full all obligations under the Prepetition Financing Agreement and to pay fees and expenses in connection with the transactions and for general corporate purposes of the Borrowers and its Subsidiaries not otherwise prohibited by this Agreement.
(t) Solvency. After giving effect to the transactions contemplated by this Agreement and before and after giving effect to each Loan, each Loan Party is, and the Loan Parties on a consolidated basis are, Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.
(u) Intellectual Property. Except as set forth on Schedule 6.01(u), each Loan Party owns or licenses or otherwise has the right to use all Intellectual Property rights that are necessary for the operation of its business, without infringement upon or conflict with the rights of any other Person with respect thereto, except for such infringements and conflicts which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 6.01(u) is a complete and accurate list as of the Effective Date of (i) each item of Registered Intellectual Property owned by each Loan Party; (ii) each material work of authorship owned by each Loan party and which is not Registered Intellectual Property, and (iii) each material Intellectual Property Contract to which each Loan Party is bound. No trademark or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened, except for such infringements and conflicts which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the knowledge of each Loan Party, no patent, invention, industrial design, device, application, principle or any statute, law, rule, regulation, standard or code pertaining to Intellectual Property is pending or proposed, which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
(v) Material Contracts. Each Material Contract (i) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and, to the best knowledge of such Loan Party, all other parties thereto in accordance with its terms, (ii) has not been otherwise amended or modified, and (iii) is not in default due to the action of any Loan Party or, to the best knowledge of any Loan Party, any other party thereto.
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(w) Investment Company Act. None of the Loan Parties is (i) an “investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended, or (ii) subject to regulation under any Requirement of Law that limits in any respect its ability to incur Indebtedness or which may otherwise render all or a portion of the Obligations unenforceable.
(x) Customers and Suppliers. There exists no actual or threatened termination, cancellation or limitation of, or modification to or change in, the business relationship between (i) any Loan Party, on the one hand, and any customer or any group thereof, on the other hand, whose agreements with any Loan Party are individually or in the aggregate material to the business or operations of such Loan Party, or (ii) any Loan Party, on the one hand, and any supplier or any group thereof, on the other hand, whose agreements with any Loan Party are individually or in the aggregate material to the business or operations of such Loan Party; and there exists no present state of facts or circumstances that could give rise to or result in any such termination, cancellation, limitation, modification or change.
(y) Senior Indebtedness, Etc.
(i) The Borrowers have the power and authority to incur the Exit Notes and has duly authorized, executed and delivered the Exit Notes Indenture and the Exit Notes issued thereunder. The Borrowers have issued, pursuant to due authorization, the Exit Notes under the Exit Notes Indenture. The Exit Notes Indenture and the Exit Notes issued thereunder constitutes the legal, valid and binding obligation of the Borrowers enforceable against the Borrowers in accordance with their its terms. All Obligations, including, without limitation, those to pay principal of and interest (including post-petition interest) on the Loans and fees, expenses and indemnities in connection therewith, constitute Senior Indebtedness (as defined in the Super Senior Intercreditor Agreement), and all such Obligations are entitled to the benefits of the subordination created by the Super Senior Intercreditor Agreement. The Borrowers acknowledges that the Agents and the Lenders are entering into this Agreement, and extending their Commitments, in reliance upon the subordination provisions of the Super Senior Intercreditor Agreement and this Section 6.01(y)(i).
(ii) The Loan Parties have the power and authority to incur the each of the ABL Facility and the B. Riley Credit Agreement, and has duly authorized, executed and delivered the ABL Credit Agreement and the B. Riley Credit Agreement. The ABL Credit Agreement and the B. Riley Credit Agreement constitute the legal, valid and binding obligations of the Loan Parties enforceable against the Loan Parties in accordance with their terms. All Obligations, including, without limitation, those to pay principal of and interest (including post-petition interest) on the Loans and fees, expenses and indemnities in connection therewith, constitute Term Obligations (as defined in the ABL Intercreditor Agreement), and all such Obligations are entitled to the benefits of the subordination created by the ABL Intercreditor Agreement with respect to the Term Priority Collateral. The Borrowers acknowledges that the Agents and the Lenders are entering into this Agreement, and extending their Commitments, in reliance upon the subordination provisions of the ABL Intercreditor Agreement and this Section 6.01(y)(ii).
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(z) Sanctions; Anti-Corruption and Anti-Money Laundering Laws. None of any Loan Party, any Subsidiary thereof, any of their respective directors, officers, or employees, shareholders or owners, nor, to the knowledge of any Loan Party, any of their respective agents or Affiliates, (i) is a Sanctioned Person or currently the subject or target of any Sanctions, (ii) has assets located in a Sanctioned Country, (iii) conducts any business with or for the benefit of any Sanctioned Person, (iv) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons, (v) is a “Foreign Shell Bank” within the meaning of the USA Patriot Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision, or (vi) is a Person that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Section 311 or 312 of the USA Patriot Act as warranting special measures due to money laundering concerns. Each Loan Party and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by each Loan Party and its Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Anti-Corruption Laws and Anti-Money Laundering Law. Each Loan Party and each Subsidiary is in compliance with all Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws. Each Loan Party and each Affiliate, officer, employee or director acting on behalf of any Loan Party is (and is taking no action that would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA Patriot Act. In addition, no Loan Party or any Subsidiary is engaged in any kind of activities or business of or with any Person or in any country or territory that is subject to any sanctions administered by OFAC, the United Kingdom, the European Union, Germany, Canada, Australia or the United Nations.
(aa) Anti-Bribery and Corruption.
(i) Neither any Loan Party nor, to the best knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has offered, promised, paid, given or authorized the payment or giving of any money or other thing of value, directly or indirectly, to or for the benefit of any Person, including without limitation, any employee, official or other Person acting on behalf of any Governmental Authority, or otherwise engaged in any activity that may violate any Anti-Corruption Law.
(ii) Neither any Loan Party nor, to the best knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has engaged in any activity that would breach any Anti-Corruption Laws.
(iii) To the best of each Loan Party’s knowledge and belief, there is no pending or, to the best knowledge of any Loan Party, threatened action, suit, proceeding or investigation before any court or other Governmental Authority against any Loan Party or any of its directors, officers, employees or other Person acting on its behalf that relates to a potential violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.
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(iv) The Loan Parties will not directly or indirectly use, lend or contribute the proceeds of the advances for any purpose that would breach the Anti-Bribery and Corruption Laws.
(v) The representations and warranties in Section 6.01(z) and Section 6.01(aa) shall not apply to any Canadian Loan Party, or to any director, officer, agent or employee of such Party, to the extent that they would result in a violation of or conflict with the Foreign Extraterritorial Measures (United States) Order, 1992.
(bb) [Reserved].
(cc) [Reserved].
(dd) [Reserved].
(ee) Pari Passu. The obligations of each Loan Party under this Agreement and the other Loan Documents to which it is a party rank and will rank at least pari passu in priority of payment and in all other respects with all its other present and future unsecured and unsubordinated Indebtedness of such Loan Party.
(ff) [Reserved].
(gg) Full Disclosure. Each Loan Party has disclosed to the Agents all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Agents (other than forward-looking information and projections and information of a general economic nature and general information about Borrowers’ industry) in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which it was made, not misleading.
Article VII
COVENANTS OF THE LOAN PARTIES AND OTHER COLLATERALMATTERS
Section 7.01 Affirmative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, the Borrowers shall and shall cause each of their Subsidiaries and the Lead Borrower to comply with their respective obligations set forth in this Section 7.01, unless the Required Lenders shall otherwise consent in writing:
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(a) Reporting Requirements.
(i) For so long as any Obligations are outstanding, the Borrowers shall deliver to Administrative Agent and each Lender (upon such Lender’s request) a copy of all of the information and reports referred to below (provided, that if the Borrowers do not furnish the information as set forth in clause (iv) below, each Lender will be deemed to have requested to receive such information):
(A) within 15 days after the time period specified in the SEC’s rules and regulations for non-accelerated filers, annual reports of the Public Reporting Entity (as defined below) for such Fiscal Year containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) if the Public Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC;
(B) within 15 days after the time period specified in the SEC’s rules and regulations for non-accelerated filers, quarterly reports of the Public Reporting Entity for such fiscal quarter containing the information that would have been required to be contained in a quarterly report on Form 10-Q (or any successor or comparable form) if the Public Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC; and
(C) within 15 days after the time period specified in the SEC’s rules and regulations for filing current reports on Form 8-K, current reports of the Public Reporting Entity containing substantially all of the information that would be required to be filed in a current report on Form 8-K under the Exchange Act on the Effective Date pursuant to Sections 1, 2 and 4, Items 5.01, 5.02 (a),(b) and (c) and Item 9.01(a) and (b) (only to the extent relating to any of the foregoing) of Form 8-K if the Public Reporting Entity had been a reporting company under the Exchange Act.
Any financial statements provided pursuant to this Section 7.01(a)(A) and Section 7.01(a)(B) shall also include a statement of cash flows.
At the option of the Borrowers, the Borrowers may make available to the Administrative Agent and such requesting Lenders the information required to be provided pursuant to the foregoing clauses (A), (B) and (C), by posting such information to its website (or the website of any of the Borrower’s parent companies, including the Public Reporting Entity) on IntraLinks or any comparable online data system or website to which each Lender and the Administrative Agent have access; provided, that the Borrower shall notify (which may be by electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. If at any time the Borrowers or any direct or indirect parent of the Borrowers has made a good faith determination to file a registration statement with the SEC with respect to an initial public offering of such entity’s Capital Stock, the Borrowers will not be required to disclose any information or take any actions that, in the good faith view of the Borrowers would violate the securities laws or the SEC’s “gun jumping” rules.
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Notwithstanding the foregoing, (A) neither the Borrowers nor another Public Reporting Entity will be required to deliver any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain financial information required by Rule 3- 09, Rule 3-10 or Rule 3-16 of Regulation S-X or include any exhibits or certifications required by Form 10-K, Form 10-Q or Form 8-K (or any successor or comparable forms) or related rules under Regulation S-K and (C) such reports shall not be required to present compensation or beneficial ownership information.
(ii) The financial statements, information and other documents required to be provided as described in Section 7.01(a)(i) may be those of (i) the Borrowers and their respective Subsidiaries (on a combined basis) or (ii) any direct or indirect parent of all of the Borrowers (any such entity, a “Public Reporting Entity”); provided, that, if the financial information so delivered relates to such direct or indirect parent of the Borrowers the same is accompanied by consolidating financial statements (including statements of cash flows) that explain in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Lead Borrower and its Subsidiaries on a standalone basis, on the other hand, for the applicable period. Notwithstanding any of the foregoing herein, to the extent any of the Borrower’s parent companies is subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act, such information described in this paragraph shall be included in the Form 10-K and Form 10-Q reports of the Public Reporting Entity described in Sections 7.01(a)(i)(A) and (B) filed with the SEC.
(iii) In addition, the Borrowers will make such information available to prospective investors upon request. The Borrowers have agreed that, for so long as any Obligations remain outstanding during any period when neither it nor another Public Reporting Entity is subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, they will furnish to Lenders, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(iv) Notwithstanding the foregoing, the Borrowers will be deemed to have delivered such reports and information referred to in this Section 7.01(a) to the Lenders and the Administrative Agent for all purposes of this Agreement if the Borrowers or another Public Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, except as required by the last sentence of Section 7.01(a)(ii), the requirements of this Section 7.01(a) shall be deemed satisfied and the Borrowers will be deemed to have delivered such reports and information referred to this Section 7.01(a) to the Administrative Agent, holders, prospective investors, market makers and securities analysts for all purposes of this Agreement by the posting of reports and information that would be required to be provided on the Borrower’s website (or that of any of the Borrower’s parent companies, including the Public Reporting Entity). The Agents shall have no obligation to monitor whether the Borrowers post such reports, information and documents on the Borrower’s website (or that of any of the Borrower’s parent companies, including the Public Reporting Entity) or the SEC’s EDGAR service, or collect or re-post any such information from the Borrower’s (or any of the Borrower’s parent companies) website or the SEC’s EDGAR service.
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(v) The Borrowers or any Public Reporting Entity will also hold quarterly conference calls, beginning with the first full fiscal quarter ending after the Effective Date, for all Lenders and prospective Lenders to discuss such financial information no later than ten Business Days after the distribution of such information required by clauses (A) or (B) of Section 7.01(a)(i) and, prior to the date of each such conference call, will announce the time and date of such conference call and either include all information necessary to access the call or inform Lenders and prospective Lenders how they can obtain such information, including, without limitation, the applicable password or login information (if applicable).
(vi) [Reserved].
(vii) Simultaneously with the delivery of the financial statements of the Borrowers required by clause (i) of this Section 7.01(a), a Compliance Certificate:
(A) stating that such Authorized Officer has reviewed the provisions of this Agreement and the other Loan Documents and has made or caused to be made under his or her supervision a review of the condition and operations of the Reporting Entities during the period covered by such financial statements with a view to determining whether the Reporting Entities were in compliance with all of the provisions of this Agreement and such Loan Documents at the times such compliance is required hereby and thereby, and that such review has not disclosed, and such Authorized Officer has no knowledge of, the occurrence and continuance during such period of an Event of Default or Default or, if an Event of Default or Default had occurred and continued or is continuing, describing the nature and period of existence thereof and the action which the Reporting Entities propose to take or have taken with respect thereto,
(B) in the case of the delivery of the financial statements of the Reporting Entities required by clauses (i)(A) and (i)(B) of this Section 7.01(a), (1) attaching a schedule showing the calculation of the financial covenants specified in Section 7.03 and (2) including a discussion and analysis of the financial condition and results of operations of the Reporting Entities for the portion of the Fiscal Year then elapsed, and
(C) in the case of the delivery of the financial statements of the Reporting Entities required by clause (i)(A) of this Section 7.01(a), attaching (1) a summary of all material insurance coverage maintained as of the date thereof by any Loan Party or any of its Subsidiaries and evidence that such insurance coverage meets the requirements set forth in Section 7.01, each Security Agreement, each Canadian Security Agreement and each Mortgage, together with such other related documents and information as the Required Lenders may reasonably require and (2) confirmation that there have been no changes to the information contained in each of the Perfection Certificates delivered on the Effective Date or the date of the most recently updated Perfection Certificate delivered pursuant to this clause (vii) and/or attaching an updated Perfection Certificate identifying any such changes to the information contained therein;
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(viii) Promptly after submission to any Governmental Authority, all documents and information furnished to such Governmental Authority in connection with any investigation of any Loan Party other than routine inquiries by such Governmental Authority.
(ix) As soon as possible, and in any event three (3) days after the occurrence of an Event of Default or Default or the occurrence of any event or development that could reasonably be expected to have a Material Adverse Effect, the written statement of an Authorized Officer of the Administrative Borrower setting forth the details of such Event of Default or Default or other event or development having a Material Adverse Effect and the action which the affected Loan Party proposes to take with respect thereto.
(x) As soon as possible and in any event: (A) at least 10 days prior to any event or development that could reasonably be expected to result in or constitute an ERISA Event or a Canadian Pension Event, and, to the extent not reasonably expected, within 5 days after the occurrence of any ERISA Event or a Canadian Pension Event, notice of such ERISA Event or a Canadian Pension Event (in each case, in reasonable detail), (B) within three days after receipt thereof by any Loan Party or any of its ERISA Affiliates from the PBGC, copies of each notice received by any Loan Party or any of its ERISA Affiliates of the PBGC’s intention to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan or Canadian Pension Plan, (C) within 10 days after the filing thereof with (1) the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Pension Plan or Canadian Pension Plan, and (2) any applicable Governmental Authority, copies of each actuarial valuation with respect to each Canadian Pension Plan, (D) three (3) days after receipt thereof by any Loan Party or any of its ERISA Affiliates from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice received by any Loan Party or any of its ERISA Affiliates concerning the imposition or amount of withdrawal liability under Section 4202 of ERISA or indicating that such Multiemployer Plan may enter reorganization status under Section 4241 of ERISA, and (E) within 10 days after any Loan Party sends notice of a plant closing or mass layoff (as defined in WARN) to employees, copies of each such notice sent by such Loan Party.
(xi) Promptly after the commencement thereof but in any event not later than 5 days after service of process with respect thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of each action, suit or proceeding before any court or other Governmental Authority or other regulatory body or any arbitrator which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.
(xii) As soon as possible and in any event within 5 days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with any Material Contract.
(xiii) As soon as possible and in any event within 5 days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with the sale or other Disposition of all of the assets of, any Loan Party.
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(xiv) As soon as possible and in any event within 5 days after the delivery thereof to the Parent’s or the Borrower’s Board of Directors, copies of all reports or other information so delivered.
(xv) Promptly upon receipt thereof, copies of all financial reports (including, without limitation, management letters), if any, submitted to any Loan Party by its auditors in connection with any annual or interim audit of the books thereof.
(xvi) Promptly upon request, any certification or other evidence requested from time to time by any Lender in its sole discretion, confirming the Borrowers’ compliance with Section 7.02(r).
(xvii) Simultaneously with the delivery of the financial statements of the Reporting Entities required by clause (i) of this Section 7.01(a), if, as a result of any change in accounting principles and policies from those used in the preparation of the last delivered financial statements that is permitted by Section 7.02(q), the consolidated financial statements of Reporting Entities required by clause (i) of this Section 7.01(a) will differ from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance satisfactory to the Required Lenders.
(b) Additional Guarantors and Collateral Security. The Borrowers shall cause each Subsidiary that is not an Excluded Subsidiary to:
(i) execute and deliver to the Collateral Agent promptly and in any event within ten (10) Business Days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) the Administrative Agent or the Collateral Agent (in each case acting at the direction of the Required Lenders)) after the formation, acquisition or change in status thereof, (A) a Joinder Agreement, pursuant to which such Subsidiary shall be made a party to this Agreement as a Guarantor, (B) a supplement to the Security Agreement or the Canadian Security Agreement, as applicable, together with (1) certificates evidencing all of the Equity Interests of any Person owned by such Subsidiary required to be pledged under the terms of the Security Agreement or the Canadian Security Agreement, as applicable, (2) undated stock powers for such Equity Interests executed in blank with signature guaranteed, and (3) such opinions of counsel as the Collateral Agent or the Required Lenders may reasonably request, (C) to the extent required under the terms of this Agreement, one or more Mortgages creating on the real property of such Subsidiary a perfected, first priority Lien (in terms of priority, subject only to Permitted Specified Liens) on such real property and such other Real Property Deliverables as may be required by the Collateral Agent or the Required Lenders with respect to each such real property, and (D) such other agreements, instruments, approvals or other documents reasonably requested by the Collateral Agent or the Required Lenders in order to create, perfect, establish the first priority of or otherwise protect any Lien purported to be covered by any such Security Agreement, Canadian Security Agreement or Mortgage or otherwise to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that all property and assets of such Subsidiary shall become Collateral for the Obligations; and
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(ii) cause each owner of the Equity Interests of any such Subsidiary to execute and deliver promptly and in any event within ten (10) Business Days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) the Administrative Agent or the Collateral Agent (in each case acting at the direction of the Required Lenders)) after the formation or acquisition of such Subsidiary a Pledge Amendment (as defined in the Security Agreement or the Canadian Security Agreement, as applicable), together with (A) certificates evidencing all of the Equity Interests of such Subsidiary required to be pledged under the terms of the Security Agreement or the Canadian Security Agreement, as applicable, (B) undated stock powers or other appropriate instruments of assignment for such Equity Interests executed in blank with signature guaranteed, (C) such opinions of counsel as the Collateral Agent or the Required Lenders may reasonably request and (D) such other agreements, instruments, approvals or other documents requested by the Collateral Agent or the Required Lenders.
Notwithstanding the foregoing, no Excluded Subsidiary shall be required to become a Guarantor hereunder (and, as such, shall not be required to deliver the documents required by clause (i) above); provided, however, that (I) if the Equity Interests of a Foreign Subsidiary that is an Excluded Subsidiary are owned by a Loan Party, such Loan Party shall deliver all such documents, instruments, agreements (including, without limitation, at the reasonable request of the Collateral Agent or the Required Lenders, a pledge agreement governed by the laws of the jurisdiction of the organization of such Excluded Subsidiary, in form and substance satisfactory to the Collateral Agent and the Required Lenders) and certificates described in clause (ii) above to the Collateral Agent, and take all commercially reasonable actions reasonably requested by the Collateral Agent or the Required Lenders or otherwise necessary to grant and to perfect a first-priority Lien (subject to Permitted Specified Liens) in favor of the Collateral Agent, for the benefit of the Secured Parties, in 100% of all Equity Interests of such Foreign Subsidiary owned by such Loan Party, and (II) promptly and in any event within 20 days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) the Administrative Agent or the Collateral Agent (in each case acting at the direction of the Required Lenders)) after the effectiveness of any amendment of the Internal Revenue Code to allow for 100% of the voting Equity Interests of such Foreign Subsidiary to be pledged to the Collateral Agent without material adverse tax consequences to the Parent and its Subsidiaries, 100% of such voting Equity Interests shall be pledged pursuant to clause (ii) above.
(c) Compliance with Laws; Payment of Taxes.
(i) Comply, and cause each of its Subsidiaries to comply, in all material respects, with all Requirements of Law, judgments and awards (including any settlement of any claim that, if breached, could give rise to any of the foregoing.
(ii) Pay, and cause each of its Subsidiaries to pay, in full before delinquency or before the expiration of any extension period, all Taxes imposed upon any Loan Party or any of its Subsidiaries or any property of any Loan Party or any of its Subsidiaries, except (i) for those Taxes which will be treated as general unsecured claims in accordance with the Restructuring Plan or otherwise satisfied in accordance with the Restructuring Plan (provided*,* that, for the avoidance of doubt, the Loan Parties shall pay Taxes to the extent required under and in accordance with the Restructuring Plan), and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.
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(d) Preservation of Existence, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except to the extent that the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
(e) Keeping of Records and Books of Account. Keep, and cause each of its Subsidiaries to keep, adequate records and books of account, with complete entries made to permit the preparation of financial statements in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the agents, advisors and representatives of any Agent at any time and from time to time during normal business hours, at the expense of the Borrowers, to examine and make copies of and abstracts from its records and books of account, to visit and inspect its properties, to verify materials, leases, notes, accounts receivable, deposit accounts and its other assets, to conduct audits, physical counts, valuations, appraisals or examinations and to discuss its affairs, finances and accounts with any of its directors, officers, managerial employees, independent accountants or any of its other representatives. In furtherance of the foregoing, each Loan Party hereby authorizes its independent accountants, and the independent accountants of each of its Subsidiaries, to discuss the affairs, finances and accounts of such Person (independently or together with representatives of such Person) with the agents and representatives of any Agent in accordance with this Section 7.01(f).
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear and casualty excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder, except to the extent the failure to so maintain and preserve or so comply could not reasonably be expected to have a Material Adverse Effect.
(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, flood, rent, worker’s compensation and business interruption insurance) with respect to the Collateral and its other properties (including all real property leased or owned by it) and business, in such amounts and covering such risks as is (i) carried generally in accordance with sound business practice by companies in Similar Businesses similarly situated, (ii) required by any Requirement of Law, (iii) required by any Material Contract and (iv) in any event in amount, adequacy and scope reasonably satisfactory to the Required Lenders. All policies covering the Collateral are to be made payable to the Collateral Agent for the benefit of the Secured Parties, as their interests may appear, in case of loss, under a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as the Collateral Agent or the Required Lenders may require to fully protect the Secured Parties’ interest in the Collateral and to any payments to be made under such policies. All certificates of insurance are to be delivered to the Collateral Agent and the policies are to be premium prepaid, with the loss payable and additional insured endorsement in favor of the Collateral Agent for the benefit of the Secured Parties, as their respective interests may appear, and such other Persons as the Collateral Agent may designate from time to time, and shall provide for not less than 30 days’ (10 days’ in the case of non-payment) prior written notice to the Collateral Agent of the exercise of any right of cancellation. If any Loan Party or any of its Subsidiaries fails to maintain such insurance, the Collateral Agent may arrange for such insurance, but at the Borrowers’ expense and without any responsibility on the Collateral Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the sole right, in the name of the Secured Parties, any Loan Party and its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
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(i) Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations that are necessary or useful in the proper conduct of its business, in each case, except to the extent the failure to obtain, maintain, preserve or take such action could not reasonably be expected to have a Material Adverse Effect.
(j) Environmental.
(i) Keep the Collateral free of any Environmental Lien;
(ii) Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all Environmental Permits that are necessary or useful in the proper conduct of its business, and comply, and cause each of its Subsidiaries to comply, with all Environmental Laws and Environmental Permits, except to the extent the failure to so obtain, maintain, preserve or comply could not reasonably be expected to result in a material Environmental Claim or Environmental Liability;
(iii) Take all commercially reasonable steps to prevent any Release or threatened Release of Hazardous Materials in violation of any Environmental Law or Environmental Permit at, in, on, under or from any property owned, leased or operated by any Loan Party or its Subsidiaries that could reasonably be expected to result in material Environmental Liabilities;
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(iv) Provide the Collateral Agent with written notice within ten (10) days of any of the following: (A) discovery of any Release of a Hazardous Material or environmental condition at, in, on, under or from any property currently or formerly owned, leased or operated by any Loan Party, Subsidiary or predecessor in interest or any violation of Environmental Law or Environmental Permit that in any case could reasonably be expected to result in any material Environmental Claim or Environmental Liability; (B) notice that an Environmental Lien has been filed against any Collateral; or (C) a material Environmental Claim or Environmental Liabilities; and provide such reports, documents and information as the Collateral Agent or the Required Lenders may reasonably request from time to time with respect to any of the foregoing.
(k) Fiscal Year. Cause the Fiscal Year of the Parent and its Subsidiaries to end on December 31 of each calendar year unless the Agents and the Required Lenders consent to a change in such Fiscal Year (and appropriate related changes to this Agreement).
(l) [Reserved].
(m) After Acquired Real Property. Promptly, following the acquisition by a Borrower or any Guarantor of any After-Acquired Property, or promptly, following any additional Subsidiary of the Borrowers becoming a Guarantor, such Borrower or such Subsidiary shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and other Collateral Documents as shall be reasonably necessary to vest in the Collateral Agent a perfected first-priority security interest, subject only to Permitted Liens and Liens permitted under Section 7.02(a), in such After-Acquired Property and to have such After-Acquired Property (but subject to the limitations as described in the Collateral Documents) added to the Collateral (or in the case of a Guarantor, all of its assets that constitute After-Acquired Property), and thereupon all provisions of this Agreement relating to the Collateral shall be deemed to relate to such After- Acquired Property to the same extent and with the same force and effect.
(n) Anti-Corruption Laws; Anti-Money Laundering Laws; Sanctions.
(i) Maintain, and cause each of its Subsidiaries to maintain, policies and procedures designed to promote compliance by each Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with all Anti-Corruption Laws and Anti-Money Laundering Laws.
(ii) Comply, and cause each of its Subsidiaries to comply, with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.
(iii) Neither Loan Party nor, to the best knowledge of any Loan Party, any director, officer, employee or any Person acting on behalf of any Loan Party will engage in any activity that would breach any Anti-Corruption Law.
(iv) Promptly notify the Administrative Agent in writing of any action, suit or investigations by any court or Governmental Authority in relation to an alleged breach of the Anti-Corruption Law.
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(v) Not directly or indirectly use, lend or contribute the proceeds of any Loan for any purpose that would breach any Anti-Corruption Law.
(vi) Each Loan Party and Affiliate, officer, employee or director, acting on behalf of the Loan Party is (and will take no action which would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other reasonable internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA Patriot Act. In addition, none of the activities or business of any Loan Party includes any kind of activities or business of or with any Person or in any country or territory that is subject to any Sanctions.
(vii) In order to comply with the “know your customer/borrower” requirements of the Anti-Money Laundering Laws, promptly provide to each Agent and each Lender upon its reasonable request from time to time (A) information relating to individuals and entities affiliated with any Loan Party that maintain a business relationship with such Agent or such Lender, and (B) such identifying information and documentation as may be available for such Loan Party in order to enable any Agent or any Lender to comply with Anti-Money Laundering Laws.
(viii)
(ix) Without limiting the foregoing, the provisions of Section 7.01(n) shall not be interpreted to contravene, or require any notification to the Attorney General of Canada under, the Foreign Extraterritorial Measures Act (Canada) or the Foreign Extraterritorial Measures (United States) Order, 1992 issued thereunder, by any Canadian Loan Party.
(o) [Reserved].
(p) Board Information Rights. The Lenders shall be entitled to receive all information provided to the members of the Board of Directors or any similar group performing an executive oversight or similar function (or any relevant committee thereof) of the Parent (or its direct or indirect ultimate parent holding company) and any of its Subsidiaries in anticipation of or at such meeting (regular or special and whether telephonic or otherwise), in addition to copies of the records of the proceedings or minutes of such meeting, when provided to the members, and the Lenders shall keep such materials and information confidential in accordance with Section 12.19 of this Agreement.
(q) [Reserved].
(r) Post-Effective Date. Satisfy the requirements set forth on Schedule 7.01(r), on or before the date set forth opposite such requirements or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) the Administrative Agent or the Collateral Agent (in each case acting at the direction of the Required Lenders).
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(s) Further Assurances. Take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as any Agent or the Required Lenders may require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected first priority Liens any of the Term Priority Collateral or any other property of any Loan Party and its Subsidiaries and perfected Liens in any of the ABL Priority Collateral with the priority set forth in the ABL Intercreditor Agreement, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Secured Party the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable Requirements of Law, each Loan Party (i) authorizes each Agent to execute any such agreements, instruments or other documents in such Loan Party’s name and to file such agreements, instruments or other documents in any appropriate filing office, (ii) authorizes each Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Loan Party, and (iii) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Loan Party prior to the date hereof.
Section 7.02 Negative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, the Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to do any of the following, unless the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc.
(i) The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (except Permitted Liens) on any asset or property of the Borrowers or such Subsidiary securing Indebtedness of the Borrowers or any of the Borrowers’ Subsidiaries.
(ii) For purposes of determining compliance with this Section 7.02(a), (i) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 7.02(a)(i) but may be permitted in part under any combination thereof and (ii) in the event that a Lien securing an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 7.02(a)(i), the Borrowers may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to only include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or any portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” or pursuant to Section 7.02(a)(i) and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to Section 7.02(a)(i) without giving pro forma effect to such item (or portion thereof) when calculating the amount of Liens or Indebtedness that may be Incurred pursuant to any other clause or paragraph (or portion thereof) at such time. In addition, with respect to any revolving loan Indebtedness or commitment to Incur Indebtedness that is designated to be Incurred on any Deemed Date pursuant to Section 7.02(v)(iii)(C), any Lien that does or that shall secure such Indebtedness may also be designated by the Borrowers or any Subsidiary to be Incurred on such Deemed Date and, in such event, any related subsequent actual Incurrence of such Lien shall be deemed for all purposes under this Agreement to be Incurred on such prior date, including for purposes of calculating usage of any “Permitted Lien” (and any calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith).
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(iii) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of the Borrowers, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of “Indebtedness.”
(b) [Reserved].
(c) Fundamental Changes; Dispositions.
(i) Fundamental Changes.
(A) [Reserved].
(B) Exela Finance may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not Exela Finance is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless Exela Finance is the surviving Person.
(C) No Guarantor shall, and the Borrowers shall not permit any Subsidiary that is a Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless (A) such Guarantor is the surviving Person or (B) such sale or disposition or consolidation, amalgamation or merger is not in violation of Section 7.02(c)(ii).
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Notwithstanding the foregoing, a Subsidiary that is a Guarantor may merge, amalgamate or consolidate with a Borrower or any other Subsidiary that is a Guarantor.
In addition, notwithstanding the foregoing, a Guarantor may consolidate, amalgamate or merge with or into or wind up into, liquidate, dissolve, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a “Transfer”) to the Borrowers or any of the Borrowers’ Subsidiaries that is a Guarantor.
(ii) Dispositions. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to make any Disposition, whether in one transaction or a series of related transactions, of all or any part of its business, property or assets, whether now owned or hereafter acquired (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the foregoing; provided, however, that any Loan Party and its Subsidiaries may make Permitted Dispositions.
(d) Change in Nature of Business.
(i) The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to make, or permit any of its Subsidiaries to make, any change in the nature of its business as described in Section 6.01(l).
(ii) The Borrowers shall not permit the Parent to own material assets (other than the equity interests of its subsidiaries), or engage in operations or business activities, except to the extent such assets, operations, or activities are (A) customary or incidental to the Parent’s status and functions as a publicly traded holding company, including raising capital, administering equity plans, compliance with applicable laws, regulations, and reporting obligations, or (B) related to the ownership, management, or oversight of its subsidiaries.
(e) Loans, Advances, Investments, Etc. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to make or commit or agree to make, or permit any of its Subsidiaries make or commit or agree to make, any Investment in any other Person except for Permitted Investments.
(f) Sale/Leaseback Transactions. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to enter into, or permit any of its Subsidiaries to enter into, any Sale/Leaseback Transaction.
(g) [Reserved].
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(h) Restricted Payments.
(i) The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to, directly or indirectly:
(A) declare or pay any dividend or make any distribution on account of any of the Borrowers or any of its Subsidiaries including any payment made in connection with any merger, amalgamation or consolidation involving the Borrowers (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of the Borrowers; or (B) dividends or distributions by a Subsidiary, so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Subsidiary that is not a Wholly Owned Subsidiary, the Borrowers or a Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities), respectively;
(B) purchase or otherwise acquire or retire for value any Equity Interests of the Borrowers or any direct or indirect parent of the Borrowers;
(C) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of a Borrower or any Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness other than the Exit Notes in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement, (B) the Exit Notes in accordance with the terms of the Super Senior Intercreditor Agreement, (C) the B. Riley Credit Agreement and (D) Indebtedness permitted under clauses (G) and (I) of Section 7.02(v)(ii));
(D) make any Restricted Investment;
(E) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, at maturity thereof or otherwise, any Indebtedness (other than the Loans and the Exit Notes) owed to any Affiliate of the Borrowers that is not a Borrower, a Subsidiary of the Borrowers or a Guarantor; or
(F) [reserved];
(all such payments and other actions set forth in clauses (A) through (E) above being collectively referred to as “Restricted Payments”).
(ii) The provisions of Section 7.02(h)(i) shall not prohibit:
(A) the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such redemption, as applicable, such payment would have otherwise complied with the provisions of this Agreement;
(B) [reserved];
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(C) the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of a Borrower or Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Subordinated Indebtedness of such Borrower or Guarantor, which is Incurred in accordance with Section 7.02(v) so long as:
(1) the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),
(2) such Indebtedness is subordinated to the Obligations or the related Guaranty of such Guarantor, as the case may be, on terms acceptable to the Agents and the Required Lenders, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(3) such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Obligations then outstanding, and
(4) such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Exit Notes then outstanding were instead due on such date;
(D) [reserved];
(E) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Borrowers or any Subsidiary issued or incurred in accordance with Section 7.02(v);
(F) [reserved].
(G) [reserved];
(H) [reserved];
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(I) [reserved];
(J) [reserved];
(K) [reserved];
(L) with respect to any taxable period (or portion thereof) for which the Borrowers and any of their Subsidiaries are members (or are disregarded from a member) of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which Parent is the common parent, dividends or distributions by the Borrowers or such applicable Subsidiaries, as the case may be, to such direct or indirect parent of the Borrowers in an amount not to exceed the lesser of (i) the sum of the amount of the relevant U.S. federal, state, local or foreign income Taxes reduced by any such income Taxes directly paid or withheld at the level of the Borrowers or such Subsidiaries or (ii) the amount of any U.S. federal, state, local or non-U.S. income taxes that the Borrowers and/or its Subsidiaries, as applicable, would have paid for such taxable period (taking into account prior year losses) had the Borrowers and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; provided that distributions pursuant to this clause shall not exceed the actual Tax liability of Parent in respect of the relevant U.S. federal, state, local or non-U.S. income Taxes;
(M) any Restricted Payment in amounts required for any direct or indirect parent of the Lead Borrower to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Lead Borrower and general corporate operating and overhead expenses of any direct or indirect parent of the Lead Borrower in each case to the extent such fees and expenses are attributable to the ownership or operation of the Lead Borrower if applicable, and its Subsidiaries, provided that the allocation of such fees and expenses attributable to the ownership or operation of the Lead Borrower and its Subsidiaries shall be determined in the aggregate based on the proportion of revenues of the Lead Borrower and its Subsidiaries to the revenues of all subsidiaries of such direct or indirect parent of the Lead Borrower;
(N) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(O) [reserved];
(P) [reserved];
(Q) [reserved];
(R) payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation, merger or transfer of all or substantially all of the assets of the Borrowers and the Subsidiaries, taken as a whole, that complies with Section 7.02(c)(i);
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(S) any Restricted Payment used to fund amounts owed by and attributable to the Borrowers in connection with the Transactions and the payment of fees and expenses Incurred by and attributable to the Borrowers in connection with the Transactions or owed by the Borrowers in each case to the extent permitted by Section 7.02(j);
(T) any Restricted Payment used to fund the payment of professional fees and expenses of Loeb & Loeb LLP in connection with the Transactions and Specified Professional Fees;
(U) [reserved]; and
(V) any Person may make distributions to minority shareholders of any Subsidiary that is acquired pursuant to an acquisition or Investment permitted under this Agreement pursuant to appraisal or dissenters’ rights with respect to shares of such Subsidiary held by such shareholders;
provided, that any Restricted Payments made with property other than cash shall be calculated using the Fair Market Value (as determined in good faith by the Borrower) of such property.
Notwithstanding the foregoing or any other term of this Agreement, the Lead Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, invest, transfer, dispose, sell or otherwise convey any Material Property, a material portion of the assets constituting Collateral or Intellectual Property to any Affiliate of the Lead Borrower other than the Lead Borrower or any Guarantor; provided, however the foregoing shall not prohibit the entry into the non-exclusive intellectual property licenses (i) set forth on Schedule 7.02(h) hereto as of the date hereof and (ii) on and after the date consistent with Schedule 7.02(h) or otherwise in the ordinary course of business consistent with past practice.
The Borrowers, in their sole discretion, may classify any Restricted Payment or Permitted Investment as being made in part under one of the clauses or subclauses of this Section 7.02(h) or under one of the clauses or subclauses of the definition of “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 7.02(h) to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (9), (11), (16), (18) and (21) of the definition of “Permitted Investments.”
(i) Federal Reserve Regulations. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to permit any Loan or the proceeds of any Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X of the Board.
(j) Transactions with Affiliates.
(i) The Borrowers shall not and shall not permit any of their Subsidiaries, to, in each case, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Borrowers (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $5,000,000, unless:
(A) such Affiliate Transaction is in the ordinary course of business and on terms that are not materially less favorable to the Borrowers or the relevant Subsidiary than those that could have been obtained in a comparable transaction by the Borrowers or such Subsidiary with an unrelated Person; and
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(B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25,000,000, the Borrowers delivers to the Administrative Agent (i) a resolution adopted in good faith by a majority of disinterested directors of the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions), approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) above or (ii) if there are no directors on the Board of Directors of the Parent (or in the committee thereof comprised of disinterested directors tasked with the review of such transactions),that are disinterested with respect to such transaction(s), a letter from an Independent Financial Advisor stating that such transaction is fair to the Borrowers or Subsidiary from a financial point of view.
(ii) The provisions of Section 7.02(j)(i) shall not apply to the following:
(A) transactions between or among the Borrowers and/or any of their Subsidiaries (or an entity that becomes a Subsidiary as a result of such transaction) in the ordinary course of business and any merger, consolidation or amalgamation of the Borrowers and any direct parent of the Borrowers; provided, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Borrowers and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Agreement and effected for a bona fide business purpose;
(B) (i) sales or contributions of Receivables Assets by (A) each Exar Originator to Exar SPV and (B) Exar SPV to the Exar Buyer pursuant to the Exar Facility in effect as of the date hereof or (ii) the purchase of participation interests by any Loan Party in the B. Riley Credit Agreement;
(C) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Borrowers, any Subsidiary, or any direct or indirect parent of the Borrowers in the ordinary course of business; provided, that the payment of any such fees or reimbursements to, on behalf of, or for the account of, shareholders of Parent, Affiliates of Parent or any of their respective Affiliates (other than the Parent and its Subsidiaries) shall not be permitted other than payment or reimbursement of fees and expenses incurred by Ernst & Young in connection with Ernst & Young’s determination or re-determination (if any) of the Transaction Tax Liability (as defined in the Restructuring Plan), and provided, further, that no such payments shall be permitted under this clause (C) to any of ETI or its Affiliates (other than the Parent and its Subsidiaries) for, or in respect of, or as reimbursement for, any consultants;
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(D) transactions in which the Borrowers or any Subsidiary of the Borrowers as the case may be, delivers to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to the Borrowers or such Subsidiary from a financial point of view or meets the requirements of clause (A) of Section 7.02(j)(i);
(E) payments of compensation in the ordinary course of business to officers, directors, employees or consultants which are approved by a majority of the Board of Directors of the Lead Borrower in good faith;
(F) issuance, transfer or assignment of Loans in accordance with the terms hereof and performance of the Obligations hereunder and issuance, transfer or assignment of Exit Notes in accordance with the terms of the Exit Notes Indenture and performance of the obligations thereunder.
(G) the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under the terms of, any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Effective Date and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Effective Date shall only be permitted by this clause (G) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the Lenders in any material respect than the original transaction, agreement or arrangement as in effect on the Effective Date, as determined in good faith by the Borrowers;
(H) the execution of the Transactions and the payment of professional fees and expenses in connection therewith;
(I) (1) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement, which are fair to the Borrowers and the Subsidiaries of the Borrowers in the reasonable determination of the Board of Directors of the Lead Borrower or (2) transactions with joint ventures entered into in the ordinary course of business;
(J) transactions pursuant to any Permitted Securitization Financing;
(K) the issuance of Equity Interests (other than Disqualified Stock) of the Borrowers to any Person;
(L) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Borrower or any direct or indirect parent of the Borrowers or of a Subsidiary of the Borrowers as appropriate, in good faith;
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(M) the entering into of any tax sharing agreement or arrangement that complies with Section 7.02(h)(ii)(L) and the performance under any such agreement or arrangement;
(N) any contribution to the capital of the Borrower;
(O) transactions permitted by, and complying with, Section 7.02(c)(i);
(P) transactions between the Borrowers or any of their Subsidiaries and any Person that would constitute an Affiliate Transaction solely because a director of such other Person is also a director of the Borrowers or any direct or indirect parent of the Borrower; provided, however, that such director abstains from voting as a director of the Borrowers or such direct or indirect parent, as the case may be, on any matter involving such other Person;
(Q) [reserved];
(R) the formation and maintenance of any consolidated group or subgroup for tax, accounting or cash pooling or management purposes in the ordinary course of business;
(S) [reserved];
(T) [reserved];
(U) intercompany transactions for the purpose of improving the consolidated tax efficiency of the Borrowers and their respective Subsidiaries and not for the purpose of circumventing any covenant set forth in this Agreement;
(V) [reserved]; and
(W) any agreements or arrangements between a third party and an Affiliate of the Borrowers that are acquired or assumed by the Borrowers or any Subsidiary in connection with an acquisition or merger of such third party (or assets of such third party) by or with the Borrowers or any Subsidiary; provided, that (A) such acquisition or merger is permitted under this Agreement and (B) such agreements or arrangements are undertaken in good faith and not entered into in contemplation of such acquisition or merger or otherwise for the purpose of avoiding the restrictions imposed by this Section 7.02(j).
(iii) Notwithstanding the foregoing or anything in this Agreement to the contrary, with respect to any Disposition or other sale, lease, transfer or other disposition of any property or asset with a Fair Market Value of or involving aggregate consideration in excess of $5,000,000 to an Affiliate (other than to the Borrowers or a Subsidiary of the Borrower), whether in a single transaction or series of related transactions, such Disposition or other disposition (A) shall be on terms that are not less favorable to the Borrowers or Subsidiary of the Borrowers than those that could have been obtained in a comparable transaction by the Borrowers or such Subsidiary with an unrelated Person, and the transferor shall have received a letter from an Independent Financial Advisor hired by a majority of the disinterested directors of the Board of Directors of the Lead Borrower stating that such transaction is fair to the transferor from a financial point of view, (B) shall be made for no less than Fair Market Value, and (C) 100% of the consideration therefor shall be in cash.
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(k) Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries, to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Subsidiary, to:
(i) (A) pay dividends or make any other distributions to the Borrowers or any Subsidiary, respectively, (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (B) pay any Indebtedness owed to the Borrowers or any Subsidiary of the Borrowers, respectively;
(ii) make loans or advances to the Borrowers or any Subsidiary of the Borrowers, respectively; or
(iii) sell, lease or transfer any of its properties or assets to the Borrowers or any Subsidiary of the Borrowers, respectively;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) (A) contractual encumbrances or restrictions in effect on the Effective Date and described in Schedule 7.02(k)(iii)(1) hereto and (B) contractual encumbrances or restrictions pursuant to the Exit Notes Indenture and related documents, the ABL Facility and related documents, the B. Riley Credit Agreement and related documents and, in each case, any similar contractual encumbrances or restrictions or any amendments, modifications, restatements, renewals, supplements, refundings, replacements or refinancings of such agreements or instruments to the extent not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing;
(2) the Loan Documents;
(3) applicable law or any applicable rule, regulation or order;
(4) any agreement or other instrument of a Person acquired by the Borrowers or any Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
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(5) contracts or agreements for the sale of assets, including any restriction with respect to a Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Subsidiary;
(6) Secured Indebtedness otherwise permitted to be Incurred pursuant to Section 7.02(v) that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;
(9) purchase money obligations for property acquired and Capitalized Lease Obligations in the ordinary course of business that impose restrictions of the nature discussed in Section 7.02(k)(iii) above on the property so acquired;
(10) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business or consistent with industry norm;
(11) in the case of Section 7.02(k)(iii) above, any encumbrance or restriction that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any such lease, license (including without limitation, licenses of intellectual property) or other contracts;
(12) any encumbrances or restrictions of a Special Purpose Securitization Subsidiary effected in connection with a Permitted Securitization Financing; provided, however, that such restrictions apply only to such Special Purpose Securitization Subsidiary;
(13) other Indebtedness, Disqualified Stock or Preferred Stock (a) of the Borrowers or any Subsidiary that is a Borrower, a Guarantor or a Foreign Subsidiary or (b) of any Subsidiary that is not a Borrower, a Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Borrowers’ ability to make anticipated principal or interest payments on the Exit Notes (as determined in good faith by the Borrower), provided, that in the case of each of clauses (a) and (b), such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Effective Date pursuant to Section 7.02(v);
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(14) any Restricted Investment not prohibited by Section 7.02(h) and any Permitted Investment; or
(15) any encumbrances or restrictions of the type referred to in Section 7.02(k)(i), (ii) or (iii) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (14) above; provided, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Borrowers, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.
For purposes of determining compliance with this Section 7.02(k), (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Borrowers or a Subsidiary to other Indebtedness Incurred by the Borrowers or any such Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
(l) Limitations on Negative Pledges. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Loan Party or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) this Agreement and the other Loan Documents, (ii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by Section 7.02(v) of this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iii) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided, that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, and (iv) customary provisions in leases restricting the assignment or sublet thereof.
(m) Modifications of Indebtedness, Organizational Documents and Certain Other Agreements; Etc. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to:
(i) other than as permitted under the Intercreditor Agreements, amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) any of the provisions of any of its or its Subsidiaries’ Indebtedness or of any instrument or agreement (including, without limitation, any purchase agreement, indenture, loan agreement or security agreement) relating to any such Indebtedness if such amendment, modification or change would shorten the final maturity or average life to maturity of, or require any payment to be made earlier than the date originally scheduled on such Indebtedness, or would change the subordination provision, if any, of such Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such Indebtedness in any respect;
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(ii) except for the Obligations or as permitted by the Intercreditor Agreements, make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Subordinated Indebtedness in violation of the subordination provisions thereof or any subordination agreement with respect thereto or the Intercreditor Agreements;
(iii) (a) amend, modify or otherwise change, or permit any Subsidiary to amend, modify or otherwise change, any of its Governing Documents (including, without limitation, by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it) with respect to any of its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to any of its Equity Interests, except any such amendments, modifications or changes or any such new agreements or arrangements pursuant to this clause (iii) that either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, provided, that no such amendment, modification or change or new agreement or arrangement shall provide for any plan of division pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or other comparable event under any jurisdiction’s law) or (b) amend, modify or otherwise change the tax designation (i.e. corporation, partnership, etc.) of Parent or its Subsidiaries (or any direct or indirect parent of Parent) in a manner that would cause an adverse tax consequence to the Parent or any of its Subsidiaries; or
(n) Investment Company Act of 1940. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to engage in any business, enter into any transaction, use any securities or take any other action or permit any of its Subsidiaries to do any of the foregoing, that would cause it or any of its Subsidiaries to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.
(o) ERISA and Canadian Pension Events. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to (i) cause or fail to prevent, or permit any of its ERISA Affiliates to cause or fail to prevent, an ERISA Event or Canadian Pension Event, or (ii) adopt, or permit any of its ERISA Affiliates to adopt, any employee welfare benefit plan within the meaning of Section 3(1) of ERISA that provides benefits to employees after termination of employment other than as required by Section 601 of ERISA or other Requirements of Law.
(p) Environmental. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials on, in, at, under or from any property owned, leased or operated by it or any of its Subsidiaries, except in compliance with Environmental Laws (other than any noncompliance that could not reasonably be expected to result in any material Environmental Liability).
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(q) Accounting Methods. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to modify or change, or permit any of its Subsidiaries to modify or change, its method of accounting or accounting principles from those utilized in the preparation of the Financial Statements (other than as may be required to conform to GAAP or as may be necessary in connection with the Borrowers’ emergence from bankruptcy, including adjustments made to reflect fresh-start accounting or other similar restructuring adjustments).
(r) Sanctioned Persons; Anti-Corruption Laws; Anti-Money Laundering Laws. The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to make to:
(i) conduct, nor permit any of its Subsidiaries to conduct, any business or engage in any transaction or deal with or for the benefit of any Sanctioned Person, including the making or receiving of any contribution of funds, goods or services to, from or for the benefit of any Sanctioned Person; or
(ii) use, nor permit any of its Subsidiaries to use, directly or indirectly, any of the proceeds of any Loan, (A) to fund any activities or business of or with any Sanctioned Person or in any other manner that would result in a violation of any Sanctions by any Person (including by any Person participating in any Loan, whether as underwriter, advisor, investor or otherwise), or (B) for the purpose of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Law.
(s) Liability Management Transactions. The Borrowers shall not, and shall not permit any of their Subsidiaries to, enter into any Liability Management Transaction; provided, that Borrowers and/or its Subsidiaries shall be permitted to enter into a Liability Management Transaction so long as each Lender is offered a bona fide right to participate in such Liability Management Transaction, on a pro rata basis, on not less than five (5) Business Days' notice prior to the deadline established by Borrowers to elect to participate in such Liability Management Transaction.
(t) Canadian Defined Benefit Plans. No Loan Party shall establish, sponsor, maintain, administer, contribute to or otherwise incur liability under any Canadian Defined Benefit Plan or acquire an interest in any Person that sponsors, maintains, administers, contributes to or otherwise has incurred liability under any Canadian Defined Benefit Plan.
(u) Reserved.
(v) Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.
(i) (A)The Borrowers shall not, and shall not permit any of the Borrowers’ Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and (B) the Borrowers shall not permit any of their Subsidiaries (other than any Subsidiary that is a Guarantor) to issue any shares of Preferred Stock; provided, however, that a Borrower and any Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, in each case, in an aggregate amount not to exceed $25,000,000, if (I) the Fixed Charge Coverage Ratio of the Borrowers for the most recently ended four full fiscal quarters for which financial statements have been delivered to the Administrative Agent immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and (II) such Indebtedness is subordinated in right of payment to the Obligations and if secured, subordinated in respect of lien priority to the Liens securing the Obligations on terms acceptable to the Agents and the Required Lenders; provided, further, that (x) any Subsidiary that is not a Borrower or a Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock; and (y) any Indebtedness Incurred pursuant to this Section 7.02(v)(i) shall be subordinated in right of payment to the Obligations and if secured, subordinated in respect of lien priority to the Liens securing the Obligations on terms acceptable to the Agents and the Required Lenders.
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(ii) The limitations set forth in Section 7.02(v)(i) shall not apply to:
(A) the Incurrence by the Borrowers or any Subsidiary of (1) the Obligations, (2) Permitted Securitization Financings, plus (3) up to an additional aggregate principal amount of $5,000,000, so long as the Senior Secured Leverage Ratio for the most recently ended four full fiscal quarters for which financial statements have been delivered to the Administrative Agent, determined on a pro forma basis, does not exceed 3.75 to 1.00;
(B) Indebtedness of the Borrowers or any Subsidiary in respect of (1) the Exit Notes issued on the Effective Date, (2)(I) the ABL Facility in an aggregate principal amount outstanding at any time not to exceed the lesser of (x) $150,000,000 and (y) the Borrowing Base (as defined in the ABL Credit Agreement as in effect as of the date hereof) at such time and (II) the B. Riley Credit Agreement in an aggregate principal amount outstanding at any time (after giving effect to the transactions occurring on the Effective Date) not to exceed $22,500,000; provided that such Indebtedness under the B. Riley Credit Agreement shall not be permitted after March 31, 2027, (3) the GUC Payment Obligations, (4) Additional Notes issued in connection with the ETI Funding Obligation and (5) Additional Notes issued other than in connection with the ETI Funding Obligation in an amount not to exceed $10,000,000;
(C) Indebtedness existing on the Effective Date and described on Schedule 7.02(v) hereto (other than Indebtedness described in clauses (A) or (B) of this Section 7.02(v)(ii));
(D) (1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Borrowers or any Subsidiary, Disqualified Stock issued by the Borrowers or any Subsidiary and Preferred Stock issued by any Subsidiary to finance (whether prior to or within 180 days after) the acquisition, lease, construction, repair, replacement or improvement by such Person of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (D)(1), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (O) below, does not exceed $35,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount); and (2) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending or other funds made available by suppliers in connection with any sale and leaseback arrangements not in violation of this Agreement;
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(E) Indebtedness Incurred by the Borrowers or any Subsidiary of the Borrowers owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrowers or any of the Borrowers’ Subsidiaries , respectively, pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the ordinary course of business or consistent with industry practices;
(F) Indebtedness arising from agreements of the Borrowers or any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition, in each case, to the extent such obligation or transaction is permitted by this Agreement;
(G) Indebtedness of the Borrowers to any of its Subsidiaries; provided, that (x) any such Indebtedness owed to a Subsidiary that is not a Borrower or a Subsidiary that is a Guarantor is subordinated in right of payment to the Obligations on terms acceptable to the Agents and the Required Lenders and (y) the aggregate amount of all Indebtedness owed to a Loan Party by any Subsidiary that is not a Loan Party shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (G);
(H) shares of Preferred Stock of a Subsidiary issued to the Borrowers or another Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Subsidiary that holds such shares of Preferred Stock of another Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Borrowers or another Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (H);
(I) Indebtedness of any Subsidiary to the Borrowers or any other Subsidiary; provided, that (x) if a Subsidiary that is a Guarantor incurs such Indebtedness to a Subsidiary that is not a Borrower or a Guarantor, such Indebtedness is subordinated in right of payment to the Guaranty of such Subsidiary pursuant to the Intercompany Subordination Agreement and (y) if any Subsidiaries that are not a Guarantor incur Indebtedness to any Borrower or Guarantor, the aggregate amount of such Indebtedness shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Subsidiary of the Borrowers holding such Indebtedness ceasing to be a Subsidiary of the Borrowers or any other subsequent transfer of any such Indebtedness (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (I);
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(J) Hedging Obligations by a Person that are not incurred for speculative purposes but (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness of such Person that is permitted by the terms of this Agreement to be outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk of such Person with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk of such Person with respect to any commodity purchases or sales and, in each case, extensions or replacements thereof;
(K) Indebtedness of the Borrowers and the Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Borrowers and the Subsidiaries, respectively, as conducted in accordance with good and prudent business industry practices and otherwise as permitted by this Agreement;
(L) Indebtedness (x) incurred to finance an acquisition or (y) of Persons that are acquired, in each case so long as (A)(i) the Borrowers would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in clause (v)(i) above or (ii) the Fixed Charge Coverage Ratio of the Borrowers would be no less than immediately prior to such acquisition, (B) the aggregate principal amount of Indebtedness under clause (L)(x) shall not exceed $10,000,000, and (C) any such Indebtedness shall be subordinated in right of payment to the Obligations on terms acceptable to the Agents and the Required Lenders ;
(M) [reserved];
(N) any guarantee by the Borrowers or any Subsidiary of Indebtedness or other obligations of the Borrowers or any Subsidiary so long as the Incurrence of such Indebtedness or other obligations by the Borrowers or such Subsidiary is permitted under the terms of this Agreement; provided, that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Obligations or the Guaranty of the Borrowers or such Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to the Obligations or such Guaranty, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Obligations or the Guaranty, as applicable, and (B) if such guarantee is of Indebtedness of the Borrowers such guarantee is Incurred in accordance with, or not in contravention of, Section 7.01(b) solely to the extent Section 7.01(b) is applicable;
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(O) the Incurrence by the Borrowers or any of their Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under clauses (A)(3), (B)(2)(II), (C), (D)(1), (L), (P), (T) and (W) of this Section 7.02(v)(ii) in an aggregate amount not to exceed the then- outstanding principal amount (or, if applicable, the liquidation preference face amount of the Indebtedness, Disqualified Stock or Preferred Stock being so refunded, refinanced or defeased), together with any accrued interest and any related fees, expenses and premiums (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of the Obligations;
(2) to the extent such Refinancing Indebtedness refinances (a) Indebtedness subordinated in right of payment to the Obligations or a Guaranty, as applicable, such Refinancing Indebtedness is subordinated in rights of payment to the Obligations or the Guaranty, as applicable, on terms acceptable to the Agents and the Required Lenders or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(3) shall not have any of the Lead Borrower or any Subsidiary of the Lead Borrower as an obligor thereon except to the extent such Person was an obligor on the Indebtedness being extended, refinanced or modified, and shall not be secured by any Lien on any asset other than the assets that secured such Indebtedness being extended, refinanced or modified or, if applicable, shall be unsecured;
(4) shall not (if secured) have a Lien priority greater than such Indebtedness being extended, refinanced or modified; and
(5) shall not include Indebtedness (including any guarantees) of a Subsidiary that is not a Borrower or a Guarantor that refinances Indebtedness of a Borrower or a Subsidiary that is a Guarantor;
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(P) Indebtedness, Disqualified Stock or Preferred Stock of (A) the Borrowers or any Subsidiary incurred to finance an acquisition or (B) Persons that are acquired by the Borrowers or any Subsidiary or merged, consolidated or amalgamated with or into the Borrowers or any Subsidiary in accordance with the terms of this Agreement; provided, that after giving effect to such acquisition or merger, consolidation or amalgamation, either:
(1) the Borrowers would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 7.02(v)(i); or
(2) the Fixed Charge Coverage Ratio of the Borrowers would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
provided, further, that (x) the aggregate principal amount of Indebtedness under this clause (P) (solely if incurred in contemplation of such acquisition or merger, consolidation or amalgamation), together with any Refinancing Indebtedness in respect thereof incurred under clause (O) hereof, shall not exceed $10,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (y) any Indebtedness Incurred pursuant to this clause (P) shall be subordinated in right of payment to the Obligations on terms acceptable to the Agents and the Required Lenders;
(Q) [reserved];
(R) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business (provided, that such Indebtedness is extinguished within five Business Days of its Incurrence) or other cash management services in the ordinary course of business;
(S) Indebtedness of the Borrowers or Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Bank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(T) Indebtedness of any Subsidiary that is not a Borrower or a Guarantor; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (T), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (T), together with Refinancing Indebtedness in respect thereof Incurred pursuant to clause (O) hereof, does not exceed $4,000,000 (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(U) Indebtedness of the Borrowers or Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(V) Indebtedness of the Borrowers and its respective Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of business;
(W) Indebtedness, Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Borrowers and any Subsidiary; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (W), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (W), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (O) hereof, does not exceed $10,000,000 and provided, further, that any Indebtedness Incurred or guaranteed by a Loan Party pursuant to this clause (W) shall be subordinated in right of payment to the Obligations on terms acceptable to the Agents and the Required Lenders;
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(X) to the extent constituting Indebtedness of the Borrowers and the Subsidiaries, all premium (if any), defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness otherwise permitted to be incurred pursuant to this Section 7.02(v);
(Y) Indebtedness in respect of Obligations of the Borrowers or Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services for such Person; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money or any Hedging Obligations;
(Z) [reserved].
(AA) deposits raised by any Subsidiary that is subject to state and/or federal banking regulations that constitute Indebtedness owing to such depositor;
(BB) Indebtedness consisting of earn outs and obligations of the Borrowers or Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with any Permitted Investment by such Person;
(CC) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business; and
(DD) obligations in respect of Cash Management Agreements.
(iii) For purposes of determining compliance with this Section 7.02(v):
(A) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (A) through (DD) of Section 7.02(v)(ii) above or is entitled to be Incurred or issued pursuant to Section 7.02(v)(i), then the Borrowers may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 7.02(v); provided, that (1) any Exit Notes issued on the Effective Date (but for the avoidance of doubt, not any Additional Notes) and Indebtedness under the ABL Facility and B. Riley Credit Agreement shall be incurred under clauses (B)(1) and (B)(2) of Section 7.02(v)(ii), (2) the Obligations shall be incurred under clause (A)(1) of Section 7.02(v)(ii), (3) any Permitted Securitization Financing shall be incurred under clause (A)(3) of Section 7.02(v)(ii), (4) the GUC Payment Obligations shall be incurred under clause (B)(3) of Section 7.02(v)(ii), (5) Additional Notes incurred in connection with the ETI Funding Obligation shall be incurred under clause (B)(4) of Section 7.02(v)(ii) and (6) Additional Notes, other than those issued pursuant to clause (B)(4) of Section 7.02(v)(ii) shall be incurred under clause (B)(5) of Section 7.02(v)(ii), and in each case, may not be reclassified.
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(B) at the time of Incurrence, classification or reclassification, the Borrowers will be entitled to divide and classify an item of Indebtedness in more than one of the categories of Indebtedness described in Section 7.02(v)(i) or clauses (A) through (DD) of Section 7.02(v)(ii) (or any portion thereof) without giving pro forma effect to the Indebtedness Incurred, classified or reclassified pursuant to any other clause or paragraph of this Section 7.02(v) (or any portion thereof) when calculating the amount of Indebtedness that may be Incurred, classified or reclassified pursuant to any such clause or paragraph (or any portion thereof) at such time; provided, that, for the avoidance of doubt, it is understood and agreed that for any Indebtedness Incurred, classified or reclassified in reliance on a category of permitted Indebtedness involving the calculation of a ratio, such Indebtedness will be included in the calculation of such ratio at the time of such Incurrence, classification or reclassification; and
(C) in connection with (x) the Incurrence or issuance, as applicable, of revolving loan Indebtedness under this Section 7.02(v) or (y) any commitment to Incur or issue Indebtedness, Disqualified Stock or Preferred Stock under this Section 7.02(v), the Borrowers or applicable Subsidiary may designate such Incurrence or issuance as having occurred on the date of first Incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual Incurrence or issuance will be deemed for all purposes under this Agreement to have been Incurred or issued on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Senior Secured Leverage Ratio and Consolidated EBITDA (and all such calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith).
Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 7.02(v). Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 7.02(v).
For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of the refinancing Indebtedness does not exceed the principal amount of the Indebtedness being refinanced.
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Notwithstanding any other provision of this Section 7.02(v), the maximum amount of Indebtedness that Borrowers and their respective Subsidiaries may Incur pursuant to this Section 7.02(v) shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which the respective Indebtedness is denominated that is in effect on the date of the refinancing.
Section 7.03 Financial Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:
(a) Senior Leverage Ratio. Permit the Senior Leverage Ratio of the Parent and its Subsidiaries for any period of 12 consecutive fiscal months of the Parent and its Subsidiaries as of the last day of the fiscal quarter of the Borrowers most recently ended to be greater than 1.00:1.00.
(b) Liquidity. Permit Liquidity at any time to be less than (x) prior to the incurrence of any Incremental Facility in accordance with the terms of Section 2.14 hereof, $2,000,000, and (y) from and after the incurrence of any Incremental Facility in accordance with Section 2.14 hereof, $10,000,000.
Article VIII
[RESERVED]
Article IX
EVENTSOF DEFAULT
Section 9.01 Events of Default. Each of the following events shall constitute an event of default (each, an “Event of Default”):
(a) any Borrower shall fail to pay, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), (i) any interest on any Loan or any fee, indemnity or other amount payable under this Agreement (other than any portion thereof constituting principal of the Loans) or any other Loan Document, and such failure continues for a period of three (3) Business Days or (ii) all or any portion of the principal of the Loans;
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(b) any representation or warranty made or deemed made by or on behalf of the Parent, the Parent’s Subsidiaries or any of the Borrowers’ Subsidiaries or by any officer of the foregoing under or in connection with any Loan Document or under or in connection with any certificate or other writing delivered to any Secured Party pursuant to any Loan Document shall have been incorrect in any material respect (or in any respect if such representation or warranty is qualified or modified as to materiality or “Material Adverse Effect” in the text thereof) when made or deemed made;
(c) the Borrowers or any of the Borrowers’ Subsidiaries shall fail to perform or comply with any covenant or agreement contained in Section 7.01(a), Section 7.01(c), Section 7.01(d), Section 7.01(f), Section 7.01(h), Section 7.01(k), Section 7.01(m), Section 7.02 or Section 7.03, the Borrowers, or any of the Borrowers’ Subsidiaries shall fail to perform or comply with any covenant or agreement contained in the Security Agreement, the Canadian Security Agreement or any Mortgage to which it is a party;
(d) the Borrowers, the Parent or any of the Borrowers’ Subsidiaries shall fail to perform or comply with any other term, covenant or agreement contained in any Loan Document to be performed or observed by it and, except as set forth in subsections (a), (b) and (c) of this Section 9.01, such failure, if capable of being remedied, shall remain unremedied for 15 days after the earlier of the date a senior officer of the Lead Borrower, or any of the Borrowers’ Subsidiaries has knowledge of such failure and the date written notice of such default shall have been given by any Agent to the Borrowers, or any of the Borrowers’ Subsidiaries;
(e) the Borrowers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of (i) the Exit Notes, (ii) the ABL Facility, (iii) the B. Riley Credit Agreement, (iv) the GUC Payment Obligation or (v) other Indebtedness (excluding Indebtedness evidenced by this Agreement) having an aggregate amount outstanding in excess of $25,000,000 and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or any other default under any agreement or instrument relating to any such Indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof;
(f) any of the Borrowers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) (i) shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, interim receiver, receiver and manager, trustee, monitor, custodian or other similar official for any such Person or for any substantial part of its property, (ii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iii) shall make a general assignment for the benefit of creditors, or (iv) shall take any action to authorize or effect any of the actions set forth above in this subsection (f);
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(g) any proceeding shall be instituted against any of the Borrowers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, interim receiver, receiver and manager, trustee, monitor, custodian or other similar official for any such Person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such Person or the appointment of a receiver, interim receiver, receiver and manager, trustee, monitor, custodian or other similar official for it or for any substantial part of its property) shall occur;
(h) the Security Agreement, the Canadian Security Agreement, the Intercreditor Agreements, any Mortgage or any other Collateral Document, after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on Term Priority Collateral and a Lien on ABL Priority Collateral with the priority set forth in the ABL Intercreditor Agreement, in each case in favor of the Collateral Agent for the benefit of the Secured Parties on any Collateral purported to be covered thereby;
(i) any Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than 15 days;
(j) any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than 15 consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of any Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary), if any such event or circumstance could reasonably be expected to have a Material Adverse Effect;
(k) the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by the Borrowers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary), if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
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(l) the indictment, or the threatened indictment of the Parent, the Borrowers, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against the Parent, Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary), pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of such Person;
(m) (i) there shall occur one or more ERISA Events and/or Canadian Pension Events that individually or in the aggregate results in, or could reasonably be expected to result in, liability of the Parent, any Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) or any of its ERISA Affiliates in excess of $25,000,000, (ii) there exists any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or Section 4068 of ERISA upon the property or rights to property of the Parent, any Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) or any of its ERISA Affiliates, or (iii) a Lien (choate or inchoate) arises in respect of a Loan Party or its property in connection with any Canadian Pension Plan (save for contribution amounts not yet due);
(n) one or more judgments, orders or awards (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order or award) for the payment of money exceeding $25,000,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has been notified and has not denied coverage) shall be rendered against any of the Parent, Borrower, or any Significant Subsidiary (other than any Special Purpose Securitization Subsidiary) (or any group of Subsidiaries that together would constitute a Significant Subsidiary, other than any Special Purpose Securitization Subsidiary) and remain unsatisfied and (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment, order, award or settlement or (ii) there shall be a period of 10 consecutive days after entry thereof during which (A) a stay of enforcement thereof is not be in effect or (B) the same is not vacated, discharged, stayed or bonded pending appeal;
(o) any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by any Loan Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any liability or obligation purported to be created under any Loan Document;
(p) (i) there shall occur and be continuing any “Event of Default” (or any comparable term) under, and as defined in the documents evidencing or governing any Subordinated Indebtedness, (ii) any of the Obligations for any reason shall cease to be “Senior Indebtedness” or “Designated Senior Indebtedness” (or any comparable terms) under, and as defined in the documents evidencing or governing any Subordinated Indebtedness, (iii) any Indebtedness other than the Obligations shall constitute “Designated Senior Indebtedness” (or any comparable term) under, and as defined in, the documents evidencing or governing any Subordinated Indebtedness, (iv) any holder of Subordinated Indebtedness shall fail to perform or comply with any of the subordination provisions of the documents evidencing or governing such Subordinated Indebtedness, or (v) the subordination provisions of the documents evidencing or governing any Subordinated Indebtedness shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable Subordinated Indebtedness;
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(q) there is a failure by a Borrower or any Guarantor to comply for 60 days after notice to such Borrower or Guarantor with its other agreements contained in the Collateral Documents except for a failure that would not be material to the Lenders and would not materially affect the value of the Collateral taken as a whole;
(r) a Change of Control shall have occurred;
(s) [reserved]; or
(t) an event or development occurs which could reasonably be expected to have a Material Adverse Effect;
then, and in any such event, the Administrative Agent may, and shall at the request of the Required Lenders, by notice to the Administrative Borrower, (i) terminate or reduce all Commitments, whereupon all Commitments shall immediately be so terminated or reduced, (ii) declare all or any portion of the Obligations then outstanding to be accelerated and due and payable, whereupon all or such portion of the aggregate principal of all Loans, all accrued and unpaid interest thereon, all fees and all other Obligations payable under this Agreement and the other Loan Documents shall become due and payable immediately, together with the payment of the Applicable Premium with respect to the Commitments so terminated and the Loans so accelerated, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (iii) exercise any and all of its other rights and remedies under applicable law, hereunder and under the other Loan Documents; provided, however, that upon the occurrence of any Event of Default described in subsection (f) or (g) of this Section 9.01 with respect to any Loan Party, without any notice to any Loan Party or any other Person or any act by any Agent or any Lender, all Commitments shall automatically terminate and all Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other Obligations due under this Agreement and the other Loan Documents, including, without limitation, the Applicable Premium, shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by each Loan Party.
Section 9.02 Cure Right. In the event that the Borrowers fail to comply with the requirements of any financial covenant set forth in Section 7.03(a), until the expiration of the 10th day after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, the Parent shall have the right to issue Permitted Cure Equity for cash or otherwise receive cash contributions to the capital of the Parent, and, in each case, to contribute any such cash to the capital of the Borrowers, and apply the amount of the proceeds thereof to increase Covenant Consolidated EBITDA with respect to such applicable quarter (the “Cure Right”); provided, that (a) such proceeds are actually received by the Borrowers no later than 10 days after the date on which financial statements are required to be delivered with respect to such fiscal quarter hereunder, (b) such proceeds do not exceed the aggregate amount necessary to cure (by addition to Covenant Consolidated EBITDA) such Event of Default under Section 7.03(a) for such period, (c) the Cure Right shall not be exercised more than 4 times during the term of the Loans, (d) in each period of four fiscal quarters, there shall be at least 2 consecutive fiscal quarters during which the Cure Right is not exercised, (e) the aggregate amount of all Cure Right proceeds during the term of this Agreement shall not exceed $10,000,000, (f) there shall be no pro forma reduction in Indebtedness with the proceeds of the Cure Right for purposes of determining compliance with the financial covenants in Section 7.03(a) or for determining any pricing, financial covenant based conditions or baskets with respect to the covenants contained in this Agreement, in each case in the fiscal quarter in which the Cure Right is used or subsequent periods that include such fiscal quarter, and (g) such proceeds shall be applied to prepay the Loans in accordance with Section 2.05(c)(v). If, after giving effect to the foregoing pro forma adjustment (but not, for the avoidance of doubt, giving pro forma adjustment to any repayment of Indebtedness in connection therewith), the Borrowers are in compliance with the financial covenants set forth in Section 7.03(a), the Borrowers shall be deemed to have satisfied the requirements of such Section as of the relevant date of determination with the same effect as though there had been no failure to comply on such date, and the applicable breach or default of such Section 7.03(a) that had occurred shall be deemed cured for purposes of this Agreement. The parties hereby acknowledge that this Section may not be relied on for purposes of calculating any financial ratios other than as applicable to Section 7.03(a) and shall not result in any adjustment to any amounts other than the amount of the Covenant Consolidated EBITDA referred to in the immediately preceding sentence.
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Article X
AGENTS
Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by its making thereof) hereby irrevocably appoints, authorizes and empowers the Administrative Agent and the Collateral Agent to perform the duties of each such Agent as set forth in this Agreement and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto, including: (i) to receive on behalf of each Lender any payment of principal of or interest on the Loans outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and paid to such Agent, and, subject to Section 2.02 of this Agreement, to distribute promptly to each Lender its Pro Rata Share of all payments so received; (ii) to distribute to each Lender copies of all material notices and agreements received by such Agent and not required to be delivered to each Lender pursuant to the terms of this Agreement, provided, that the Agents shall not have any liability to the Lenders for any Agent’s inadvertent failure to distribute any such notices or agreements to the Lenders; (iii) to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Loans, and related matters and to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (iv) to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other Loan Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document; (vi) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Loan Parties, the Obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document; (vii) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; (viii) subject to Section 10.03, to take such action as such Agent deems appropriate on its behalf to administer the Loans and the Loan Documents and to exercise such other powers delegated to such Agent by the terms hereof or the other Loan Documents (including, without limitation, the power to give or to refuse to give notices, waivers, consents, approvals and instructions and the power to make or to refuse to make determinations and calculations); and (ix) to act with respect to all Collateral under the Loan Documents, including for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including, without limitation, enforcement or collection of the Loans), the Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of 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), and such instructions of 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) shall be binding upon all Lenders and all makers of Loans; provided, however, the Agents shall not be required to take any action which, in its opinion or the opinion of its counsel, may (i) expose such Agent to liability or which is contrary to this Agreement or any other Loan Document or applicable Requirements of Law or (ii) be in violation of the automatic stay under any Requirement of Law relating to bankruptcy, insolvency, reorganization, or relief of debtors; provided, further, that if any Agent so requests, it shall first be indemnified and provided with adequate security to its sole satisfaction (including reasonable advances as may be requested by such Agent) by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such directed action; provided, further, that any Agent may seek clarification or further direction from 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) prior to taking any such directed action and may refrain from acting until such clarification or further direction has been provided.
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Section 10.02 Nature of Duties; Delegation. (a) The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Loan Documents. The permissive rights of each Agent to take any actions permitted by this Agreement or any other Loan Document shall not be construed as an obligation or duty to do so. The duties of the Agents shall be mechanical and administrative in nature. The Agents shall not have by reason of this Agreement or any other Loan Document a fiduciary, principal-agency, or trustee relationship in respect of any Lender, regardless of whether a Default or Event of Default has occurred or is continuing. Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall be construed to impose upon the Agents any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent. Each Lender has made its own independent investigation of the financial condition and affairs of the Loan Parties in connection with the making and the continuance of the Loans hereunder and shall make its own appraisal of the creditworthiness of the Loan Parties and the value of the Collateral without reliance upon any Agent or any other Lender or any of their respective Related Parties, and neither the Agents nor any of their Related Parties shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into their possession before the initial Loan hereunder or at any time or times thereafter; provided, that, upon the reasonable request of a Lender, each Agent shall provide to such Lender any documents or reports delivered to such Agent by the Loan Parties pursuant to the terms of this Agreement or any other Loan Document. Each Lender has made its own independent investigation of the financial condition and affairs of the Loan Parties in connection with the making and the continuance of the Loans hereunder and has made its own appraisal of the creditworthiness of the Loan Parties and the value of the Collateral without reliance upon any Agent or any other Lender or any of their respective Related Parties, and neither the Agents nor any of their Related Parties shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into their possession before the initial Loan hereunder or at any time or times thereafter, provided, that, upon the reasonable request of a Lender, each Agent shall provide to such Lender any documents or reports delivered to such Agent by the Loan Parties pursuant to the terms of this Agreement or any other Loan Document. Each Lender acknowledges that it will, independently and without reliance upon any 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 other agreement or document furnished hereunder or thereunder. Each Lender acknowledges that no Agent or its Related Parties have made any representation or warranty to it, and that no act by any Agent or its Related Parties hereinafter taken shall be deemed to constitute any representation or warranty by such Agent or its Related Parties to any Lender. Each Lender agrees that it will not assert any claim against any Agent based on an alleged breach of fiduciary duty by such Agent in connection with this Agreement, the other Loan Documents, or the transactions contemplated hereby or thereby.
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(b) Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by any Agent, such Agent and its Related Parties shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Loan Parties or any other Person party to a Loan Document that may come into the possession or control of such Agent or its Related Parties.
(c) Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document (including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder) by or through any one or more co-agents, sub-agents and attorneys-in-fact appointed by such Agent, and shall be entitled to advice of counsel, both internal and external, and other consultants or experts concerning all matters pertaining to such duties. Each Agent and any such co-agents, sub-agents and attorneys-in-fact may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. All provisions of this Article X and Article XII (including Section 12.04 and Section 12.15) and all other rights, privileges, protections, immunities, and indemnities granted to each Agent hereunder and under the other Loan Documents shall apply to any such co-agents, sub-agents and attorneys-in-fact, and to the Related Parties of each Agent and any such co-agents, sub-agents and attorneys-in-fact. Each Agent shall not be responsible for the negligence or misconduct of any such co-agents, sub-agents and attorneys-in-fact except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such co-agents, sub-agents and attorneys-in-fact.
Section 10.03 Rights, Exculpation, Etc.
(a) The Agents and their Related Parties shall not be liable for any action taken or omitted to be taken by them under or in connection with this Agreement or the other Loan Documents, (i) with the consent or at the request of 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) (and such consent or request and such action or action not taken pursuant thereto shall be binding upon all the Secured Parties) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable judgment (which shall not include any action taken or omitted to be taken in accordance with clause (i), for which the Agents and their Related Parties shall have no liability).
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(b) Without limiting the generality of the foregoing, the Agents and their Related Parties (i) are entitled to treat the holder of any Loan as set forth in the Register as the owner thereof until such Loan is assigned in accordance with Section 12.07 hereof; (ii) may consult with legal counsel (including, without limitation, counsel to any Agent or counsel to the Loan Parties), independent public accountants, and other consultants or experts selected by any of them and shall be entitled to rely, shall be fully protected in relying, and shall not incur any liability for relying (including taking any action or omitting to take any action in reliance), upon advice and statements of such counsel, accountants, consultants or experts; (iii) make no warranty or representation; and (iv) shall not be responsible or liable for or have any duty to ascertain or inquire into or monitor (A) any recital, statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (B) the contents of any certificate, report, statement, or other document referred to, provided for, or delivered hereunder or thereunder or in connection herewith or therewith, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, the use of proceeds of the New Money Loans, or the occurrence or possible existence of any Default or Event of Default, (D) the execution, validity, legality, validity, enforceability, effectiveness, genuineness, collectability or sufficiency or value of this Agreement, any other Loan Document or any other agreement, instrument or document or the creation, preservation, perfection, maintenance or continuation of perfection, or priority of any Lien purported to be created by the Collateral Documents, (E) the value or the sufficiency of any Collateral, (F) whether the Collateral exists, is owned by Borrower or its Subsidiaries, is cared for, protected, insured, or maintained, or has been encumbered, or meets the eligibility criteria applicable in respect thereof, (G) the satisfaction of any condition set forth in Article V or elsewhere, other than to confirm receipt of items expressly required to be delivered to such Agent, or the inspection of the properties (including any Collateral), books or records of any Loan Party or any Affiliate thereof, or (H) the financial condition or business affairs of any Loan Party or any other Person liable for the payment of any Obligations.
(c) The Agents shall not be liable for any apportionment or distribution of payments made in good faith pursuant to Section 4.03, and if any such apportionment or distribution is subsequently determined to have been made in error, and the sole recourse of any Lender to whom payment was due but not made shall be to recover from other Lenders any payment in excess of the amount which they are determined to be entitled. The Agents may at any time request instructions from 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) with respect to any actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the Agents are permitted or required to take or to grant, and the Agents shall be absolutely entitled to refrain from taking any action or to withhold any approval under any of the Loan Documents until they shall have received such instructions from 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), and the Agents shall be entitled to rely, shall be fully protected in relying, and shall not incur any liability for relying, upon such instructions. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of 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).
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(d) The Agents and their Related Parties 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, the Loan Parties, or any of their Affiliates that is communicated to or obtained by the Person serving as any Agent or any of its Related Parties in any capacity.
(e) Nothing in this Agreement or any other Loan Document shall require any Agent or its Related Parties to expend or risk its own funds or otherwise incur any financial liability in the performance of any duties, obligations or responsibilities or in the exercise of any right, power, authority or discretion hereunder or under the other Loan Documents.
(f) No Agent or its Related Parties shall be responsible or liable for any failure or delay in the performance of its obligations under this Agreement or any other Loan Document, in each case, arising out of or caused, directly or indirectly, by circumstances beyond its control, including without limitation, any act or provision of any present or future law or regulation or governmental authority; acts of God; earthquakes; fires; floods; wars; terrorism; civil or military disturbances; sabotage; epidemics; pandemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility.
(g) If at any time, any Agent is served with any judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process (including orders of attachment or garnishment or other forms of levies or injunctions or stays relating to the transfer of any Collateral), such Agent is authorized to comply therewith in any manner as it or its legal counsel of its own choosing deems appropriate, and if such Agent complies with any such judicial or administrative order, judgment, decree, writ or other form of judicial or administrative process, such Agent shall not be liable to any of the Loan Parties, the Secured Parties, or to any other Person even though such order, judgment, decree, writ or process may be subsequently modified or vacated or otherwise determined to have been without legal force or effect.
(h) Any corporation or association into which any Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate agency business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which such Agent is a party, will be and become the successor Agent under this Agreement and will have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.
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(i) For the avoidance of doubt, and without limiting the other protections set forth in this Article X, with respect to any approval, determination, designation, or judgment to be made by any Agent herein or in the other Loan Documents, such Agent shall be entitled to request that the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary) make or confirm such approval, determination, designation, or judgment.
(j) No Agent shall be deemed to have knowledge of any Default or Event of Default unless and until written notice describing such Default or Event of Default and stating that such notice is a “notice of default” is given to such Agent by a Borrower or a Lender.
Section 10.04 Reliance. Each Agent shall be entitled to rely, shall be fully protected in relying, and shall not incur any liability for relying, upon any instrument, writing, resolution, notice, consent, request, certificate, affidavit, letter, facsimile, telecopy, telex or teletype message, statement, order or other document, communication or conversation (including any electronic message, Internet or intranet website posting or other distribution and any statement made orally or by telephone) believed by it to be genuine and correct and to have been signed, sent, made or otherwise authenticated by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05 Indemnification. To the extent that any Agent or any Related Party of the foregoing is not reimbursed and indemnified by any Loan Party, and whether or not such Agent has made demand on any Loan Party for the same, the Lenders will, within five days of written demand by such Agent, reimburse such Agent and such Related Parties for and indemnify such Agent and such Related Parties from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses (including, without limitation, client charges and expenses of counsel or any other advisor to such Agent and such Related Parties), advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Agent and such Related Parties in any way relating to or arising out of the Commitments, the Loans, this Agreement or any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, the performance of its duties or exercise of any of its rights or powers hereunder or thereunder, or any action taken or omitted by such Agent and such Related Parties under this Agreement or any of the other Loan Documents, in proportion to each Lender’s Pro Rata Share (or, if indemnification is sought after the date upon which the Loans shall have been paid in full, ratably in accordance with their Pro Rata Share in effect immediately prior to such date), including, without limitation, advances and disbursements made pursuant to Section 10.08; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements for which there has been a final and non-appealable judgment of a court of competent jurisdiction that such liability resulted from such Agent’s or such Related Party’s gross negligence or willful misconduct; provided, that, no action taken by any Agent in accordance with the directions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or the other Loan Documents) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 10.05. In the case of any investigation, litigation or proceeding giving rise to any such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, fees, costs, expenses, advances or disbursements, this Section 10.05 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. Without limiting the foregoing, each Lender shall reimburse any Agent upon demand for its ratable share of any fees, costs or out-of-pocket expenses (including attorneys’ fees and expenses) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that such Agent is not reimbursed for such expenses by or on behalf of the Borrowers, provided, that such reimbursement by the Lenders shall not affect the Borrowers’ continuing reimbursement obligations with respect thereto. The obligations of the Lenders under this Section 10.05 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
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Section 10.06 [Reserved].
Section 10.07 Successor Agent. (a) Any Agent may at any time give at least 30 days prior written notice of its resignation to the Lenders and the Administrative Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right to appoint a successor Agent. If no such successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Agent. Whether or not a successor Agent has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b) With effect from the Resignation Effective Date, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by such Collateral Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring Collateral Agent shall continue to hold such collateral security until such time as a successor Collateral Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through such retiring Agent shall instead be made by or to each Lender directly, until such time, if any, as a successor Agent shall have been appointed as provided for above. Upon the acceptance of a successor Agent’s appointment as Agent hereunder, such successor Agent shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Agent, and the retiring 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 10.07). After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X, Section 12.04 and Section 12.15 shall continue in effect for the benefit of such retiring Agent, its co-agents, sub-agents and attorneys-in-fact and their respective Related Parties in respect of any actions taken or omitted to be taken by it while the retiring Agent was acting as Agent.
Section 10.08 Collateral Matters.
(a) The Collateral Agent may from time to time make such disbursements and advances (“Collateral Agent Advances”) which the Collateral Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrowers of the Loans and other Obligations or to pay any other amount chargeable to the Borrowers pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in Section 12.04. The Collateral Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to Loans that are Reference Rate Loans. The Collateral Agent Advances shall constitute Obligations hereunder. The Collateral Agent shall notify each Lender and the Administrative Borrower in writing of each such Collateral Agent Advance, which notice shall include a description of the purpose of such Collateral Agent Advance. Without limitation to its obligations pursuant to Section 10.05, each Lender agrees that it shall make available to the Collateral Agent, upon the Collateral Agent’s demand, in Dollars in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Collateral Agent Advance. If such funds are not made available to the Collateral Agent by such Lender, the Collateral Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Collateral Agent, at the Federal Funds Rate for three Business Days and thereafter at the Reference Rate.
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(b) The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral upon termination of the Total Commitment and payment and satisfaction of all Loans and all other Obligations (other than Contingent Indemnity Obligations) in accordance with the terms hereof; or constituting property being sold or disposed of in the ordinary course of any Loan Party’s business or otherwise in compliance with the terms of this Agreement and the other Loan Documents; or constituting property in which the Loan Parties owned no interest at the time the Lien was granted or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders in accordance with Section 12.02. Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Collateral Agent’s authority to act without any specific or further authorization or consent by the Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to release Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from the Lenders of its authority to release any particular item or types of Collateral, and upon prior written reasonable request by and at the expense of any Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Secured Parties upon such Collateral; provided, however, that (i) the Collateral Agent shall not be required to execute any such document or take any action to evidence such release on terms which, in the Collateral Agent’s opinion or the opinion of its counsel, could expose the Collateral Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse to or representation or warranty by the Collateral Agent of any kind, (ii) the Loan Parties shall have provided the Collateral Agent with such certifications or documents as the Collateral Agent shall reasonably request in order to demonstrate that the requested release is permitted hereunder, and (iii) such release shall not in any manner discharge, affect or impair the Obligations or any Lien upon (or obligations of any Loan Party in respect of) all interests in the Collateral retained by any Loan Party.
(d) Anything contained in any of the Loan Documents to the contrary notwithstanding, the Loan Parties, each Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral under any Loan Document or to enforce any Guaranty, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Collateral Agent for the benefit of the Secured Parties in accordance with the terms thereof, (ii) in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale, the Administrative Agent or the Collateral Agent (including pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code or any similar or equivalent provision of any other Debtor Relief Law), or any Lender (except with respect to a “credit bid” pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code or any similar or equivalent provision of any other Debtor Relief Law), may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and the Collateral Agent, as agent for and representative of the Secured Parties (but not any Lender or Lenders in its or their respective individual capacities) shall be entitled, upon instructions from the Required Lenders, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale or disposition, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by the Collateral Agent at such sale or other disposition and (iii) the Collateral Agent, as agent for and representative of the Secured Parties (but not any other Agent or any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing) shall be entitled (either directly or through one or more acquisition vehicles) for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral to be sold (A) at any public or private sale, (B) at any sale conducted by the Collateral Agent under the provisions of the Uniform Commercial Code (including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial Code) or the PPSA, (C) at any sale or foreclosure conducted by the Collateral Agent (whether by judicial action or otherwise) in accordance with applicable law or (D) any sale conducted pursuant to the provisions of any Debtor Relief Law (including Section 363 of the Bankruptcy Code), to use and apply all or any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale. For the avoidance of doubt, no Agent shall be required to take title to any Collateral without its prior written consent.
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(e) The Collateral Agent shall have no obligation whatsoever to any Lender to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected or insured or has been encumbered or that the Lien granted to the Collateral Agent pursuant to this Agreement or any other Loan Document has been properly or sufficiently or lawfully created, perfected, protected or enforced or is entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.08 or in any other Loan Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders (if applicable) and that the Collateral Agent shall have no duty or liability whatsoever to any other Lender, except as otherwise provided herein.
Section 10.09 Agency for Perfection. Each Agent and each Lender hereby appoints each other Agent and each other Lender as its sub-collateral agent and gratuitous bailee for the purpose of perfecting the security interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the Uniform Commercial Code or the PPSA, can be perfected only by possession or control (or where the security interest of a secured party with possession or control has priority over the security interest of another secured party) and each Agent and each Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral for the benefit of the Secured Parties as secured party. Should the Administrative Agent or any Lender obtain possession or control of any such Collateral, the Administrative Agent or such Lender shall notify the Collateral Agent in writing thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver possession or control of such Collateral to the Collateral Agent and take such other actions as sub-collateral agent or gratuitous bailee in accordance with the Collateral Agent’s instructions. In addition, the Collateral Agent shall also have the power and authority hereunder to appoint such other sub-agents as may be necessary or required under applicable state law or otherwise to perform its duties and enforce its rights with respect to the Collateral and under the Loan Documents. Each Loan Party by its execution and delivery of this Agreement hereby consents to the foregoing.
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Section 10.10 No Reliance on any Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Related Parties, participants or assignees, may rely on any Agent to carry out such Lender’s, Related Parties’, participant’s or assignee’s customer identification program, or other requirements imposed by the USA PATRIOT Act or the regulations issued thereunder, including the regulations set forth in 31 C.F.R. §§ 1010.100(yy), (iii), 1020.100, and 1020.220 (formerly 31 C.F.R. § 103.121), as hereafter amended or replaced (“CIP Regulations”), or any other Anti-Money Laundering Laws, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Related Parties or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or other regulations issued under the USA PATRIOT Act. Each Lender, Affiliate, participant or assignee subject to Section 326 of the USA PATRIOT Act will perform the measures necessary to satisfy its own responsibilities under the CIP Regulations.
Section 10.11 No Third-Party Beneficiaries. The provisions of this Article are solely for the benefit of the Secured Parties, and no Loan Party shall have rights as a third-party beneficiary of any of such provisions.
Section 10.12 No Fiduciary Relationship. It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to any 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.
Section 10.13 Reports; Confidentiality; Disclaimers. By becoming a party to this Agreement, each Lender:
(a) is deemed to have requested that each Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report with respect to the Parent or any of its Subsidiaries (each, a “Report”) prepared by or at the request of such Agent, and each Agent shall so furnish each Lender with each such Report,
(b) expressly agrees and acknowledges that the Agents (i) do not make any representation or warranty as to the accuracy of any Reports, and (ii) shall not be liable for any information contained in any Reports,
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(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that any Agent or other party performing any audit or examination will inspect only specific information regarding the Parent and its Subsidiaries and will rely significantly upon the Parent’s and its Subsidiaries’ books and records, as well as on representations of their personnel,
(d) agrees to keep all Reports and other material, non-public information regarding the Parent and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 12.19, and
(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold any Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of the Borrowers, and (ii) to pay and protect, and indemnify, defend and hold any Agent and any other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by any such Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
Section 10.14 Collateral Custodian. Upon the occurrence and during the continuance of any Default or Event of Default, the Collateral Agent or its designee may at any time and from time to time employ and maintain on the premises of any Loan Party a custodian selected by the Collateral Agent or its designee who shall have full authority to do all acts necessary to protect the Secured Parties’ interests. Each Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any such custodian and to do whatever the Collateral Agent or its designee may reasonably request to preserve the Collateral. All costs and expenses incurred by the Collateral Agent or its designee by reason of the employment of the custodian shall be the responsibility of the Borrowers.
Section 10.15 Intercreditor Agreements; Authorization to Execute Other Loan Documents. Each Lender hereby acknowledges that it has received and reviewed the Intercreditor Agreements and agrees to be bound by the terms thereof. Each Lender (and each Person that becomes a Lender under this Agreement) hereby authorizes and directs the Agents to enter into, and agrees to be bound by, this Agreement, the Collateral Documents, the Intercreditor Agreements, and the other Loan Documents to be executed by the Agents and agrees that each Agent may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreements. In addition, each Lender and Agent acknowledge and agree that (a) the rights and remedies of the Agents and Lenders hereunder and under the other Loan Documents are subject to the Intercreditor Agreements and (b) in the event of a conflict, the provisions of the Intercreditor Agreements shall control. Each Lender hereby acknowledges and agrees that (i) the foregoing instructed actions constitute an instruction from all the Lenders under this Section and (ii) this Article X and Section 12.04 and Section 12.15 and all other rights, privileges, protections, immunities, and indemnities in favor of the Agents hereunder and under the other Loan Documents shall apply to any and all actions taken or not taken by the Agents in accordance with such instruction. Each Lender agrees that any actions taken by any Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by such Agent of its powers set forth therein or herein, together with such powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.
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Section 10.16 [Reserved].
Section 10.17 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 shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrowers) 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 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 Secured Parties and their respective Related Parties (including any claim for the compensation, expenses, indemnities, disbursements and advances of the Secured Parties and their respective Related Parties and all other amounts due the foregoing hereunder and under the other Loan Documents) 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, interim receiver, receiver and manager, assignee, trustee, monitor, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party 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 Secured Parties, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, indemnities, disbursements and advances of any Agent and its Related Parties, and any other amounts due to any Agent and its Related Parties hereunder and under the other Loan Documents. Nothing contained herein shall be deemed to authorize any Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize any Agent to vote in respect of the claim of any Lender in any such proceeding.
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Section 10.18 Erroneous Payment.
(a) If any Agent notifies a Lender or Secured Party, or any Person who has received funds on behalf of a Lender or Secured Party (any such Lender, Secured Party or other recipient, and each of their respective successors and assigns, a “Payment Recipient”) that such Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds (as set forth in such notice form such Agent) received by such Payment Recipient from such Agent or any of its Related Parties were erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Lender, Secured Party or other Payment Recipient on its behalf) (any such funds, whether transmitted or 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 such Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of such Agent, and such 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 (2) Business Days thereafter, return to such 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 such Agent in same day funds at the greater of the (x) a rate determined by such Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error) and (y) a rate determined by such in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of any Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.
(b) Without limiting the immediately preceding clause (a), each Lender or Secured Party (or any Payment Recipient who received such funds on its behalf), 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 any Agent (or any of its Related Parties) (x) that is in a different amount than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment sent by such Agent (or any of its Related Parties) 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 such Agent (or any of its Related Parties), or (z) that such Lender or Secured Party, or other such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) then in each such case:
(i) it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error and mistake shall be presumed to have been made (absent written confirmation from such Agent to the contrary) or (B) an error and mistake 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 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 (and, in all events, within one (1) Business Day of any of the circumstances described in immediately preceding clauses (x), (y), and (z)) notify such Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying such Agent pursuant to this Section 10.18.
For the avoidance of doubt, the failure to deliver a notice to such Agent pursuant to this Section 10.18 shall not have any effect on a Payment Recipient’s obligations pursuant to Section 10.18 or on whether or not an Erroneous Payment has been made.
(c) Each Lender or Secured Party hereby authorizes the Agents to set off, net and apply any and all amounts at any time owing to such Lender or Secured Party under any Loan Document, or otherwise payable or distributable by any Agent to such Lender or Secured Party from any source, against any amount due to any Agent under immediately preceding clause (a), Section 10.05, or any other indemnity obligations from such Lender to any Agent or its Related Parties under the Loan Documents.
(d) The parties hereto agree that (x) irrespective of whether an Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, such Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment Recipient who has received funds on behalf of a Lender or other Secured Party, to the rights and interests of such Lender or other Secured Party, as the case may be) under the Loan Documents with respect to such amount (the “Erroneous Payment Subrogation Rights”) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrowers or any other Loan Party; provided*,* that this Section 10.18(d) shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the Obligations of the Borrowers relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by such Agent; provided, further, that for the avoidance of doubt, the immediately preceding clauses (x) and (y) shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by such Agent from the Borrowers for the purpose of making such Erroneous Payment.
(e) Notwithstanding anything to the contrary contained herein, and for the avoidance of doubt, in no event shall the occurrence of an Erroneous Payment (or the existence of any Erroneous Payment Subrogation Rights or other rights of any Agent in respect of an Erroneous Payment) result in such Agent becoming, or being deemed to be, a Lender hereunder or the holder of any Loans hereunder.
(f) 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 such Agent from the Borrowers or any other Loan Party for the purpose of making such Erroneous Payment.
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(g) 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 any 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.
Section 10.19 Appointment as Hypothecary Representative(a) . Without limiting the powers of the Collateral Agent, for the purposes of holding any hypothec granted to the Attorney (as defined below) pursuant to the laws of the Province of Quebec to secure the prompt payment and performance of any and all Obligations by any Loan Party, each of the Secured Parties hereby irrevocably appoints and authorizes the Collateral Agent and, to the extent necessary, ratifies the appointment and authorization of the Collateral Agent, to act as the hypothecary representative of the creditors as contemplated under Article 2692 of the Civil Code of Quebec (in such capacity, the “Attorney”), and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon the Attorney under any related deed of hypothec. The Attorney shall: (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to the Attorney pursuant to any such deed of hypothec and applicable law, and (b) benefit from all rights, privileges, protections, immunities, and indemnities of the Collateral Agent and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and reimbursement and indemnification by the Secured Parties and Loan Parties. Any person who becomes a Secured Party shall, by its execution of an Assignment and Acceptance, be deemed to have consented to and confirmed the Attorney as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Secured Party, all actions taken by the Attorney in such capacity. The substitution of the Collateral Agent pursuant to the provisions of this Article X also constitutes the substitution of the Attorney.
Section 10.20 Survival. The agreements in this Article X shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
Article XI
GUARANTY
Section 11.01 Guaranty. Each Guarantor hereby jointly and severally and unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all Obligations of the Borrowers now or hereafter existing under any Loan Document, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of any Borrower, whether or not a claim for post-filing interest is allowed in such Insolvency Proceeding) fees, commissions, expense reimbursements, indemnifications or otherwise (such obligations, to the extent not paid by the Borrowers, being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under the guaranty set forth in this Article XI. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrowers to the Secured Parties under any Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Borrower. Notwithstanding any of the foregoing, Guaranteed Obligations shall not include any Excluded Swap Obligations. In no event shall the obligation of any Guarantor hereunder exceed the maximum amount such Guarantor could guarantee under any Debtor Relief Law.
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Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. Each Guarantor agrees that this Article XI constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be made by any Secured Party to any Collateral. The obligations of each Guarantor under this Article XI are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce such obligations, irrespective of whether any action is brought against any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of each Guarantor under this Article XI shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;
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(c) any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense or other right that any Guarantor may have at any time against any Person, including, without limitation, any Secured Party;
(e) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or
(f) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Secured Parties that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.
This Article XI shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by Secured Parties or any other Person upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all as though such payment had not been made.
Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Article XI and any requirement that the Secured Parties exhaust any right or take any action against any Loan Party or any other Person or any Collateral, (iii) any right to compel or direct any Secured Party to seek payment or recovery of any amounts owed under this Article XI from any one particular fund or source or to exhaust any right or take any action against any other Loan Party, any other Person or any Collateral, (iv) any requirement that any Secured Party protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any Loan Party, any other Person or any Collateral, and (v) any other defense available to any Guarantor. Each Guarantor agrees that the Secured Parties shall have no obligation to marshal any assets in favor of any Guarantor or against, or in payment of, any or all of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 11.03 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Article XI, and acknowledges that this Article XI is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
Section 11.04 Continuing Guaranty; Assignments. This Article XI is a continuing guaranty and shall (a) remain in full force and effect until the later of the cash payment in full of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Secured Parties and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Agent or any Lender may pledge, assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitments, its Loans owing to it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Agent or such Lender herein or otherwise, in each case as provided in Section 12.07.
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Section 11.05 Subrogation. No Guarantor will exercise any rights that it may now or hereafter acquire against any Loan Party or any other guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Article XI, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Secured Parties against any Loan Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI shall have been paid in full in cash and the Final Maturity Date shall have occurred. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Article XI, whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Article XI thereafter arising. If (i) any Guarantor shall make payment to the Secured Parties of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Article XI shall be paid in full in cash and (iii) the Final Maturity Date shall have occurred, the Secured Parties will, at such Guarantor’s reasonable request and expense, execute and deliver to such Guarantor appropriate documents, without recourse to and without representation or warranty by the Secured Parties of any kind, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
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Section 11.06 Contribution. All Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any date by a Guarantor under this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such date, such Guarantor shall be entitled to a contribution from each of the other Guarantors in an amount sufficient to cause each Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to any Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Guarantor, to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Guarantors multiplied by, (b) the aggregate amount paid or distributed on or before such date by all Guarantors under this Guaranty in respect of the obligations guaranteed. “Fair Share Contribution Amount” means, with respect to any Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Guarantor under this Guaranty that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Guarantor for purposes of this Section 11.06, any assets or liabilities of such Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to any Guarantor as of any date of determination, an amount equal to (A) the aggregate amount of all payments and distributions made on or before such date by such Guarantor in respect of this Guaranty (including, without limitation, in respect of this Section 11.06), minus (B) the aggregate amount of all payments received on or before such date by such Guarantor from the other Guarantors as contributions under this Section 11.06. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Guarantor. The allocation among Guarantors of their obligations as set forth in this Section 11.06 shall not be construed in any way to limit the liability of any Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 11.06.
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Article XII
**** MISCELLANEOUS
Section 12.01 Notices, Etc.
(a) Notices Generally. All notices and other communications provided for hereunder or under any other Loan Document shall be in writing and shall be delivered by hand, sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, or telecopier. In the case of notices or other communications to any Loan Party, Administrative Agent or the Collateral Agent, as the case may be, they shall be sent to the respective address set forth below (or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 12.01):
c/o Exela Technologies BPA, LLC
6641 N. Belt Line Road, Suite 100
Irving, TX 75063 USA
Attention: President
Email: legalnotices@exelatech.com
with a copy to:
Latham & Watkins LLP
Attention: Hugh Murtagh
1271 Avenue of the Americas
New York, NY 10020
Email: Hugh.Murtagh@lw.com
if to the Administrative Agent or the Collateral Agent, to it at the following address:
Ankura Trust Company, LLC
140 Sherman Street, 4th Floor
Fairfield, CT 06824
Attention: Beth Micena
Email: Beth.Micena@ankura.com
with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036-8704
Attention: Mark Somerstein, Patricia Chen
Email: mark.somerstein@ropesgray.com; patricia.chen@ropesgray.com
All notices or other communications sent in accordance with this Section 12.01, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (i) notices sent by overnight courier service shall be deemed to have been given when received, (ii) notices by facsimile 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), provided, further that any notice or other communication to any Agent shall not be effective until received by such Agent during its normal business hours, and (iii) notices by electronic communications shall be deemed given as provided in Section 12.01(b); provided, further, that, in no event shall a voice mail message be effective as a notice, communication or confirmation hereunder.
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(b) Electronic Communications.
(i) Each Agent and the Administrative Borrower may, in its 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. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Agents, provided, that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Agents that it is incapable of receiving notices under such Article by electronic communication.
(ii) Unless the Administrative Agent otherwise prescribes, (A) 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), and (B) 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 (A), of notification that such notice or communication is available and identifying the website address therefor; provided, that, for both clauses (A) and (B) 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. Notwithstanding any other provision of this Agreement, none of the Agents or their Related Parties will be responsible or liable to the Borrowers or any other Person for damages arising from the use by others of any information or other materials obtained through internet, electronic, telecommunications or other information transmission systems.
Section 12.02 Amendments, Etc. (a) No amendment or waiver of any provision of this Agreement or any other Loan Document (excluding the Fee Letter), and no consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed (x) in the case of an amendment, consent or waiver to cure any ambiguity, omission, defect or inconsistency or grant a new Lien for the benefit of the Secured Parties or extending an existing Lien over additional property, by the Agents and the Borrowers (or by the Administrative Borrower on behalf of the Borrowers), (y) in the case of any other waiver or consent, by the Required Lenders (with a copy to the Agents) (or by the Agents with the consent of the Required Lenders) and (z) in the case of any other amendment, by the Required Lenders (with a copy to the Agents) (or by the Agents with the consent of the Required Lenders) and the Borrowers (or by the Administrative Borrower on behalf of the Borrowers), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:
(i) other than pursuant to Section 2.14, increase the Commitment of any Lender, reduce the principal of, or interest on, the Loans payable to any Lender, reduce the amount of any fee payable for the account of any Lender, or postpone or extend any scheduled date fixed for any payment of principal of, or interest or fees on, the Loans payable to any Lender, in each case, without the written consent of such Lender;
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(ii) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans that is required for the Lenders or any of them to take any action hereunder without the written consent of each Lender;
(iii) amend the definition of “Required Lenders” or “Pro Rata Share” without the written consent of each Lender;
(iv) release all or a substantial portion of the Collateral (except as otherwise provided in this Agreement and the other Loan Documents), subordinate any Lien granted in favor of the Collateral Agent for the benefit of the Secured Parties, or release any Borrower or any Guarantor (except in connection with a Disposition of the Equity Interests thereof permitted by Section 7.02(c)(ii)), in each case, without the written consent of each Lender; provided, that the Required Lenders may elect to release all or a substantial portion of the Collateral without the requirement to obtain the written consent of each Lender if such release is in connection with (x) an exercise of remedies by the Collateral Agent at the direction of the Required Lenders pursuant to Section 9.01 or (y) any Disposition of all or a substantial portion of the Collateral by one or more of the Loan Parties with the consent of the Required Lenders after the occurrence and during the continuance of an Event of Default so long as such Disposition is conducted in a commercially reasonable manner as if such Disposition were a disposition of collateral by a secured creditor in accordance with Article 9 of the UCC or the applicable provisions of the PPSA;
(v) amend, modify or waive Section 4.02, Section 4.03 or this Section 12.02 of this Agreement without the written consent of each Lender;
(vi) amend, modify or waive the definition of Liability Management Transaction or Section 7.02(s) of this Agreement without the written consent of the Required Supermajority Lenders; or
(vii) amend, waive or otherwise modify Section 12.07(m) or any provision of the Loan Documents to allow for purchases of any Loans (by open market purchase, Dutch auction, through assignments or otherwise) without the written consent of each Lender directly and adversely affected thereby.
(b) Notwithstanding anything to the contrary in Section 12.02(a):
(i) no amendment, waiver or consent shall, unless in writing and signed by each Agent, affect the rights or duties of, or any fees or other amounts payable to, such Agent (but not in its capacity as a Lender) under this Agreement or the other Loan Documents; provided, that, only the consent of the parties to the Fee Letter shall be required to amend, modify or supplement the terms thereof;
(ii) any amendment, waiver or consent to any provision of this Agreement (including Sections 4.01 and 4.02) that permits any Loan Party to purchase Loans on a non-pro rata basis, become an eligible assignee pursuant to Section 12.07 and/or make offers to make optional prepayments on a non-pro rata basis shall require the prior written consent of the Required Lenders rather than the prior written consent of each Lender directly affected thereby;
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(iii) any Control Agreement, Guaranty, Mortgage, Security Agreement, Canadian Security Agreement, collateral access agreement, landlord waiver or other agreement or document purporting to create or perfect a security interest in any of the Collateral (a “Collateral Document”) may be amended, waived or otherwise modified with the consent of the applicable Agent and the applicable Loan Party without the need to obtain the consent of any Lender or any other Person if such amendment, modification, supplement or waiver is delivered in order (A) to comply with local Requirements of Law (including foreign law or regulatory requirements) or advice of local counsel, (B) to cure any ambiguity, inconsistency, omission, mistake or defect or (C) to cause such Collateral Document to be consistent with this Agreement and the other Loan Documents, and if the Administrative Agent and the Administrative Borrower shall have jointly identified an ambiguity, inconsistency, omission, mistake or defect, in each case, in any provision of any Loan Document (other than a Collateral Document), then the Administrative Agent and the Administrative Borrower shall be permitted to amend such provision; any amendment, waiver or modification pursuant to this paragraph shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof;
(iv) no consent of any Loan Party shall be required to change any order of priority set forth in Section 2.05(d) and Section 4.03; and
(v) the Administrative Agent and the Administrative Borrower may enter into an amendment to this Agreement pursuant to Section 2.13 to reflect an alternative service or index rate and such other related changes to this Agreement as may be applicable, and the Administrative Agent may make Conforming Changes pursuant to Section 2.13; and
(vi) no Defaulting Lender or any Affiliate of a Defaulting Lender that is a Lender shall have any right to approve or disapprove any amendment, waiver or consent under the Loan Documents and any Loans held by such Person for purposes hereof shall be automatically deemed to be voted pro rata according to the Loans of all other Lenders in the aggregate (other than such Defaulting Lender or Affiliate).
(c) [Reserved].
(d) [Reserved].
Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Agents and the Lenders provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agents and the Lenders under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Agents and the Lenders to exercise any of their rights under any other Loan Document against such party or against any other Person.
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Section 12.04 Expenses; Attorneys’ Fees. The Borrowers will pay on demand, all costs and expenses incurred by or on behalf of each Agent (and, in the case of clauses (b) through (m) below, each Lender), regardless of whether the transactions contemplated hereby are consummated, including, without limitation, reasonable fees, costs, client charges and expenses of counsel for each Agent (and, in the case of clauses (b) through (m) below, each Lender), accounting, due diligence, periodic field audits, physical counts, valuations, investigations, searches and filings, monitoring of assets, appraisals of Collateral, the rating of the Loans, title searches and reviewing environmental assessments, miscellaneous disbursements, examination, travel, lodging and meals, arising from or relating to: (a) the negotiation, preparation, execution, delivery, performance and administration of this Agreement and the other Loan Documents (including, without limitation, the preparation of any additional Loan Documents pursuant to Section 7.01(b) or the review of any of the agreements, instruments and documents referred to in Section 7.01(f)), (b) any requested amendments, supplements, waivers, modifications or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given, (c) the preservation, protection and enforcement of the Agents’ or any of the Lenders’ rights under this Agreement or the other Loan Documents, (d) the defense of any claim or action asserted or brought against any Agent or any Lender by any Person that arises from or relates to this Agreement, any other Loan Document, the Agents’ or the Lenders’ claims against any Loan Party, or any and all matters in connection therewith, (e) the commencement or defense of, or intervention in, any court proceeding arising from or related to this Agreement or any other Loan Document, (f) the filing of any petition, complaint, answer, motion or other pleading by any Agent or any Lender, or the taking of any action in respect of the Collateral or other security, in connection with this Agreement or any other Loan Document, (g) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other security in connection with this Agreement or any other Loan Document, (h) any attempt to enforce any Lien or security interest in any Collateral or other security in connection with this Agreement or any other Loan Document, (i) any attempt to collect from any Loan Party, (j) any Environmental Claim, Environmental Liability or Remedial Action arising from or in connection with the past, present or future operations of, or any property currently, formerly or in the future owned, leased or operated by, any Loan Party, any of its Subsidiaries or any predecessor in interest, (k) any Environmental Lien, (l) the rating of the Loans by one or more rating agencies in connection with any Lender’s Securitization, or (m) the receipt by any Agent or any Lender of any advice from professionals with respect to any of the foregoing. Without limitation of the foregoing or any other provision of any Loan Document: (x) the Borrowers agree to pay all broker fees that may become due in connection with the transactions contemplated by this Agreement and the other Loan Documents and (y) if the Borrowers fail to perform any covenant or agreement contained herein or in any other Loan Document, any Agent may itself perform or cause performance of such covenant or agreement, and the expenses of such Agent incurred in connection therewith shall be reimbursed on demand by the Borrowers. The obligations of the Borrowers under this Section 12.04 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
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Section 12.05 Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, any Agent or any Lender may, and is hereby authorized to, at any time and from time to time, without notice to any Loan Party (any such notice being expressly waived by the Loan Parties) and to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Agent or such Lender or any of their respective Affiliates to or for the credit or the account of any Loan Party against any and all obligations of the Loan Parties either now or hereafter existing under any Loan Document, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured; provided, that in the event that any Defaulting Lender shall exercise any such right of set-off, (a) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 4.04 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 Secured Parties, and (b) 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 set-off. Each Agent and each Lender agrees to notify the Administrative Agent and such Loan Party in writing promptly after any such set-off and application made by such Agent or such Lender or any of their respective Affiliates provided, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agents and the Lenders under this Section 12.05 are in addition to the other rights and remedies (including other rights of set-off) which the Agents and the Lenders may have under this Agreement or any other Loan Documents of law or otherwise.
Section 12.06 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
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Section 12.07 Assignments and Participations.
(a) This Agreement and the other Loan Documents shall be binding upon and inure to the benefit of each Loan Party and each Agent and each Lender and their respective successors and assigns; provided, however, that none of the Loan Parties may assign or transfer any of its rights hereunder or under the other Loan Documents without the prior written consent of each Agent and any such assignment without the Agents’ prior written consent shall be null and void.
(b) Subject to the conditions set forth in clause (c) below, each Lender may assign all or a portion of its rights and obligations under this Agreement with respect to all or a portion of its Term Loan Commitment and any Term Loan made by it to one or more other Persons (other than a natural person) that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities, with the written consent of the Administrative Agent;
provided, however, that no written consent of the Administrative Agent shall be required in connection with any assignment by a Lender to a Lender, an Affiliate of such Lender or a Related Fund of such Lender.
(c) Assignments shall be subject to the following additional conditions:
(i) Each such assignment shall be in an amount which is at least $1,000,000 or a multiple of $500,000 in excess thereof (or the remainder of such Lender’s Commitment) (except such minimum amount shall not apply to an assignment by a Lender to (A) a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (B) a group of new Lenders, each of whom is an Affiliate or Related Fund of each other to the extent the aggregate amount to be assigned to all such new Lenders is at least $1,000,000 or a multiple of $500,000 in excess thereof);
(ii) The parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance, an Assignment and Acceptance and such parties shall deliver to the Administrative Agent, for its own benefit, a processing and recordation fee of $3,500 (which may be waived by the Administrative Agent in its sole discretion), and if such assignee is not a Lender, such assignee shall deliver to the Administrative Agent, a completed Administrative Questionnaire, all tax forms required under Section 2.09 and all documentation and other information that each Agent reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the USA PATRIOT Act; and
(iii) No such assignment shall be made to (A) any Defaulting Lender or any of its Affiliates, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (A) or (B) any Natural Person.
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(d) Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance and recordation on the Register, which effective date shall be at least 3 Business Days after the delivery thereof to the Administrative Agent (or such shorter period as shall be agreed to by the Administrative Agent and the parties to such assignment), (A) the assignee thereunder shall become a “Lender” hereunder and, in addition to the rights and obligations hereunder held by it immediately prior to such effective date, have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).
(e) By executing and delivering an Assignment and Acceptance, the assigning Lender and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or any of its Subsidiaries or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the other Loan Documents, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the assigning Lender, any Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (v) such assignee appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agents by the terms hereof and thereof, together with such powers as are reasonably incidental hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Lender.
(f) The Administrative Agent shall, acting for this purpose as a non-fiduciary agent of the Borrowers, solely for tax purposes, maintain, or cause to be maintained at one of its offices, a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitments of, and the principal amount of the Loans (and stated interest thereon) (the ”Registered Loans”) owing to each Lender from time to time. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agents and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Administrative Borrower and any Lender (solely with respect to its own outstanding Obligations) at any reasonable time and from time to time upon reasonable prior written notice. This Section 12.07(i) and Section 12.07(f) shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and Treasury Regulations thereunder, and the right, title and interest of each Lender in and to such Loans shall be transferable only upon notation of such transfer in the Register.
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(g) Upon receipt by the Administrative Agent of a completed Assignment and Acceptance, and subject to any consent required from the Administrative Agent pursuant to Section 12.07(b) (which consent of the applicable Agent must be evidenced by the Administrative Agent’s execution of an acceptance to such Assignment and Acceptance), the Administrative Agent shall accept such assignment, record the information contained therein in the Register (as adjusted to reflect any principal payments on or amounts capitalized and added to the principal balance of the Loans and/or Commitment reductions made subsequent to the effective date of the applicable assignment, as confirmed in writing by the corresponding assignor and assignee in conjunction with delivery of the assignment to the Administrative Agent).
(h) A Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide). Any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s) to the Administrative Borrower, one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).
(i) If any Lender sells participations in a Registered Loan, such Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the Borrowers, maintain, or cause to be maintained, a register, on which it enters the name of all participants in the Registered Loans held by it and the principal amount (and stated interest thereon) of the portion of the Registered Loan that is the subject of the participation (the “Participant Register”). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. The Participant Register shall be available for inspection by the Administrative Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(j) Any Foreign Lender who purchases or is assigned or participates in any portion of such Registered Loan shall comply with Section 2.09(d).
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(k) Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Commitments and the Loans made by it); provided, that (i) such Lender’s obligations under this Agreement (including without limitation, its Commitments hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and the Borrowers, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents; and (iii) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (A) action directly effecting an extension of the maturity dates or decrease in the principal amount of the Loans, (B) action directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loans or the fees payable to such Lender under this Agreement, or (C) actions directly effecting a release of all or a substantial portion of the Collateral or any Loan Party (except as set forth in Section 10.08 of this Agreement or any other Loan Document). The Loan Parties agree that each participant shall be entitled to the benefits of Section 2.09 and Section 2.10 of this Agreement with respect to its participation in any portion of the Commitments and the Loans as if it was a Lender.
(l) 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 or loans made to, or other indebtedness issued by, such Lender pursuant to a securitization transaction (including any structured warehouse credit facility, collateralized loan obligation transaction or similar facility or transaction, and including any further securitization of the indebtedness or equity issued under such a transaction) (a “Securitization”); 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. The Loan Parties shall cooperate with such Lender and its Affiliates to effect a Securitization, including, without limitation, by providing such information as may be reasonably requested by such Lender in connection with the rating of its Loans or any Securitization.
(m) Any Lender may, so long as no Event of Default has occurred and is continuing or would result therefrom, assign all or a portion of its rights and obligations with respect to the Term Loans and the Term Loan Commitments under this Agreement to the Lead Borrower, any of the Lead Borrower’s Subsidiaries through (i) Dutch auctions open to all Lenders using solely cash consideration (and not the proceeds of Indebtedness (including for the avoidance of doubt, revolving indebtedness) or (ii) open market purchases using solely cash consideration (and not the proceeds of Indebtedness (including for the avoidance of doubt, revolving indebtedness) and solely offered on a pro rata basis to all Lenders, in each case subject to the following limitations; provided, that:
(i) if the assignee is a Subsidiary of the Lead Borrower (but not a Borrower), upon such assignment, transfer or contribution, the applicable assignee shall automatically be deemed to have contributed or transferred the principal amount of such Term Loans, plus all accrued and unpaid interest thereon, to a Borrower; or
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(ii) if the assignee is a Borrower (including through contribution or transfers set forth in clause (i) above), either (1) (x) the principal amount of such Term Loans, along with all accrued and unpaid interest thereon, so contributed, assigned or transferred to such Borrower shall be deemed automatically cancelled and extinguished on the date of such contribution, assignment or transfer and (y) such Borrower shall promptly provide written notice to the Administrative Agent of such contribution, assignment or transfer of such Term Loans (which notice shall set forth the effective date and amount of such contribution, assignment or transfer), and the Administrative Agent, upon receipt of such notice, shall reflect the cancellation of the applicable Term Loans in the Register as of the effective date set forth in such notice or (2) the Obligations in respect of such Term Loans shall become subordinated to the Term Loans of the other Lenders on terms and conditions satisfactory to the Borrowers, the Agents and the Required Lenders.
Section 12.08 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by telecopier or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telecopier or electronic mail also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
Section 12.09 Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10 Consent to Jurisdiction; Service of Process and Venue.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE FEDERAL COURTS SITTING IN THE SOUTHERN DISTRICT OF NEW YORK IN THE STATE OF NEW YORK, OR IF SUCH FEDERAL COURTS DO NOT HAVE JURISDICTION, THEN TO THE COMMERCIAL DIVISION OF THE STATE COURTS RESIDING IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK, OR, TO THE EXTENT THAT ANY ACTION IS NOT ELIGIBLE FOR FILING IN THE COMMERCIAL DIVISION, THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURT. EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN Section 12.01, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE LOAN PARTIES AGREE 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 HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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(b) Each Loan Party irrevocably and unconditionally agrees that it will not commence any action or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against any Agent, any Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than 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.
(c) [Reserved].
Section 12.11 Waiver of Jury Trial, Etc. EACH LOAN PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.
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Section 12.12 Consent by the Agents and Lenders. Except as otherwise expressly set forth herein to the contrary or in any other Loan Document, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of any Agent or any Lender shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which any Loan Party is a party and to which any Agent or any Lender has succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by such Agent or such Lender, in its sole discretion, with or without any reason, and without being subject to question or challenge on the grounds that such Action was not taken in good faith.
Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon any Secured Party for repayment or recovery of any amount or amounts received by such Secured Party in payment or on account of any of the Obligations, such Secured Party shall give prompt notice of such claim to the Administrative Agent and the Administrative Borrower, and if such Secured Party repays all or part of such amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such Secured Party or any of its property, or (ii) any good faith settlement or compromise of any such claim effected by such Secured Party with any such claimant, then and in such event each Loan Party agrees that (A) any such judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding the cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination of this Agreement or the other Loan Documents, and (B) it shall be and remain liable to such Secured Party hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Secured Party.
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Section 12.15 Indemnification; Limitation of Liability for Certain Damages.
(a) In addition to each Loan Party’s other Obligations under this Agreement, each Loan Party agrees to, jointly and severally, defend, protect, indemnify and hold harmless each Secured Party and all of their respective Related Parties (collectively called the “Indemnitees”) from and against any and all losses, damages, liabilities, actions, suits, judgments, obligations, penalties, fees, claims, reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the Effective Date, whether direct, indirect or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the negotiation, preparation, execution, performance, delivery, administration or enforcement of this Agreement, any other Loan Document, of any Environmental Claim or any other document executed in connection with the transactions contemplated by the Loan Documents, (ii) any Agent’s or any Lender’s furnishing of funds to the Borrowers under this Agreement or the other Loan Documents, including, without limitation, the management of any such Loans or the Borrowers’ use of the proceeds thereof, (iii) the Agents and the Lenders relying on any instructions of the Administrative Borrower or the handling of the Collateral of the Borrowers as provided in the Loan Documents, (iv) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents or by any document executed in connection with the transactions contemplated by this Agreement or the other Loan Documents, or (v) any claim, including any Environmental Claim, investigation or proceeding relating to or arising out of any of the foregoing, whether or not any Indemnitee is a party thereto (collectively, the “Indemnified Matters”); provided, however, that the Loan Parties shall not have any obligation to any Indemnitee under this subsection (a) for any Indemnified Matter caused by the gross negligence or willful misconduct of such Indemnitee, as determined by a final non-appealable judgment of a court of competent jurisdiction. This Section 12.15 and Section 12.04 shall not apply with respect to Taxes other than any Taxes that represent losses, damages, liabilities, actions, suits, judgments, obligations, penalties, fees, claims, or reasonable costs and expenses arising from any non-Tax claim.
(b) To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 12.15 may be unenforceable because it is violative of any law or public policy, each Loan Party shall, jointly and severally, contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
(c) No Loan Party shall assert, and each Loan Party hereby waives, any claim against the Indemnitees, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Loan Party hereby waives, releases and agrees not to sue upon any such claim or seek any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
(d) The indemnities and waivers set forth in this Section 12.15 shall survive the resignation or replacement of any Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments, the repayment, satisfaction or discharge of the Loans and all other Obligations payable hereunder and under any other Loan Document, and the termination of this Agreement or any other Loan Document.
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Section 12.16 Records. The unpaid principal of and interest on the Loans, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability, the Commitments, and the accrued and unpaid fees payable pursuant to Section 2.06 hereof, shall at all times be ascertained from the records of the Agents, which shall be conclusive and binding absent manifest error.
Section 12.17 Binding Effect. This Agreement shall become effective when it shall have been executed by each Loan Party, each Agent and each Lender and when the conditions precedent set forth in Section 5.01 hereof have been satisfied or waived in writing by the Agents and the Required Lenders, and thereafter shall be binding upon and inure to the benefit of each Loan Party, each Agent and each Lender, and their respective successors and assigns, except that the Loan Parties shall not have the right to assign their rights hereunder or any interest herein without the prior written consent of each Agent and each Lender, and any assignment by any Lender shall be governed by Section 12.07 hereof.
Section 12.18 Highest Lawful Rate. It is the intention of the parties hereto that each Agent and each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York, the federal laws of Canada (including the Criminal Code (Canada)) or any other jurisdiction whose laws may be mandatorily applicable to such Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to any Agent or any Lender that is contracted for, taken, reserved, charged or received by such Agent or such Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by such Agent or such Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent (solely if such Agent is holding such excess) or such Lender, as applicable, to the Borrowers); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Agent or any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall, subject to the last sentence of this Section 12.18, be canceled automatically by such Agent or such Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Agent or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent (solely if such Agent is holding such excess) or such Lender to the Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Agent or such Lender, be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (x) the amount of interest payable to any Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Agent or such Lender pursuant to this Section 12.18 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Agent or such Lender would be less than the amount of interest payable to such Agent or such Lender computed at the Highest Lawful Rate applicable to such Agent or such Lender, then the amount of interest payable to such Agent or such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Agent or such Lender until the total amount of interest payable to such Agent or such Lender shall equal the total amount of interest which would have been payable to such Agent or such Lender if the total amount of interest had been computed without giving effect to this Section 12.18.
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For purposes of this Section 12.18, the term “applicable law” shall mean that law in effect from time to time and applicable to the loan transaction between the Borrowers, on the one hand, and the Agents and the Lenders, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America
The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.
Section 12.19 Confidentiality. Each Agent and each Lender agrees (on behalf of itself and its Related Parties) to use reasonable precautions to keep confidential, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Loan Parties pursuant to this Agreement or the other Loan Documents which is identified in writing by the Loan Parties as being confidential at the time the same is delivered to such Person (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), provided, that nothing herein shall limit the disclosure by any Agent or any Lender of any such information (i) to its Affiliates, its Related Parties or the Related Parties of any Person described in clause (ii) or (iii) below) (it being understood that the Persons to whom such disclosure is made either will be informed of the confidential nature of such information and instructed to keep such information confidential in accordance with this Section 12.19 or is subject to other customary confidentiality obligations); (ii) to any other party hereto; (iii) to any assignee or participant (or prospective assignee or participant) or any party to a Securitization, so long as such assignee or participant (or prospective assignee or participant) or party to a Securitization agrees, in writing, to be bound by or is otherwise subject to customary confidentiality obligations (including, without limitation, confidentiality provisions similar in substance to this Section 12.19); (iv) to the extent required by any Requirement of Law or judicial process or as otherwise requested by any Governmental Authority; (v) to the National Association of Insurance Commissioners or any similar organization, any examiner, auditor or accountant or any nationally recognized Rating Agency; (vi) in connection with any litigation to which any Agent or any Lender is a party; (vii) 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; (viii) to any other Person if such information is general portfolio information that does not identify the Loan Parties, or (ix) with the consent of the Administrative Borrower. In addition, the Agents 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 any Agent or any Lender in connection with the administration of this Agreement, the other Loan Documents and the Commitments.
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Section 12.20 Platform; Borrower Materials.
(a) Each Loan Party hereby acknowledges that (a) the Administrative Agent may make available to the Lenders communications, documents, materials or information provided by or on behalf of any Loan Party hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”), and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive information of a type that would constitute material non-public information with respect to the Borrowers or their securities) (each, a “Public Lender”). The Borrowers hereby agree that they will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (a) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof, (b) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent and the Lenders to treat the Borrower Materials as either publicly available information or not material information (although it may be sensitive and proprietary) with respect to the Borrowers or their securities for purposes of United States federal and state securities laws, (c) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (d) the Administrative Agent shall be entitled to treat the Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the following Borrower Materials may be posted on that portion of the Platform designated for Public Lenders unless the Borrowers notify the Administrative Agent promptly in writing that any such document contains material non-public information: (1) the Loan Documents, and (2) notification of changes in the terms of the Loans.
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(b) Each of the Lenders and the Loan Parties acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that no Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Platform, and that there are confidentiality and other risks associated with such distribution. Each of the Lenders and the Loan Parties hereby approves distribution of the Borrower Materials through the Platform and understands and assumes the risks of such distribution.
(c) Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Borrower Materials that are not made available through the “Public Investor” portion of the Platform and that may contain information of a type that would constitute material non-public information with respect to the Borrowers or their securities for purposes of United States Federal or state securities laws. In the event that any Public Lender has elected for itself to not access any information disclosed through the Platform or otherwise, such Public Lender acknowledges that (i) the Agents and other Lenders may have access to such information and (ii) neither the Borrowers nor the Agents or other Lender with access to such information shall have (x) any responsibility for such Public Lender’s decision to limit the scope of information it has obtained in connection with this Agreement and the other Loan Documents or (y) any duty to disclose such information to such electing Lender or to use such information on behalf of such electing Lender, and shall not be liable for the failure to so disclose or use such information.
(d) Each Lender agrees that notice to it (as provided in the next sentence) specifying that Borrower Materials have been posted to the Platform shall constitute effective delivery of the Borrower Materials to such Lender for purposes of the Loan Documents. Each Lender agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender’s email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.
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(e) Each of the Lenders and the Loan Parties agrees that each Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Borrower Materials on the Platform in accordance with such Agent’s generally applicable document retention procedures and policies.
(f) THE PLATFORM AND THE BORROWER MATERIALS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENTS AND THEIR RELATED PARTIES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS IN THE PLATFORM OR THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING 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 OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall any Agent or its Related Parties have any liability to any Loan Party, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Loan Party’s or any Agent’s transmission of Borrower Materials through the internet or the Platform.
(g) Nothing herein shall prejudice the right of any Agent or any Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.
Section 12.21 Public Disclosure. Each Loan Party agrees that neither it nor any of its Affiliates will now or in the future issue any press release or other public disclosure using the name of an Agent, any Lender or any of their respective Affiliates or referring to this Agreement or any other Loan Document without the prior written consent of such Agent or such Lender, except to the extent that such Loan Party or such Affiliate is required to do so under applicable law (in which event, such Loan Party or such Affiliate will consult with such Agent or such Lender before issuing such press release or other public disclosure). Each Loan Party hereby authorizes each Agent and each Lender, after consultation with the Borrowers, to advertise the closing of the transactions contemplated by this Agreement, and to make appropriate announcements of the financial arrangements entered into among the parties hereto, as such Agent or such Lender shall deem appropriate, including, without limitation, on a home page or similar place for dissemination of information on the Internet or worldwide web, or in announcements commonly known as tombstones, in such trade publications, business journals, newspapers of general circulation and to such selected parties as such Agent or such Lender shall deem appropriate.
Section 12.22 Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
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Section 12.23 USA PATRIOT Act. Each Agent and each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Borrowers that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the entities composing the Borrowers, which information includes the name and address of each such entity and other information that will allow such Agent and such Lender to identify the entities composing the Borrowers in accordance with the USA PATRIOT Act. Each Loan Party agrees to take such action and execute, acknowledge and deliver at its sole cost and expense, such instruments and documents as any Agent or any Lender may reasonably require from time to time in order to enable such Agent or such Lender to comply with the USA PATRIOT Act.
Section 12.24 Judgment Currency. This is an international financial transaction in which the specification of a currency and payment in New York is of the essence. Dollars shall be the currency of account in the case of all payments pursuant to or arising under this Agreement or under any other Loan Document, and all such payments shall be made to the Administrative Agent’s Accounts in New York in immediately available funds. To the fullest extent permitted by applicable law, the obligations of each Loan Party to the Secured Parties under this Agreement and under the other Loan Documents shall not be discharged by any amount paid in any other currency or in a place other than to the Administrative Agent’s Accounts in New York to the extent that the amount so paid after conversion under this Agreement and transfer to New York does not yield the amount of Dollars in New York due under this Agreement and under the other Loan Documents. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder in Dollars into another currency (the “Other Currency”), to the fullest extent permitted by applicable law, the rate of exchange used shall be that at which the Administrative Agent could, in accordance with normal procedures, purchase Dollars with the Other Currency on the Business Day preceding that on which final judgment is given. The obligation of each Loan Party in respect of any such sum due from it to the Secured Parties hereunder shall, notwithstanding any judgment in such Other Currency, be discharged only to the extent that, on the Business Day immediately following the date on which the Administrative Agent receives any sum adjudged to be so due in the Other Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase Dollars with the Other Currency. If the Dollars so purchased are less than the sum originally due to the Secured Parties in Dollars, each Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Secured Parties against such loss, and if the Dollars so purchased exceed the sum originally due to the Secured Parties in Dollars, the Secured Parties agrees to remit to the Loan Parties such excess.
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Section 12.25 Waiver of Immunity. To the extent that any Loan Party has or hereafter may acquire (or may be attributed, whether or not claimed) any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service of process or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, such Loan Party hereby irrevocably waives and agrees not to plead or claim, to the fullest extent permitted by law, such immunity in respect of (a) its obligations under the Loan Documents, (b) any legal proceedings to enforce such obligations and (c) any legal proceedings to enforce any judgment rendered in any proceedings to enforce such obligations. Each Loan Party hereby agrees that the waivers set forth in this Section 12.25 shall be to the fullest extent permitted under the Foreign Sovereign Immunities Act and are intended to be irrevocable for purposes of the Foreign Sovereign Immunities Act.
Section 12.26 English Language. This Agreement and each other Loan Document have been negotiated and executed in English. All certificates, reports, notices and other documents and communications given or delivered by any party hereto pursuant to this Agreement or any other Loan Document shall be in English or, if not in English, accompanied by a certified English translation thereof. The English version of any such document shall control the meaning of the matters set forth herein.
Section 12.27 Parent. The parties hereto acknowledge and agree that Parent is not a party to this Agreement or any other Loan Document and shall not be deemed a Borrower, Guarantor, or other obligor with respect to the Obligations.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFTBLANK]
190
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
| BORROWERS: | |
|---|---|
| EXELA TECHNOLOGIES BPA, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA FINANCE INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| GUARANTORS: | |
| EXELA INTERMEDIATE LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV HOLDINGS, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| CORPSOURCE HOLDINGS, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP, INCORPORATED | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP BPS INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DELIVEREX, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| UNITED INFORMATION SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| ECONOMIC RESEARCH SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| SOURCECORP LEGAL INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RUST CONSULTING, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCEHOV HEALTHCARE, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| KINSELLA MEDIA LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOV SERVICES, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOV ENTERPRISE SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| MERIDIAN CONSULTING GROUP, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RUSTIC CANYON III, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| HOV SERVICES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| CHARTER LASON, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| LASON INTERNATIONAL, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| SOURCECORP MANAGEMENT, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| PANGEA ACQUSITIONS INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC GROUP LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC (PUERTO RICO), INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DOCUDATA SOLUTIONS, L.C. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BTC VENTURES, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| RECOGNITION MEXICO HOLDING INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC INTERMEDIATE HOLDING, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| RC4 CAPITAL, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DFG2 HOLDINGS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| DFG2, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| PLEXUS GLOBAL FINANCE, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| HOVG, LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| TRAC HOLDINGS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| MANAGED CARE PROFESSIONALS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| FTS PARENT INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| TRANSCENTRA, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| J & B SOFTWARE, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| REGULUS HOLDING INC. | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS GROUP LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS GROUP II LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS AMERICA LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| REGULUS INTERGRATED SOLUTIONS LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA RE LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| REGULUS WEST LLC | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX INTERMEDIATE, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX GOVERNMENT SOLUTIONS, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA XBP, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| BANCTEC (CANADA), INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| SOURCEHOV CANADA COMPANY | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| AFFILIATED GUARANTORS: | |
| NEON ACQUISITION, LLC | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| NOVITEX ENTERPRISE SOLUTIONS CANADA, INC. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer | |
| EXELA ENTERPRISE SOLUTIONS, INC. | |
| By: | |
| Name: Mayur Joshi | |
| Title: Vice President & Treasurer | |
| Services Integration Group, L.P. | |
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| SIG - GP L.L.C., A LIMITED LIABILITY COMPANY | |
|---|---|
| By: | /s/ Suresh Yannamani |
| Name: Suresh Yannamani | |
| Title: Chief Executive Officer |
[Signature Page to Financing Agreement]
| COLLATERAL AGENT AND<br> ADMINISTRATIVE AGENT:<br><br> <br><br><br> <br>ANKURA TRUST COMPANY, LLC | |
|---|---|
| By: | /s/ Beth Micena |
| Name: Beth Micena | |
| Title: Managing Director |
[Signature Page to Financing Agreement]
| LENDERS: | |
|---|---|
| By: | |
| Name: | |
| Title: |
[Signature Page to Financing Agreement]
| On behalf of the funds: | |
|---|---|
| ECF Value Fund, L.P. | |
| By: Gates Capital Partners,<br> LLC, its general partner | |
| By: Gates Capital Management,<br> Inc., its managing member | |
| By: | /s/ Marc<br> Blatter |
| Name: Marc Blatter | |
| Title: Chief Financial Officer | |
| ECF Value Fund II, L.P. | |
| By: Gates Capital Partners,<br> LLC, its general partner | |
| By: Gates Capital Management,<br> Inc., its managing member | |
| By: | /s/ Marc<br> Blatter |
| --- | --- |
| Name: Marc Blatter | |
| Title: Chief Financial Officer | |
| ECF Value Fund International Master, L.P. | |
| --- | --- |
| By: Gates Capital Partners, LLC, its general partner | |
| By: Gates Capital Management, Inc., its managing member | |
| By: | /s/ Marc<br> Blatter |
| Name: Marc Blatter | |
| Title: Chief Financial Officer |
[Signature Page to Financing Agreement]
| Avenue Global Dislocation Opportunities Fund, L.P.<br><br> <br>By: Avenue Global Dislocation Opportunities GenPar, LLC, its General<br>Partner<br><br> <br>By: GL Global Dislocation Opportunities Partners, LLC,<br>its Managing Member | |
|---|---|
| [LENDING ENTITY]:^3^ | |
| By: | /s/ Sonia Gardner |
| Name: Sonia Gardner | |
| Title: Member |
^^
^3^ Note to Form: Must be signed by the entity that will be the lender of record under the Gates Exit Facility.
[Signature Page to Financing Agreement]
| Avenue RP Opportunities Fund, L.P.<br><br><br><br>By: Avenue RP Opportunities Fund GenPar, LLC, its General Partner<br><br><br><br>By: GL RP Partners, LLC, its Managing Member | |
|---|---|
| [LENDING ENTITY]:^3^ | |
| By: | /s/ Sonia Gardner |
| Name: Sonia Gardner | |
| Title: Member |
^^
^3^ Note to Form: Must be signed by the entity that will be the lender of record under the Gates Exit Facility.
[Signature Page to Financing Agreement]
| Avenue Global Opportunities Master Fund, L.P.<br><br><br><br>By: Avenue Global Opportunities GenPar Holdings, Ltd., its General<br>Partner<br><br><br><br>By: Avenue Global Opportunities GenPar, LLC, its Sole Shareholder | |
|---|---|
| [LENDING ENTITY]:^3^ | |
| By: | /s/ Sonia Gardner |
| Name: Sonia Gardner | |
| Title: Member |
^3^ Note to Form: Must be signed by the entity that will be the lender of record under the Gates Exit Facility.
[Signature Page to Financing Agreement]
| LIVE MICROSYSTEMS, INC. | |
|---|---|
| By: | /s/ Matthew A. Gerritsen |
| Name: Matthew A. Gerritsen | |
| Title: President |
[Signature Page to Financing Agreement]
| CCUR HOLDINGS, INC. | |
|---|---|
| By: | /s/ Igor Volshteyn |
| Name: Igor Volshteyn | |
| Title: CEO |
[Signature Page to Financing Agreement]
| SYMBOLIC LOGIC, INC. | |
|---|---|
| By: | /s/ Igor Volshteyn |
| Name: Igor Volshteyn | |
| Title: CEO |
[Signature Page to Financing Agreement]
| OSK XI-US, LLC | |
|---|---|
| By: | /s/ Chuck Anderson |
| Name: Chuck Anderson | |
| Title: Chief Operating Officer |
[Signature Page to Financing Agreement]
| HOF III LIQUIDATING PARTNERSHIP LP | |
|---|---|
| By: HoldCo Asset Management, LP | |
| By: | /s/ Vik Ghei |
| Name: Vik Ghei | |
| Title: Authorized Signatory |
[Signature Page to Financing Agreement]
Exhibit 10.4
TAX FUNDING AGREEMENT
This TAX FUNDING AGREEMENT (this “Agreement”), dated as of July 29, 2025, is made by and among Exela Technologies BPA, LLC and each of its debtor affiliates (collectively, the “Debtors” and upon the effectiveness of their plan of reorganization, the “ReorganizedDebtors”) that filed chapter 11 cases (the “Chapter 11 Cases”) under Title 11 of the United States Code, 11 U.S.C. §§ 101- 1532 (as it may be amended from time to time, the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Exela Technologies BPA, LLC, in its capacity as Agent for the Reorganized Debtors (the “Agent”), XBP Europe Holdings Inc. (“XBP”), Exela Technologies, Inc. (“ETI”), GP 3XCV LLC (“GP3”) and XCV-STS, LLC (“XCV-STS”, together with ETI and GP3, the “Consenting ETI Parties”). The Reorganized Debtors, the Agent, XBP and the Consenting ETI Parties are referred to herein, individually, as a “Party” and, collectively, as the “Parties.”
RECITALS
WHEREAS, pursuant to the Plan Support Agreement [D.I. 396] (“PSA”) by and among, inter alia, the Consenting ETI Parties and the Debtors, the consenting ETI Parties agreed to support the Restructuring Transactions (as defined therein) including as set forth in the term sheet attached to the PSA, subject to the terms and conditions memorialized therein;
WHEREAS, on June 23, 2025, the Bankruptcy Court confirmed that certain that certain Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code [Docket No. 592] (as may be amended, the “Plan”) providing for the restructuring of the Debtors; and
WHEREAS, on the terms and conditions contained in this Agreement, the Consenting ETI Parties agree to pay the ETI Funding Obligation (as defined below) and the Reorganized Debtors agree to pay the Reorganized Debtors Funding Obligation (as defined below), in each case with respect to the Transaction Tax Liabilities (as defined below);
NOW, THEREFORE, in consideration of the mutual promises, agreements, representations, warranties and covenants contained herein, each of the Parties hereby agree as follows:
Article I
TAX FUNDING OBLIGATIONS
Section 1.1 Determination of Transaction Tax Liabilities
(a) ETI shall continue to engage Ernst & Young as Independent Tax Advisor (in such capacity, “E&Y”) for the purpose of determining the applicable federal, state and local tax liabilities arising, resulting from or triggered by (i) the Restructuring Transactions occurring under the Plan, (ii) the steps taken under the Definitive Documents or pursuant to the Restructuring Steps Exhibit, and/or (iii) the Governance Changes^1^ including any related or similar transactions, in each case, as determined by E&Y (collectively, the “Transaction Tax Liabilities”).
^1^ As defined in the ETI Entities’ Statement and Reservation of Rights Regarding the Motion of the Debtors for Interim and Final Orders (I) Authorizing The Debtors to Obtain Postpetition Financing, (II) Granting Adequate Protection to the Prepetition Secured Parties, (III) Authorizing the Use of Cash Collateral, (IV) Modifying the Automatic Stay, and (V) Granting Related Relief [D.I. 168].
(b) Following the date hereof, ETI shall provide to the Reorganized Debtors written notice of the due dates by which Transaction Tax Liabilities must be paid to the relevant tax authorities, including, for the avoidance of doubt, such dates in respect of estimated taxes and fees (the “Transaction Tax Liabilities Deadlines”).
(c) ETI shall cause E&Y to determine the Transaction Tax Liabilities in respect of each Transaction Tax Liabilities Deadline and shall provide written notice of such determination by E&Y to the Reorganized Debtors and XBP, including appropriate documentation supporting E&Y’s calculations. To the extent practicable, E&Y’s Transaction Tax Liabilities determination shall be provided to the Reorganized Debtors for the Reorganized Debtors’ review and comment (x) at least ten (10) days prior to such Transaction Tax Liabilities Deadline in respect of any estimated taxes, or (y) at least twenty (20) days prior to such Transaction Tax Liabilities Deadline in respect of the final tax return reflecting the Transaction Tax Liabilities. Any settlement of the Transaction Tax Liabilities prior to the Effective Date shall require the consent of the Required Consenting Creditors (such consent not to be unreasonably withheld), and after the Effective Date, shall require the consent of the New Board (such consent not to be unreasonably withheld).
Section 1.2 ETI Funding Obligations.
(a) In the event of an identification of a Transaction Tax Liability, the Consenting ETI Parties shall make a payment to the appropriate taxing authority in the amount of the Transaction Tax Liability owed to such taxing authority on or before the relevant Transaction Tax Liability Deadline, or shall reimburse the party that made such payment in the first instance, as the case may be, provided that the total amount of Transaction Tax Liabilities to be borne by the Consenting ETI Parties shall be limited to:
(i) An amount equal to the first $15,000,000 of Transaction Tax Liabilities owed (or the total amount of Transaction Tax Liabilities, if less than $15,000,000) (such amount, the “Initial ETI Funding Obligation”); and
(ii) an amount equal to the Transaction Tax Liabilities owed in excess of $25,000,000, if any (such amount, the “SubsequentETI Funding Obligation” and together with the Initial ETI Funding Obligation, the “ETI Funding Obligations”).
(b) The Consenting ETI Parties may elect (the “Consenting ETI Party Election”) to have any or all of their payments of, or reimbursements with respect to, the ETI Funding Obligations, including any payment with respect to a Blocked ETI Share Disposition (as defined below), treated as a purchase for cash of (i) Rollover Exit Notes at par and/or (ii) New Parent Interests at Plan Equity Value, by providing written notice to the Agent and to the applicable issuers of Rollover Exit Notes (in the case of Rollover Exit Notes), XBP (in the case of New Parent Interests), and if such election occurs prior to the Effective Date, Ropes & Gray LLP, as counsel to the Consenting Creditors, no later than ten (10) business days prior to the ETI Funding Payment Date (as defined below). Such notice shall include the amount of Rollover Exit Notes and New Parent Interests, as applicable, to be deemed purchased, the identity of the purchasing party and the intended date of payment of the related ETI Funding Obligations (the “ETI Funding Payment Date”). The applicable issuers of Rollover Exit Notes (in the case of Rollover Exit Notes) and XBP (in the case of New Parent Interests) shall issue such Rollover Exit Notes and/or New Parent Interests within one (1) business day after receipt of evidence of the payment of the applicable ETI Funding Obligations.
| 2 |
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Section 1.3 Reorganized Debtors’ Funding Obligations. No later than five (5) business days prior to the relevant Transaction Tax Liabilities Deadlines, the Reorganized Debtors shall pay to ETI, or pay directly to the applicable taxing authorities, the amount of Transaction Tax Liabilities owed in excess of $15,000,000 and up to and including $25,000,000, if any (such amount, the “Reorganized Debtors Funding Obligation”). In the event the Reorganized Debtors pay some or all of the Reorganized Debtors Funding Obligation to ETI, ETI shall promptly, and in any event no later than the relevant Transaction Tax Liabilities Deadlines, pay such amounts to the applicable taxing authorities to the extent such amounts are still owing to such authorities. In the event that the Reorganized Debtors pay some or all of the Reorganized Debtors Funding Obligation directly to the taxing authorities, they shall make such payment no later than the relevant Transaction Tax Liabilities Deadlines, and shall provide prompt written notice thereof to the Consenting ETI Parties.
Section 1.4 Transaction Tax Liability Audit. ETI, on the one hand, and the Reorganized Debtors, on the other hand, shall promptly notify the other party upon receipt of any notice from any taxing authority of any audit, claim, examination or other proceeding that could be reasonably expected to affect the Transaction Tax Liabilities (each, a “Transaction Tax Liability Audit”). Notwithstanding anything herein to the contrary, for the avoidance of doubt, the settlement of any Transaction Tax Liability Audit prior to the Effective Date shall require the consent of the Required Consenting Creditors (such consent not to be unreasonably withheld), and after the Effective Date shall require the consent of the New Board (such consent not to be unreasonable withheld). Further, notwithstanding anything herein to the contrary, for the avoidance of doubt, in connection with the final resolution of any Transaction Tax Liability Audit, ETI shall cause E&Y to determine the Transaction Tax Liability taking into account the resolution of such Transaction Tax Liability Audit; provided that the Reorganized Debtors shall be responsible for payment of E&Y’s fees and expenses in connection with such determination. Section 1.2 and Section 1.3 shall apply to such re-determined Transaction Tax Liability, mutatis mutandis.
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Article II
SECURITY FOR ETI FUNDING OBLIGATIONS
Section 2.1 Control Accounts. On the Effective Date, all New Parent Interests owing and delivered to the Consenting ETI Parties (each a “Blocked ETI Share Party”) on account of the ETI Equity Distribution pursuant to the Plan shall be deposited into separate securities accounts, each subject to a security account control agreement in substantially the form attached hereto as Exhibit A (each a “Control Agreement” and together the “Control Agreements” and such New Parent Interests collectively, the “Blocked ETIShares”).
Section 2.2 Security Interest.
(a) As collateral security for the payment of the Transaction Tax Liabilities, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each Blocked ETI Share Party hereby pledges, collaterally assigns and grants to the Agent, as collateral agent for the Reorganized Debtors, for the benefit of the Reorganized Debtors, a continuing first priority security interest in and lien on the Blocked ETI Shares to secure the payment of the ETI Funding Obligations.
(b) Neither the Agent nor the Reorganized Debtors shall have the right to rehypothecate, use, borrow, lend, pledge or sell the Blocked ETI Shares, except in accordance with Section 2.7 below, or with the applicable Blocked ETI Share Party’s consent.
(c) The Parties agree that at all times prior to the sale of any Blocked ETI Shares pursuant Section 2.7 below, the applicable Blocked ETI Share Party shall be treated as the owner of the applicable Blocked ETI Shares for U.S. federal and state tax purposes.
(d) The Parties authorize the Agent to file any financing statement to perfect the security interest granted hereunder as the Agent deems necessary or advisable in its sole discretion, and any continuation statement or amendment with respect thereto, in any appropriate filing office.
Section 2.3 Rights with Respect to Blocked ETI Shares.
(a) At all times up and until an ETI Funding Obligation Default (as defined below), and, for the avoidance of doubt, at all times following the waiver or cure of any such ETI Funding Obligation Default or the payment in full of the ETI Funding Obligations, each Blocked ETI Share Party shall be entitled to exercise all voting rights with respect to the Blocked ETI Shares for any purpose not inconsistent with the terms of this Agreement, including with respect to any matters permitting or requiring a shareholder vote; provided, however, that (A) no Blocked ETI Share Party will exercise or refrain from exercising any such right, as the case may be, if the Agent gives such Blocked ETI Share Party notice that, in the Agent’s reasonable judgment, such action (or inaction) would violate the terms of this Agreement, and (B) each Blocked ETI Share Party will give the Agent at least two (2) business days’ notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right which would adversely affect the value, liquidity, or marketability of any of the Blocked ETI Shares or the creation, perfection and priority of the Agent’s lien thereon; provided, further, that nothing herein shall require any Blocked ETI Share Party to take any actions that would be (or that the Blocked ETI Share Party reasonably believes would be) a breach of any fiduciary duties or other legal duties of a shareholder. Except as otherwise provided herein, each Blocked ETI Share Party shall retain all other ownership rights with respect to the Blocked ETI Shares, including economic rights, and the Blocked ETI Shares shall have registration rights identical to the other New Parent Interests, in accordance with the Plan.
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(b) In connection with the exercise of remedies solely with respect to the Blocked ETI Shares and solely following the occurrence and during the continuation of an ETI Funding Obligation Default, and upon the Agent’s contemporaneous written notice (a “DefaultNotice”) to the Blocked ETI Share Parties of the suspension of the voting rights under Section 2.3(a) which shall have been made in a commercially reasonable manner, all rights of each Blocked ETI Share Party to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to clause (a) above, shall cease, and all such rights shall thereupon become vested in the Agent, which shall thereupon have the sole right to exercise such voting and other consensual rights, and the Agent (personally or through an agent) shall thereupon be solely authorized and empowered, following any foreclosure sale, to transfer and register in the name of any purchaser in such foreclosure sale (which may be the Agent), or in the name of the nominee of such purchaser, the whole or any part of the Blocked ETI Shares, it being acknowledged by each Blocked ETI Share Party that such transfer and registration may be effected by the Agent by the delivery of a registration page to the Blocked ETI Share Party, reflecting the purchaser or its designee as the holder of such Blocked ETI Shares, or otherwise by the Agent through its irrevocable appointment as attorney in fact pursuant to clause (c) below. For the avoidance of doubt, all such voting and consensual rights shall revert back to each Blocked ETI Share Party following the waiver or cure of the applicable ETI Funding Obligation Default or the payment in full of the ETI Funding Obligations. Following a Blocked ETI Share Disposition (as defined below), the Agent shall be authorized and empowered to transfer and register in the successful buyer’s name, such Blocked ETI Shares sold through a Blocked ETI Share Disposition after the proceeds from a Blocked ETI Share Sale (defined below) are deposited by such successful buyer into an account designated by Agent. Such transfer and registration may be effected by the Agent by the delivery of a registration page to the Blocked ETI Share Party, reflecting the successful buyer as the holder of such Blocked ETI Shares, or otherwise by the Agent through its irrevocable appointment as attorney in fact pursuant to clause (c) below.
(c) Effective upon the occurrence and solely during the continuance of an ETI Funding Obligation Default, each Blocked ETI Share Party hereby irrevocably appoints the Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Blocked ETI Share Party and in the name of such Blocked ETI Share Party or otherwise, from time to time in the Agent’s discretion, to take any action and to execute any instrument that the Agent may reasonably deem necessary or advisable to ensure the payment of the ETI Funding Obligations. This power is coupled with an interest and is irrevocable until the ETI Funding Payment Date.
Section 2.4 Blocked ETI Dispositions.
(a) Each Blocked ETI Share Party may sell some or all of its Blocked ETI Shares (each a “Blocked ETI Share Sale”), provided that 100% of the net cash proceeds received by such Blocked ETI Share Party in connection with such disposition shall be applied by such Blocked ETI Share Party to the ETI Funding Obligations promptly, and in any event no more than five (5) business days after receipt thereof, provided however, such Blocked ETI Share Party shall be entitled to retain any net cash proceeds received in excess of the ETI Funding Obligations.
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(b) Each Blocked ETI Share Party may pledge some or all its Blocked ETI Shares to secure a margin facility (a “BlockedETI Share Margin Pledge” and together with Blocked ETI Share Sale, a “Blocked ETI Share Disposition”), provided that (i) the net cash proceeds from such margin facility are sufficient to pay the ETI Funding Obligations in full and (ii) 100% of the net cash proceeds are applied by the Blocked ETI Share Parties to the ETI Funding Obligations promptly, and in any event no more than five (5) business days after receipt thereof, provided however, such Blocked ETI Share Party shall be entitled to retain any net cash proceeds received in excess of the ETI Funding Obligations.
Section 2.5 Blocked ETI Share Release Event. Upon the Consenting ETI Parties’ payment of the ETI Funding Obligations in the amounts indicated below, the liens over certain Blocked ETI Shares shall be released as follows (each a “Blocked ETI Share Release Event”):
(i) The liens with respect to 50% of the Blocked ETI Shares shall be released (pro rata across the Control Accounts) upon payment of the Initial ETI Funding Obligation by the Consenting ETI Parties and delivery of a Consenting ETI Party Election indicating that such payment shall be treated as a purchase of Rollover Exit Notes in accordance with Section 1.2(b)(i);
(ii) The liens with respect to 90% of the Blocked ETI Shares shall be released (pro rata across the Control Accounts) upon payment of the Initial ETI Funding Obligation by the Consenting ETI Parties and delivery of a Consenting ETI Party Election indicating that such payment shall be treated as a purchase of New Parent Interests in accordance with Section 1.2(b)(ii); and
(iii) The liens with respect to 100% of the Blocked ETI Shares shall be released following (x)(a) payment of the Transaction Tax Liabilities in full and (b) satisfaction of the ETI Funding Obligations, or (y) the funding in Cash by the Consenting ETI Parties of an amount equal to the ETI Funding Obligations as estimated by E&Y into a collateral account subject to an account control agreement on terms that are reasonably acceptable to the Agent, the Consenting ETI Parties and the applicable control bank; provided that, if the Consenting ETI Parties have paid in full the ETI Funding Obligations and the failure to pay the Transaction Tax Liabilities in full is due solely to the failure of the Reorganized Debtors to pay the Reorganized Debtors Tax Funding Obligation, the liens with respect to 100% of the Blocked ETI Shares shall be released.
Section 2.6 Release of Blocked ETI Shares.
(i) Substantially simultaneously with any Blocked ETI Share Disposition, and in any event no later than one (1) business day after any Blocked ETI Share Release Event, the Agent shall direct the applicable control bank, in accordance with the applicable Control Agreement, to release the relevant Blocked ETI Shares, and to permit the relevant Blocked ETI Share Party to transfer such shares to an account not subject to a control agreement.
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(ii) For the avoidance of doubt, upon a Blocked ETI Share Disposition or Blocked ETI Share Release, such shares shall no longer be Blocked ETI Shares under this Agreement and the liens with respect to such shares shall be terminated without further action by the Agent or the Reorganized Debtors.
Section 2.7 Remedies.
(a) If the Consenting ETI Parties fail to pay some or all of the ETI Funding Obligations hereunder on or before the relevant Transaction Tax Liability Deadline (a “ETI Funding Obligation Default”), upon written notice to the Consenting ETI Parties, the Agent may direct the sale of an amount of Blocked ETI Shares, for cash up to the amount necessary to satisfy the outstanding ETI Funding Obligations, inclusive of (a) any reasonable and documented fees and expenses incurred by the Reorganized Debtors in connection with the sale of the Blocked ETI Shares and (b) any penalties imposed by the relevant taxing authority or authorities as a result of the ETI Funding Obligation Default, and the Consenting ETI Parties shall consent to such sale (to any extent necessary) and provide commercially reasonable cooperation with the Agent.
(b) The Agent shall promptly apply the proceeds from such sale of such Blocked ETI Shares to satisfy the outstanding ETI Funding Obligations (inclusive of (a) any reasonable and documented fees and expenses incurred by the Reorganized Debtors in connection with the sale of the Blocked ETI Shares and (b) any penalties imposed by the relevant taxing authority or authorities as a result of the ETI Funding Obligation Default) and in any event, no later than five (5) Business Days after receipt.
(c) Upon payment of the outstanding ETI Funding Obligations in full, the Agent shall promptly, and in any event no later than three (3) business days after such payment, release and transfer any remaining sale proceeds and direct the applicable control bank in accordance with the applicable Control Agreement to release and transfer any remaining Blocked ETI Shares, in each case, to the applicable Consenting ETI Parties. Upon payment of the outstanding ETI Funding Obligations in full such remaining shares shall no longer be Blocked ETI Shares under this Agreement and the liens with respect to such remaining shares shall be terminated.
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization and Qualification. Each of the Parties is a legal entity duly organized, validly existing and in good standing (or the equivalent thereof) under the laws of its respective jurisdiction of incorporation or organization and has all requisite power and authority to own, lease and operate its properties and to carry on its business as currently conducted. Each Party is duly qualified or licensed to do business and is in good standing (or the equivalent thereof) under the laws of each other jurisdiction in which conducts any business.
Section 3.2 Corporate Power and Authority. Each of the Parties has the requisite corporate power and authority (i) enter into, execute and deliver this Agreement, and (ii) to perform its obligations under this Agreement. No other corporate proceedings on the part of the Parties are or will be necessary to authorize this Agreement or to perform its obligations contemplated hereby.
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Section 3.3 Certificated Interests. The Blocked ETI Share Parties represent and warrant that none of the Blocked ETI Shares are certificated.
ArticleIV
Agents
Section 4.1 Appointment. Upon the date hereof, each Reorganized Debtor irrevocably appoints, authorizes and empowers the Agent to perform its duties as set forth in this Agreement together with such actions and powers as are reasonably incidental thereto, including, (i) to perform, exercise, and enforce any and all other rights and remedies of the Reorganized Debtors with respect to the ETI Funding Obligations, and (ii) to act with respect to the Blocked ETI Shares including for purposes of acquiring, holding and enforcing any and all liens on Blocked ETI Shares granted by each Blocked ETI Shares Party to secure the ETI Funding Obligations.
Article V
GENERAL PROVISIONS
Section 5.1 Prior Negotiations; Entire Agreement.
(a) This Agreement constitutes the entire agreement of the Parties and supersedes all prior agreements, arrangements or understandings, whether written or oral, among the Parties with respect to the subject matter of this Agreement.
(b) Notwithstanding anything to the contrary in the Plan (including any amendments, supplements or modifications thereto) or the Confirmation Order (and any amendments, supplements or modifications thereto), nothing contained in the Plan (including any amendments, supplements or modifications thereto) or Confirmation Order (including any amendments, supplements or modifications thereto) shall alter, amend or modify the rights of the Parties under this Agreement unless the Parties have provided written consent with respect to such alteration, amendment or modification.
Section 5.2 Amendments, Etc,. No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Party therefrom, shall be effective unless in writing and signed by each Party, and such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 5.3 Notices; Effectiveness; 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 as follows:
if to the Reorganized Debtors:
6641 N. Belt Line Road, Suite 100
Irving, Texas 75063 USA
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Attention to: Suresh Yannamani; Matt Brown
Email: suresh.yannamani@exelatech.com; matt.brown@exelatech.com
with copies to:
Latham & Watkins LLP
1271 Avenue of the Americas
New York, New York 10020
Attention to: Alexander W. Welch; Hugh K. Murtagh; Jonathan J. Weichselbaum
Email: alex.welch@lw.com; hugh.murtagh@lw.com; jon.weichselbaum@lw.com
if to the Agent:
6641 N. Belt Line Road, Suite 100
Irving, Texas 75063 USA
Attention to: Suresh Yannamani; Matt Brown
Email: suresh.yannamani@exelatech.com; matt.brown@exelatech.com
with copies to:
Latham & Watkins LLP
1271 Avenue of the Americas
New York, New York 10020
Attention to: Alexander W. Welch; Hugh K. Murtagh; Jonathan J. Weichselbaum
Email: alex.welch@lw.com; hugh.murtagh@lw.com; jon.weichselbaum@lw.com
if to the Consenting ETI Parties:
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
Attention to: Sean A. O’Neal; Kara A. Hailey
Email: soneal@cgsh.com; khailey@cgsh.com
if to XBP:
2701 E Grauwyler Rd
Irving, Texas 75061
Attn: Andrej Jonovic
Email: ajonovic@hgmfund.com
with copies to: emengwall@loeb.com
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if to the Consenting Creditors (other than the Consenting ETI Parties):
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attention to: Matthew M. Roose; Sam Badawi
Email: matthew.roose@ropesgray.com; sam.badawi@ropesgray.com
-and-
Ropes & Gray LLP
191 North Wacker Drive
Chicago, IL 60606
Attention to: Eric P. Schriesheim
Email: eric.schriesheim@ropesgray.com
Section 5.4 Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES CONSENT AND AGREE THAT ANY ACTION TO ENFORCE THIS AGREEMENT OR ANY DISPUTE, WHETHER SUCH DISPUTES ARISE IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY SHALL BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT. THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE BANKRUPTCY COURT, (II) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY THE BANKRUPTCY COURT OR (III) ANY LITIGATION OR OTHER PROCEEDING COMMENCED IN THE BANKRUPTCY COURT IS BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS PROVIDED IN WRITING BY THE RECIPIENT OF SUCH MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.
Section 5.5 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY JURISDICTION IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE AMONG THE PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE.
Section 5.6 Further Assurances. Upon the reasonable request of any Party, each other Party shall execute or deliver any additional agreements, documents and instruments and take such further actions to carry out the provisions and purposes of Agreement.
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Section 5.7 Counterparts. This Agreement may be executed in any number of counterparts, all of which will be considered one and the same agreement and will become effective when such counterparts have been signed by each of the Parties and delivered to each other Party (including via facsimile or other electronic transmission), it being understood that each Party need not sign the same counterpart.
Section 5.8 Headings. The headings in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first above written.
| By: | /s/<br> Par Chadha |
|---|---|
| Exela Technologies, Inc. | |
| Name: Par Chadha | |
| Title: Chairman | |
| By: | /s/ Par Chadha |
| GP 3XCV LLC | |
| Name: Par Chadha | |
| Title: Manager | |
| By: | /s/ Par Chadha |
| XCV-STS, LLC | |
| Name: Par Chadha | |
| Title: Manager | |
| By: | /s/ Randall S. Eisenberg |
| Exela Technologies BPA, LLC | |
| Name: Randall S. Eisenberg | |
| Title: Chief Restructuring Officer |
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Exhibit A
Security Account Control Agreement
| 13 |
| --- |
Exhibit 10.5
Execution Version
CREDIT AND SECURITY AGREEMENT
dated as of July 29, 2025
by and among
EXELA TECHNOLOGIESBPA, LLC**,**
as Borrower,
and
MIDCAP FUNDING IV TRUST,
as Agent,
and
THE LENDERS
FROM TIME-TO-TIME PARTY HERETO
table of contents
| Page | ||
|---|---|---|
| Article 1 - DEFINITIONS | 1 | |
| Section 1.1 | Certain<br> Defined Terms | 1 |
| Section 1.2 | Accounting<br> Terms and Determinations | 65 |
| Section 1.3 | Other<br> Definitional and Interpretive Provisions | 65 |
| Section 1.4 | Time<br> is of the Essence | 66 |
| Section 1.5 | Exchange<br> Rates | 66 |
| Section 1.6 | Quebec<br> Interpretation | 66 |
| Article 2 - LOANS | 67 | |
| Section 2.1 | Loans | 67 |
| Section 2.2 | Interest,<br> Interest Calculations and Certain Fees | 69 |
| Section 2.3 | Notes | 75 |
| Section 2.4 | [Reserved] | 75 |
| Section 2.5 | [Reserved] | 75 |
| Section 2.6 | General<br> Provisions Regarding Payment; Loan Account | 75 |
| Section 2.7 | Maximum<br> Interest | 75 |
| Section 2.8 | Taxes;<br> Capital Adequacy; Increased Costs; Inability to Determine Rates; Illegality | 76 |
| Section 2.9 | Appointment<br> of Borrower Representative | 81 |
| Section 2.10 | Joint<br> and Several Liability; Rights of Contribution; Subordination and Subrogation | 82 |
| Section 2.11 | Collections<br> and Lockbox Account | 85 |
| Section 2.12 | Termination;<br> Restriction on Termination | 86 |
| Article 3 - REPRESENTATIONS AND WARRANTIES | 87 | |
| Section 3.1 | Existence<br> and Power | 87 |
| Section 3.2 | Organization<br> and Governmental Authorization; No Contravention | 88 |
| Section 3.3 | Binding<br> Effect | 88 |
| Section 3.4 | Capitalization | 88 |
| Section 3.5 | Financial<br> Information | 88 |
| Section 3.6 | Litigation | 88 |
| Section 3.7 | Ownership of Property | 89 |
| Section<br> 3.8 | No<br> Default | 89 |
| --- | --- | --- |
| Section<br> 3.9 | Labor<br> Matters | 89 |
| Section<br> 3.10 | Regulated<br> Entities | 89 |
| Section<br> 3.11 | Margin<br> Regulations | 89 |
| Section<br> 3.12 | Compliance<br> With Laws; Anti-Terrorism Laws | 89 |
| Section<br> 3.13 | Taxes | 90 |
| Section<br> 3.14 | Compliance<br> with ERISA | 90 |
| Section<br> 3.15 | Consummation<br> of Operative Documents; Brokers | 91 |
| Section<br> 3.16 | Related<br> Transactions | 91 |
| Section<br> 3.17 | Material<br> Contracts | 91 |
| Section<br> 3.18 | Compliance<br> with Environmental Requirements; No Hazardous Materials | 91 |
| Section<br> 3.19 | Intellectual<br> Property | 91 |
| Section<br> 3.20 | Solvency | 92 |
| Section<br> 3.21 | Full<br> Disclosure | 92 |
| Section<br> 3.22 | Canadian<br> Pension Plans | 92 |
| Section<br> 3.23 | Subsidiaries | 92 |
| Section<br> 3.24 | [Reserved] | 92 |
| Section<br> 3.25 | Borrowing<br> Base Collateral | 93 |
| Article 4 - AFFIRMATIVE COVENANTS | 93 | |
| Section<br> 4.1 | Financial<br> Statements and Other Reports | 93 |
| Section<br> 4.2 | Payment<br> and Performance of Obligations | 96 |
| Section<br> 4.3 | Maintenance of Existence | 96 |
| Section<br> 4.4 | Maintenance<br> of Property; Insurance | 97 |
| Section<br> 4.5 | Compliance<br> with Laws and Material Contracts | 98 |
| Section<br> 4.6 | Inspection<br> of Property, Books and Records | 98 |
| Section<br> 4.7 | Use of Proceeds | 98 |
| Section<br> 4.8 | Notices<br> of Litigation and Defaults | 99 |
| Section<br> 4.9 | Hazardous<br> Materials; Remediation | 99 |
| Section<br> 4.10 | Further<br> Assurances | 100 |
| Section<br> 4.11 | [Reserved] | 101 |
| Section<br> 4.12 | Power of Attorney | 101 |
| Section<br> 4.13 | Borrowing<br> Base Collateral Administration | 102 |
| Section<br> 4.14 | Maintenance of Management | 102 |
| Article 5 - NEGATIVE COVENANTS | 102 | |
| --- | --- | --- |
| Section 5.1 | Debt;<br> Contingent Obligations | 102 |
| Section 5.2 | Liens | 102 |
| Section 5.3 | Restricted<br> Distributions | 103 |
| Section 5.4 | Restrictive<br> Agreements | 103 |
| Section 5.5 | Payments<br> and Modifications of Subordinated Debt | 103 |
| Section 5.6 | Consolidations,<br> Mergers and Sales of Assets; Change in Control | 104 |
| Section 5.7 | Purchase<br> of Assets, Investments | 104 |
| Section 5.8 | Transactions<br> with Affiliates | 104 |
| Section 5.9 | Modification<br> of Organizational Documents | 106 |
| Section 5.10 | Modification<br> of Certain Agreements | 106 |
| Section 5.11 | Conduct of Business | 107 |
| Section 5.12 | Lease<br> Payments | 107 |
| Section 5.13 | Limitation<br> on Sale and Leaseback Transactions | 107 |
| Section 5.14 | Deposit<br> Accounts and Securities Accounts; Payroll and Benefits Accounts | 107 |
| Section 5.15 | Compliance<br> with Anti-Terrorism Laws | 108 |
| Section 5.16 | Canadian<br> Defined Benefit Plans | 108 |
| Article 6 - FINANCIAL COVENANTS | 108 | |
| Section 6.1 | Fixed<br> Charge Coverage Ratio | 108 |
| Section 6.2 | Minimum<br> Excess Availability | 108 |
| Section 6.3 | Evidence of Compliance | 108 |
| Article 7 - CONDITIONS | 109 | |
| Section 7.1 | Conditions<br> to Closing | 109 |
| Section 7.2 | Conditions<br> to Each Loan | 112 |
| Section 7.3 | Searches | 113 |
| Section 7.4 | Post<br> Closing Requirements | 113 |
| Article 8 - [RESERVED] | 114 | |
| Article 9 - SECURITY AGREEMENT | 114 | |
| Section 9.1 | Generally | 114 |
| Section 9.2 | Representations<br> and Warranties and Covenants Relating to Collateral | 114 |
| Section 9.3 | ULC<br> Limitation | 118 |
| Article 10<br> - EVENTS OF DEFAULT | 119 | |
| --- | --- | --- |
| Section<br> 10.1 | Events<br> of Default | 119 |
| Section<br> 10.2 | Acceleration<br> and Suspension or Termination of Revolving Loan Commitment | 123 |
| Section<br> 10.3 | UCC<br> and PPSA Remedies | 123 |
| Section<br> 10.4 | [Reserved] | 125 |
| Section<br> 10.5 | Default<br> Rate of Interest | 125 |
| Section<br> 10.6 | Setoff<br> Rights | 125 |
| Section<br> 10.7 | Application<br> of Proceeds | 125 |
| Section<br> 10.8 | Waivers | 126 |
| Section<br> 10.9 | Injunctive<br> Relief | 128 |
| Section<br> 10.10 | Marshalling;<br> Payments Set Aside | 128 |
| Article 11<br> - AGENT | 129 | |
| Section<br> 11.1 | Appointment<br> and Authorization | 129 |
| Section<br> 11.2 | Agent<br> and Affiliates | 129 |
| Section<br> 11.3 | Action<br> by Agent | 129 |
| Section<br> 11.4 | Consultation<br> with Experts | 130 |
| Section<br> 11.5 | Liability<br> of Agent | 130 |
| Section<br> 11.6 | Indemnification | 130 |
| Section<br> 11.7 | Right<br> to Request and Act on Instructions | 131 |
| Section<br> 11.8 | Credit<br> Decision | 131 |
| Section<br> 11.9 | Collateral<br> Matters | 131 |
| Section<br> 11.10 | Agency<br> for Perfection | 131 |
| Section<br> 11.11 | Notice<br> of Default | 132 |
| Section<br> 11.12 | Assignment<br> by Agent; Resignation of Agent; Successor Agent | 132 |
| Section<br> 11.13 | Payment<br> and Sharing of Payment | 133 |
| Section<br> 11.14 | Right<br> to Perform, Preserve and Protect | 136 |
| Section<br> 11.15 | Additional<br> Titled Agents | 136 |
| Section<br> 11.16 | Amendments<br> and Waivers | 136 |
| Section<br> 11.17 | Assignments<br> and Participations | 138 |
| Section<br> 11.18 | Funding<br> and Settlement Provisions Applicable When Non-Funding Lenders Exist | 141 |
| Section<br> 11.19 | Buy-Out<br> Upon Refinancing | 142 |
| Section<br> 11.20 | Erroneous<br> Payments | 142 |
| Section<br> 11.21 | Definitions | 144 |
| Section<br> 11.22 | Appointment<br> as Hypothecary Representative | 145 |
| Article 12<br> - GUARANTEE | 146 | |
| --- | --- | --- |
| Section<br> 12.1 | [Reserved] | 146 |
| Section<br> 12.2 | Guarantee;<br> Limitation of Liability | 146 |
| Section<br> 12.3 | Guarantee<br> Absolute | 146 |
| Section<br> 12.4 | Waivers<br> and Acknowledgments | 147 |
| Section<br> 12.5 | Subrogation | 148 |
| Section<br> 12.6 | [Reserved] | 149 |
| Section<br> 12.7 | Subordination | 149 |
| Section<br> 12.8 | Continuing<br> Guarantee; Assignments | 149 |
| Article 13<br> - MISCELLANEOUS | 150 | |
| Section<br> 13.1 | Survival | 150 |
| Section<br> 13.2 | No<br> Waivers | 150 |
| Section<br> 13.3 | Notices | 150 |
| Section<br> 13.4 | Severability | 151 |
| Section<br> 13.5 | Headings | 151 |
| Section<br> 13.6 | Confidentiality | 151 |
| Section<br> 13.7 | Waiver<br> of Consequential and Other Damages | 152 |
| Section<br> 13.8 | GOVERNING<br> LAW; SUBMISSION TO JURISDICTION | 152 |
| Section<br> 13.9 | WAIVER<br> OF JURY TRIAL | 153 |
| Section<br> 13.10 | Publication;<br> Advertisement | 153 |
| Section<br> 13.11 | Counterparts;<br> Integration | 154 |
| Section<br> 13.12 | No<br> Strict Construction | 154 |
| Section<br> 13.13 | Lender<br> Approvals | 154 |
| Section<br> 13.14 | Expenses;<br> Indemnity | 155 |
| Section<br> 13.15 | Confession<br> of Judgment | 156 |
| Section<br> 13.16 | Reinstatement | 157 |
| Section<br> 13.17 | Successors<br> and Assigns | 157 |
| Section<br> 13.18 | USA<br> PATRIOT Act Notification | 157 |
| Section<br> 13.19 | Judgment<br> Currency | 157 |
| Section<br> 13.20 | Acknowledgement<br> and Consent to Bail-In of Affected Financial Institutions | 158 |
| Section<br> 13.21 | Canadian<br> Anti-Money Laundering Legislation | 158 |
| Section<br> 13.22 | Parent | 159 |
CREDIT AND SECURITY AGREEMENT
THIS CREDIT AND SECURITYAGREEMENT (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”) is dated as of July 29, 2025 by and among Exela Technologies BPA, LLC, a Delaware limited liability company, and any additional borrower that may hereafter be added to this Agreement (each individually as a “Borrower”, and collectively as “Borrowers”), MIDCAP FUNDING IV TRUST, a Delaware statutory trust, as Agent (as defined below), and the financial institutions or other entities from time to time parties hereto, each as a Lender (as defined below).
RECITALS
WHEREAS, on March 3, 2025 (the “Petition Date”), Docudata Solutions, L.C., the Borrower and certain other Affiliates (each, a “Debtor” and collectively, the “Debtors”) filed voluntary petitions with the Bankruptcy Court initiating their respective cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (such court, the “BankruptcyCourt”; and each such case of the Debtors, a “Chapter 11 Case” and collectively, the “Chapter 11Cases”) and continued in the possession of their assets and the management of their business pursuant to Section 1107 and 1108 of the Bankruptcy Code;
WHEREAS, on June 23, 2025, the Bankruptcy Court entered the Confirmation Order (as defined herein) approving the Plan of Reorganization of the Debtors, and concurrently with the making of the Loans hereunder, the effective date with respect to the Plan of Reorganization has occurred;
WHEREAS, Borrowers have requested that Lenders make available to Borrowers the financing facilities as described herein, and Lenders are willing to extend such credit to Borrowers under the terms and conditions herein set forth;
WHEREAS, by execution and delivery of this Agreement and the other Financing Documents and entry of the Confirmation Order in respect of the Chapter 11 Cases, as applicable, agree to guarantee the Obligations, and the Borrower and each Guarantor agrees to secure all of the Obligations by granting to Agent, for the benefit of the Lenders, a lien and security interest in respect of, and on, the Collateral, on and subject to the terms and priorities set forth in the other Financing Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:
Article 1
- DEFINITIONS
Section1.1****Certain Defined Terms. The following terms have the following meanings:
“ABL IntercreditorAgreement” means that certain Intercreditor Agreement, dated as of the Closing Date, among the Borrowers, the Subsidiary Guarantors, Agent, the administrative agent and collateral agent under the Term Loan Documents, the Trustee, the Exit Notes Collateral Agent, BRF Finance Co., LLC, and the other parties from time-to-time party thereto, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time.
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“ABL Priority Collateral” has the meaning specified therefor in the ABL Intercreditor Agreement.
“Acceleration Event” means the occurrence of an Event of Default (a) in respect of which Agent has declared all or any portion of the Obligations to be immediately due and payable pursuant to Section 10.2, (b) the date that is ninety (90) days prior to the earliest stated maturity date of the term loans incurred pursuant to the Term Loan Agreement, (c) pursuant to Section 10.1(a), and in respect of which Agent has suspended or terminated the Revolving Loan Commitment pursuant to Section 10.2, and/or (d) pursuant to either Section 10.1(e) and/or Section 10.1(f).
“Account Debtor” means “account debtor”, as defined in Article 9 of the UCC or in the PPSA, as applicable, and any other obligor in respect of an Account.
“Accounts” means, collectively, (a) any right to payment of a monetary obligation, whether or not earned by performance, (b) without duplication, any “account” (as defined in the UCC or the PPSA, as applicable), any accounts receivable (whether in the form of payments for services rendered or goods sold, rents, license fees or otherwise), any “health-care-insurance receivables” (as defined in the UCC), any “payment intangibles” (as defined in the UCC), “intangibles” (as defined in the PPSA) and all other rights to payment and/or reimbursement of every kind and description, whether or not earned by performance, (c) all accounts, “general intangibles” (as defined in the UCC), “intangibles” (as defined in the PPSA), Intellectual Property, rights, remedies, guarantees, “supporting obligations” (as defined in the UCC), “letter-of-credit rights” (as defined in the UCC) and security interests in respect of the foregoing, all rights of enforcement and collection, all books and records evidencing or related to the foregoing, and all rights under the Financing Documents in respect of the foregoing, (d) all information and data compiled or derived by any Borrower or to which any Borrower is entitled in respect of or related to the foregoing, and (e) all proceeds of any of the foregoing.
“Accurate ApplicableMargin” has the meaning specified therefor in the definition of “Applicable Margin”.
“Additional Notes” means the notes issued under the terms of the Exit Notes Indenture subsequent to the Closing Date.
“Additional Tranche” means an additional amount of Revolving Loan Commitment equal to $25,000,000 (it being acknowledged that multiple Additional Tranches are permitted pursuant to Section 2.1(b) in minimum amounts of $1,000,000 each, for a total of up to $25,000,000).
“Affected FinancialInstitution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
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“Affiliate” means, with respect to any Person, (a) any Person that directly or indirectly controls such Person, (b) any Person which is controlled by or is under common control with such controlling Person, and (c) each of such Person’s (other than, with respect to any Lender, any Lender’s) officers or directors (or Persons functioning in substantially similar roles) and the spouses, parents, descendants and siblings of such officers, directors or other Persons. As used in this definition, the term “control” of a Person means the possession, directly or indirectly, of the power to vote ten percent (10%) or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agent” means MCF, in its capacity as administrative agent for itself and for Lenders hereunder, as such capacity is established in, and subject to the provisions of, Article 11, and the successors and assigns of MCF in such capacity.
“Agent Assignee” has the meaning specified therefor in Section 11.20(d).
“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering, including, without limitation, Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, the Laws administered by OFAC and the Canadian Anti-Money Laundering & Anti-Terrorism Legislation.
“Applicable Law” means, with respect to any Person, any Law (x) that is applicable to such Person or any of its property, (y) to which such Person is a party or (z) by which any of such Person’s property is bound. For the avoidance of doubt, FATCA shall constitute an “Applicable Law” for all purposes of this Agreement.
“Applicable Margin” means, for any day, with respect to Revolving Loans and all other Obligations, the applicable rate per annum based on Borrowers’ EBITDA, calculated on a trailing 12-month period basis, as of the last day of the most recently ended calendar month for which financial statements have been delivered pursuant to Section 4.1, as set forth under the relevant column heading below:
| Pricing Level | EBITDA ($M) | Applicable Margin |
|---|---|---|
| I | EBITDA > $70,000,000 | 3.75% |
| II | EBITDA > $45,000,000 but < $70,000,000 | 4.00% |
| III | EBITDA < $45,000,000 | 4.25% |
provided that, if at any time the Borrower shall have failed to deliver such financial statements and such Compliance Certificate when so required, the Applicable Margin shall be set at Level II as set forth in the table above until such time as such financial statements and Compliance Certificate are delivered, at which time the Applicable Margin shall be determined as provided in the table above. Notwithstanding the foregoing, the Applicable Margin from the Closing Date until the date by which the financial statements and Compliance Certificate for the month ended September 30, 2025, are required to be delivered shall be at Level 1 as set forth in the table above. In the event that any financial statement or Compliance Certificate delivered hereunder is shown to be inaccurate (regardless of whether this Agreement or the Revolving Loan Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin based upon the pricing grid set forth herein (the “Accurate Applicable Margin”) for any period that such financial statement or Compliance Certificate covered, then (i) the Borrower shall immediately deliver to Agent a correct financial statement or Compliance Certificate, as the case may be, for such period, (ii) the Applicable Margin shall be adjusted such that after giving effect to the corrected financial statement or Compliance Certificate, as the case may be, the Applicable Margin shall be reset to the Accurate Applicable Margin based upon the pricing grid set forth herein for such period and (iii) Borrower shall immediately pay to Agent, for the account of Lenders, the accrued additional interest and fees owing as a result of such Accurate Applicable Margin for such period. The provisions of this definition shall not limit the rights of Agent and the Lenders with respect to Section 4.1 or Article 10.
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“Approved Goods andServices” means goods sold and/or services rendered by Borrowers in the Ordinary Course of Business, in compliance with all Laws, and consistent with the type of goods sold and/or services rendered by Borrowers throughout all or substantially all of its business operations as of the Closing Date.
“Asset Disposition” means any sale, lease, license, transfer, assignment or other consensual disposition (including by merger, allocation of assets (including allocation of assets to any series of a limited liability company), division, consolidation or amalgamation) by any Credit Party of any asset.
“Bail-InAction” means 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-InLegislation” means (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).
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto.
“BaseRate” means the per annum rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its “prime rate,” with the understanding that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate; provided, however, that Agent may, upon prior written notice to Borrower, choose a reasonably comparable index or source to use as the basis for the Base Rate.
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“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) that is named a “specially designated national” or “blocked person” on the most current list published by OFAC, any Person that is a “designated person”, “politically exposed foreign person” or “terrorist group” as described in any Canadian Economic Sanctions and Export Control Laws, or other similar list or is named as a “listed person” or “listed entity” on other lists made under any Anti-Terrorism Law.
“Borrower” and “Borrowers” mean the entity(ies) described in the first paragraph of this Agreement and each of their successors and permitted assigns.
“Borrower Representative” means Exela Technologies BPA, LLC, in its capacity as Borrower Representative pursuant to the provisions of Section 2.9, or any successor Borrower Representative selected by Borrowers and approved by Agent.
“Borrowing Base” means, the sum of:
(a) the product of (i) the applicable IG Advance Rate multiplied by (ii) the aggregate net amount at such time of the Eligible Investment Grade Billed Accounts; plus
(b) the product of (i) ninety percent (90%) multiplied by (ii) the aggregate net amount at such time of the Eligible Billed Accounts; plus
(c) the lesser of (i) the product of (A) ninety percent (90%) multiplied by (B) the aggregate net amount at such time of the Eligible Unbilled Accounts and (ii) twenty percent (20%) of the total Borrowing Base (prior to giving effect to this clause (c)); plus
(d) the lesser of (i) the product of (A) the applicable Exar Billed Advance Rate multiplied by (B) the aggregate net amount at such time of the Eligible Exar Billed Accounts and (ii) $5,000,000; plus
(e) the lesser of (i) the product of (A) the applicable Exar Unbilled Advance Rate multiplied by (B) the aggregate net amount at such time of the Eligible Exar Unbilled Accounts and (ii) $5,000,000; plus
(f) one hundred percent (100%) multiplied by the aggregate amount of Eligible Cash; minus
(g) the amount of the Dilution Reserve, and any other Eligibility Reserves established from time to time by Agent in its Permitted Discretion; minus
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(h) a currency reserve equal to three percent (3%) of the United States Dollar equivalent of the aggregate net amount of Eligible Accounts payable in Canadian Dollars, as determined by Agent in its Permitted Discretion.
Any determination by Agent in respect of the Borrowing Base shall be based on Agent’s Permitted Discretion. The parties understand that the exclusionary criteria in the definitions of Eligible Investment Grade Billed Accounts, Eligible Billed Accounts, Eligible Unbilled Accounts, Eligible Exar Billed Accounts, and Eligible Exar Unbilled Accounts, any Eligibility Reserves that may be imposed as provided herein, and any deductions or other adjustments to determine the value of Eligible Accounts have the effect of reducing the Borrowing Base, and, accordingly, whether or not any provisions hereof so state, all of the foregoing shall be determined without duplication so as not to result in multiple reductions of the Borrowing Base for the same facts or circumstances.
“Borrowing Base Certificate” means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit C hereto.
“B. Riley CreditAgreement” means that certain Amended and Restated Credit Agreement, dated July 29, 2025, among BRF Finance Co. LLC, as agent (the “B. Riley Agent”), the lenders party thereto from time to time, Exela Technologies BPA, LLC and other entities party thereto, as borrowers, and the guarantors party thereto from time to time, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Business Day” means any day except a Saturday, Sunday or other day on which either the New York Stock Exchange is closed, or on which commercial banks in Washington, DC and New York City are authorized by law to close; provided, however, that when used in the context of a SOFR Loan, the term “Business Day” shall also exclude any day that is not also a SOFR Business Day.
“Canadian Anti-MoneyLaundering & Anti-Terrorism Legislation” means, collectively, the Criminal Code, R.S.C. 1985, c. C-46, the Proceeds of Crime Act and the United Nations Act, R.S.C. 1985, c. U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al Qaida and Taliban Regulations promulgated under the United Nations Act.
“Canadian CreditParty” means each Credit Party which is incorporated, formed or organized under the laws of Canada or any province or territory thereof.
“Canadian DefinedBenefit Plan” means a Canadian Pension Plan which contains a “defined benefit provision,” as defined in subsection 147.1(1) of the Canadian ITA.
“Canadian Dollars” means the lawful currency of Canada.
“CanadianEconomic Sanctions and Export Control Laws” means any Canadian Laws, regulations or orders governing transactions in restricted goods or technologies or dealings with countries, entities, organizations, or individuals subject to economic sanctions and similar measures, including the Special Economic Measures Act (Canada), the United Nations Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), the Corruption of Foreign Public Officials Act (Canada), Part II.1 of the Criminal Code (Canada), and the Export and Import Permits Act (Canada), and the Foreign Extraterritorial Measures Act (Canada), and any related regulations.
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“Canadian ITA” means the Income Tax Act (Canada), as amended.
“Canadian PensionEvent” means the earlier of (a) the whole or partial withdrawal of a Credit Party from a Canadian Pension Plan during a plan year; (b) the filing of a notice of intent to terminate in whole or in part a Canadian Pension Plan or the treatment of a Canadian Pension Plan amendment as a termination or partial termination; (c) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer a Canadian Pension Plan; (d) any statutory deemed trust or Lien, other than a Permitted Lien, arises in connection with a Canadian Pension Plan; or (e) any other event or condition which might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of trustee to administer, any Canadian Pension Plan.
“Canadian PensionPlan” means a pension plan that is covered by the applicable pension standards laws of any jurisdiction in Canada including the Pension Benefits Act (Ontario) and the Canadian ITA and that is maintained or sponsored by a Credit Party for employees or former employees.
“Canadian PriorityPayables” means, at any time, with respect to the Borrowing Base, the amount due and owing by any Credit Party, or the accrued amount for which such Credit Party has an obligation to remit, on or prior to the date as of which the Borrowing Base is to be determined and remaining unpaid at the time of determination of the Borrowing Base, to a Canadian Governmental Authority or other Canadian Person pursuant to any applicable Law, rule or regulation, in respect of (a) employment insurance, all contributions under the Canada Pension Plan or the Quebec Pension Plan, employee source deductions, employee income tax; (b) goods and services taxes, sales taxes, excise tax, harmonized sales tax and other taxes payable or to be remitted or withheld; (c) workers’ compensation; (d) wages, salaries, commission or compensation and vacation pay (including amounts protected by section 81.3 of the Bankruptcy and Insolvency Act (Canada) and as provided for under the Wage Earner Protection Program Act (Canada)); (e) any amounts deemed to be held in trust, or held in trust, pursuant to applicable law; and (f) unpaid or unremitted contributions, normal cost contributions or special payments to a Canadian Pension Plan and any unfunded liability, solvency deficiency or wind-up deficiency, in each case whether or not due, with respect to a Canadian Pension Plan, in each case to the extent any Canadian Governmental Authority or other Canadian Person may claim a security interest, hypothecation, prior claim, trust, deemed trust or other claim or Lien ranking in priority to or pari passu with one or more of the Liens granted pursuant to this Agreement and the Security Documents.
“CanadianPriority Payables Reserves” means on any date of determination for the Borrowing Base, reserves established from time to time by Agent in its Permitted Discretion in such amount as Agent may reasonably determine in respect of Canadian Priority Payables of the Credit Parties; provided that without otherwise limiting Agent’s Permitted Discretion, the Canadian Priority Payables Reserves shall include a reserve for Canadian Priority Payables in an amount up to the amount of Canadian Priority Payables set forth on the most recent applicable Borrowing Base Certificate (as the same may be reduced or increased by the next succeeding applicable Borrowing Base Certificate) delivered to Agent.
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“Canadian SecurityAgreement” means, collectively, (i) the Canadian Security Agreement dated as of the Closing Date by and between Agent and each Credit Party party thereto, and (ii) any other security agreement, pledge agreement or deed of hypothec dated on or after the Closing Date granted by any Credit Party in favor of Agent, in each case as amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time.
“Capital Expenditures” means any expenditure that would be classified as a capital expenditure on a statement of cash flow of Borrowers prepared in accordance with GAAP.
“Capitalized SoftwareExpenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Subsidiaries.
“Cash CollateralAccount” means a segregated Deposit Account or Securities Account of a Credit Party (a) that is maintained with a bank or securities dealer, as applicable, located in the United States and having as of any date of determination combined capital and surplus of not less than $1,000,000,000, (b) the funds in which consist solely of unrestricted Eligible Cash of such Credit Party, (c) that is subject to a Deposit Account Control Agreement or Securities Account Control Agreement, as applicable, in favor of Agent, which (subject to Section 2.11(b)) provides Agent the sole ability to withdraw or direct funds from such accounts, (d) that is not subject to any Lien (other than the Lien in favor of Agent), and (e) the funds on deposit in which are not funds held for the payment of any drawn or committed, but unpaid draft, ACH or EFT transaction or specified for any other purposes.
“CashDominion Period” means any period commencing (a) (i) on or prior December 31, 2025, any date on which Excess Availability is less than (A) $10,000,000 for three (3) consecutive Business Days or (B) $7,500,000 on any calendar day and (ii) at any time after December 31, 2025, any date on which Excess Availability is less than the lesser of (A) 10% of the Revolving Loan Commitment for three (3) consecutive Business Days or (B) $7,500,000 on any calendar day or (b) following the occurrence and during the continuance of an Event of Default, and, in each case, continuing until the date on which Excess Availability has been greater than (x) on or prior to December 31, 2025, $10,000,000, and (y) after December 31, 2025, ten percent (10%) of the Revolving Loan Commitment, in either such case for twenty (20) consecutive calendar days and no Event of Default is continuing (each such date, a “Cash Dominion Termination Date”).
“CashEquivalents” means, as of any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally; (d) certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s.
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“Cash ManagementAgreement” means any agreement to provide to the Borrower Representative or any of its Subsidiaries cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. § 9601 et seq., as the same may be amended from time to time.
“Change in Control” means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Borrowers and their respective Subsidiaries, taken as a whole, to a Person;
(2) the Borrowers become aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the direct or indirect acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the holders of such interests as of the Closing Date, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the voting equity interests of the Borrower Representative or the Parent; or
(3) except as expressly permitted pursuant to Section 5.6, the Borrower shall cease to directly or indirectly own and control one hundred percent (100%) of each class of the outstanding equity interests of any Subsidiary the assets of which contribute more than $5,000,000 to the Borrowing Base.
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“Claims AdministrationArrangements” means any and all arrangements entered into by any Exar Originator and any Claims Administration Bank whereby short-term loans (which loans shall be secured solely by Claim Administration Liens) are made by such Claims Administration Bank to any Exar Originator; provided, that the proceeds of such loans are deposited in one or more segregated deposit or securities accounts and are solely used to purchase Claims Administration Investments (which shall be held in such segregated accounts) and pay transaction costs in connection therewith.
“Claims AdministrationBank” means any third-party financial institution having capital and surplus in excess of $250,000,000 and whole long-term debt is rated “A” or the equivalent by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) that is designated by any Exar Originator to hold and distribute certain legal settlement funds administered by any Exar Originator in connection with such Exar Originator’s claims administration business.
“Claims AdministrationIndebtedness” means Indebtedness for borrowed money of any Exar Originator in favor of the Claims Administration Bank in respect of loans made pursuant to Claims Administration Arrangements.
“Claims AdministrationInvestments” means Cash Equivalents invested with proceeds of Claims Administration Indebtedness.
“Claims AdministrationLiens” means Liens in favor of the Claims Administration Bank on Claims Administration Investments and related segregated deposit and securities accounts securing Claims Administration Indebtedness solely to the extent the amount of such Claims Administration Investment equals or exceeds the amount of such Claims Administration Indebtedness.
“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.
“Collateral” means, subject to the ABL Intercreditor Agreement, all property, now existing or hereafter acquired, mortgaged or pledged to, or purported to be subjected to a Lien in favor of, Agent, for the benefit of Agent and Lenders, pursuant to this Agreement and the Security Documents, including, without limitation, all of the property described in Schedule 9.1 hereto.
“Commitment Annex” means Annex A to this Agreement.
“Commitment ExpiryDate” means the date that is 36 months following the Closing Date.
“Compliance Certificate” means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit B hereto.
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“Confirmation Order” means the Order (I) Approving Debtors’ Disclosure Statement and (II) Confirming Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code Docket No. 834 entered by the Bankruptcy Court on June 23, 2025.
“Conforming Changes” means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement (as defined in Section 2.2(n)), any technical, administrative or operational changes (including (a) changes to the definition of “Base Rate,” “Business Day”, “Interest Period,” “Reference Time” or other definitions, (b) the addition of concepts such as “interest period”, (c) changes to timing and/or frequency of determining rates, making interest payments, giving borrowing requests, prepayment, conversion or continuation notices, or length of lookback periods, (d) the applicability of Section 2.8 (Compensation for Losses) and (e) other technical, administrative or operational matters) that Agent decides may be appropriate to reflect the adoption and implementation of Term SOFR or such Benchmark Replacement and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or determines that no such market practice exists, in such other manner as Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Financing Documents).
“Connection IncomeTaxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Depreciationand Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including, without limitation, the amortization of intangible assets, deferred financing fees, capitalized contract incentives, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Consolidated Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
“Consolidated InterestExpense” means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Consolidated Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including the interest component of capitalized lease obligations and net payments and receipts (if any) pursuant to interest rate Swap Contracts and excluding amortization of deferred financing fees and original issue discount, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Swap Contracts or other derivatives (in each case permitted hereunder) under GAAP); plus
(2) consolidated capitalized interest of such Person and its Consolidated Subsidiaries for such period, whether paid or accrued; minus
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(3) interest income for such period.
For purposes of this definition, interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP.
“Consolidated NetIncome” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Consolidated Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(2) (a) the Net Income for such period of any Person that is not a Consolidated Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Consolidated Subsidiary thereof in respect of such period and (b) the Net Income for such period shall include any dividend, distribution or other payment in cash (or to the extent converted into cash) received by the referent Person or a Consolidated Subsidiary thereof from any Person in excess of, but without duplication of, the amounts included in subclause (a);
(3) accruals and reserves that are established or adjusted within 12 months after the Closing Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(4) (i) cash received from landlords for tenant allowances shall be included and (ii) to the extent not already included in Net Income, the cash portion of sublease rentals received shall be included;
(5) any deductions attributable to minority interests shall be excluded;
(6) non cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(7) any gain, loss, income, expense or charge resulting from the application of any LIFO shall be excluded; and
(8) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (e) of the definition of “Permitted Distributions” shall be included as though such amounts had been paid as income taxes directly by such Person for such period.
“ConsolidatedNon-Cash Charges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its Consolidated Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided, that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
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“Consolidated Subsidiary” means, at any date, any Subsidiary the accounts of which would be consolidated with those of “parent” Borrower (or any other Person, as the context may require hereunder) in its consolidated financial statements if such statements were prepared as of such date.
“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, federal, state, provincial, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and, without duplication, any Tax Distributions taken into account in calculating Consolidated Net Income.
“Consolidated TotalIndebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Debt of the Borrowers and their respective Subsidiaries (excluding letters of credit or bank guarantees, to the extent undrawn, cash collateralized or backstopped) consisting of capitalized lease obligations and Debt for borrowed money, plus (2) the aggregate amount of all outstanding customary disqualified equity interests of the Borrowers and their respective Subsidiaries and all preferred stock of the Subsidiaries, with the amount of such disqualified equity interests and preferred stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
“Contingent Obligation” means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect to any Debt of another Person (a “Third Party Obligation”) if the purpose or intent of such Person incurring such liability, or the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation will be protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing; (c) under any Swap Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant to any guarantee or pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to preserve the solvency, financial condition or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determinable amount, the maximum amount so guaranteed or otherwise supported.
“Control Agreement” means any Deposit Account Control Agreement or Securities Account Control Agreement.
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“Controlled Group” means all members of any group of corporations and all members of a group of trades or businesses (whether or not incorporated) under common control which, together with any Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.
“Credit Exposure” means, at any time, any portion of the Revolving Loan Commitment that remains outstanding; provided, however, that no Credit Exposure shall be deemed to exist solely due to the existence of contingent indemnification liability, absent the assertion of a claim, or the known existence of a claim reasonably likely to be asserted, with respect thereto.
“Credit Party” means each Borrower and each Guarantor; and “Credit Parties” means all such Persons, collectively.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided that if Agent decides that any such convention is not administratively feasible for Agent, then Agent may establish another convention in its reasonable discretion.
“Debt” of a Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business, (d) all capital leases of such Person, (e) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit, banker’s acceptance or similar instrument, (f) all equity securities of such Person subject to repurchase or redemption other than at the sole option of such Person, (g) all obligations secured by a Lien on any asset of such Person, whether or not such obligation is otherwise an obligation of such Person, (h) “earnouts” (until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of purchase and sale contracts, (i) all Debt of others guaranteed by such Person, (j) off-balance sheet liabilities and/or Pension Plan or Multiemployer Plan liabilities of such Person, (k) obligations arising under non-compete agreements, and (l) obligations arising under bonus, deferred compensation, incentive compensation or similar arrangements, other than those arising in the Ordinary Course of Business. Without duplication of any of the foregoing, Debt of Borrowers shall include any and all Loans.
Notwithstanding the foregoing, Debt shall be deemed not to include (1) Contingent Obligations incurred in the Ordinary Course of Business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) [reserved]; (5) trade and other ordinary course payables, accrued expenses and intercompany liabilities, including with respect to working capital advancements, arising in the Ordinary Course of Business; (6) obligations in respect of Third Party Funds; (7) in the case of the Borrowers and their respective Subsidiaries (x) all intercompany Debt having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the Ordinary Course of Business and (y) intercompany liabilities in connection with cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries; (8); any Claims Administration Indebtedness of the Exar Originators (except to the extent that any such Claims Administration Indebtedness exceeds the Claims Administration Investments of such Exar Originator); and (9) any obligations under Swap Contracts; provided, that such agreements are entered into for bona fide hedging purposes of the Borrowers or their respective Subsidiaries (as determined in good faith by the Board of Directors or senior management of the Borrower Representative, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of the Borrowers or their Subsidiaries entered into in the Ordinary Course of Business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Debt of the Borrowers or their Subsidiaries incurred without violation of this Agreement.
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Notwithstanding anything in this Agreement to the contrary, Debt shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Debt for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Debt; and any such amounts that would have constituted Debt under this Agreement but for the application of this sentence shall not be deemed an incurrence of Debt under this Agreement.
“Debtor Relief Laws” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada), any corporate statute which is used by a Person to propose an arrangement in connection with a compromise of such Person’s debt obligations each as now and hereafter in effect, any successors to such statutes, 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, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“Defined Period” means, for purposes of calculating the Fixed Charge Coverage Ratio for any given calendar month, the twelve (12) month period immediately preceding any such calendar month.
“Deposit Account” means a “deposit account” (as defined in Article 9 of the UCC), bank account or an investment account, or other account in which funds are deposited, held or invested for credit to or for the benefit of any Credit Party.
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“Deposit AccountControl Agreement” means an agreement, in form and substance satisfactory to Agent, among Agent, any Credit Party and each financial institution in which such Credit Party maintains a Deposit Account, which agreement provides that (a) such financial institution shall comply with instructions originated by Agent directing disposition of the funds in such Deposit Account without further consent by the applicable Credit Party, and (b) such financial institution shall agree that it shall have no Lien on, or right of setoff or recoupment against, such Deposit Account or the contents thereof, other than in respect of usual and customary service fees and returned items for which Agent has been given value, in each such case expressly consented to by Agent, and containing such other terms and conditions as Agent may require, including as to any such agreement pertaining to any Lockbox Account, providing that during any Cash Dominion Period such financial institution shall wire, or otherwise transfer, in immediately available funds, on a daily basis to the Payment Account all funds received or deposited into such Lockbox or Lockbox Account.
“Dilution” means, as of any date of determination, a percentage, based upon the experience during any prior period selected from time to time by Agent in its sole discretion, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Credit Parties’ Accounts during such period, by (b) Credit Parties’ billings with respect to Accounts during such period.
“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the applicable advance rate against each applicable category of Eligible Accounts by one (1) percentage point for each percentage point by which Dilution is in excess of two and one-half (2.5%) percent.
“Dollars” means the lawful currency of the United States of America.
“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Consolidated Subsidiaries for such period plus, without duplication and to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) (i) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, (ii) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Consolidated Subsidiaries and (iii) costs of surety bonds in connection with financing activities; plus
(3) Consolidated Depreciation and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) any (x) net after-tax extraordinary, nonrecurring or unusual losses (plus all fees and expenses relating thereto) or (y) expenses or charges, including, without limitation, severance expenses, relocation expenses, restructuring expenses, curtailments or modifications to pension and post- retirement employee benefit plans, excess pension charges, any expenses related to any New Project or any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facility rebranding costs, acquisition integration costs, facility opening costs, project and contract start- up costs, business optimization costs, recruiting costs, signing, retention or completion bonuses, and any fees, expenses, charges or change in control payments related to the Transactions (including any costs relating to auditing prior periods, any transition-related expenses, and transaction expenses incurred before, on or after the Closing Date) for such period, in each case, to the extent not already added back in clause (21) or (23) below; plus
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(6) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Consolidated Subsidiaries and including, without limitation, the effects of adjustments to (A) deferred rent, (B) capitalized lease obligations or other obligations or deferrals attributable to capital spending funds with suppliers or (C) any other deferrals of income) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, for such period; plus
(7) any net after-tax loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets during such period; plus
(8) any net after-tax losses (plus all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Borrower Representative) during such period; plus
(9) any net after-tax losses (plus all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Swap Contracts or other derivative instruments during such period; plus
(10) [reserved]; plus
(11) any impairment charges and asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles and other fair value adjustments to good will and other intangible assets arising pursuant to GAAP for such period; plus
(12) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights, in each case to the extent not otherwise added back pursuant to clause (13) or (24); plus
(13) any (a) non-cash compensation charges, (b) [reserved], or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Closing Date of officers, directors and employees, in each case of such Person or any Consolidated Subsidiary, to the extent not already added back pursuant to clause (12); plus
(14) (a) the non-cash portion of “straight-line” rent expense and (b) the non-cash amortization of tenant allowances; plus
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(15) any currency translation gains and losses related to currency remeasurements of Debt, and any net loss or gain resulting from hedging transactions for currency exchange risk, for such period; plus
(16) (a) amounts received or estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption during such period, to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), and (b) expenses with respect to liability or casualty events or business interruption during such period; plus
(17) Capitalized Software Expenditures for such period; plus
(18) non-cash charges for deferred tax asset valuation allowances for such period; plus
(19) any other costs, expenses or charges resulting from facility closures or sales, including income (or losses) from such facility closures or sales, to the extent not already added back pursuant to clause (5)(y); plus
(20) business optimization expenses and other restructuring charges, reserves or expenses not related to the Transactions (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, severance, systems establishment costs, contract termination costs, future lease commitments and excess pension charges) and Pre-Opening Expenses; to the extent not already added back pursuant to clause (5)(y); plus
(21) any expenses or charges (other than Consolidated Depreciation and Amortization Expense) (i) related to any issuance of equity interests, Investment, acquisition, New Project, disposition, loan origination, recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by this Agreement (including a refinancing thereof) (whether or not successful) or (ii) incurred in connection with the Transactions, including (A) such fees, expenses or charges related to the Transactions, the Obligations or any Debt and (B) any amendment or other modification of the Obligations or other Debt, in each case, to the extent not already added back pursuant to clause (5)(y); plus
(22) [reserved]; plus
(23) [reserved]; plus
(24) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of a Borrower or a Guarantor or net cash proceeds of an issuance of equity interests of the Borrowers (other than customary disqualified equity interests), and to the extent not otherwise added back pursuant to clause (12) or (13); plus
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(25) the amount of any loss attributable to a New Project, until the date that is 12 months after the date of completing the construction, acquisition, assembling or creation of such New Project, as the case may be; provided, that (a) such losses are reasonably identifiable and factually supportable and certified by a responsible financial or accounting officer of the Borrowers and (b) losses attributable to such New Project after 12 months from the date of completing such construction, acquisition, assembling or creation, as the case may be, shall not be included in this clause (25); plus
(26) [reserved]; plus
(27) with respect to any joint venture that is not a Subsidiary and solely to the extent relating to any net income referred to in clause (2) of the definition of “Consolidated Net Income” an amount equal to the proportion of those items described in clauses (1) and (2) above relating to such joint venture corresponding to the Borrower’s and the Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Subsidiary); plus
(28) [reserved]; plus
(29) [reserved]; and
less, without duplication, to the extent the same increased Consolidated Net Income,
(30) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); plus
(31) any net after-tax extraordinary, nonrecurring or unusual gains (less all fees and expenses relating thereto); plus
(32) any net after-tax income from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets during such period; plus
(33) any net after-tax gains (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Borrower Representative) during such period; plus
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(34) any net after-tax gains (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Swap Contracts or other derivative instruments during such period;
provided that for all purposes, the individual amount added back to EBITDA pursuant to any of clauses (5), (13), (14), (19), (20), (21)(i), (23), (24) or (25) above shall not be more than 15% of EBITDA for the most recently ended twelve month period (calculated prior to giving effect to such adjustments and exclusions) and, together with the aggregate amount added back pursuant to clauses (5), (13), (14), (19), (20), (21)(i), (23), (24) or (25) above, shall not be more than 30% of EBITDA for the most recently ended twelve month period (calculated prior to giving effect to such adjustments and exclusions).
Notwithstanding the foregoing, for purposes of determining EBITDA for any period that includes any of the months set forth below, EBITDA for such month shall equal the respective amount set forth opposite such month in the table set forth below:
| Month | EBITDA (in thousands) | |
|---|---|---|
| July 2024 | $ | 6,321 |
| August 2024 | $ | 4,863 |
| September 2025 | $ | 6,989 |
| October 2024 | $ | 9,035 |
| November 2024 | $ | 8,412 |
| December 2024 | $ | 10,912 |
| January 2025 | $ | 4,269 |
| February 2025 | $ | 8,143 |
| March 2025 | $ | 9,504 |
| April 2025 | $ | 7,596 |
| May 2025 | $ | 4,069 |
| June 2025 | $ | 6,059 |
“EEAFinancial Institution” means (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. “EEAMember Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEAResolution Authority” means any public administrative authority, or any person entrusted with public administrative authority of any EEA Member Country (including any delegee), having responsibility for the resolution of any EEA Financial Institution.
“Eligibility Reserves” means, effective as of five (5) Business Days after the date of written notice of any determination thereof to the Borrower Representative by Agent (which notice shall include a reasonable description of the basis for such determination), such amounts as Agent, in its Permitted Discretion, may from time to time establish, against the gross amounts of Eligible Billed Accounts, Eligible Exar Billed Accounts, Eligible Unbilled Accounts, Eligible Exar Unbilled Accounts and Eligible Investment Grade Billed Accounts to reflect Dilution Reserves, Canadian Priority Payables Reserves, sales, excise or similar taxes and other risks or contingencies that may adversely affect any one or more class of such items or that may affect the credit risk or lending against the Eligible Accounts, in each case subject to the last sentence of the definition of “Borrowing Base”; provided that, during such five Business Day period, no Revolving Loans may be borrowed to the extent the aggregate Revolving Loan Outstandings after giving effect thereto would exceed the Revolving Loan Limit determined as if such new Eligibility Reserve were in effect.
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“Eligible Account” means Eligible Billed Accounts, Eligible Exar Billed Accounts, Eligible Unbilled Accounts, Eligible Exar Unbilled Accounts and Eligible Investment Grade Billed Accounts.
“Eligible BilledAccount” means, subject to the criteria below, an account receivable of a Credit Party (other than (until the termination of the Exar Facility) an Exar Originator or a Canadian Credit Party until such time a Solvency Certificate has been delivered with respect to such Canadian Credit Party), which was generated in the Ordinary Course of Business, which was generated originally in the name of a Credit Party (other than (until the termination of the Exar Facility) an Exar Originator or a Canadian Credit Party until such time a Solvency Certificate has been delivered with respect to such Canadian Credit Party) and not acquired via assignment or otherwise. The net amount of an Eligible Billed Account at any time shall be the face amount of such Eligible Billed Account as originally billed minus all cash collections and other proceeds of such Account received from or on behalf of the Account Debtor thereunder as of such date and any and all returns, rebates, discounts (which may, at Agent’s option, be calculated on shortest terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Accounts at such time. Without limiting the generality of the foregoing, no Account shall be an Eligible Billed Account if:
(a) the Account remains unpaid more than ninety (90) days past the due date (but in no event more than one hundred fifty (150) days after invoice date or the date that the applicable goods or services have been rendered, serviced or delivered);
(b) the Account is subject to any defense, set-off, recoupment, counterclaim, deduction, discount, backdating, postdating, redating, credit, chargeback, freight claim, allowance, or adjustment of any kind (but only to the extent of such defense, set-off, recoupment, counterclaim, deduction, discount, backdating, postdating, redating, credit, chargeback, freight claim, allowance, or adjustment), or the applicable Credit Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;
(c) if the Account arises from the sale of goods, any part of any goods the sale of which has given rise to the Account has been returned, rejected, lost, or damaged (but only to the extent that such goods have been so returned, rejected, lost or damaged);
(d) if the Account arises from the sale of goods, the sale was not an absolute, bona fide sale, or the sale was made on consignment or on approval or on a sale-or-return or bill-and-hold or progress billing basis, or the sale was made subject to any other repurchase or return agreement, or the goods have not been shipped to the Account Debtor or its designee or the sale was not made in compliance with applicable Laws;
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(e) if the Account arises from the performance of services, the services have not actually been performed or the services were undertaken in violation of any Law or the Account represents a progress billing for which services have not been fully and completely rendered;
(f) the Account is subject to a Lien other than a Permitted Lien, or Agent does not have a first priority, perfected Lien on such Account;
(g) the Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment, unless such Chattel Paper or Instrument has been delivered to Agent;
(h) the Account Debtor is an Affiliate or Subsidiary of a Credit Party, or if the Account Debtor holds any Debt of a Credit Party;
(i) more than fifty percent (50%) of the aggregate balance of all Accounts owing from the Account Debtor obligated on the Account are ineligible under subclause (a) above (in which case all Accounts from such Account Debtor shall be ineligible);
(j) the Credit Party owning such Account is an Exar Originator;
(k) the total unpaid Accounts of the Account Debtor obligated on the Account exceed twenty percent (20%) of the net amount of all Eligible Accounts owing from all Account Debtors (but only the amount of the Accounts of such Account Debtor exceeding such twenty percent (20%) limitation shall be considered ineligible);
(l) any covenant, representation or warranty contained in the Financing Documents with respect to such Account has been breached in any respect;
(m) the Account is unbilled or has not been invoiced to the Account Debtor in accordance with the procedures and requirements of the applicable Account Debtor;
(n) the Account is an obligation of an Account Debtor that is the federal, state, provincial, territorial or local government or any political subdivision thereof, unless Agent has agreed to the contrary in writing in the exercise of its Permitted Discretion and, if requested by Agent, in the exercise of its Permitted Discretion, Agent has received from the Account Debtor the acknowledgement of Agent’s notice of assignment of such obligation pursuant to this Agreement;
(o) the Account is an obligation of an Account Debtor that has suspended business, made a general assignment for the benefit of creditors, is unable to pay its debts as they become due or as to which a petition has been filed (voluntary or involuntary) under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or the Account is an Account as to which any facts, events or occurrences exist which could reasonably be expected to impair the validity, enforceability or collectability of such Account or reduce the amount payable or delay payment thereunder;
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(p) the Account Debtor has its principal place of business or executive office outside the United States or Canada;
(q) the Account is payable in a currency other than United States Dollars or Canadian Dollars; provided that, in the case of Canadian Dollars, the aggregate amount of such Accounts does not exceed 20% of the aggregate amount of Eligible Accounts at any time;
(r) the Account Debtor is an individual;
(s) the Credit Party owning such Account has not signed and delivered to Agent notices, in the form requested by Agent, directing the Account Debtors to make payment to the applicable Lockbox Account;
(t) the Account includes late charges or finance charges (but only such portion of the Account shall be ineligible);
(u) the Account arises out of the sale of any Inventory upon which any other Person holds, claims or assets a Lien (unless such Lien does not also include proceeds of such Inventory); or
(v) the Account or Account Debtor fails to meet such other specifications and requirements which may from time to time be established by Agent in its good faith credit judgment and Permitted Discretion and in accordance with its customary criteria.
“Eligible Cash” means cash and Cash Equivalents of a Credit Party that is held in a Cash Collateral Account or held in escrow by Agent on behalf of a Credit Party in a Deposit Account owned by Agent.
“Eligible Exar BilledAccounts” means, only following the termination of the Exar Facility and the release of any liens pursuant thereto, any Accounts held by an Exar Originator that:
(a) meet all criteria set forth in the definition of “Eligible Billed Account” except for clause (a) and (j) thereof; and
(b) do not remain unpaid more than one hundred fifty (150) days past the invoice date (or the date that the applicable goods or services have been rendered, serviced or delivered).
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“Eligible Exar UnbilledAccount” means, at any time of determination, Accounts of an Exar Originator that:
(a) qualify as Eligible Exar Billed Accounts, except that the invoice applicable to such Accounts has not been issued to the applicable Account Debtor; provided that an Account shall cease to be an Eligible Exar Unbilled Account upon the earlier of (i) the date the invoice applicable to such Account is issued to the applicable Account Debtor and (ii) ninety (90) days after the services giving rise to such Account have been completed by the applicable Exar Originator; and
(b) are evidenced by supporting documentation in form and substance reasonably satisfactory to Agent in form consistent with documentation delivered prior to the Closing Date.
“Eligible InvestmentGrade Billed Account” means, at any time of determination, Accounts of a Credit Party that:
(a) qualify as Eligible Billed Accounts;
(b) the Account Debtor is an Investment Grade Account Debtor; and
(c) are evidenced by supporting documentation in form and substance reasonably satisfactory to Agent in form consistent with documentation delivered prior to the Closing Date.
“Eligible UnbilledAccount” means, at any time of determination, Accounts of a Credit Party (other than an Exar Originator) that:
(a) qualify as Eligible Billed Accounts, except that the invoice applicable to such Accounts has not been issued to the applicable Account Debtor; provided that an Account shall cease to be an Eligible Unbilled Account upon the earlier of (i) the date the invoice applicable to such Account is issued to the applicable Account Debtor and (ii) thirty (30) days after the services giving rise to such Account have been completed by the applicable Credit Party; and
(b) are evidenced by supporting documentation in form and substance reasonably satisfactory to Agent in form consistent with documentation delivered prior to the Closing Date.
In determining the amount to be included, Eligible Unbilled Accounts shall be calculated net of customer deposits and unapplied cash.
“EnvironmentalLaws” means any present and future federal, state, provincial, territorial, municipal and local laws, statutes, ordinances, rules, regulations, standards, policies and other governmental directives or requirements, as well as common law, pertaining to the environment, natural resources, pollution, health (including any environmental clean-up statutes and all regulations adopted by any local, state, provincial, territorial, municipal, federal or other Governmental Authority, and any statute, ordinance, code, order, decree, law rule or regulation all of which pertain to or impose liability or standards of conduct concerning medical waste or medical products, equipment or supplies), safety or clean-up that apply to any Borrower and relate to Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 etseq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. § 4851 et seq.), the Canadian Environmental Protection Act, 1999, any analogous federal, state, provincial, territorial, municipal or local laws, any amendments thereto, and the regulations promulgated pursuant to said laws, together with all amendments from time to time to any of the foregoing and judicial interpretations thereof.
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“Equivalent Amount” means, on any date of determination, with respect to obligations or valuations denominated in one currency (the “first currency”), the amount of another currency (the “second currency”) which would result from Agent converting the first currency into the second currency at the Spot Rate on the applicable date of determination, or at such other rate as Agent may determine in its sole discretion.
“ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.
“ERISA Plan” means any “employee benefit plan”, as such term is defined in Section 3(3) of ERISA (other than a Multiemployer Plan), which any Credit Party maintains, sponsors or contributes to, or, in the case of an employee benefit plan which is subject to Section 412 of the Code or Title IV of ERISA, to which any Credit Party or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five (5) years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Erroneous Payment” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentDeficiency Assignment” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentImpacted Loans” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentReturn Deficiency” has the meaning specified therefor in Section 11.20.
“ETI” means Exela Technologies, Inc.
“ETI Funding Obligation” has the meaning assigned to it in the Plan of Reorganization.
“EUBail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” has the meaning set forth in Section 10.1.
“ExarBilled Advance Rate” means the advance rate applicable to Eligible Exar Billed Accounts, as set forth in the table below, which shall adjust automatically on the dates specified unless otherwise agreed by Agent in its sole discretion:
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| Date | Advance Rate on Eligible Exar Billed <br><br>Accounts |
|---|---|
| Closing Date through and including the date that is six months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 85.0% |
| One day after the end of the period described immediately above, through and including the date that is seven months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 83.33% |
| One day after the end of the period described immediately above, through and including the date that is eight months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 81.67% |
| One day after the end of the period described immediately above, through and including the date that is nine months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 80.00% |
| One day after the end of the period described immediately above, through and including the date that is ten months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 78.33% |
| One day after the end of the period described immediately above, through and including the date that is eleven months after the first date upon which any Eligible Exar Billed Account is included in the Borrowing Base | 76.67% |
| One day after the end of the period described immediately above, and thereafter | 75% |
“Exar Facility” means the receivables purchase facility established pursuant to that certain Receivables Purchase Agreement, dated as of February 12, 2024, among Exela BR SPV LLC, a Delaware limited liability company (“Exar SPV”), as seller, BR EXAR, LLC, a Delaware limited liability company (as successor by assignment to B. Riley Securities, Inc.), as buyer (the “Exar Buyer”), and the originators party thereto as of the Closing Date (the “Exar Originators”), as amended, restated, amended and restated, supplemented or otherwise modified from time to time (for the avoidance of doubt, other than with respect to amendments, restatements amendments and restatements, supplements or modifications which change the identities of the Exar Originators).
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“Exar Originator” has the meaning specified therefore in the definition of Exar Facility.
“ExarUnbilled Advance Rate” means the advance rate applicable to Eligible Exar Unbilled Accounts, as set forth in the table below, which shall adjust automatically on the dates specified unless otherwise agreed by Agent in its sole discretion:
| Date | Advance Rate on Eligible Exar Unbilled<br><br> Accounts |
|---|---|
| Closing Date through and including the date that is six months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 85.0% |
| One day after the end of the period described immediately above, through and including the date that is seven months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 79.17% |
| One day after the end of the period described immediately above, through and including the date that is eight months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 73.33% |
| One day after the end of the period described immediately above, through and including the date that is nine months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 67.50% |
| One day after the end of the period described immediately above, through and including the date that is ten months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 61.67% |
| One day after the end of the period described immediately above, through and including the date that is eleven months after the first date upon which any Eligible Exar Unbilled Account is included in the Borrowing Base | 55.83% |
| One day after the end of the period described immediately above, and thereafter | 50.0% |
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“Excess Availability” means, at a particular date, an amount equal to the Revolving Loan Availability.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Account” has the meaning specified therefor in Section 5.14.
“Excluded Subsidiary” means, with respect to any Subsidiary of the Borrowers, (a) each Subsidiary that is prohibited from Guaranteeing the Obligations by any Requirement of Law or that would require consent, approval, license or authorization of a governmental (including regulatory) authority to Guarantee the Obligations (unless such consent, approval, license or authorization has been received); provided, that, for the avoidance of doubt, such Subsidiary shall have no obligation to seek such consent, approval, license or authorization, (b) each Subsidiary that is prohibited by any applicable contractual requirement from Guaranteeing the Obligations on the Closing Date or at the time such Subsidiary becomes a Subsidiary (in each case for so long as such restriction or any replacement or renewal thereof is in effect and only to the extent that such prohibition was not implemented or consented to with the intent of evading the requirements of Section 4.10), (c) [reserved], (d) any Subsidiary that (i) did not, as of the last day of the fiscal quarter of the Borrowers most recently ended, have assets with a value in excess of 5.0% of the total assets or revenues representing in excess of 5.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries being excluded pursuant to this clause (d), as of the last day of the fiscal quarter of the Borrowers most recently ended, did not have assets with a value in excess of 10.0% of the total assets or revenues representing in excess of 10.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date, and (e) any Subsidiary for which providing a Guarantee or granting Liens required by the Security Documents to secure Indebtedness could reasonably be expected to result in material tax consequences as determined in good faith by the Borrowers in consultation with the Required Lenders, in each case pursuant to clauses (a) through (e) hereof, only for so long as it remains as such; provided that any Subsidiary that incurs or provides a guarantee under (or has pledged its assets to secure the obligations of) any Indebtedness for borrowed money shall not be an Excluded Subsidiary.
“ExcludedTaxes” means any of the following Taxes imposed on or with respect to Agent, any Lender or any other recipient of any payment to be made by or on behalf of any obligation of Credit Parties hereunder or the Obligations or required to be withheld or deducted from a payment to Agent, such Lender or such recipient: (a) Taxes to the extent imposed on or measured by Agent’s, any Lender’s or such other recipient’s net income (however denominated), branch profits Taxes, and franchise Taxes, in each case, (i) imposed by the jurisdiction (or any political subdivision thereof) under which Agent, such Lender or such other recipient is organized, has its principal office or, in the case of any Lender, has its applicable lending office or (ii) that are Other Connection Taxes; (b) in the case of a Lender, United States withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Loans pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loans other than as a result of an assignment requested by a Credit Party under the terms hereof or (ii) such Lender changes its lending office for funding its Loan, except in each case to the extent that, pursuant to Section 2.8, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or Revolving Loan Commitment or to such Lender immediately before it changed its lending office; (c) Taxes attributable to Agent’s, such Lender’s or such other recipient’s failure to comply with Section 2.8(c); and (d) any Taxes imposed under FATCA.
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“Exit Notes” means the notes under the Exit Notes Indenture.
“Exit Notes CollateralAgent” means Ankura Trust Company, LLC, as the collateral agent under the Exit Notes Indenture.
“Exit Notes Indenture” means the indenture dated as of the date hereof among the Exela Technologies BPA, LLC, Exela Finance Inc., the guarantors named therein, the financial institutions named therein, the Trustee and the Exit Notes Collateral Agent, as in effect on the date hereof.
“Fair Value” means the amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury regulations or official interpretations thereof and any agreement entered into pursuant to the implementation of Section 1471(b)(1) of the Code, and any intergovernmental agreement, treaty or convention between the United States Internal Revenue Service, the U.S. Government and any governmental or taxation authority under any other jurisdiction which agreement’s principal purposes deals with the implement such sections of the Code.
“Financing Documents” means this Agreement, the ABL Intercreditor Agreement, any other intercreditor agreements, any Notes, the Security Documents, any subordination or intercreditor agreement pursuant to which any Debt and/or any Liens securing such Debt is subordinated to all or any portion of the Obligations and all other documents, instruments and agreements (other than any Swap Contract) related to the Obligations and heretofore executed, executed concurrently herewith or executed at any time and from time to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.
“Fixed Charge CalculationDate” has the meaning assigned in the “Fixed Charge Coverage Ratio” definition.
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“Fixed Charge CoverageRatio” means, with respect to any Person for any period, the ratio of (a) (i) EBITDA of such Person for such period minus (ii) the Unfinanced Capital Expenditures of the Borrower and its Subsidiaries during such period minus (iii) Capitalized Software Expenditures to (b) the Fixed Charges of such Person for such period. In the event that the Borrowers or any of its Subsidiaries incurs, repays, repurchases or redeems any Debt or issues, repurchases or redeems disqualified equity interests or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, repayment, repurchase or redemption of Debt, or such issuance, repurchase or redemption of disqualified equity interests or preferred stock, as if the same had occurred at the beginning of the applicable period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable reference period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in a Responsible Officer’s certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the reference period (including, to the extent applicable, the Transactions); provided, that for all purposes of determining EBITDA hereunder all adjustments (to the extent such adjustment is effected pursuant to the definition of EBITDA) shall not be more than the amount of applicable adjustments permitted pursuant to the applicable provision(s) of the definition of EBITDA, as the case may be for the most recently ended reference period (calculated prior to giving effect to such capped adjustments and exclusions (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
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If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Debt shall be calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Swap Contracts applicable to such Debt if such Swap Contract has a remaining term in excess of 12 months). Interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Debt under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Debt during the applicable period. Interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (a) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or customary disqualified equity interests of such Person and its Subsidiaries, (c) regularly scheduled payments of principal on Debt for borrowed money that were paid or payable (but without duplication) during such period (excluding, for the avoidance of doubt, that attributable to Capital Lease Obligations and the Exar Facility) and (d) the aggregate amount of cash payments made in respect of Taxes (other than payroll taxes, sales taxes and Transaction Tax Liability (as defined in the Plan of Reorganization)) during such period.
“Floor” means the rate per annum of interest equal to 1.00%.
“Foreign Lender” has the meaning specified therefor in Section 2.8(c)(i).
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“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the United States accounting profession), which are applicable to the circumstances as of the date of determination.
“General Intangible” means any “general intangible” as defined in Article 9 of the UCC (and includes, for certainty, any “intangible” as defined in the PPSA), and any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas or other minerals before extraction, but including payment intangibles and software.
“Governmental Authority” means any nation or federal government, any state, province, territory, municipality or other political subdivision thereof, and any agency, department or Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other Person owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing, whether domestic or foreign.
“guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that the term guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business. The term “guarantee” used as a verb has a corresponding meaning.
“Guarantee” means the guarantee of the Guaranteed Obligations made by the Guarantors as set forth in Section 12 of this Agreement or in such other form as may be accepted by Agent in its reasonable discretion.
“Guarantee Supplement” has the meaning specified in Section 12.6.
“Guaranteed Obligations” has the meaning specified therefor in Section 12.2(a).
“Guarantor” means each Subsidiary of the Borrowers (other than an Excluded Subsidiary or other Person designated in writing by Agent as not required to be a Guarantor). For the avoidance of doubt, each Guarantor shall be jointly and severally liable for the Obligations to the extent provided in this Agreement and the other Financing Documents.
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“Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing materials; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which is prohibited by any Environmental Laws; toxic mold, any substance that requires special handling; and any other material or substance now or in the future defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” or other words of similar import within the meaning of any Environmental Law, including: (a) any “hazardous substance” defined as such in (or for purposes of) CERCLA, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (c) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d) any petroleum or petroleum by-products, including crude oil or any fraction thereof; (e) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (f) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; (g) any toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without limitation, asbestos, polychlorinated biphenyls (“PCB’s”), flammable explosives, radioactive materials, infectious substances, materials containing lead-based paint or raw materials which include hazardous constituents); and (h) any other toxic substance or contaminant that is subject to any Environmental Laws or other past or present requirement of any Governmental Authority.
“Hazardous MaterialsContamination” means contamination (whether now existing or hereafter occurring) of the improvements, buildings, facilities, personalty, soil, groundwater, air or other elements on or of the relevant property by Hazardous Materials, or any derivatives thereof, or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating from or disposed of in connection with the relevant property.
“IGAdvance Rate” means the advance rate applicable to Eligible Investment Grade Billed Accounts, as set forth in the table below, which shall adjust automatically on the dates specified unless otherwise agreed by Agent in its sole discretion:
| Date | Advance Rate on Eligible Investment Grade<br><br> Billed Accounts |
|---|---|
| Closing Date through and including January 29, 2026 | 95.0% |
| January 30, 2026, through and including July 29, 2026 | 92.5% |
| After July 29, 2026 | 90.0% |
“IndemnifiedTaxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrowers or any other Credit Party under any Financing Documents and (b) to the extent not otherwise described in (a), Other Taxes.
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“Instrument” means “instrument”, as defined in Article 9 of the UCC or in the PPSA, as applicable.
“Intellectual Property” means, with respect to any Person, all patents, patent applications, industrial designs, industrial design applications and like protections, including improvements divisions, continuation, renewals, reissues, extensions and continuations in part of the same, trademarks, trade names, trade styles, trade dress, service marks, logos and other business identifiers and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of such Person connected with and symbolized thereby, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative works, whether published or unpublished, technology, know-how and processes, operating manuals, trade secrets, computer hardware and software, rights to unpatented inventions and all applications and licenses therefor, used in or necessary for the conduct of business by such Person and all claims for damages by way of any past, present or future infringement of any of the foregoing.
“Interest Period” means any period commencing on the first day of a calendar month and ending on the last day of such calendar month.
“Inventory” means “inventory” as defined in Article 9 of the UCC or in the PPSA, as applicable.
“Investment” means any investment in any Person, whether by means of acquiring (whether for cash, property, services, securities or otherwise), making or holding Debt, securities, capital contributions, loans, time deposits, advances, guarantees or otherwise. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect thereto.
“InvestmentGrade Account Debtor” means an Account Debtor listed on Schedule 1.1 (as such list may be updated from time to time by Borrower and consented to by Agent) that, at any time of determination, has a corporate credit rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P.
“IRS” has the meaning specified therefor in Section 2.8(c)(i).
“Junior Lien Obligations” means the obligations with respect to Debt permitted to be incurred under this Agreement, which is by its terms intended to be secured by the Collateral on a basis junior to the Obligations, excluding the Term Loan Agreement and the Exit Notes.
“Laws” means any and all federal, state, provincial, territorial, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, governmental agreements and governmental restrictions, whether now or hereafter in effect, which are applicable to any Credit Party in any particular circumstance. “Laws” includes, without limitation, Environmental Laws.
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“Lender” means each of (a) MidCap Financial Trust, in its capacity as a lender hereunder, (b) each other Person party hereto in its capacity as a lender hereunder, (c) each other Person that becomes a party hereto as Lender pursuant to Section 11.17, and (d) the respective successors of all of the foregoing, and “Lenders” means all of the foregoing. In addition to the foregoing, solely for the purpose of identifying the Persons entitled to share in payments and collections from the Collateral as more fully set forth in this Agreement and the Security Documents, the term “Lender” shall include Eligible Swap Counterparties. In connection with any such distribution of payments and collections, Agent shall be entitled to assume that no amounts are due to any Eligible Swap Counterparty unless such Eligible Swap Counterparty has notified Agent of the amount of any such liability owed to it prior to such distribution.
“Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the Closing Date after giving effect to the consummation of the Transactions determined in accordance with GAAP consistently applied.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, in respect of such asset. For the purposes of this Agreement and the other Financing Documents, any Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Litigation” means any action, suit or proceeding before any court, mediator, arbitrator or Governmental Authority.
“Loan(s)” means the Revolving Loans.
“Loan Account” has the meaning specified therefor in Section 2.6(b).
“Lockbox” has the meaning specified therefor in Section 2.11.
“Lockbox Account” means an account or accounts maintained at the Lockbox Bank into which collections of Accounts are paid, which account or accounts shall be, if requested by Agent, opened in the name of Agent (or a nominee of Agent).
“Lockbox Bank” has the meaning specified therefor in Section 2.11.
“Material AdverseEffect” means a material adverse effect on any of (a) the operations, assets, liabilities, financial condition or prospects of the Credit Parties taken as a whole, (b) the ability of the Credit Parties taken as a whole to perform any of their obligations under any Financing Document, (c) the legality, validity or enforceability of this Agreement or any other Financing Document, (d) the rights and remedies of any Agent or any Lender under any Financing Document, or (e) the validity, perfection or priority of a Lien in favor of Agent on Collateral having a fair market value in excess of $25,000,000.
“MaterialContracts” means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $10,000,000 or more in any fiscal year (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium) and (b) all other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
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“Maximum Lawful Rate” has the meaning specified therefor in Section 2.7.
“MCF” means MidCap Funding IV Trust, a Delaware statutory trust, and its successors and assigns.
“Minimum Balance” shall mean, on any day, an amount that equals the product of: (i) the average Borrowing Base (or, if less on any given day, the Revolving Loan Commitment) during the immediately preceding month multiplied by (ii) twenty percent (20.0%).
“Minimum BalanceFee” shall mean a fee equal to (a) the positive difference, if any, remaining after subtracting (i) the average end-of-day principal balance of Revolving Loans outstanding during the immediately preceding month (without giving effect to the clearance day calculations referenced above) or in Section 2.2(a) from (ii) the Minimum Balance multiplied by (b) the highest interest rate applicable to the Revolving Loans during such month (or, during the existence of an Event of Default, the default rate of interest set forth in Section 10.5).
“Multiemployer Plan” means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which any Credit Party or any other member of the Controlled Group (or any Person who in the last five years was a member of the Controlled Group) is making or accruing an obligation to make contributions or has within the preceding five plan years (as determined on the applicable date of determination) made contributions.
“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Consolidated Subsidiaries, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.
“New Project” means (x) each contract or project with respect to new customers and any expansions of contracts or projects with respect to existing customers and (y) each creation (in one or a series of related transactions) of a business unit to the extent such business unit commences operations or each expansion (in one or a series of related transactions) of business into a new market, in each case, to the extent and for so long as not capitalized in the Ordinary Course of Business of the Borrowers and their Subsidiaries.
“Notes” has the meaning specified therefor in Section 2.3.
“Notice of Borrowing” means a notice of a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit D hereto.
“Obligations” means all obligations, liabilities and indebtedness (monetary (including, without limitation, the payment of interest and other amounts arising after the commencement of any case with respect to any Credit Party under any Debtor Relief Laws or any similar statute which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case) or otherwise) of each Credit Party under this Agreement or any other Financing Document, in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due. In addition to, but without duplication of, the foregoing, the Obligations shall include, without limitation, all obligations, liabilities and indebtedness arising from or in connection with all Swap Contracts entered into with any Eligible Swap Counterparty.
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“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“Operative Documents” means the Financing Documents, the Term Loan Documents, the Exit Notes Indenture and the B. Riley Credit Agreement.
“Ordinary Courseof Business” means, in respect of any transaction involving any Credit Party, the ordinary course of business of such Credit Party, as conducted by such Credit Party in accordance with past practices.
“Organizational Documents” means, with respect to any Person other than a natural person, the documents by which such Person was organized or formed (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Person (such as by-laws, memoranda of association, a partnership agreement or an operating, limited liability company or members agreement), including any and all shareholder agreements or voting agreements relating to the capital stock or other equity interests of such Person.
“OtherConnection Taxes” means, with respect to a Lender or Agent, taxes imposed as a result of a present or former connection between Agent or any Lender and the jurisdiction imposing such tax (other than connections arising solely from Agent or such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, engaged in any other transaction pursuant to or enforced any Financing Document, or sold or assigned an interest in any Loans or any Financing Document).
“OtherTaxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Financing Document, except any such taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.8(i)).
“Parent” means XBP Europe Holdings Inc., a Delaware corporation, and any successor thereto.
“Participant Register” has the meaning specified therefor in Section 11.17(a)(iii).
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“Payment Account” means the account specified on the signature pages hereof into which all payments by or on behalf of each Borrower to Agent under the Financing Documents shall be made, or such other account as Agent shall from time to time specify by notice to Borrower Representative.
“Payment Condition” means, with respect to any payment subject to such condition, that:
(a) the Credit Parties shall have a pro forma Fixed Charge Coverage Ratio of not less than 1.00:1.00 after giving effect to such payment;
(b) the Credit Parties shall have maintained Excess Availability (after giving pro forma effect to any advance with respect to the subject payment)of not less than twenty percent (20%) of the Revolving Loan Limit for the 30-day period immediately preceding the date of such payment; and
(c) no Default or Event of Default shall have occurred and be continuing on the date of such payment or as a result thereof.
“Payment Recipient” has the meaning specified therefor in Section 11.20.
“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding to any or all of its functions under ERISA.
“Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code or Title IV of ERISA.
“Permits” means all governmental licenses, authorizations, provider numbers, supplier numbers, registrations, permits, drug or device authorizations and approvals, certificates, franchises, qualifications, accreditations, consents and approvals of a Credit Party required under all applicable Laws and required for such Credit Party in order to carry on its business as now conducted.
“Permitted Affiliate” means with respect to any Person (a) any Person that directly or indirectly controls such Person, and (b) any Person which is controlled by or is under common control with such controlling Person. As used in this definition, the term “control” of a Person means the possession, directly or indirectly, of the power to vote eighty percent (80%) or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
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“PermittedAsset Dispositions” means the following Asset Dispositions: (a) dispositions of Inventory in the Ordinary Course of Business and not pursuant to any bulk sale, (b) dispositions of furniture, fixtures and equipment in the Ordinary Course of Business that the applicable Borrower or Subsidiary determines in good faith is no longer used or useful in the business of such Borrower and its Subsidiaries, (c) dispositions approved by Agent, (d) licensing, on a non-exclusive basis, intellectual property rights in the ordinary course of business of the Borrowers or any Subsidiary, (e) leasing or subleasing assets in the ordinary course of business of the Borrower or any Subsidiary, (f) so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from the Borrower or any Subsidiary to a Credit Party and (ii) from any Subsidiary that is not a Credit Party to any other Subsidiary, (g) any Asset Disposition occurring in accordance with the terms of the Tax Funding Agreement, (h) any involuntary loss, damage or destruction of property and any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property, (i) any involuntary loss, damage or destruction of property, (j) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property, (k)(i) the lapse of Registered Intellectual Property of the Borrowers or any Subsidiary of the Borrowers to the extent not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of their business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lenders, and (l) sales and contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility in effect as of the date hereof; provided that certain of the proceeds from such sale and contribution pursuant to this clause (i) are used to repay the B. Riley Credit Agreement (which may be by way of a purchase of a participation interest, so long as such participation interest is purchased by a Credit Party or immediately transferred to a Credit Party) in accordance with the terms of the Exar Facility as in effect as of the date hereof.
“Permitted Contest” means, with respect to any tax obligation or other obligation allegedly or potentially owing from any Borrower or its Subsidiary to any governmental tax authority or other third party, a contest maintained in good faith by appropriate proceedings promptly instituted and diligently conducted and with respect to which such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made on the books and records and financial statements of the applicable Credit Party(ies); provided, however, that (a) compliance with the obligation that is the subject of such contest is effectively stayed during such challenge; (b) Borrowers’ and its Subsidiaries’ title to, and its right to use, the Collateral is not adversely affected thereby and Agent’s Lien and priority on the Collateral are not adversely affected, altered or impaired thereby; (c) Borrowers have given prior written notice to Agent of a Borrower’s or its Subsidiary’s intent to so contest the obligation; (d) the Collateral or any part thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrowers or its Subsidiaries; (e) Borrowers have given Agent notice of the commencement of such contest and upon request by Agent, from time to time, notice of the status of such contest by Borrowers and/or confirmation of the continuing satisfaction of this definition; and (f) upon a final determination of such contest, Borrowers and its Subsidiaries shall promptly comply with the requirements thereof.
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“PermittedContingent Obligations” means (a) Contingent Obligations arising in respect of the Debt under or permitted by the Financing Documents; (b) Contingent Obligations resulting from endorsements for collection or deposit in the Ordinary Course of Business; (c) Contingent Obligations outstanding on the date of this Agreement and set forth on Schedule 5.1 (but not including any refinancings, extensions, increases or amendments to the indebtedness underlying such Contingent Obligations other than extensions of the maturity thereof without any other change in terms); (d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations; (e) Contingent Obligations arising under indemnity agreements with title insurers to cause such title insurers to issue to Agent mortgagee title insurance policies; (f) Contingent Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions of personal property assets permitted under Section 5.6; (g) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction, Contingent Obligations existing or arising under any Swap Contract, provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation; and (h) other Contingent Obligations not permitted by clauses (a) through (h) above, not to exceed the Threshold Amount in the aggregate at any time outstanding.
“Permitted Debt” means:
(a) Borrowers’ and its Subsidiaries’ Debt to Agent and each Lender under this Agreement and the other Financing Documents;
(b) Debt incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business;
(c) purchase money Debt for property acquired and capital lease obligations not to exceed $35,000,000 at any time (whether in the form of a loan or a lease and including any refinancing of such indebtedness pursuant to clause (ll) below) used solely to acquire, lease, construct, repair, replace or improve property or equipment used in the Ordinary Course of Business and secured only by such equipment;
(d) Debt existing on the date of this Agreement and described on Schedule 5.1 (but not including any refinancings, extensions, increases or amendments to such Debt other than extensions of the maturity thereof without any other change in terms);
(e) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction, Debt existing or arising under any Swap Contract, provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation;
(f) Debt in the form of insurance premiums financed through the applicable insurance company;
(g) trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business;
(h) Borrowers’ and its Subsidiaries’ Debt incurred in connection with the Term Loan Documents;
(i) [reserved];
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(j) Debt of any Credit Party in an aggregate amount not to exceed $25,000,000 so long as (x) the Fixed Charge Coverage Ratio of the Borrower Representative and its Subsidiaries for the most recently ended four fiscal quarters for which financial statements have been delivered to Agent would have been at least 2.00 to 1.00 determined on a pro forma basis and (y) any such Debt shall be subordinated in right of payment to the Obligations and, if secured, subordinated in respect of lien priority to the Liens securing the Obligations on terms acceptable to Agent;
(k) [reserved];
(l) Debt in an aggregate amount not to exceed $5,000,000 so long as the Senior Secured Leverage Ratio for the most recently ended four fiscal quarters for which financial statements have been delivered to Agent does not exceed 3.75 to 1.00 determined on a pro forma basis;
(m) the Exit Notes issued on the Closing Date;
(n) [reserved];
(o) Debt (x) incurred to finance an acquisition or (y) of Persons that are acquired, in each case so long as (A)(i) the Borrowers would be permitted to incur at least $1.00 of additional Debt pursuant to the Fixed Charge Coverage Ratio test set forth in clause (j) above or (ii) the Fixed Charge Coverage Ratio of the Borrowers would be no less than immediately prior to such acquisition, (B) the aggregate principal amount of Debt under clause (o)(x) shall not exceed $10,000,000, and (C) any such Debt shall be subordinated in right of payment to the Obligations on terms acceptable to Agent;
(p) Debt of any Subsidiary that is not a Credit Party in an aggregate amount not to exceed $4,000,000;
(q) Debt incurred on behalf of, or representing guarantees of Debt of, joint ventures of any Borrower or any Subsidiary in an aggregate principal amount not to exceed $10,000,000, so long as any such Debt shall be subordinated in right of payment to the Obligations on terms acceptable to Agent;
(r) [reserved];
(s) Debt of the Borrowers or any Subsidiary in respect of the B. Riley Credit Agreement in an aggregate principal amount outstanding at any time not to exceed $22,500,000 (it being understood and agreed that, notwithstanding anything herein to the contrary, the aggregate principal amount of the B. Riley Credit Agreement outstanding will be deemed to be reduced by the amount of the participation interest in respect thereof held by any Credit Party); provided that such Debt under the B. Riley Credit Agreement shall not be permitted after March 31, 2027;
(t) [reserved];
(u) (i) Additional Notes issued in connection with the ETI Funding Obligation and (ii) Additional Notes issued other than in connection with the ETI Funding Obligation in an amount not to exceed $10,000,000;
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(v) Debt of the Borrowers to any of the Subsidiaries; provided, that (x)any such Debt owed to a Subsidiary that is not a Borrower or a Guarantor is subordinated in right of payment to the Obligations on terms acceptable to Agent and (y) the aggregate amount of all such Debt owed to a Borrower or a Guarantor by any Subsidiary that is not a Borrower or a Guarantor shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any equity interests or any other event which results in any such Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such Debt (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Debt constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence of such debt not permitted by this clause (v);
(w) Debt of any Subsidiary to the Borrowers or any other Subsidiary; provided, that (x) if a Subsidiary that is a Guarantor incurs such Debt to a Subsidiary that is not a Borrower or a Guarantor, such Debt is subordinated in right of payment to the Guarantee of such Subsidiary on terms acceptable to Agent and (y) if any Subsidiaries that are not a Guarantor incur Debt to any Borrower or Guarantor, the aggregate amount of such Debt shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any equity interests or any other event which results in any Subsidiary of the Borrowers holding such Debt ceasing to be a Subsidiary of the Borrowers or any other subsequent transfer of any such Debt (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Debt constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence of such Debt not permitted by this clause (v);
(x) Debt of the Borrowers or any Subsidiary in respect of the Unsecured Cash Pool;
(y) Debt incurred by the Borrowers or any Subsidiary of the Borrowers owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrowers or any of the Borrowers’ Subsidiaries, respectively, pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the ordinary course of business or consistent with industry practices;
(z) Debt arising from agreements of the Borrowers or any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Debt incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition, in each case, to the extent such obligation or transaction is permitted by this Agreement;
(aa) Debt of the Borrowers and the Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Borrowers and the Subsidiaries, respectively, as conducted in accordance with good and prudent business industry practices and otherwise as permitted by this Agreement;
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(bb) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business (provided that such Debt is extinguished within five Business Days of its incurrence) or other cash management services in the ordinary course of business;
(cc) Debt of the Borrowers or Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Debt otherwise permitted by Section 5.1, in a principal amount not in excess of the stated amount of such letter of credit;
(dd) Debt of the Borrowers or Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(ee) Debt of the Borrowers and its respective Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Debt) in the ordinary course of business;
(ff) to the extent constituting Debt of the Borrowers and the Subsidiaries, all premium (if any), defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Debt otherwise permitted to be incurred pursuant to Section 5.1;
(gg) Debt in respect of obligations of the Borrowers or Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services for such Person; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money or any Swap Contracts;
(hh) deposits raised by any Subsidiary that is subject to state and/or federal banking regulations that constitute Debt owing to such depositor;
(ii) Debt consisting of earn outs and obligations of the Borrowers or Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with any Permitted Investment by such Person;
(jj) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(kk) obligations in respect of Cash Management Agreements; and
(ll) the incurrence by the Borrowers or any of their Subsidiaries of Debt that serves to refund, refinance or defease any Debt as permitted under clauses (c), (d), (l), (n), (o), (p), (q) and (s) of the definition of “Permitted Debt” in an aggregate amount not to exceed the then- outstanding principal amount (or, if applicable, the liquidation preference face amount of the Debt being so refunded, refinanced or defeased), together with any accrued interest and any related fees, expenses and premiums (subject to the following proviso, “RefinancingIndebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
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(i) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Debt being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Debt being refunded or refinanced that were due on or after the date that is one year following the last maturity date of the Obligations;
(ii) to the extent such Refinancing Indebtedness refinances Debt subordinated in right of payment to the Obligations or a Guarantee, as applicable, such Refinancing Indebtedness is subordinated in rights of payment to the Obligations or the Guarantee, as applicable, on terms acceptable to Agent;
(iii) shall not have any of the Borrower Representative or any Subsidiary of the Borrower Representative as an obligor thereon except to the extent such Person was an obligor on the Debt being extended, refinanced or modified, and shall not be secured by any Lien on any asset other than the assets that secured such Debt being extended, refinanced or modified or, if applicable, shall be unsecured;
(iv) shall not (if secured) have a Lien priority greater than such Debt being extended, refinanced or modified; and
(v) shall not include Debt (including any guarantees) of a Subsidiary that is not a Borrower or a Guarantor that refinances Debt of a Borrower or a Subsidiary that is a Guarantor.
For purposes of determining compliance with Section 5.1:
(A) in the event that an item of Debt (or any portion thereof) meets the criteria of more than one of the categories of permitted Debt described in clauses (a) through (ll) of the definition of “Permitted Debt”, then the Borrower Representative may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such item of Debt (or any portion thereof) in any manner that complies with Section 5.1; provided, that (1) any Exit Notes issued on the Effective Date (as defined therein) (but for the avoidance of doubt, not any Additional Notes) shall be incurred under clause (m) of the definition of “Permitted Debt” and Debt under the Term Loan Documents and B. Riley Credit Agreement shall be incurred under clauses (h) and (s), respectively, of the definition of “Permitted Debt”, (2) the Obligations shall be incurred under clause (a) of the definition of “Permitted Debt”, (3) [reserved], (4) the Unsecured Cash Pool shall be incurred under clause (x) of the definition of “Permitted Debt”, (5) Additional Notes incurred in connection with the ETI Funding Obligation shall be incurred under clause (u)(i) of the definition of “Permitted Debt” and (6) Additional Notes other than those issued pursuant to clause (u)(i) of the definition of “Permitted Debt” shall be incurred under clause (u)(ii) of the definition of “Permitted Debt”, and in each case, may not be reclassified;
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(B) at the time of incurrence, classification or reclassification, the Borrowers will be entitled to divide and classify an item of Debt in more than one of the categories of Debt described in the definition of “Permitted Debt” (or any portion thereof) without giving pro forma effect to the Debt incurred, classified or reclassified pursuant to any other clause or paragraph of the definition of “Permitted Debt” (or any portion thereof) when calculating the amount of Debt that may be incurred, classified or reclassified pursuant to any such clause or paragraph (or any portion thereof) at such time; provided, that, for the avoidance of doubt, it is understood and agreed that for any Debt incurred, classified or reclassified in reliance on a category of permitted Debt involving the calculation of a ratio, such Debt will be included in the calculation of such ratio at the time of such incurrence, classification or reclassification; and
(C) in connection with (x) the incurrence or issuance, as applicable, of revolving loan Debt under Section 5.1 or (y) any commitment to incur or issue Debt under Section 5.1, the Borrowers or applicable Subsidiary may designate such incurrence or issuance as having occurred on the date of first incurrence of such revolving loan Debt or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or issuance will be deemed for all purposes under this Agreement to have been incurred or issued on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Senior Secured Leverage Ratio and EBITDA (and all such calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed incurrence or issuance and related transactions in connection therewith)
Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Debt, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Debt outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence of Debt for purposes of Section 5.1. Guarantees of, or obligations in respect of letters of credit relating to, Debt which is otherwise included in the determination of a particular amount of Debt shall not be included in the determination of such amount of Debt; provided, that the incurrence of the Debt represented by such guarantee or letter of credit, as the case may be, was in compliance with Section 5.1.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Debt was incurred, in the case of term debt, or first committed or first incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the Debt is incurred to refinance other Debt denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of the refinancing Debt does not exceed the principal amount of the Debt being refinanced.
Notwithstanding any other provision of Section 5.1, the maximum amount of Debt that Borrowers and their respective Subsidiaries may incur pursuant to Section 5.1 shall not be deemed to be exceeded, with respect to any outstanding Debt, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Debt incurred to refinance other Debt, if incurred in a different currency from the Debt being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which the respective Debt is denominated that is in effect on the date of the refinancing.
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“Permitted Discretion” means a determination made by Agent in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) credit judgment in accordance with its usual and customary practices (adhering to its established credit policies) and, as it relates to the establishment or increase of Eligibility Reserves or the adjustment or imposition of exclusionary criteria, shall require that the contributing factors to the imposition or increase of any Eligibility Reserve shall not duplicate (i) the exclusionary criteria set forth in the definitions of “Eligible Billed Accounts”, “Eligible Exar Billed Accounts”, “Eligible Unbilled Accounts”, “Eligible Exar Unbilled Accounts” and “Eligible Investment Grade Billed Accounts”, as applicable (and vice versa), or (ii) any reserves deducted in computing book value or orderly liquidation value.
“Permitted Distributions” means the following Restricted Distributions:
(a) dividends by any Subsidiary of any Credit Party to such parent Credit Party;
(b) dividends payable solely in common stock;
(c) repurchases of stock of former employees, directors or consultants pursuant to stock purchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase; provided however that such repurchase does not exceed the Threshold Amount in the aggregate per fiscal year;
(d) amounts required for any direct or indirect parent of any Borrower to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of any Borrower and general corporate operating and overhead expenses of any direct or indirect parent of the Borrower in each case to the extent such fees and expenses are attributable to the ownership or operation of the Borrowers, if applicable, and its Subsidiaries;
(e) with respect to any taxable period (or portion thereof) for which the Borrowers and any of their Subsidiaries are members (or are disregarded from a member) of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which Parent is the common parent, dividends or distributions by the Borrowers or such applicable Subsidiaries, as the case may be, to such direct or indirect parent of the Borrowers in an amount not to exceed the lesser of (i) the sum of the amount of the relevant U.S. federal, state, or local income Taxes reduced by any such income Taxes directly paid or withheld at the level of the Borrowers or such Subsidiaries or (ii) the amount of any U.S. federal, state, or local income taxes that the Borrowers and/or its Subsidiaries, as applicable, would have paid for such taxable period (taking into account prior year losses) had the Borrowers and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; provided that distributions pursuant to this clause shall not exceed the actual Tax liability of Parent in respect of the relevant U.S. federal, state, local or non-U.S. income Taxes;
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(f) any Restricted Distribution used to fund the payment of professional fees and expenses of Loeb & Loeb LLP, Cleary Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP in connection with the Transactions to the extent permitted by Section 5.8;
(g) the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such redemption, as applicable, such payment would have otherwise complied with the provisions of this Agreement;
(h) voluntary prepayments of the Term Loans, the B. Riley Credit Agreement or the Exit Notes, so long as after giving effect to such voluntary prepayments of the Term Loans, the B. Riley Credit Agreement or the Exit Notes, the Payment Conditions are satisfied; and
(i) the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Debt of a Borrower or Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Subordinated Debt of such Borrower or Guarantor, which is incurred in accordance with Section 5.1 so long as:
(i) the principal amount (or accreted value, if applicable) of such new Debt does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Debt being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Debt being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),
(ii) such Debt s is subordinated to the Obligations or the related Guarantee of such Guarantor, as the case may be, on terms acceptable to Agent, at least to the same extent as such Subordinated Debt so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(iii) such Debt has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Debt being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Obligations then outstanding, and
(iv) such Debt has a Weighted Average Life to Maturity at the time incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Debt being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Debt being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Exit Notes then outstanding were instead due on such date.
“Permitted Investments” means:
(a) Investments shown on Schedule 5.7 and existing on the Closing Date;
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(b) cash and Cash Equivalents;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business;
(d) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the Ordinary Course of Business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrowers or their Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrowers’ Board of Directors (or other governing body), but the aggregate of all such loans outstanding may not exceed the Threshold Amount at any time;
(e) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the Ordinary Course of Business;
(f) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the Ordinary Course of Business, provided, however, that this subpart (f) shall not apply to Investments of Borrowers in any Subsidiary;
(g) Investments consisting of deposit accounts in which Agent has received a Deposit Account Control Agreement;
(h) Investments by any Borrower or any Subsidiary in any Credit Party;
(i) other Investments in an amount not exceeding $5,000,000 in the aggregate;
(j) Investments in a Person if as a result of such Investment (i) such Person becomes a Guarantor, or (ii) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, a Credit Party;
(k) Investments in any Subsidiary that is not a Guarantor not to exceed, at any one time in the aggregate outstanding under this clause (k), the Threshold Amount;
(l) [reserved];
(m) Investments in joint ventures (as determined in good faith by the Borrower at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed, at any one time in the aggregate outstanding under this clause (m), the Threshold Amount;
(n) any Investment occurring in accordance with the terms of the Tax Funding Agreement;
(o) (i) Investments consisting of the licensing or contribution of intellectual property (on a non-exclusive basis) pursuant to joint marketing arrangements with other Persons in the ordinary course of business; (ii) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property (on a non-exclusive basis) in each case in the ordinary course of business;
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(p) Investments of a Subsidiary acquired after the Closing Date or of an entity merged into, amalgamated with, or consolidated with the Borrowers or a Subsidiary of the Borrowers that is a Guarantor in a transaction that is not prohibited by 5.7 after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(q) any Investment consisting of intercompany current liabilities in connection with the cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries;
(r) any Investment in the form of a participation interest in the B. Riley Credit Agreement which the Borrower and its Subsidiaries are required to make pursuant to the Exar Facility in effect as of the date hereof, so long as such Investment is immediately contributed to the Credit Parties and is not transferred to any Person other than a Credit Party;
(s) guarantees by the Borrowers or any Subsidiary of the Borrowers of operating leases or of other obligations that do not constitute Debt, in each case, entered into by the Borrowers or any Subsidiary of the Borrowers in the Ordinary Course of Business; and
(t) Investments the payment for which consists of equity interests of the Borrowers (other than disqualified stock) or any direct or indirect parent of the Borrowers, as applicable.
“Permitted Liens” means:
(a) deposits or pledges of cash to secure obligations under workmen’s compensation, social security or similar laws, or under unemployment insurance (but excluding Liens arising under ERISA or in respect of any Canadian Pension Plan) pertaining to a Credit Party’s or its Subsidiary’s employees, if any;
(b) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money or the deferred purchase price of property or services), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business;
(c) carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s or other like Liens on Collateral, other than any Collateral which is part of the Borrowing Base, arising in the Ordinary Course of Business with respect to obligations which are not due, or which are being contested pursuant to a Permitted Contest;
(d) Liens on Collateral, other than Accounts, for taxes or other governmental charges not due and payable or the subject of a Permitted Contest, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
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(e) attachments, appeal bonds, judgments and other similar Liens on Collateral not exceeding $15,000,000 in value, arising in connection with court proceedings and not giving rise to an Event of Default; provided, however, that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are the subject of a Permitted Contest;
(f) Liens and encumbrances in favor of Agent under the Term Loan Documents in accordance with the ABL Intercreditor Agreement;
(g) Liens and encumbrances in favor of Agent under the Financing Documents;
(h) Liens on Collateral, other than Collateral which is part of the Borrowing Base, existing on the date hereof and set forth on Schedule 5.2;
(i) any Lien on any property or equipment securing Debt permitted under subpart (c) of the definition of Permitted Debt, provided, however, that such Lien attaches concurrently with or within twenty (20) days after the acquisition thereof;
(j) [reserved];
(k) [reserved];
(l) Liens securing obligations in respect of Debt incurred pursuant to clause (l) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(m) Liens securing obligations in respect of Debt incurred pursuant to the Exit Notes in accordance with the ABL Intercreditor Agreement;
(n) Liens securing obligations in respect of Debt incurred pursuant to clause (j) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(o) Liens securing obligations in respect of Debt incurred pursuant to clause (o) of the definition of “Permitted Debt” so long as such Liens secure Debt not created or incurred in connection with, or in contemplation of, the acquisition and only extend to the property or assets acquired in such acquisition (and accessions and additions thereto and proceeds and products thereof);
(p) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary of a Borrower, or on assets or property acquired by a Borrower or a Subsidiary, so long as in each case such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary or such acquisition and do not extend to any other property of the Borrowers or their Subsidiaries (other than pursuant to after-acquired property clauses in effect at the time of the acquisition);
(q) Liens (i) on not more than $2,000,000 of deposits securing Swap Contracts entered into for non-speculative purposes and (ii) on cash or Cash Equivalents securing Swap Contracts in the Ordinary Course of Business submitted for clearing in accordance with applicable requirements of law;
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(r) Claims Administration Liens;
(s) Liens securing obligations in respect of Debt incurred pursuant to the B. Riley Credit Agreement on a junior basis to the Obligations in accordance with the ABL Intercreditor Agreement;
(t) Liens of the Borrower or any Subsidiary securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (t) that are at that time outstanding, exceed (i) in the event such Liens incurred under this clause (t) are subordinated to the Liens securing the Obligations on terms acceptable to the Agent and the Required Lenders, $15,000,000 or (ii) otherwise, $1,000,000;
(u) Liens on non-Collateral assets in an aggregate amount not to exceed $5,000,000;
(v) [reserved];
(w) non-consensual Liens (not incurred in connection with borrowed money) on equipment of any of the Borrowers or any of their Subsidiaries not exceeding $5,000,000 in value and granted in the ordinary course of business to any client of a Borrower or such Subsidiary at which such equipment is located;
(x) Liens securing obligations in respect of Debt incurred pursuant to the clause (u) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(y) Liens securing obligations in respect of Debt incurred pursuant to clause (x) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(z) Liens securing obligations in respect of Debt incurred pursuant to clause (p) of the definition of “Permitted Debt” so long as any such Liens do not extend to the property or assets of the Borrowers or any Subsidiary of the Borrowers other than a Subsidiary that is not a Borrower or a Guarantor;
(aa) Liens securing obligations in respect of Debt incurred pursuant to clause (q) of the definition of “Permitted Debt”;
(bb) licenses of intellectual property and software that are not material to the conduct of any of the business lines of the Borrowers or any Subsidiary of the Borrowers and the value of which does not constitute a material portion of the assets of the Borrowers and their respective Subsidiaries, taken as a whole, respectively, and such license does not materially interfere with the ordinary course of conduct of the business of the Borrowers or any of their Subsidiaries;
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(cc) Liens that (i) are contractual rights of set-off (and related pledges) (a) relating to the establishment of depository relations with banks and other financial institutions not given in connection with the issuance of Indebtedness or (b) relating to pooled deposits, sweep accounts, reserve accounts or similar accounts of the Borrowers or any Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrowers or any Subsidiary, including with respect to credit card charge-backs and similar obligations, or (ii) relate to purchase orders and other agreements entered into with customers, suppliers or service providers of the Borrowers or any Subsidiary (a) in the ordinary course of business or (b) in connection with implementation of business optimization programs;
(dd) [reserved];
(ee) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code in effect in the State of New York or similar provisions in similar codes, statutes or laws in other jurisdictions on items in the course of collection, (ii) attaching to commodity trading accounts, other commodity brokerage accounts or securities incurred in the ordinary course of business, (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, (iv) encumbering customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes, (v) in respect of Third Party Funds or (vi) in favor of credit card companies pursuant to agreements therewith;
(ff) any interest or title of a lessor or sublessor under any leases or subleases entered into by the Borrowers or any Subsidiary in the ordinary course of business;
(gg) Liens on the Collateral securing Junior Lien Obligations (subject to a junior lien intercreditor agreement in form and substance satisfactory to Agent) in an aggregate amount not to exceed the Threshold Amount; provided that the Obligations are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien;
(hh) Liens to secure cash management services in the ordinary course of business; provided, that such Liens are not incurred in connection with, and do not secure, any borrowings or Indebtedness;
(ii) Liens granted by (i) each Exar Originator in favor of Exar SPV and (ii) Exar SPV to the Exar Buyer, in each case, in Receivables Assets, pursuant to the Exar Facility in effect as of the date hereof; and
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(jj) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Debt secured by any Lien referred to in clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p), (q), (s), (t), (v), (x), (y), (z), (aa) and (gg) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Debt being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the applicable Indebtedness described under clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p), (q), (s), (t), (v), (x), (y), (z), (aa) and (gg) of this definition at the time the original Lien became a Permitted Lien under this Agreement, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any underwriting discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement; provided, further, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clauses (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition, the principal amount of any Debt incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition and not this clause (jj) of this definition for purposes of determining the principal amount of Debt outstanding under clause (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition; provided, further, however, that any Lien securing any refinancing of any Debt secured by a Lien referred to in clause (gg) shall be a junior Lien (subject to a junior lien intercreditor agreement in form and substance satisfactory to Agent) and any Lien securing any refinancing of any Debt referenced to in clauses (s), (x) and (y) shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent; provided, further*,* that Liens securing the Term Loan Agreement, the Exit Notes and the B. Riley Credit Agreement shall be subject to the ABL Intercreditor Agreement.
For purposes of determining compliance with Section 5.2, (i) a Lien need not be permitted solely by reference to one category of permitted Liens described in the definition of “Permitted Liens” but may be permitted in part under any combination thereof and (ii) in the event that a Lien meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens”, the Borrower Representative may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such Lien in any manner that complies with this covenant and will be entitled to only include the amount and type of such Lien in one of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” and, in such event, such Lien will be treated as being incurred or existing pursuant to only such clause or clauses (or any portion thereof) without giving pro forma effect to such item (or portion thereof) when calculating the amount of Liens or Indebtedness that may be incurred pursuant to any other clause or paragraph (or portion thereof) at such time. In addition, with respect to any revolving loan Debt or commitment to incur Debt that is designated to be incurred on any Deemed Date pursuant to clause (C) of the definition of “Permitted Debt”, any Lien that does or that shall secure such Debt may also be designated by the Borrower Representative or any Subsidiary to be incurred on such Deemed Date and, in such event, any related subsequent actual incurrence of such Lien shall be deemed for all purposes under this Agreement to be incurred on such prior date, including for purposes of calculating usage of any “Permitted Lien” (and any calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed incurrence or issuance and related transactions in connection therewith).
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With respect to any Lien securing Debt that was permitted to secure such Debt at the time of the incurrence of such Debt, such Lien shall also be permitted to secure any Increased Amount of such Debt. The “Increased Amount” of any Debt shall mean any increase in the amount of such Debt in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Debt with the same terms or in the form of common stock of the Borrowers, the payment of dividends on equity interests constituting Debt in the form of additional shares of equity interests of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Debt outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Debt described in clause (g) of the definition of “Debt.”
“Permitted Modifications” means (a) such amendments or other modifications to a Borrower’s or Subsidiary’s Organizational Documents as are required under this Agreement or by applicable Law and fully disclosed to Agent within thirty (30) days after such amendments or modifications have become effective, and (b) such amendments or modifications to a Borrower’s or Subsidiary’s Organizational Documents (other than those involving a change in the name of a Borrower or Subsidiary or involving a reorganization of a Borrower or Subsidiary under the laws of a different jurisdiction) that would not materially adversely affect the rights and interests of Agent or Lenders and fully disclosed to Agent within thirty (30) days after such amendments or modifications have become effective.
“Person” means any natural person, corporation, limited liability company, unlimited liability company, professional association, limited partnership, general partnership, joint stock company, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and any Governmental Authority.
“Plan of Reorganization” means the Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code, attached to the Confirmation Order as Exhibit A, and all exhibits, supplements, appendices, and schedules thereto, as may be altered, amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
“Pledged ULC Shares” means the equity interests which are shares in the capital stock of a ULC and which are mortgaged or pledged to, or purported to be subjected to a Lien in favor of, Agent, for the benefit of Agent and Lenders, pursuant to this Agreement and the Security Documents, including, without limitation, all of the property described in Schedule 9.1 hereto.
“PPSA” means the Personal Property Security Act (Ontario) (or any successor statute) and the regulations thereunder; provided that if validity, perfection and effect of perfection and non-perfection and opposability of Agent’s Lien in any Collateral are governed by the personal property security laws of any Canadian jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code of Quebec) of such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.
“Pre-OpeningExpenses” means, with respect to any fiscal period, the amount of expenses (other than interest expense) incurred with respect to facilities which are classified as “pre-opening expenses” (or any similar or equivalent caption) on the applicable financial statements of the Borrowers and their respective Subsidiaries for such period, prepared in accordance with GAAP.
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“Pro Rata Share” means (a) [reserved], (b) with respect to a Lender’s obligation to make Revolving Loans, such Lender’s right to receive the unused line fee described in Section 2.2(b), the Revolving Loan Commitment Percentage of such Lender, (c) with respect to a Lender’s right to receive payments of principal and interest with respect to Revolving Loans, such Lender’s Revolving Loan Exposure with respect thereto; and (d) for all other purposes (including, without limitation, the indemnification obligations arising under Section 11.6) with respect to any Lender, the percentage obtained by dividing (i) the sum of the Revolving Loan Commitment Amount of such Lender (or, in the event the Revolving Loan Commitment shall have been terminated, such Lender’s then existing Revolving Loan Outstandings), by (ii) the sum of the Revolving Loan Commitment (or, in the event the Revolving Loan Commitment shall have been terminated, the then existing Revolving Loan Outstandings) of all Lenders.
“Proceeds of CrimeAct” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), as amended from time to time, and including all regulations thereunder.
“Public ReportingEntity” has the meaning specified therefor in Section 4.1.
“Receivables Assets” means accounts receivable (including any bills of exchange) from time to time originated, acquired or otherwise owned by the Exar Originators and all right, title and interests in and to (i) all security interests or liens securing payment of such accounts receivable, (ii) any obligations supporting such accounts receivable, including all guarantees, insurance and other agreements or arrangements supporting or securing payment of such accounts receivable, (iii) all books and records relating to such accounts receivables and the related obligor and (iv) all payments and collections with respect to, and other proceeds of, such accounts receivable.
“Reference Time” means approximately a time substantially consistent with market practice two (2) SOFR Business Days prior to the first day of each calendar month. If by 5:00 pm (New York City time) on any interest lookback day, Term SOFR in respect of such interest lookback day has not been published on the SOFR Administrator’s Website, then Term SOFR for such interest lookback day will be Term SOFR as published in respect of the first preceding SOFR Business Day for which Term SOFR was published on the SOFR Administrator’s Website; provided that such first preceding SOFR Business Day is not more than three (3) SOFR Business Days prior to such interest lookback day.
“Register” has the meaning specified therefor in Section 11.17(a)(iii).
“Registered IntellectualProperty” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.
“Relevant GovernmentalBody” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
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“Required Lenders” means at any time Lenders holding (a) fifty percent (50%) or more of the Revolving Loan Commitment, or (b) if the Revolving Loan Commitment has been terminated, fifty percent (50%) or more of the then aggregate outstanding principal balance of the Loans.
“Requirements ofLaw” means, with respect to any Person, collectively, the common law and any and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities), and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means any of the Chief Executive Officer, Chief Financial Officer or any other officer of the applicable Borrower acceptable to Agent.
“Restricted Cash” means cash and Cash Equivalents held by Subsidiaries of the Borrowers that would appear as “restricted” on a consolidated balance sheet of the Borrowers or any of their respective Subsidiaries.
“Restricted Distribution” means as to any Person (a) any dividend or other distribution (whether in cash, securities or other property) on any equity interest in such Person (except those payable solely in its equity interests of the same class), (b) any payment by such Person on account of (i) the purchase, redemption, retirement, defeasance, surrender, cancellation, termination or acquisition of any equity interests in such Person or any claim respecting the purchase or sale of any equity interest in such Person, or (ii) any option, warrant or other right to acquire any equity interests in such Person, (c) any management fees, salaries or other fees or compensation to any Person holding an equity interest in a Borrower or a Subsidiary of a Borrower (other than (i) payments of salaries to individuals, (ii) directors fees, and (iii) advances and reimbursements to employees or directors, all in the Ordinary Course of Business), an Affiliate of a Borrower or an Affiliate of any Subsidiary of a Borrower, (d) any lease or rental payments to an Affiliate or Subsidiary of a Borrower, or (e) repayments of or debt service on Subordinated Debt (other than the B. Riley Credit Agreement and Debt permitted under clauses (v) and (w) of the definition of “Permitted Debt”) unless permitted under and made pursuant to a Subordination Agreement applicable to such loans or other indebtedness and voluntary prepayments of the Term Loans or the Exit Notes.
“Revolving Lender” means each Lender having a Revolving Loan Commitment Amount in excess of $0 (or, in the event the Revolving Loan Commitment shall have been terminated at any time, each Lender at such time having Revolving Loan Outstandings in excess of $0).
“Revolving Loan Availability” means, at any time, the Revolving Loan Limit minus the Revolving Loan Outstandings.
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“Revolving Loan Borrowing” means a borrowing of a Revolving Loan.
“Revolving Loan Commitment” means, as of any date of determination, the aggregate Revolving Loan Commitment Amounts of all Lenders as of such date.
“Revolving Loan CommitmentAmount” means, as to any Lender, the dollar amount set forth opposite such Lender’s name on the Commitment Annex under the column “Revolving Loan Commitment Amount” (if such Lender’s name is not so set forth thereon, then the dollar amount on the Commitment Annex for the Revolving Loan Commitment Amount for such Lender shall be deemed to be $0), as such amount may be adjusted from time to time by (a) any amounts assigned (with respect to such Lender’s portion of Revolving Loans outstanding and its commitment to make Revolving Loans) pursuant to the terms of any and all effective assignment agreements to which such Lender is a party, and (b) any Additional Tranche(s) activated by Borrowers. For the avoidance of doubt, the aggregate Revolving Loan Commitment Amount of all Lenders on the Closing Date shall be $150,000,000 and if the Additional Tranche is fully activated by Borrowers pursuant to the terms of the Agreement such amount shall increase to $175,000,000.
“Revolving Loan CommitmentPercentage” means, as to any Lender, (a) on the Closing Date, the percentage set forth opposite such Lender’s name on the Commitment Annex under the column “Revolving Loan Commitment Percentage” (if such Lender’s name is not so set forth thereon, then, on the Closing Date, such percentage for such Lender shall be deemed to be zero), and (b) on any date following the Closing Date, the percentage equal to the Revolving Loan Commitment Amount of such Lender on such date divided by the Revolving Loan Commitment on such date.
“Revolving Loan Exposure” means, with respect to any Lender on any date of determination, the percentage equal to the amount of such Lender’s Revolving Loan Outstandings on such date divided by the aggregate Revolving Loan Outstandings of all Lenders on such date.
“Revolving Loan Limit” means, at any time, the lesser of (a) the Revolving Loan Commitment and (b) the Borrowing Base.
“Revolving Loan Outstandings” means, at any time of calculation, (a) the then existing aggregate outstanding principal amount of Revolving Loans, and (b) when used with reference to any single Lender, the then existing outstanding principal amount of Revolving Loans advanced by such Lender.
“Revolving Loans” has the meaning specified therefor in Section 2.1(a).
“SEC” means the United States Securities and Exchange Commission.
“Secured Indebtedness” means any Consolidated Total Indebtedness secured by a Lien.
“Securities Account” means a “securities account” (as defined in Article 9 of the UCC or in the STA, as applicable), an investment account, or other account in which investment property or securities are held or invested for credit to or for the benefit of any Borrower.
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“Securities AccountControl Agreement” means an agreement, in form and substance satisfactory to Agent, among Agent, any applicable Borrower and each securities intermediary in which such Borrower maintains a Securities Account pursuant to which Agent shall obtain “control” (as defined in Article 9 of the UCC or in the STA, as applicable) over such Securities Account.
“Security Document” means this Agreement, the Canadian Security Agreement, any Control Agreements and any other agreement, document or instrument executed concurrently herewith or at any time hereafter pursuant to which one or more Credit Parties or any other Person either (a) guarantees payment or performance of all or any portion of the Obligations, and/or (b) provides, as security for all or any portion of the Obligations, a Lien on any of its assets in favor of Agent for its own benefit and the benefit of the Lenders, as any or all of the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Senior Secured LeverageCalculation Date” has the meaning assigned in the “Senior Secured Leverage Ratio” definition.
“Senior Secured LeverageRatio” means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Subsidiaries constituting Obligations hereunder, Notes Obligations (as defined in the Exit Notes Indenture), Obligations (as defined in the Term Loan Credit Agreement) and obligations under the B. Riley Credit Agreement, in each case as of such date of calculation (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Subsidiaries and held by such Person and its Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which financial statements have been delivered to Agent immediately preceding such date on which such additional Debt is incurred. In the event that the Borrowers or any Subsidiary incurs, repays, repurchases or redeems any Debt subsequent to the commencement of the period for which the Senior Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Senior Secured Leverage Ratio is made (the “Senior Secured Leverage CalculationDate”), then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect to such incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of customary disqualified equity interests or preferred stock as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project of initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project of initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in an Responsible Officer’s certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided, that for all purposes of determining EBITDA hereunder all adjustments and exclusions (to the extent such adjustment or exclusion is effected pursuant to the definition of EBITDA) shall not be more than the amount of applicable adjustments or exclusions permitted pursuant to the applicable provision(s) of the definitions of EBITDA and/or Consolidated Net Income, as the case may be for the most recently ended twelve month period (calculated prior to giving effect to such capped adjustments and exclusions (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
If any Debt bears a floating rate of interest and is being given pro forma effect, the interest on such Debt shall be calculated as if the rate in effect on the Senior Secured Leverage Calculation Date had been the applicable rate for the entire period (taking into account any Swap Contracts applicable to such Debt if such Swap Contract has a remaining term in excess of 12 months). Interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Debt under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Debt during the applicable period. Interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight-line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
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For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
“Significant Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the Borrowers within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
“SOFR” means, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day.
“SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of Term SOFR selected by Agent in its reasonable discretion).
“SOFR Administrator’sWebsite” means the website of the SOFR Administrator, currently at https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html, or any successor source for Term SOFR identified by the SOFR Administrator from time to time.
“SOFR Business Day” means any day other than a Saturday or Sunday or 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.
“SOFR Interest Rate” means, with respect to each day during which interest accrues on a Loan, the rate per annum (expressed as a percentage) equal to (a) Term SOFR for the applicable Interest Period for such day; or (b) if the then-current Benchmark has been replaced with a Benchmark Replacement pursuant to Section 2.2(n), such Benchmark Replacement for such day. Notwithstanding the foregoing, the SOFR Interest Rate shall not at any time be less the Floor.
“SOFR Loan” means a Loan that bears interest at a rate based on Term SOFR.
“Solvent” means, with respect to any Person, that such Person (a) owns and will own assets the fair saleable value of which are (i) greater than the total amount of its liabilities (including Contingent Obligations), and (ii) greater than the amount that will be required to pay the probable liabilities of its then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to it; (b) has capital that is not unreasonably small in relation to its business as presently conducted or after giving effect to any contemplated transaction; (c) does not intend to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due and (d) with respect to any Canadian Credit party as of the date any Accounts of such Canadian Credit Party are initially included on any Borrowing Base Certificate, such Person is not an “insolvent person” within the meaning of the Bankruptcy and Insolvency Act (Canada).
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“Specified Default” shall mean an Event of Default arising under Section 10.1(a), 10.1(c) (solely as a result of any material misrepresentation in any Borrowing Base Certificate), Section 10.1(b) (solely as a result of a default in the due observance or performance of Section 2.11, Section 4.13, Section 6.1, Section 6.2, Section 4.1(m), or Section 5.14), Section 10. 1(e), Section 10.1(f) or Section 10.1(p).
“Spot Rate” means, on any date, as determined by Agent, the spot selling rate posted by Reuters on its website for the sale of the applicable currency for Dollars at approximately 11:00 a.m., New York City time, on such date; provided, that if, for any reason, no such spot rate is being quoted, the spot selling rate shall be determined by reference to such publicly available services for displaying exchange rates as may be reasonably selected by Agent, or, in the event no such service is selected, such spot selling rate shall instead be the rate reasonably determined by Agent as the spot rate of exchange in the market where its foreign currency exchange operations in respect of the applicable currency are then being conducted, at or about 11:00 a.m., New York City time, on the applicable date for the purchase of the relevant currency for delivery two Business Days later; provided, that, Agent may obtain such spot rate from another financial institution designated by Agent if Agent does not have a spot rate for any such currency as of the date of determination.
“STA” means the Securities Transfer Act, 2006 (Ontario) or, to the extent applicable, similar legislation of any other Canadian jurisdiction, as amended from time to time.
“Subordinated Debt” means any Debt of Borrowers incurred pursuant to the terms of the Subordinated Debt Documents and with the prior written consent of Agent, all of which documents must be in form and substance acceptable to Agent in its sole discretion. For the avoidance of doubt, neither the Debt under the Term Loan Agreement nor the Exit Notes shall constitute Subordinated Debt solely by virtue of their respective junior lien priority with respect to the ABL Priority Collateral.
“Subordinated DebtDocuments” means any documents evidencing and/or securing Debt governed by a Subordination Agreement, all of which documents must be in form and substance acceptable to Agent in its sole discretion.
“Subordinated Obligations” has the meaning specified therefor in Section 12.7.
“Subordination Agreement” means any agreement between Agent and another creditor of Borrowers, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, pursuant to which the Debt owing from any Borrower(s) and/or the Liens securing such Debt granted by any Borrower(s) to such creditor are subordinated in any way to the Obligations and the Liens created under the Security Documents, the terms and provisions of such Subordination Agreements to have been agreed to by and be acceptable to Agent in the exercise of its sole discretion.
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“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than fifty percent (50%) of such capital stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership, limited liability company or unlimited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
“Supermajority Lenders” means at any time Lenders holding (a) sixty-six and two thirds percent (66 2/3%) or more of the Revolving Loan Commitment, or (b) if the Revolving Loan Commitment has been terminated, sixty-six and two thirds percent (66 2/3%) or more of the then aggregate outstanding principal balance of the Loans.
“Swap Contract” means any “swap agreement”, as defined in Section 101 of the Bankruptcy Code, that is obtained by Borrower to provide protection against fluctuations in interest or currency exchange rates, but only if Agent provides its prior written consent to the entry into such “swap agreement”.
“Tax Distributions” means any distributions described in clause (e) of the definition of “Permitted Distributions”.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tax Funding Agreement” means that certain Tax Funding Agreement, dated as of the date hereof, by and among the Exela Technologies BPA, LLC and each of its debtor affiliates, Exela Technologies BPA, LLC, in its capacity as agent, the Parent, ETI, GP 3XCV LLC and XCV-STS, LLC.
“Term Agent” as defined in the ABL Intercreditor Agreement.
“Term Loan Agreement” means that certain Financing Agreement, dated as of the Closing Date, by and among Exela Technologies BPA, LLC, the Guarantors, Ankura Trust Company, LLC, as administrative agent and collateral agent, and the other financial institutions party thereto, as the same may be amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time.
“Term Loan Documents” means the collective reference to the Term Loan Agreement and any other document, agreement and instrument executed and/or delivered in connection therewith or relating thereto, together with any amendment, supplement, waiver, or other modification to any of the foregoing.
“Term Priority Collateral” has the meaning specified therefor in the ABL Intercreditor Agreement.
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“Term SOFR” means the greater of (a) the forward-looking term rate for a period comparable to a one-month Interest Period based on SOFR that is published by the SOFR Administrator and is displayed on the SOFR Administrator’s Website at approximately the Reference Time for such Interest Period plus 0.11448%, reset monthly, and (b) the Floor. Unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.2(n), in the event that a Benchmark Replacement with respect to Term SOFR is implemented, then all references herein to Term SOFR shall be deemed references to such Benchmark Replacement.
“Termination Date” means the earlier to occur of (a) the Commitment Expiry Date, (b) any date on which Agent accelerates the maturity of the Loans pursuant to Section 10.2, or (c) the termination date stated in any notice of termination of this Agreement provided by Borrowers in accordance with Section 2.12; provided that, in each case, if such date is not a Business Day the Termination Date will be the next succeeding Business Day.
“Third Party Funds” means any accounts or funds, or any portion thereof, received by the Borrowers or any of its Subsidiaries as agent on behalf of third parties in accordance with a written agreement that imposes a duty upon the Borrowers or one or more of its Subsidiaries to collect and remit those funds to such third parties.
“Threshold Amount” means $3,000,000.
“Transaction Costs” has the meaning specified therefor in the definition of “Transactions.”
“Transactions” means each of the following transactions:
(a) the execution, delivery and performance of the Operative Documents;
(b) the borrowing of Revolving Loans on the Closing Date in an amount not less than $58,652,539.79;
(c) the execution, delivery and performance of the Term Loan Documents and the extensions of credit thereunder on the Closing Date;
(d) the execution, delivery and performance of the B. Riley Credit Agreement and the extensions of credit thereunder on the Closing Date;
(e) the transactions under or pursuant to or contemplated by the Plan of Reorganization, including the Restructuring Transactions (as defined in the Plan of Reorganization); and
(f) the payment of all fees, costs and expenses incurred in connection with the transactions described in the foregoing provisions of this definition (the “Transaction Costs”).
“Trustee” means U.S. Bank Trust Company, National Association, as trustee under the Exit Notes Indenture.
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“U.S.Tax Compliance Certificate” has the meaning specified therefor in Section 2.8(c)(i).
“UCC” means the Uniform Commercial Code of the State of New York or of any other state the laws of which are required to be applied in connection with the perfection of security interests in any Collateral.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“ULC” means any unlimited company, unlimited liability company or unlimited liability corporation or any similar entity existing under the laws of any province or territory of Canada and any successor to any such entity.
“Unfinanced CapitalExpenditures” means, for any period, the amount equal to Capital Expenditures which are not financed by the incurrence of any Indebtedness (except to the extent funded with the proceeds of the Revolving Loans; it being understood and agreed that, to the extent any Capital Expenditures are financed with Revolving Loans, such Capital Expenditures shall be deemed Unfinanced Capital Expenditures).
“United States” means the United States of America.
“Unsecured Cash Pool” has the meaning specified in the Plan of Reorganization.
“Weighted AverageLife to Maturity” means, when applied to any Debt, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Debt multiplied by the amount of such payment, by (2) the sum of all such payments.
“WithholdingAgent” means any Borrower or Agent.
“Write-Downand Conversion Powers” means, (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.
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Section1.2****Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder (including, without limitation, determinations made pursuant to the exhibits hereto) shall be made, and all financial statements required to be delivered hereunder shall be prepared on a consolidated basis in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of each Borrower and its Consolidated Subsidiaries delivered to Agent and each of the Lenders on or prior to the Closing Date. If at any time any change in GAAP would affect the computation of any financial ratio or financial requirement set forth in any Financing Document, and either Borrowers or the Required Lenders shall so request, Agent, the Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided, however, that until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Borrowers shall provide to Agent and the Lenders financial statements and other documents required under this Agreement which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Debt or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”, as defined therein.
Section1.3****OtherDefinitional and Interpretive Provisions. References in this Agreement to “Articles”, “Sections”, “Annexes”, “Exhibits”, or “Schedules” shall be to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement unless otherwise specifically provided. Any term defined herein may be used in the singular or plural. “Include”, “includes” and “including” shall be deemed to be followed by “without limitation”. Except as otherwise specified or limited herein, references to any Person include the successors and assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively. Unless otherwise specified herein, the settlement of all payments and fundings hereunder between or among the parties hereto shall be made in lawful money of the United States and in immediately available funds. References to any statute or act shall include all related current regulations and all amendments and any successor statutes, acts and regulations. All amounts used for purposes of financial calculations required to be made herein shall be without duplication. References to any statute or act, without additional reference, shall be deemed to refer to federal statutes and acts of the United States. References to any agreement, instrument or document shall include all schedules, exhibits, annexes and other attachments thereto. References to capitalized terms that are not defined herein, but are defined in the UCC or PPSA, shall have the meanings given them in the UCC or PPSA, as applicable. All references herein to times of day shall be references to daylight or standard time, as applicable. All references herein to a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or analogous term, will be construed to mean also a division of or by a limited liability company, as if it were a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term, as applicable. Any series of limited liability company shall be considered a separate Person.
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Section1.4****Time is of the Essence. Time is of the essence in Borrower’s and each other Credit Party’s performance under this Agreement and all other Financing Documents.
Section1.5****Exchange Rates.
(a) Principal, interest, reimbursement obligations, fees, and all other amounts payable under this Agreement and the other Financing Documents to Agent and the Lenders shall be payable in Dollars. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Agreement shall be made in Dollars. For the purpose of such calculations, comparisons, measurements or determinations, amounts or proceeds denominated in other currencies shall be converted to the Equivalent Amount of Dollars on the date of calculation, comparison, measurement or determination. Unless expressly provided otherwise, where a reference is made to a Dollar amount, the amount is to be considered as the amount in Dollars and, therefore, each other currency shall be converted into the Equivalent Amount thereof in Dollars. If at any time following one or more fluctuations in the exchange rate of any currency against the Dollar, the Revolving Loan Outstandings exceed the Revolving Loan Limit or any other limitations hereunder based on Dollars, the Credit Parties shall, not later than the next Business Day, make the necessary payments or repayments to reduce such Revolving Loan Outstandings to an amount necessary to eliminate such excess.
Section1.6****QuebecInterpretation. For purposes of the interpretation or construction of this Agreement pursuant to the laws of the Province of Quebec, for purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Financing Document) and for all other purposes pursuant to which the interpretation or construction of any other Financing Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, a “reservation of ownership”, “prior claim” and a “resolutory clause,” (f) all references to filing, registering or recording under the PPSA or the UCC shall be deemed to include publication under the Civil Code of Québec, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary,” (k) “construction liens” shall be deemed to include “legal hypothecs in favor of persons having taken part in the construction or renovation of an immovable”, (l) “joint and several” shall be deemed to include “solidary” and “jointly and severally” shall be deemed to include “solidarily” (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “legal title” shall be deemed to include “holding title on behalf of an owner as mandatary or prête-nom”, (p) “easement” shall be deemed to include “servitude”, (q) “priority” shall be deemed to include “prior claim” or “rank”, as applicable, (r) “survey” shall be deemed to include “certificate of location and plan”, (s) “fee simple title” and “fee title” shall be deemed to include “right of ownership”, (t) “foreclosure” shall be deemed to include “the exercise of a hypothecary right”, (u) “leasehold interest” shall be deemed to include “valid rights resulting from a lease”, (v) “lease” for personal or movable property shall be deemed to include a “contract of leasing (crédit-bail)”, (x) “deposit account” shall include a “financial account” as defined in Article 2713.6 of the Civil Code of Québec, and (y) “guarantee” and “guarantor” shall include “suretyship” and “surety”, respectively. The parties hereto confirm that it is their wish that this Agreement and any other Financing Document be drawn up in the English language only and that all other documents contemplated hereunder or relating hereto, including notices, shall also be drawn up in the English language only. Les parties auxprésentes confirment que c’est leur volonté que cette convention et les autres documents de credit soientrédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisages par cette convention etles autres documents peuvent être rédigés en langue anglaise seulement.
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Article 2
- LOANS
Section2.1****Loans.
(a) Revolving Loans.
(i) Revolving Loans and Borrowings. On the terms and subject to the conditions set forth herein, each Lender severally agrees to make loans to Borrowers from time to time as set forth herein (each a “Revolving Loan”, and collectively, “Revolving Loans”) equal to such Lender’s Revolving Loan Commitment Percentage of Revolving Loans requested by Borrowers hereunder, provided, however, that after giving effect thereto, the Revolving Loan Outstandings shall not exceed the Revolving Loan Limit. Borrowers shall deliver to Agent a Notice of Borrowing with respect to each proposed Revolving Loan Borrowing, such Notice of Borrowing to be delivered before 1:00 p.m. (Eastern time) two (2) Business Days prior to the date of such proposed borrowing. Each Borrower and each Revolving Lender hereby authorizes Agent to make Revolving Loans on behalf of Revolving Lenders, at any time in its sole discretion, to pay principal owing in respect of the Loans and interest, fees, expenses and other charges payable by any Credit Party from time to time arising under this Agreement or any other Financing Document. The Borrowing Base shall be determined by Agent based on the most recent Borrowing Base Certificate delivered to Agent in accordance with this Agreement and such other information as may be available to Agent. Without limiting any other rights and remedies of Agent hereunder or under the other Financing Documents, the Revolving Loans shall be subject to Agent’s continuing right to withhold from the Borrowing Base Eligibility Reserves, and to increase and decrease such Eligibility Reserves from time to time, if and to the extent that in Agent’s Permitted Discretion, such Eligibility Reserves are necessary.
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(ii) Mandatory Revolving Loan Repayments and Prepayments.
(A) The Revolving Loan Commitment shall terminate on the Termination Date. On such Termination Date, there shall become due, and Borrowers shall pay, the entire outstanding principal amount of each Revolving Loan, together with accrued and unpaid Obligations pertaining thereto incurred to, but excluding the Termination Date; provided, however, that such payment is made not later than 12:00 Noon (Eastern time) on the Termination Date.
(B) If at any time the Revolving Loan Outstandings exceed the Revolving Loan Limit, then, on the next succeeding Business Day, Borrowers shall repay the Revolving Loans in an aggregate amount equal to such excess.
(C) Principal payable on account of Revolving Loans shall be payable by Borrowers to Agent (I) during any Cash Dominion Period, immediately upon the receipt by any Borrower or Agent of any payments on or proceeds from any of the Accounts, to the extent of such payments or proceeds, as further described in Section 2.11 below, and (II) in full on the Termination Date.
(iii) Optional Prepayments. Borrowers may from time to time prepay the Revolving Loans in whole or in part; provided, however, that any such partial prepayment shall be in an amount equal to $1,000,000 or a higher integral multiple of $250,000.
(b) Additional Tranches. After the Closing Date, so long as no Default or Event of Default exists and subject to the terms of this Agreement, with the prior written consent of Agent and the Required Lenders in their sole discretion, the Revolving Loan Commitment may be increased upon the written request of Borrower Representative (which such request shall state the aggregate amount of the Additional Tranche requested and shall be made at least thirty (30) days prior to the proposed effective date of such Additional Tranche) to Agent to activate an Additional Tranche; provided, however, that Agent and Lenders shall have no obligation to consent to any requested activation of an Additional Tranche and the written consent of Agent and the Required Lenders shall be required in order to activate an Additional Tranche. Upon activating an Additional Tranche, each Lender’s Revolving Loan Commitment shall increase by a proportionate amount so as to maintain the same Pro Rata Share of the Revolving Loan Commitment as such Lender held immediately prior to such activation. In the event Agent and the Required Lenders do not consent to the activation of a requested Additional Tranche within thirty (30) days after receiving a written request from Borrower Representative, then the Revolving Loan Commitment shall not be increased and, within the next ninety (90) days, Borrowers may terminate this Agreement upon written notice to Agent and, if the Borrowing Base on the date of such request would have supported such increased Revolving Loan Commitment, upon repayment in full of all Obligations, no fee shall be due pursuant to Section 2.2(g) or Section 2.2(h) in connection with such termination.
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Section 2.2 Interest, Interest Calculations and Certain Fees.
(a) Interest.
(i) From and following the Closing Date, except as expressly set forth in this Agreement, Loans and the other Obligations shall bear interest at the sum of the SOFR Interest Rate plus the Applicable Margin. Interest on the Loans shall be paid in arrears on the first (1st) day of each month and on the maturity of such Loans, whether by acceleration or otherwise. Interest on all other Obligations shall be payable upon demand. For purposes of calculating interest, all funds transferred to the Payment Account for application to any Revolving Loans during a Cash Dominion Period shall be subject to a three (3) Business Day clearance period and all interest accruing on such funds during such clearance period shall accrue for the benefit of Agent, and not for the benefit of the Lenders.
(ii) In the event one or more of the following events (other than any such event constituting a Benchmark Transition Event) occurs with respect to Term SOFR: (a) a public statement or publication of information by or on behalf of the SOFR Administrator announcing that the SOFR Administrator has ceased or will cease to provide Term SOFR for a 1-month period, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide Term SOFR for a 1-month period; (b) a public statement or publication of information by the regulatory supervisor for the SOFR Administrator, the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official or resolution authority with jurisdiction over the SOFR Administrator, or a court or an entity with similar insolvency or resolution authority, which states that the SOFR Administrator has ceased or will cease to provide Term SOFR for a 1-month period permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide Term SOFR for a 1-month period; or (c) a public statement or publication of information by the regulatory supervisor for the SOFR Administrator announcing that Term SOFR for a 1-month period is no longer, or as of a specified future date will no longer be, representative and Agent has provided Borrower Representative with notice of the same, any outstanding affected SOFR Loans will be deemed to have been converted to Base Rate Loan at the end of the applicable Interest Period.
(iii) In connection with Term SOFR, Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Financing 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 Financing Document. Agent will promptly notify Borrower Representative and the Lenders of the effectiveness of any Conforming Changes.
(b) Unused Line Fee. From and following the Closing Date, Borrowers shall pay Agent, for the benefit of all Lenders committed to make Revolving Loans, in accordance with their respective Pro Rata Shares, a fee in an amount equal to (i) (A) the Revolving Loan Commitment minus (B) the average daily balance of the sum of the Revolving Loan Outstandings during the preceding month, multipliedby (ii) 0.50% per annum. Such fee is to be paid monthly in arrears on the first day of each month.
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(c) Minimum Balance Fee. On the first Business Day of each month, commencing on September 2, 2025, the Borrowers agree to pay to Agent, for the ratable benefit of all Lenders, the sum of the Minimum Balance Fees due for the prior month. The Minimum Balance Fee shall be deemed fully earned when due and payable and, once paid, shall be non-refundable.
(d) Collateral Fee. From and following the Closing Date, Borrowers shall pay Agent, for its own account and not for the benefit of any other Lenders, a fee in an amount equal to $7,500 per month. The collateral management fee shall be deemed fully earned when due and payable in arrears on the last day of each calendar month prior to the Termination Date and on such date and, once paid, shall be non-refundable.
(e) Origination Fee. Contemporaneous with Borrowers’ execution of this Agreement, Borrowers shall pay Agent, for the benefit of all Lenders committed to make Revolving Loans on the Closing Date, in accordance with their respective Pro Rata Shares, a fee in an amount equal to (i) the Revolving Loan Commitment, multiplied by (ii) one percent (1.00%). All fees payable pursuant to this paragraph shall be non-refundable as of the Closing Date.
(f) Deferred Revolving Loan Origination Fee. If Lenders’ funding obligations in respect of the Revolving Loan Commitment under this Agreement terminate for any reason (whether by voluntary termination by Borrowers, by reason of the occurrence of an Event of Default or otherwise) prior to the Commitment Expiry Date, Borrowers shall pay to Agent, for the benefit of all Lenders committed to make Revolving Loans on the Closing Date, a fee as compensation for the costs of such Lenders being prepared to make funds available to Borrowers under this Agreement, equal to an amount determined by multiplying the Revolving Loan Commitment by the following applicable percentage amount: (i) two percent (2.00%) if such prepayment or termination occurs on or prior to the date that is the first anniversary of the Closing Date, (ii) one percent (1.00%) if such termination occurs after the first anniversary of the Closing Date but on or prior to the date that is the second anniversary of the Closing Date, and (iii) zero percent (0.00%) if such termination occurs after the second anniversary of the Closing Date. All fees payable pursuant to this paragraph shall be deemed fully earned and non-refundable as of the Closing Date.
(g) [Reserved].
(h) [Reserved].
(i) Audit Fees. Borrowers shall pay to Agent, for its own account and not for the benefit of any other Lenders, all reasonable fees and expenses in connection with any audits and inspections of Borrowers’ books and records, audits, valuations or appraisals of the Collateral, audits of Borrowers’ compliance with applicable Laws and such other matters as Agent shall deem appropriate; provided that Borrowers shall only be required to reimburse Agent for the costs of one (1) such audit or inspection per fiscal year, unless a Specified Default has occurred and is continuing, in which case Agent may conduct and be fully reimbursed for any additional audits or inspections at its sole discretion. All such fees and expenses shall be due and payable on the first Business Day of the month following the date of issuance by Agent of a written request for payment thereof to Borrowers.
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(j) Wire Fees. Borrowers shall pay to Agent, for its own account and not for the account of any other Lenders, on written demand, fees for incoming and outgoing wires made for the account of Borrowers, such fees to be based on Agent’s then current wire fee schedule (available upon written request of the Borrowers).
(k) [Reserved].
(l) Computation of Interest and Related Fees. All interest and fees under each Financing Document shall be calculated on the basis of a 360-day year for the actual number of days elapsed. The date of funding of a Loan shall be included in the calculation of interest. The date of payment of a Loan shall be excluded from the calculation of interest. If a Loan is repaid on the same day that it is made, one (1) day’s interest shall be charged. For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or any fee to be paid under any Financing Document is to be calculated on the basis of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.
(m) Automated Clearing House Payments. If Agent so elects, monthly payments of principal, interest, fees, expenses or any other amounts due and owing from Borrower to Agent hereunder shall be paid to Agent by Automated Clearing House debit of immediately available funds from the financial institution account designated by Borrower Representative in the Automated Clearing House debit authorization executed by Borrowers or Borrower Representative in connection with this Agreement, and shall be effective upon receipt. Borrowers shall execute any and all forms and documentation necessary from time to time to effectuate such automatic debiting. In no event shall any such payments be refunded to Borrowers.
(n) Benchmark Replacement Setting; Conforming Changes.
(i) Upon the occurrence of a Benchmark Transition Event, Agent and Borrowers may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after Agent has posted such proposed amendment to all Lenders and Borrower so long as Agent has not received, by such time, written notice of objection thereto from Lenders comprising the Required Lenders. No such replacement will occur prior to the applicable Benchmark Transition Start Date. In connection with the implementation of a Benchmark Replacement, Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Financing 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 Financing Document. Agent will promptly notify Borrower Representative and the Lenders of the implementation of any Benchmark Replacement and the effectiveness of any Conforming Changes.
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(ii) Any determination, decision or election that may be made by Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 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 Financing Document, except, in each case, as expressly required pursuant to this Section. Notwithstanding anything to the contrary herein or in any other Financing Document, at any time, (a) if the then-current Benchmark is a term rate (including Term SOFR) 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 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 or will be no longer representative, then 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 or (ii) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark, then 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. Agent will promptly notify Borrower Representative of the removal or reinstatement of any tenor of a Benchmark pursuant to this Section.
(iii) Upon Borrower Representative’s receipt of notice of the commencement of a Benchmark Unavailability Period, any outstanding affected Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period.
(o) The following terms used in this Section 2.2(o) shall have the following meanings:
“AvailableTenor” means, as of any date of determination with respect to the then-current Benchmark, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” or similar term pursuant to Section 2.2(o).
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“Benchmark” means, initially, Term SOFR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Term SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.2(o).
“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by Agent for the applicable Benchmark Replacement Date:
(1) Daily Simple SOFR; or
(2) the sum of: (a) the alternate benchmark rate that has been selected by Agent giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Financing Documents.
“Benchmark ReplacementAdjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, 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 Agent in consultation with the Borrower Representative giving due consideration to any selection or recommendation by the Relevant Governmental Body, or any evolving or then-prevailing market convention at such time, for determining a spread adjustment, or method for calculating or determining such spread adjustment, for such type of replacement for U.S. dollar-denominated syndicated credit facilities at such time.
“BenchmarkReplacement Date” means the earlier to occur of the following events with respect to the then-current Benchmark: (a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (b) in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date. For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
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“Benchmark TransitionEvent” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official or 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, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative. For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark TransitionStart Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark UnavailabilityPeriod” means the period (if any) (a) beginning at the time that a Benchmark Replacement Date pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then- current Benchmark for all purposes hereunder and under any Financing Document in accordance with Section 2.2(o) and (b) ending at the time that a Benchmark Replacement has replaced the then -current Benchmark for all purposes hereunder and under any Financing Document in accordance with Section 2.2(o).
“Unadjusted BenchmarkReplacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
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Section 2.3 Notes. The portion of the Loans made by each Lender shall be evidenced, if so requested by such Lender, by one or more promissory notes executed by Borrowers on a joint and several basis (each, a “Note”) in an original principal amount equal to such Lender’s Revolving Loan Commitment Amount. Upon activation of an Additional Tranche in accordance with Section 2.1(b) hereof, Borrowers shall deliver to each Lender to whom Borrowers previously delivered a Note, a restated Note evidencing such Lender’s Revolving Loan Commitment Amount.
Section 2.4 [Reserved]
Section 2.5 [Reserved].
Section 2.6 GeneralProvisions Regarding Payment; Loan Account.
(a) All payments to be made by each Borrower under any Financing Document, including payments of principal and interest made hereunder and pursuant to any other Financing Document, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension (it being understood and agreed that, solely for purposes of calculating financial covenants and computations contained herein and determining compliance therewith, if payment is made, in full, on any such extended due date, such payment shall be deemed to have been paid on the original due date without giving effect to any extension thereto). Any payments received in the Payment Account before 12:00 Noon (Eastern time) on any date shall be deemed received by Agent on such date, and any payments received in the Payment Account at or after 12:00 Noon (Eastern time) on any date shall be deemed received by Agent on the next succeeding Business Day.
(b) Agent shall maintain a loan account (the “Loan Account”) on its books to record Loans and other extensions of credit made by the Lenders hereunder or under any other Financing Document, and all payments thereon made by each Borrower. All entries in the Loan Account shall be made in accordance with Agent’s customary accounting practices as in effect from time to time. The balance in the Loan Account, as recorded in Agent’s books and records at any time shall be conclusive and binding evidence of the amounts due and owing to Agent by each Borrower absent manifest error; provided, however, that any failure to so record or any error in so recording shall not limit or otherwise affect any Borrower’s duty to pay all amounts owing hereunder or under any other Financing Document. Agent shall endeavor to provide Borrowers with a monthly statement regarding the Loan Account (but neither Agent nor any Lender shall have any liability if Agent shall fail to provide any such statement). Unless any Borrower notifies Agent of any objection to any such statement (specifically describing the basis for such objection) within ninety (90) days after the date of receipt thereof, it shall be deemed final, binding and conclusive upon Borrowers in all respects as to all matters reflected therein.
Section2.7 Maximum Interest. In no event shall the interest charged with respect to the Loans or any other Obligations of any Borrower under any Financing Document exceed the maximum amount permitted under the laws of the State of New York, the federal laws of Canada (including the Criminal Code (Canada)) or of any other applicable jurisdiction. Notwithstanding anything to the contrary herein or elsewhere, if at any time the rate of interest payable hereunder or under any Note or other Financing Document (the “Stated Rate”) would exceed the highest rate of interest permitted under any applicable law to be charged (the “Maximum Lawful Rate”), then for so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the Stated Rate is less than the Maximum Lawful Rate, each Borrower shall, to the extent permitted by law, continue to pay interest at the Maximum Lawful Rate until such time as the total interest received is equal to the total interest which would have been received had the Stated Rate been (but for the operation of this provision) the interest rate payable. Thereafter, the interest rate payable shall be the Stated Rate unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event this provision shall again apply. In no event shall the total interest received by any Lender exceed the amount which it could lawfully have received had the interest been calculated for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence, any Lender has received interest hereunder in excess of the Maximum Lawful Rate, such excess amount shall be applied to the reduction of the principal balance of the Loans or to other amounts (other than interest) payable hereunder, and if no such principal or other amounts are then outstanding, such excess or part thereof remaining shall be paid to Borrowers. In computing interest payable with reference to the Maximum Lawful Rate applicable to any Lender, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation is made.
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Section2.8****Taxes; Capital Adequacy; Increased Costs; Inabilityto Determine Rates; Illegality.
(a) All payments of principal and interest on the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction or withholding for any present or future Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law, and if any such withholding or deduction is in respect of any Indemnified Taxes, then the Borrowers shall pay such additional amount or amounts as is necessary to ensure that the net amount actually received by Agent and each Lender will equal the full amount Agent and such Lender would have received had no such withholding or deduction been required (including, without limitation, such withholdings and deductions applicable to additional amounts payable under this Section 2.8). After payment of any Tax by a Borrower to a Governmental Authority pursuant to this Section 2.8, such Borrower shall promptly forward to Agent the original or a certified copy of an official receipt, a copy of the return reporting such payment, or other documentation satisfactory to Agent evidencing such payment to such authority. In addition, Borrowers shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of Agent timely reimburse it for the payment of, any Other Taxes.
(b) The Borrowers shall indemnify Agent and Lenders, within ten (10) days after demand thereof, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.8) payable or paid by Agent or any Lender or required to be withheld or deducted from a payment to Agent or any Lender and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(c) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Financing Document shall deliver to Borrower Representative and Agent, at the time or times prescribed by applicable Law or reasonably requested by Borrower Representative or Agent, such properly completed and executed documentation reasonably requested by Borrower Representative or 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 Borrower Representative or Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by Borrowers or Agent as will enable Borrowers or 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 Sections 2.8(c)(i), 2.8(c)(ii) and 2.8(e) below) shall not be required if in such 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.
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(i) Each Lender that is not a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) (each such Lender a “Foreign Lender”) shall, to the extent permitted by Law, execute and deliver to Borrower Representative and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent) whichever of the following is applicable: (A) 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 Financing Document, executed copies of United States Internal Revenue Service (“IRS”) Forms W-8BEN or W-8BEN-E (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Financing Documents, executed copies of IRS Forms W-8BEN or W-8BEN-E (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty; (B) executed copies of Form W-8ECI or W-8EXP (or successor form); (C) 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 F-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Forms W-8BEN or W-8BEN-E (or successor form); (D) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8EXP, IRS Form W-8BEN or W-8BEN-E (or successor form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9 (or successor form), 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 F-4 on behalf of each such direct and indirect partner; or (E) other applicable forms, certificates or documents prescribed by the IRS. 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 Borrower Representative and Agent in writing of its legal inability to do so. In addition, to the extent permitted by applicable Law, such forms shall be delivered by each Foreign Lender upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Each Foreign Lender shall promptly notify Borrower Representative at any time it determines that it is no longer in a position to provide any previously delivered certificate to Borrower Representative (or any other form of certification adopted by the U.S. taxing authorities for such purpose).
(ii) Each Lender that is a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) shall, to the extent permitted by Law, provide to Borrower Representative and Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent), a properly completed and executed IRS Form W-9 or any successor form certifying as to such Lender’s entitlement to an exemption from U.S. backup withholding and other applicable forms, certificates or documents prescribed by the IRS or reasonably requested by Borrower Representative or Agent. Each such Lender shall promptly notify Borrowers at any time it determines that any certificate previously delivered to Borrower Representative (or any other form of certification adopted by the U.S. governmental authorities for such purposes) is no longer valid.
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(iii) Any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower Representative and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrowers or Agent to determine the withholding or deduction required to be made.
(iv) Agent, and any sub-agent and any successor or supplemental Agent, shall deliver to the Borrowers on or prior to the date on which such person becomes Agent, sub-agent or successor or supplemental Agent hereunder (and from time to time thereafter upon the reasonable request of a Borrower), a properly completed and executed IRS Form W-9. Agent and any sub-agent and successor or supplemental Agent 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 in writing of its legal inability to do so. Agent hereby represents and warrants to the Credit Parties that it is a “U.S. person” and a “financial institution” and that it will comply with its “obligation to withhold,” each within the meaning of Treasury Regulations Section 1.1441-1(b)(2)(ii).
(d) If any Lender determines, in its sole discretion exercised in good faith, that it has received a refund in respect of any Taxes as to which it has been indemnified by any Borrower pursuant to this Section 2.8 (including by the payment of additional amounts pursuant to this Section 2.8), then it shall promptly pay an amount equal to such refund to Borrowers, net of all reasonable out-of-pocket expenses of such Lender or of Agent with respect thereto, including any Taxes; provided, however, that Borrowers, upon the written request of such Lender or Agent, agree to repay any amount paid over to Borrowers to such Lender or to Agent (plus any related penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such Lender or Agent is required, for any reason, to disgorge or otherwise repay such refund. Notwithstanding anything to the contrary in this Section 2.8, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.8(d) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.8 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.
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(e) If a payment made to a Lender under any Financing 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 Borrower Representative and Agent at the time or times prescribed by Law and at such time or times reasonably requested by Borrower Representative or Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower Representative or Agent as may be necessary for Borrowers and Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) Each Lender shall severally indemnify Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.17 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent in connection with any Financing Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Agent to set off and apply any and all amounts at any time owing to such Lender under any Financing Document or otherwise payable by Agent to such Lender from any other source against any amount due to Agent under this paragraph (f).
(g) If any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable Law regarding capital adequacy, in each instance, after the Closing Date, or any change after the Closing Date in the interpretation, administration or application thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation, administration or application thereof, or the compliance by any Lender or any Person controlling such Lender with any request, guideline or directive regarding capital adequacy (whether or not having the force of Law) of any such Governmental Authority, central bank or comparable agency adopted or otherwise taking effect after the Closing Date, has or would have the effect of reducing the rate of return on such Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations hereunder to a level below that which such Lender or such controlling Person could have achieved but for such adoption, taking effect, change, interpretation, administration, application or compliance (taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) then from time to time, upon demand by such Lender (which demand shall be accompanied by a certificate setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to Agent), Borrowers shall promptly pay to such Lender such additional amount as will compensate such Lender or such controlling Person for such reduction, so long as such amounts have accrued on or after the day which is two hundred seventy (270) days prior to the date on which such Lender first made demand therefor; provided that notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “change in applicable Law”, regardless of the date enacted, adopted or issued.
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(h) If any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable Law shall (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, (ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, or any SOFR Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes, Connection Income Taxes and Taxes covered in (b) through (d) in the definition of Excluded Taxes); or (iii) impose on any Lender any other condition, cost or expense (other than a Tax) affecting this Agreement or SOFR Loans made by such Lender, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to Term SOFR (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
(i) If any Lender requests compensation under any of the clauses in this Section 2.8), or requires Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, then, upon the written request of Borrower Representative, such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder (subject to the provisions of Section 11.17) to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or materially reduce amounts payable pursuant to any such Section, as the case may be, in the future, (ii) would not subject such Lender to any unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to such Lender (as determined in its sole good faith discretion). Without limitation of the provisions of Section 12.14, each Borrower hereby agrees to pay all reasonable and documented, out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.
(j) Subject to Section 2.2(n), if Agent determines (which determination shall be conclusive and binding absent manifest error) that Term SOFR cannot be determined pursuant to the definition thereof on or prior to the first day of any Interest Period, Agent will promptly so notify the Borrowers and each Lender. Upon notice thereof by Agent to Borrowers, any obligation of the Lenders to make SOFR Loans shall be suspended until Agent revokes such notice. Upon receipt of such notice, any outstanding affected SOFR Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period. Upon any such conversion, Borrower shall also pay any additional amounts required pursuant to this Agreement.
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(k) If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund SOFR Loans, or to determine or charge interest rates based upon Term SOFR, then, upon notice thereof by such Lender to Borrowers (through Agent), any obligation of such Lender to make SOFR Loans shall be suspended, in each case until such Lender notifies Agent and Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, all SOFR Loans shall become Base Rate Loans. Upon any such conversion, Borrower shall also pay any additional amounts required pursuant to this Agreement.
(l) Each party’s obligations under this Section 2.8 shall survive the resignation or replacement of Agent or any assignment of rights by, or the replacement of, a Lender, and the repayment, satisfaction or discharge of all Obligations hereunder.
Section 2.9 Appointmentof Borrower Representative.
(a) Each Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent and attorney-in-fact to request and receive Loans in the name or on behalf of such Borrower and any other Borrowers, deliver Notices of Borrowing, and Borrowing Base Certificates, give instructions with respect to the disbursement of the proceeds of the Loans, giving and receiving all other notices and consents hereunder or under any of the other Financing Documents and taking all other actions (including in respect of compliance with covenants) in the name or on behalf of any Borrower or Borrowers pursuant to this Agreement and the other Financing Documents. Agent and Lenders may disburse the Loans to such bank account of Borrower Representative or a Borrower or otherwise make such Loans to a Borrower, in each case as Borrower Representative may designate or direct, without notice to any other Borrower. Notwithstanding anything to the contrary contained herein, Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.
(b) Borrower Representative hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 2.9. Borrower Representative shall ensure that the disbursement of any Loans that are at any time requested by or to be remitted to or for the account of a Borrower shall be remitted or issued to or for the account of such Borrower.
(c) Each Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent to receive statements on account and all other notices from Agent and Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Documents.
(d) Any notice, election, representation, warranty, agreement or undertaking made or delivered by or on behalf of any Borrower by Borrower Representative shall be deemed for all purposes to have been made or delivered by such Borrower, as the case may be, and shall be binding upon and enforceable against such Borrower to the same extent as if made or delivered directly by such Borrower.
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(e) No resignation by or termination of the appointment of Borrower Representative as agent and attorney-in-fact as aforesaid shall be effective, except after ten (10) Business Days’ prior written notice to Agent. If the Borrower Representative resigns under this Agreement, Borrowers shall be entitled to appoint a successor Borrower Representative (which shall be a Borrower and shall be reasonably acceptable to Agent as such successor). Upon the acceptance of its appointment as successor Borrower Representative hereunder, such successor Borrower Representative shall succeed to all the rights, powers and duties of the retiring Borrower Representative and the term “Borrower Representative” shall mean such successor Borrower Representative for all purposes of this Agreement and the other Financing Documents, and the retiring or terminated Borrower Representative’s appointment, powers and duties as Borrower Representative shall be thereupon terminated.
Section 2.10****Joint and Several Liability; Rights of Contribution; Subordinationand Subrogation.
(a) Borrowers are defined collectively to include all Persons named as one of the Borrowers herein; provided, however, that any references herein to “any Borrower”, “each Borrower” or similar references, shall be construed as a reference to each individual Person named as one of the Borrowers herein. Each Person so named shall be jointly and severally liable for all of the obligations of Borrowers under this Agreement. Each Borrower, individually, expressly understands, agrees and acknowledges, that the credit facilities would not be made available on the terms herein in the absence of the collective credit of all of the Persons named as the Borrowers herein, the joint and several liability of all such Persons, and the cross-collateralization of the collateral of all such Persons. Accordingly, each Borrower individually acknowledges that the benefit to each of the Persons named as one of the Borrowers as a whole constitutes reasonably equivalent value, regardless of the amount of the credit facilities actually borrowed by, advanced to, or the amount of collateral provided by, any individual Borrower. In addition, each entity named as one of the Borrowers herein hereby acknowledges and agrees that all of the representations, warranties, covenants, obligations, conditions, agreements and other terms contained in this Agreement shall be applicable to and shall be binding upon and measured and enforceable individually against each Person named as one of the Borrowers herein as well as all such Persons when taken together. By way of illustration, but without limiting the generality of the foregoing, the terms of Section 10.1 of this Agreement are to be applied to each individual Person named as one of the Borrowers herein (as well as to all such Persons taken as a whole), such that the occurrence of any of the events described in Section 10.1 of this Agreement as to any Person named as one of the Borrowers herein shall constitute an Event of Default even if such event has not occurred as to any other Persons named as the Borrowers or as to all such Persons taken as a whole.
(b) Notwithstanding any provisions of this Agreement to the contrary, it is intended that the joint and several nature of the liability of each Borrower for the Obligations and the Liens granted by Borrowers to secure the Obligations, not constitute a Fraudulent Conveyance (as defined below). Consequently, Agent, Lenders and each Borrower agree that if the liability of a Borrower for the Obligations, or any Liens granted by such Borrower securing the Obligations would, but for the application of this sentence, constitute a Fraudulent Conveyance, the liability of such Borrower and the Liens securing such liability shall be valid and enforceable only to the maximum extent that would not cause such liability or such Lien to constitute a Fraudulent Conveyance, and the liability of such Borrower and this Agreement shall automatically be deemed to have been amended accordingly. For purposes hereof, the term “Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of Chapter 11 of Title II of the Bankruptcy Code or a fraudulent conveyance, fraudulent transfer or transfer at undervalue under the applicable provisions of any fraudulent conveyance or fraudulent transfer law or similar law of any state, province, territory, nation or other governmental unit, as in effect from time to time.
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(c) Agent is hereby authorized, without notice or demand (except as otherwise specifically required under this Agreement) and without affecting the liability of any Borrower hereunder, at any time and from time to time, to (i) renew, extend or otherwise increase the time for payment of the Obligations; (ii) with the written agreement of any Borrower, change the terms relating to the Obligations or otherwise modify, amend or change the terms of any Note or other agreement, document or instrument now or hereafter executed by any Borrower and delivered to Agent for any Lender; (iii) accept partial payments of the Obligations; (iv) take and hold any Collateral for the payment of the Obligations or for the payment of any guaranties of the Obligations and exchange, enforce, waive and release any such Collateral; (v) apply any such Collateral and direct the order or manner of sale thereof as Agent, in its sole discretion, may determine; and (vi) settle, release, compromise, collect or otherwise liquidate the Obligations and any Collateral therefor in any manner, all guarantor and surety defenses being hereby waived by each Borrower. Without limitations of the foregoing, with respect to the Obligations, each Borrower hereby makes and adopts each of the agreements and waivers set forth in the Guarantee set forth under Section 12 hereof. Except as specifically provided in this Agreement or any of the other Financing Documents, Agent shall have the exclusive right to determine the time and manner of application of any payments or credits, whether received from any Borrower or any other source, and such determination shall be binding on all Borrowers. All such payments and credits may be applied, reversed and reapplied, in whole or in part, to any of the Obligations that Agent shall determine, in its sole discretion, without affecting the validity or enforceability of the Obligations of the other Borrower.
(d) Each Borrower hereby agrees that, except as hereinafter provided, its obligations hereunder shall be unconditional, irrespective of (i) the absence of any attempt to collect the Obligations from any obligor or other action to enforce the same; (ii) the waiver or consent by Agent with respect to any provision of any instrument evidencing the Obligations, or any part thereof, or any other agreement heretofore, now or hereafter executed by a Borrower and delivered to Agent; (iii) failure by Agent to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Obligations; (iv) the institution of any proceeding under any Debtor Relief Law, or any similar proceeding, by or against any Credit Party or Agent’s election in any such proceeding of the application of Section 1111(b)(2) of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws); (v) any borrowing or grant of a security interest by a Borrower as debtor-in-possession, under Section 364 of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws); (vi) the disallowance, under Section 502 of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws), of all or any portion of Agent’s claim(s) for repayment of any of the Obligations; or (vii) any other circumstance other than payment in full of the Obligations which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety.
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(e) The Borrowers hereby agree, as between themselves, that to the extent that Agent, on behalf of Lenders, shall have received from any Borrower any Recovery Amount (as defined below), then the paying Borrower shall have a right of contribution against each other Borrower in an amount equal to such other Borrower’s contributive share of such Recovery Amount; provided, however, that in the event any Borrower suffers a Deficiency Amount (as defined below), then the Borrower suffering the Deficiency Amount shall be entitled to seek and receive contribution from and against the other Borrowers in an amount equal to the Deficiency Amount; and provided, further, that in no event shall the aggregate amounts so reimbursed by reason of the contribution of any Borrower equal or exceed an amount that would, if paid, constitute or result in Fraudulent Conveyance. Until all Obligations have been paid and satisfied in full, no payment made by or for the account of a Borrower including, without limitation, (i) a payment made by such Borrower on behalf of the liabilities of any other Borrower, or (ii) a payment made by any other Guarantor under any Guarantee, shall entitle such Borrower, by subrogation or otherwise, to any payment from such other Borrower or from or out of such other Borrower’s property. The right of each Borrower to receive any contribution under this Section 2.10(e) or by subrogation or otherwise from any other Borrower shall be subordinate in right of payment to the Obligations and such Borrower shall not exercise any right or remedy against such other Borrower or any property of such other Borrower by reason of any performance of such Borrower of its joint and several obligations hereunder, until the Obligations have been indefeasibly paid and satisfied in full, and no Borrower shall exercise any right or remedy with respect to this Section 2.10(e) until the Obligations have been indefeasibly paid and satisfied in full. As used in this Section 2.10(e), the term “Recovery Amount” means the amount of proceeds received by or credited to Agent from the exercise of any remedy of the Lenders under this Agreement or the other Financing Documents, including, without limitation, the sale of any Collateral. As used in this Section 2.10(e), the term “Deficiency Amount” means any amount that is less than the entire amount a Borrower is entitled to receive by way of contribution or subrogation from, but that has not been paid by, the other Borrowers in respect of any Recovery Amount attributable to the Borrower entitled to contribution, until the Deficiency Amount has been reduced to $0 through contributions and reimbursements made under the terms of this Section 2.10(e) or otherwise.
(f) Notwithstanding any other provision contained herein or in any other Financing Document, if a “secured creditor” (as that term is defined under the Bankruptcy and Insolvency Act (Canada)) is determined by a court of competent jurisdiction not to include a Person to whom obligations are owed on a joint and several basis, then such Person’s Obligations (and the Obligations of each other Canadian Credit Party or any other applicable Credit Party), to the extent such Obligations are secured, shall be several obligations and not joint and several obligations.
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Section 2.11****Collections and Lockbox Account.
(a) Credit Parties shall maintain a lockbox (the “Lockbox”) with (a) PNC Bank, as of the Closing Date, or (b) another United States depository institution (or, in the case of a Canadian Credit Party, another Canadian depository institution) designated from time to time by Agent (the “Lockbox Bank”), subject to the provisions of this Agreement, and shall execute with the Lockbox Bank a Control Agreement and such other agreements related to such Lockbox as Agent may require. Borrowers shall ensure that all collections of Accounts are paid directly from Account Debtors (i) into the Lockbox for deposit into the Lockbox Account and/or (ii) directly into the Lockbox Account; provided, however, unless Agent shall otherwise direct by written notice to Borrowers, Borrowers shall be permitted to cause Account Debtors who are individuals to pay Accounts directly to Borrowers, which Borrowers shall then administer and apply in the manner required below. During any Cash Dominion Period, all funds deposited into a Lockbox Account shall be transferred into the Payment Account by the close of each Business Day.
(b) Upon three (3) Business Days’ prior written request, Borrower Representative may request that the Agent release any funds in a Cash Collateral Account so long as (a) no Default or Event of Default has occurred and is continuing or would result therefrom, (b) such release will not result in the Revolving Loan Outstandings exceeding the Revolving Loan Limit and (c) concurrent with such written request, Borrower Representative provides to the Agent a duly completed Borrowing Base Certificate signed by a Responsible Officer as of the date of such written request giving pro forma effect to such release of funds.
(c) Notwithstanding anything in any lockbox agreement or Control Agreement to the contrary, Borrowers agree that they shall be liable for any fees and charges in effect from time to time and charged by the Lockbox Bank in connection with the Lockbox, the Lockbox Account, and that Agent shall have no liability therefor. Borrowers hereby indemnify and agree to hold Agent harmless from any and all liabilities, claims, losses and demands whatsoever, including reasonable attorneys’ fees and expenses, arising from or relating to actions of Agent or the Lockbox Bank pursuant to this Section or any lockbox agreement or Control Agreement or similar agreement, except to the extent of such losses arising solely from Agent’s gross negligence or willful misconduct.
(d) During any Cash Dominion Period, Agent shall immediately apply, on a daily basis, all funds transferred into the Payment Account pursuant to this Section to reduce the outstanding Revolving Loans in such order of application as Agent shall elect. If as the result of collections of Accounts pursuant to the terms and conditions of this Section, a credit balance exists with respect to the Loan Account, such credit balance shall not accrue interest in favor of Borrowers, but Agent shall transfer such funds into an account designated by Borrower Representative for so long as no Event of Default exists.
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Agent shall exercise its commercially reasonable efforts to rescind cash dominion promptly after the occurrence of a Cash Dominion Termination.
(e) To the extent that any collections of Accounts or proceeds of other Collateral are not sent directly to the Lockbox or Lockbox Account but are received by any Borrower, such collections shall be held in trust for the benefit of Agent pursuant to an express trust created hereby and immediately remitted, in the form received, to applicable Lockbox or Lockbox Account. No such funds received by any Borrower shall be commingled with other funds of the Borrowers.
(f) Borrowers acknowledge and agree that compliance with the terms of this Section is essential, and that Agent and Lenders will suffer immediate and irreparable injury and have no adequate remedy at law, if any Borrower, through acts or omissions, causes or permits Account Debtors to send payments other than to the Lockbox or Lockbox Accounts or if any Borrower fails to promptly deposit collections of Accounts or proceeds of other Collateral in the Lockbox Account as herein required. Accordingly, in addition to all other rights and remedies of Agent and Lenders hereunder, Agent shall have the right to seek specific performance of the Borrowers’ obligations under this Section, and any other equitable relief as Agent may deem necessary or appropriate, and Borrowers waive any requirement for the posting of a bond in connection with such equitable relief.
(g) Borrowers shall not, and Borrowers shall not suffer or permit any Credit Party to, (i) withdraw any amounts from any Lockbox Account during any Cash Dominion Period, (ii) change the procedures or sweep instructions under the agreements governing any Lockbox Accounts, or (iii) send to or deposit in any Lockbox Account any funds other than payments made with respect to and proceeds of Accounts or other Collateral. Borrowers shall, and shall cause each Credit Party to, cooperate with Agent in the identification and reconciliation on a daily basis of all amounts received in or required to be deposited into the Lockbox Accounts. In addition, if any such amount cannot be identified or reconciled to the reasonable satisfaction of Agent, Agent may utilize its own staff or, if it deems necessary, engage an outside auditor, in either case at Borrowers’ expense (which in the case of Agent’s own staff shall be in accordance with Agent’s then prevailing customary charges (plus expenses)), to make such examination and report as may be necessary to identify and reconcile such amount.
(h) During any Cash Dominion Period, if any Borrower breaches its obligation to direct payments of the proceeds of the Collateral to the Lockbox Account, Agent, as the irrevocably made, constituted and appointed true and lawful attorney for Borrowers, may, by the signature or other act of any of Agent’s authorized representatives (without requiring any of them to do so), direct any Account Debtor to pay proceeds of the Collateral to Borrowers by directing payment to the Lockbox Account.
Section 2.12****Termination; Restriction on Termination.
(a) Termination by Lenders. In addition to the rights set forth in Section 10.2, Agent may, and at the direction of Required Lenders shall, terminate this Agreement without notice upon or after the occurrence and during the continuance of an Event of Default.
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(b) Termination by Borrowers. Upon at least thirty (30) days’ prior written notice to Agent and Lenders, Borrowers may, at its option, terminate this Agreement. Any notice of termination given by Borrowers shall be irrevocable unless all Lenders otherwise agree in writing and no Lender shall have any obligation to make any Loans on or after the termination date stated in such notice. Borrowers may elect to terminate this Agreement in its entirety only. No section of this Agreement or type of Loan available hereunder may be terminated singly.
(c) Effectiveness of Termination. All of the Obligations shall be immediately due and payable upon the Termination Date. All undertakings, agreements, covenants, warranties and representations of Borrowers contained in the Financing Documents shall survive any such termination and Agent shall retain its Liens in the Collateral and Agent and each Lender shall retain all of its rights and remedies under the Financing Documents notwithstanding such termination until all Obligations have been discharged or paid, in full, in immediately available funds, including, without limitation, all Obligations under Section 2.2(f). Notwithstanding the foregoing or the payment in full of the Obligations, Agent shall not be required to terminate its Liens in the Collateral unless, with respect to any loss or damage Agent may incur as a result of dishonored checks or other items of payment received by Agent from Borrower or any Account Debtor and applied to the Obligations, Agent shall, at its option, (i) have received a written agreement satisfactory to Agent, executed by Borrowers and by any Person whose loans or other advances to Borrowers are used in whole or in part to satisfy the Obligations, indemnifying Agent and each Lender from any such loss or damage or (ii) have retained cash Collateral or other Collateral for such period of time as Agent, in its discretion, may deem necessary to protect Agent and each Lender from any such loss or damage.
ARTICLE3 - REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this Agreement and to make the Loans and other credit accommodations contemplated hereby, each Credit Party hereby represents and warrants to Agent and each Lender that (after giving effect to the Transactions):
Section3.1 Existence and Power. Each Credit Party is an entity as specified on Schedule 3.1, is duly organized, validly existing and in good standing under the laws of the jurisdiction specified on Schedule 3.1 and no other jurisdiction, has the same legal name as it appears in such Credit Party’s Organizational Documents and an organizational identification number (if any), in each case as specified on Schedule 3.1, and has all powers and all Permits necessary or desirable in the operation of its business as presently conducted or as proposed to be conducted, except where the failure to have such Permits could not reasonably be expected to have a Material Adverse Effect. Each Credit Party is qualified to do business as a foreign entity in each jurisdiction in which it is required to be so qualified, which jurisdictions as of the Closing Date are specified on Schedule 3.1, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party (a) has had, over the five (5) year period preceding the Closing Date, any name other than its current name, or (b) was incorporated or organized under the laws of any jurisdiction other than its current jurisdiction of incorporation or organization.
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Section3.2****Organization and Governmental Authorization; No Contravention. The execution, delivery and performance by each Credit Party of the Operative Documents to which it is a party are within its powers, have been duly authorized by all necessary action pursuant to its Organizational Documents, require no further action by or in respect of, or filing with, any Governmental Authority and do not violate, conflict with or cause a breach or a default under (a)(i) any Law applicable to any Credit Party or (ii) any of the Organizational Documents of any Credit Party, or (b) any agreement or instrument binding upon it, except for such violations, conflicts, breaches or defaults as could not, with respect to clause (a)(i) or clause (b), reasonably be expected to have a Material Adverse Effect.
Section3.3****Binding Effect. Each of the Operative Documents to which any Credit Party is a party constitutes a valid and binding agreement or instrument of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
Section 3.4 Capitalization. The authorized equity securities of each of the Credit Parties as of the Closing Date are as set forth on Schedule 3.4. All issued and outstanding equity securities of each of the Credit Parties are duly authorized and validly issued, fully paid, nonassessable, free and clear of all Liens other than those in favor of Agent for the benefit of Agent and Lenders, and such equity securities were issued in compliance with all applicable Laws. The identity of the holders of the equity securities of each of the Credit Parties and the percentage of their fully-diluted ownership of the equity securities of each of the Credit Parties as of the Closing Date is set forth on Schedule 3.4. No shares of the capital stock or other equity securities of any Credit Party, other than those described above, are issued and outstanding as of the Closing Date. Except as set forth on Schedule 3.4, as of the Closing Date there are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from any Credit Party of any equity securities of any such entity.
Section3.5****Financial Information. All information delivered to Agent and pertaining to the financial condition of any Credit Party fairly presents the financial position of such Credit Party as of such date in conformity with GAAP (and as to unaudited financial statements, subject to normal year- end adjustments and the absence of footnote disclosures). Since the Petition Date, there has been no material adverse change in the business, operations, properties, prospects or condition (financial or otherwise) of any Credit Party.
Section3.6 Litigation. Except as set forth on Schedule 3.6 as of the Closing Date, and except as hereafter disclosed to Agent in writing, there is no Litigation pending against, or to such Credit Party’s knowledge threatened against or affecting, any Credit Party or, to such Credit Party’s knowledge, any party to any Operative Document other than a Credit Party. There is no Litigation pending in which an adverse decision could reasonably be expected to have a Material Adverse Effect or which in any manner draws into question the validity of any of the Operative Documents.
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Section3.7****Ownership of Property. Each Credit Party and each of its Subsidiaries is the lawful owner of, has good and marketable title to and is in lawful possession of, or has valid leasehold interests in, all properties and other assets (real or personal, tangible, intangible or mixed) material to its business and purported or reported to be owned or leased (as the case may be) by such Person.
Section3.8 No Default. No Event of Default, or to such Credit Party’s knowledge, Default, has occurred and is continuing. No Credit Party is in breach or default under or with respect to any contract, agreement, lease or other instrument to which it is a party or by which its property is bound or affected, which breach or default could reasonably be expected to have a Material Adverse Effect.
Section3.9****Labor Matters. As of the Closing Date, there are no strikes or other labor disputes pending or, to any Credit Party’s knowledge, threatened against any Credit Party. Hours worked and payments made to the employees of the Credit Parties have not been in violation of the Fair Labor Standards Act or any other applicable Law dealing with such matters. All payments due from the Credit Parties, or for which any claim may be made against any of them, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on their books, as the case may be, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. The consummation of the transactions contemplated by the Financing Documents will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which it is a party or by which it is bound.
Section3.10****Regulated Entities. No Credit Party is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” all within the meaning of the Investment Company Act of 1940.
Section3.11 Margin Regulations. None of the proceeds from the Loans have been or will be used, directly or indirectly, for the purpose of purchasing or carrying any “margin stock” (as defined in Regulation U of the Federal Reserve Board), for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any “margin stock” or for any other purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning of Regulation T, U or X of the Federal Reserve Board.
Section 3.12****ComplianceWith Laws; Anti-Terrorism Laws.
(a) Each Credit Party is in compliance with the requirements of all applicable Laws, except for such noncompliance which could not reasonably be expected to have a Material Adverse Effect.
(b) None of the Credit Parties and, to the knowledge of the Credit Parties, none of their Affiliates (i) is in violation of any Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked Person, or is controlled by a Blocked Person, (iv) is acting or will act for or on behalf of a Blocked Person, (v) is associated with, or will become associated with, a Blocked Person or (vi) is providing, or will provide, material, financial or technical support or other services to or in support of acts of terrorism of a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (A) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (B) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law or any Canadian Economic Sanctions and Export Control Laws.
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(c) The representations and warranties in Section 3.12 shall not apply to any Canadian Credit Party, or to any director, officer, agent or employee of such Party, to the extent that they would result in a violation of or conflict with the Foreign Extraterritorial Measures (United States) Order, 1992.
Section3.13 Taxes . (i) All Tax returns and other reports required by applicable law to be filed by any Credit Party have been timely filed and (ii) all Taxes imposed upon any Credit Party or any property of any Credit Party which have become due and payable on or prior to the date hereof have been paid, except (A) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization and paid in accordance with the Plan of Reorganization, and (B) Taxes subject to a Permitted Contest.
Section 3.14****Compliance with ERISA.
(a) Each ERISA Plan (and the related trusts and funding agreements) complies in form and in operation with, has been administered in compliance with, and the terms of each ERISA Plan satisfy, the applicable requirements of ERISA and the Code in all material respects. Each ERISA Plan which is intended to be qualified under Section 401(a) of the Code is so qualified, and the United States Internal Revenue Service has issued a favorable determination letter with respect to each such ERISA Plan which may be relied on currently. No Credit Party has incurred liability for any material excise tax under any of Sections 4971 through 5000 of the Code.
(b) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Credit Party and each Subsidiary is in compliance with the applicable provisions of ERISA and the provision of the Code relating to ERISA Plans and the regulations and published interpretations therein. During the thirty-six (36) month period prior to the (i) no steps have been taken to terminate any Pension Plan, and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by any Credit Party of any material liability, fine or penalty. No Credit Party has incurred liability to the PBGC (other than for current premiums) with respect to any employee Pension Plan. All contributions (if any) have been made on a timely basis to any Multiemployer Plan that are required to be made by any Credit Party or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable Law; no Credit Party nor any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan, and no Credit Party nor any member of the Controlled Group has received any notice that any Multiemployer Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.
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Section3.15****Consummation of Operative Documents; Brokers. Except for fees payable to Agent and/or Lenders, no broker, finder or other intermediary has brought about the obtaining, making or closing of the transactions contemplated by the Operative Documents, and no Credit Party has or will have any obligation to any Person in respect of any finder’s or brokerage fees, commissions or other expenses in connection herewith or therewith.
Section3.16 Related Transactions. All transactions contemplated by the Operative Documents to be consummated on or prior to the date hereof have been so consummated (including, without limitation, the disbursement and transfer of all funds in connection therewith) in all material respects pursuant to the provisions of the applicable Operative Documents, true and complete copies of which have been delivered to Agent, and in compliance with all applicable Law, except for such Laws the noncompliance with which would not reasonably be expected to have a Material Adverse Effect.
Section3.17 Material Contracts. Except for the agreements set forth on Schedule 3.17(a), as of the Closing Date there are no Material Contracts. Schedule 3.17(b) sets forth, with respect to each real estate lease agreement to which any Credit Party is a party (as a lessee) as of the Closing Date, the address of the subject property and the annual rental (or, where applicable, a general description of the method of computing the annual rental). The consummation of the transactions contemplated by the Financing Documents will not give rise to a right of termination in favor of any party to any Material Contract (other than any Credit Party), except any such termination which would not reasonably be expected to have a Material Adverse Effect.
Section3.18****Compliance with Environmental Requirements; No Hazardous Materials. Except in each case as set forth on Schedule 3.18:
(a) no notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending, or to such Credit Party’s knowledge, threatened by any Governmental Authority or other Person with respect to any (i) alleged violation by any Credit Party of any Environmental Law, (ii) alleged failure by any Credit Party to have any Permits required in connection with the conduct of its business or to comply with the terms and conditions thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of any Hazardous Materials, or (iv) release of Hazardous Materials; and
(b) no property now owned or leased by any Credit Party and, to the knowledge of each Credit Party, no such property previously owned or leased by any Credit Party, to which any Credit Party has, directly or indirectly, transported or arranged for the transportation of any Hazardous Materials, is listed or, to such Credit Party’s knowledge, proposed for listing, on the National Priorities List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list or is the subject of federal, state or local enforcement actions or, to the knowledge of such Credit Party, other investigations which may lead to claims against any Credit Party for clean- up costs, remedial work, damage to natural resources or personal injury claims, including, without limitation, claims under CERCLA.
(c) For purposes of this Section 3.18, each Credit Party shall be deemed to include any business or business entity (including a corporation) that is, in whole or in part, a predecessor of such Credit Party.
Section 3.19 IntellectualProperty. Each Credit Party owns, is licensed to use or otherwise has the right to use, all Intellectual Property that is material to the condition (financial or other), business or operations of such Credit Party. All Intellectual Property existing as of the Closing Date which is issued, registered or pending with any United States or foreign Governmental Authority (including, without limitation, any and all applications for the registration of any Intellectual Property with any such United States or foreign Governmental Authority) and all licenses under which any Credit Party is the licensee of any such registered Intellectual Property (or any such application for the registration of Intellectual Property) owned by another Person are set forth on Schedule 3.19. Such Schedule 3.19 indicates in each case whether such registered Intellectual Property (or application therefor) is owned or licensed by such Credit Party, and in the case of any such licensed registered Intellectual Property (or application therefor), lists the name and address of the licensor and the name and date of the agreement pursuant to which such item of Intellectual Property is licensed and whether or not such license is an exclusive license and indicates whether there are any purported restrictions in such license on the ability to such Credit Party to grant a security interest in and/or to transfer any of its rights as a licensee under such license. Except as indicated on Schedule 3.19, the applicable Credit Party is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to each such registered Intellectual Property (or application therefor) purported to be owned by such Credit Party, free and clear of any Liens and/or licenses in favor of third parties or agreements or covenants not to sue such third parties for infringement. All registered Intellectual Property of each Credit Party is duly and properly registered, filed or issued in the appropriate office and jurisdictions for such registrations, filings or issuances, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. No Credit Party is party to, nor bound by, any material license or other agreement with respect to which any Credit Party is the licensee that prohibits or otherwise restricts such Credit Party from granting a security interest in such Credit Party’s interest in such license or agreement or other property. To such Credit Party’s knowledge, each Credit Party conducts its business without infringement or claim of infringement of any Intellectual Property rights of others and there is no infringement or claim of infringement by others of any Intellectual Property rights of any Credit Party, which infringement or claim of infringement could reasonably be expected to have a Material Adverse Effect.
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Section 3.20 Solvency. As of (a) the Closing Date, the Borrower and each other Credit Party is (on a consolidated basis), and immediately after giving effect to the Transactions to occur on the Closing Date, is Solvent and (b) the date any Accounts of a Canadian Credit Party are initially included on any Borrowing Base Certificate, such Canadian Credit Party is, on a stand-alone basis, not an “insolvent person” as defined in the Bankruptcy and Insolvency Act (Canada).
Section3.21****Full Disclosure. None of the written information (financial or otherwise) (other than any projections, budgets, pro forma financial statements, estimates and other forward-looking information (collectively, “Projections”), information of a general economic nature and third party reports and memoranda) concerning the Credit Parties, their Subsidiaries and the transactions contemplated hereby furnished by or on behalf of any Credit Party to Agent or any Lender in connection with the consummation of the transactions contemplated by the Operative Documents, when furnished and taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which such statements were made (in each case, after giving effect to all supplements and updates thereto from time to time). All Projections delivered to Agent and the Lenders by Borrowers (or their agents) have been prepared on the basis of the assumptions stated therein and such assumptions are believed by such Borrower to be fair and reasonable as of the date furnished in light of current business conditions; provided, however, that Borrowers can give no assurance that such Projections will be attained, such Projections are subject to significant uncertainties and contingencies many of which are beyond the Borrowers’ control, and actual results may vary materially.
Section3.22****Canadian Pension Plans. All obligations of the Credit Parties (including fiduciary, funding, investment and administration obligations) required to be performed in connection with any Canadian Pension Plan and the funding agreements relating thereto have been performed on a timely basis. All contributions or premiums required to be made or paid by the Credit Parties to any Canadian Pension Plan have been made on a timely basis in accordance with the terms of such plans and all applicable laws. No event has occurred which could cause the loss of registered status of any Canadian Pension Plan. No fact or situation that may reasonably be expected to result in a Material Adverse Effect exists in connection with any Canadian Pension Plan. No Credit Party nor any of its Subsidiaries has any withdrawal liability in connection with a Canadian Pension Plan which could reasonably be expected to have a Material Adverse Effect. No Lien has arisen, choate or inchoate, in respect of any Credit Party or its Subsidiaries or its or their property in connection with any Canadian Pension Plan (save for contribution amounts not yet due). No Credit Party contributes to, sponsors or maintains, or has contributed to, sponsored or maintained (in the last 5 years), a Canadian Defined Benefit Plan. No Canadian Pension Event has occurred or is reasonably likely to occur.
Section3.23****Subsidiaries. Credit Parties do not own any stock, partnership interests, limited liability company interests or other equity securities except for Permitted Investments.
Section 3.24[Reserved].
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Section3.25 Borrowing Base Collateral. As to each Account that is identified by the Credit Parties as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is, (i) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the Ordinary Course of Business of the applicable Credit Party, (ii) owed to the applicable Credit Party without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (iii) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Billed Account, Eligible Exar Billed Account, Eligible Unbilled Account, Eligible Exar Unbilled Account, or Eligible Investment Grade Billed Account, as the case may be.
ARTICLE4 - AFFIRMATIVE COVENANTS
Each Credit Party agrees that, so long as any Credit Exposure exists:
Section4.1****Financial Statements and Other Reports. The Borrower Representative shall deliver to Agent, on behalf of itself and each other Credit Party:
(a) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet, cash flow and income statement (including year-to-date results) covering the Borrower Representative’s and its Consolidated Subsidiaries’ consolidated operations during the period, prepared under GAAP, consistently applied, setting forth in comparative form the corresponding figures as at the end of the corresponding month of the previous fiscal year and the projected figures for such period based upon the projections required hereunder, all in reasonable detail, certified by a Responsible Officer and in a form acceptable to Agent; provided that solely for the period commencing as of the Closing Date through and including December 31, 2025, the cash flow statements may be delivered quarterly;
(b) together with the financial reporting package described in (a) above, evidence of payment and satisfaction of all payroll, withholding and similar taxes due and owing by the Credit Parties with respect to the payroll period(s) occurring during such month;
(c) (x) prior to any initial public offering with respect to Borrower’s equity interests as soon as available, but no later than one hundred twenty (120) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Agent in its reasonable discretion (except for a qualification solely related to a going concern or with respect to any Debt which matures within twelve months from the time such opinion is delivered) or (y) following any such initial public offering, within fifteen (15) days after the time period specified in the SEC’s rules and regulations for non-accelerated filers, annual reports of the Public Reporting Entity for such fiscal year containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) if the Public Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC;
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(d) within five (5) days of delivery or filing thereof, copies of all statements, reports and notices made available to the Borrower Representative’s security holders or to any holders of Subordinated Debt and copies of all reports and other filings made by a Credit Party with any stock exchange on which any securities of any Credit Party are traded and/or the SEC;
(e) a prompt written notice of any legal actions pending against any Credit Party or any Subsidiaries thereof that could reasonably be expected to result in damages or costs to any Credit Party or any of Subsidiaries thereof equal to or in excess of $10,000,000 or may be reasonably expected to result in a Material Adverse Effect;
(f) prompt written notice of an event that materially and adversely affects the value of any material Intellectual Property owned by a Credit Party;
(g) promptly after the same become available, copies of any amendments, waivers or other modifications of or relating to the Term Loan Facility;
(h) budgets, sales projections, operating plans and other financial information and information, reports or statements regarding the Credit Parties, their business and the Collateral as Agent may from time to time reasonably request;
(i) along with the monthly reports delivered pursuant to Section 4.1(a) above, evidence reasonably satisfactory to Agent of each Credit Party’s compliance with any payment plan or arrangement with any taxing authority with respect to Priority Tax Claims (as defined in the Plan of Reorganization), including copies of payment confirmations, material correspondence with taxing authorities and a schedule of outstanding Priority Tax Claims;
(j) as soon as available, but no later than five (5) days after the last day of each fiscal quarter, an updated Schedule 1.1 identifying the credit ratings of Investment Grade Account Debtors used in determination of Eligible Investment Grade Billed Accounts, in form and substance reasonably satisfactory to Agent;
(k) within thirty (30) days after the last day of each month, together with the monthly financial statements described in clause (a) above, a duly completed Compliance Certificate signed by a Responsible Officer setting forth calculations showing compliance with the financial covenants set forth in this Agreement;
(l) promptly upon their becoming available, copies of all Swap Contracts and Material Contracts, in each case that are required to be publicly filed; and
(m) within twenty (20) days after the last day of each month, a duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged listings of accounts receivable and accounts payable (by invoice date); provided that Borrower shall deliver such Borrowing Base Certificates as soon as available, but in any event no later than the second (2nd) Business Day of each week, in arrears, following the occurrence and during the continuance of a Cash Dominion Period; and provided, further, that Borrower shall deliver a new “roll-forward” Borrowing Base Certificate as required pursuant to Exhibit D (or, at Borrower’s option, a complete Borrowing Base Certificate) concurrently with any Notice of Borrowing.
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At the option of the Borrowers, the Borrowers may make available to Agent and such requesting Lenders the information required to be provided pursuant to clause (c) of the immediately preceding paragraph by posting such information to its website (or the website of any of the Borrower Representative’s parent companies, including the Public Reporting Entity) on IntraLinks or any comparable online data system or website to which each Lender and Agent have access; provided, that the Borrower Representative shall notify (which may be by electronic mail) Agent of the posting of any such documents and provide to Agent by electronic mail electronic versions (i.e., soft copies) of such documents. If at any time the Borrowers or any direct or indirect parent of the Borrowers has made a good faith determination to file a registration statement with the SEC with respect to an initial public offering of such entity’s equity interests, the Borrowers will not be required to disclose any information or take any actions that, in the good faith view of the Borrowers would violate the securities laws or the SEC’s “gun jumping” rules.
Notwithstanding the foregoing, (A) neither the Credit Parties nor another Public Reporting Entity will be required to deliver any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain financial information required by Rule 3- 09, Rule 3-10 or Rule 3-16 of Regulation S-X or include any exhibits or certifications required by Form 10-K, Form 10-Q or Form 8-K (or any successor or comparable forms) or related rules under Regulation S-K and (C) such reports shall not be required to present compensation or beneficial ownership information.
The financial statements, information and other documents required to be provided as described in clause (c) of the first paragraph of this Section 4.1 may be those of (i) the Borrower Representative and its Subsidiaries (on a combined basis) or (ii) any direct or indirect parent of all of the Credit Parties (any such entity, a “Public Reporting Entity”); provided, that, if the financial information so delivered relates to such direct or indirect parent of the Credit Parties the same is accompanied by consolidating financial statements (including statements of cash flows) that explain in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Borrower Representative and its Subsidiaries on a standalone basis, on the other hand, for the applicable period. Notwithstanding any of the foregoing herein, to the extent any of the Credit Parties’ parent companies is subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act, such information described in this paragraph shall be included in the Form 10-K reports of the Public Reporting Entity described in clause (c) of the first paragraph of this Section 4.1 filed with the SEC.
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Notwithstanding the foregoing, the Credit Parties will be deemed to have delivered such reports and information referred to in this Section 4.1 to the Lenders and Agent for all purposes of this Agreement if the Credit Parties or another Public Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system), and such reports are publicly available. In addition, except as required by the last sentence of the immediately preceding paragraph, the requirements of this Section 4.1 shall be deemed satisfied and the Credit Parties will be deemed to have delivered such reports and information referred to this Section 4.1 to Agent, holders, prospective investors, market makers and securities analysts for all purposes of this Agreement by the posting of reports and information that would be required to be provided on the Borrower’s website (or that of any of the Credit Parties’ parent companies, including the Public Reporting Entity). Agent shall have no obligation to monitor whether the Credit Parties post such reports, information and documents on the Borrower’s website (or that of any of the Credit Parties’ parent companies, including the Public Reporting Entity) or the SEC’s EDGAR service, or collect or re-post any such information from any Credit Party (or any of the Credit Parties’ parent companies) website or the SEC’s EDGAR service.
Section4.2****Payment and Performance of Obligations. Each Credit Party (a) will pay and discharge, and cause each Subsidiary to pay and discharge, on a timely basis as and when due, in accordance with Applicable Law, all of their respective obligations and liabilities, except for such obligations and/or liabilities (i) that may be the subject of a Permitted Contest or (ii) the nonpayment or nondischarge of which could not reasonably be expected to have a Material Adverse Effect or result in a Lien against any Collateral, except for Permitted Liens, (b) without limiting anything contained in the foregoing clause (a), pay all amounts due and owing in respect of Taxes (including without limitation, payroll and withholdings tax liabilities) on a timely basis as and when due, and in any case prior to the date on which any material fine, penalty, interest, late charge or loss may be added thereto for nonpayment thereof, except (i) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization or otherwise satisfied in accordance with the Plan of Reorganization (provided*,* that, for the avoidance of doubt, the Credit Parties shall pay Taxes to the extent required under and in accordance with the Plan of Reorganization), and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP, (c) will maintain, and cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of all of their respective obligations and liabilities, and (d) will not breach or permit any Subsidiary to breach, or permit to exist any default under, the terms of any lease, commitment, contract, instrument or obligation to which it is a party, or by which its properties or assets are bound, except for such breaches or defaults which could not reasonably be expected to have a Material Adverse Effect.
Section4.3****Maintenance of Existence. Each Credit Party will preserve, renew and maintain in full force and effect and in good standing under the laws of its jurisdiction of organization, and will cause each Subsidiary to preserve, renew and keep in full force and effect and in good standing under the laws of its jurisdiction of organization, their respective existence and (except in the case failure to do so could not reasonably be expected to have a Material Adverse Effect except solely with respect to any jurisdiction other than the jurisdiction of organization of such Credit Party or Subsidiary) their respective rights, privileges and franchises necessary or desirable in the normal conduct of business.
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Section 4.4****Maintenanceof Property; Insurance.
(a) Each Credit Party will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect. If all or any part of the Collateral useful or necessary in its business, or upon which any Borrowing Base is calculated, becomes damaged or destroyed, each Credit Party will, and will cause each Subsidiary to, promptly and completely repair and/or restore the affected Collateral in a good and workmanlike manner (except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect), regardless of whether Agent agrees to disburse insurance proceeds or other sums to pay costs of the work of repair or reconstruction.
(b) Upon completion of any Permitted Contest, Credit Parties shall, and will cause each Subsidiary to, promptly pay the amount due, if any, and deliver to Agent proof of the completion of the contest and payment of the amount due, if any (except in each case to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect), following which Agent shall return the security, if any, deposited with Agent pursuant to the definition of Permitted Contest.
(c) Each Credit Party will maintain (i) casualty insurance on all real and personal property on an all risks basis (including the perils of flood, windstorm and quake), covering the repair and replacement cost of all such property and coverage, business interruption and rent loss coverages with extended period of indemnity (for the period required by Agent from time to time) and indemnity for extra expense, in each case without application of coinsurance and with agreed amount endorsements, (ii) general and professional liability insurance (including products/completed operations liability coverage), and (iii) such other insurance coverage in such amounts and with respect to such risks as Agent may request from time to time, pursuant to the Insurance Requirements attached hereto as Schedule 4.4; provided, however, that, in no event shall such insurance be in amounts or with coverage less than, or with carriers with qualifications inferior to, any of the insurance or carriers in existence as of the Closing Date (or required to be in existence after the Closing Date under a Financing Document). All such insurance shall be provided by insurers having an A.M. Best policyholders rating reasonably acceptable to Agent.
(d) On or prior to the Closing Date (subject to Section 7.4), and at all times thereafter, each Credit Party will cause Agent to be named as an additional insured, assignee and lender loss payee (which shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required to be maintained pursuant to this Section 4.4 pursuant to endorsements in form and substance acceptable to Agent. Credit Parties shall deliver to Agent and the Lenders (i) on the Closing Date (subject to Section 7.4), a certificate from Credit Parties’ insurance broker dated such date showing the amount of coverage as of such date, and that if all or any part of such policy is canceled, terminated or expires, the insurer will forthwith give notice thereof to each additional insured, assignee and loss payee and that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by each additional insured, assignee and loss payee of written notice thereof, (ii) upon the request of any Lender through Agent from time to time full information as to the insurance carried, (iii) within five (5) days of receipt of notice from any insurer, a copy of any notice of cancellation, nonrenewal or material change in coverage from that existing on the date of this Agreement, (iv) forthwith, notice of any cancellation or nonrenewal of coverage by any Credit Party, and (v) at least 60 days prior to expiration of any policy of insurance, evidence of renewal of such insurance upon the terms and conditions herein required.
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(e) In the event any Credit Party fails to provide Agent with evidence of the insurance coverage required by this Agreement, Agent may purchase insurance at Credit Party’s expense to protect Agent’s interests in the Collateral. This insurance may, but need not, protect such Credit Party’s interests. The coverage purchased by Agent may not pay any claim made by such Credit Party or any claim that is made against such Credit Party in connection with the Collateral. Such Credit Party may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that such Credit Party has obtained insurance as required by this Agreement. If Agent purchases insurance for the Collateral, Credit Parties will be responsible for the costs of that insurance to the fullest extent provided by law, including interest and other charges imposed by Agent in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance may be more than the cost of insurance such Credit Party is able to obtain on its own.
Section4.5****Compliance with Laws and Material Contracts . Each Credit Party will comply, and cause each Subsidiary to comply, with the requirements of all applicable Laws and Material Contracts, except to the extent that failure to so comply could not reasonably be expected to have a Material Adverse Effect.
Section4.6****Inspection of Property, Books and Records. Each Credit Party will keep, and will cause each Subsidiary to keep, proper books of record substantially in accordance with GAAP in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Subsidiary to permit, at the sole cost of the applicable Credit Party or any applicable Subsidiary, representatives of Agent and of any Lender to visit and inspect any of their respective properties, to examine and make abstracts or copies from any of their respective books and records, to conduct a collateral audit and analysis of their respective operations and the Collateral, to verify the amount and age of the Accounts, the identity and credit of the respective Account Debtors, to review the billing practices of Credit Parties and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants as often as may reasonably be desired. In the absence of a Specified Default, Credit Parties shall not be required to reimburse Agent pursuant to this Section 4.6 more than once per fiscal year, and shall give the applicable Credit Party or any applicable Subsidiary commercially reasonable prior notice of such exercise, and subject to the aforesaid limitation absent a Specified Default, the Credit Parties shall be responsible for all documented fees, expenses and other costs pursuant to Section 2.2(i). At any time following the occurrence and during the continuance of a Specified Default, Agent may exercise its rights under this Section 4.6, without prior notice.
Section4.7 Use of Proceeds. Credit Parties shall use the proceeds of Revolving Loans solely for (a) transaction fees incurred in connection with the Financing Documents and the refinancing on the Closing Date of Debt, (b) for working capital and general corporate needs of Borrowers and their Subsidiaries and (c) to effect the Transactions in accordance with the Plan of Reorganization, to make payments and distributions under the Plan of Reorganization, and to pay the Transaction Costs. No portion of the proceeds of the Loans will be used for family, personal, agricultural or household use.
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Section 4.8 Noticesof Litigation and Defaults. Credit Parties will give prompt written notice to Agent (a) of any litigation or governmental proceedings pending or threatened (in writing) against Borrowers or any other Credit Party which would reasonably be expected to have a Material Adverse Effect with respect to Borrowers or any other Credit Party or which in any manner calls into question the validity or enforceability of any Financing Document, (b) upon any Credit Party becoming aware of the existence of any Default or Event of Default, (c) if any Credit Party is in breach or default under or with respect to any Material Contract, or if any Credit Party is in breach or default under or with respect to any other contract, agreement, lease or other instrument to which it is a party or by which its property is bound or affected, which breach or default could reasonably be expected to have a Material Adverse Effect, (d) of any strikes or other labor disputes pending or, to any Credit Party’s knowledge, threatened against any Credit Party, (e) if there is any infringement or claim of infringement by any other Person with respect to any Intellectual Property rights of any Credit Party, or if there is any claim by any other Person that any Credit Party in the conduct of its business is infringing on the Intellectual Property Rights of others, which in any such case could reasonably be expected to have a Material Adverse Effect, (f) the occurrence of any “default” or “event of default” under and as defined in the Term Loan Agreement, and (g) of all returns, recoveries, disputes and claims that involve more than the Threshold Amount. Each Credit Party represents and warrants that Schedule 4.9 sets forth a complete list of all matters existing as of the Closing Date for which notice could be required under this Section and all litigation or governmental proceedings pending or threatened (in writing) against any Credit Party as of the Closing Date.
Section 4.9****Hazardous Materials; Remediation.
(a) If any release or disposal of Hazardous Materials shall occur or shall have occurred on any real property or any other assets of any Borrower or any other Credit Party, such Borrower or Credit Party will cause, or direct the applicable Subsidiary to cause, the prompt containment and removal of such Hazardous Materials and the remediation of such real property or other assets as is necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, each Credit Party shall, and shall cause each other Subsidiary to, comply with each Environmental Law requiring the performance at any real property by any Borrower or any other Credit Party of activities in response to the release or threatened release of a Hazardous Material.
(b) Credit Parties will provide Agent within thirty (30) days after written demand therefor with a bond, letter of credit or similar financial assurance evidencing to the reasonable satisfaction of Agent that sufficient funds are available to pay the cost of removing, treating and disposing of any Hazardous Materials or Hazardous Materials Contamination and discharging any assessment which may be established on any property as a result thereof, such demand to be made, if at all, upon Agent’s reasonable business determination that the failure to remove, treat or dispose of any Hazardous Materials or Hazardous Materials Contamination, or the failure to discharge any such assessment could reasonably be expected to have a Material Adverse Effect.
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Section 4.10****FurtherAssurances.
(a) Each Credit Party will, and will cause each Subsidiary to, at its own cost and expense, promptly and duly take, execute, acknowledge and deliver all such further acts, documents and assurances as may from time to time be necessary or as Agent or the Required Lenders may from time to time reasonably request in order to carry out the intent and purposes of the Financing Documents and the transactions contemplated thereby, including all such actions to establish, create, preserve, protect and perfect a first priority Lien (subject only to Permitted Liens and to the ABL Intercreditor Agreement) in favor of Agent for itself and for the benefit of the Lenders on the Collateral (including Collateral acquired after the date hereof). Without limiting the generality of the foregoing, (x) Credit Parties shall, at the time of the delivery of any Compliance Certificate disclosing the acquisition by an Credit Party of any registered Intellectual Property or application for the registration of Intellectual Property, deliver to Agent a duly completed and executed supplement to the applicable Credit Party’s Patent Security Agreement or Trademark Security Agreement in the form of the respective Exhibit thereto, and (y) at the request of Agent, following the disclosure by Credit Parties on any Compliance Certificate of the acquisition by any Credit Party of any rights under a license as a licensee with respect to any registered Intellectual Property or application for the registration of any Intellectual Property owned by another Person, Credit Parties shall execute any documents requested by Agent to establish, create, preserve, protect and perfect a first priority lien in favor of Agent (subject only to Permitted Liens and to the ABL Intercreditor Agreement), to the extent legally possible, in such Credit Party’s rights under such license.
(b) Upon receipt of an affidavit of an authorized representative of Agent or a Lender as to the loss, theft, destruction or mutilation of any Note or any other Financing Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other applicable Financing Document, Credit Parties will issue, in lieu thereof, a replacement Note or other applicable Financing Document, dated the date of such lost, stolen, destroyed or mutilated Note or other Financing Document in the same principal amount thereof and otherwise of like tenor.
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(c) Upon the formation or acquisition of a new Subsidiary (other than an Excluded Subsidiary), Credit Parties shall, within ten (10) Business Days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) Agent (in each case acting at the direction of the Required Lenders)) after such formation or acquisition, (i) pledge, have pledged or cause or have caused to be pledged to Agent (or to the Term Agent as bailee) pursuant to a pledge agreement in form and substance satisfactory to Agent, all of the outstanding shares of equity interests or other equity interests of such new Subsidiary owned directly or indirectly by any Credit Party, along with undated stock or equivalent powers for such certificates, executed in blank; (ii) unless Agent shall agree otherwise in writing, cause the new Subsidiary to take such other actions (including entering into or joining any Security Documents) as are necessary or advisable in the reasonable opinion of Agent in order to grant Agent, acting on behalf of the Lenders, a first priority Lien on all real and personal property of such Subsidiary in existence as of such date and in all after acquired property (subject only to Permitted Liens and to the ABL Intercreditor Agreement), which first priority Liens are required to be granted pursuant to this Agreement; (iii) unless Agent shall agree otherwise in writing, cause such new Subsidiary to become a Guarantor of the obligations of Credit Parties hereunder and under the other Financing Documents pursuant to a Guarantee Supplement; and (iv) cause the new Subsidiary to deliver certified copies of such Subsidiary’s certificate or articles of incorporation, together with good standing certificates, by-laws (or other operating agreement or governing documents), resolutions of the Board of Directors or other governing body, approving and authorize the execution and delivery of the Security Documents, incumbency certificates and to execute and/or deliver such other documents and legal opinions or to take such other actions as may be requested by Agent, in each case, in form and substance satisfactory to Agent.
Notwithstanding the foregoing, no Excluded Subsidiary shall be required to become a Guarantor hereunder (and, as such, shall not be required to deliver the documents required by this clause (c) above); provided, however, that (I) if the equity interests of a foreign Subsidiary that is an Excluded Subsidiary are owned by a Credit Party, such Credit Party shall deliver all such documents, instruments, agreements (including, without limitation, at the reasonable request of Agent, a pledge agreement governed by the laws of the jurisdiction of the organization of such Excluded Subsidiary, in form and substance satisfactory to Agent) and certificates representing such equity interests to Agent, and take all commercially reasonable actions reasonably requested by Agent or otherwise necessary to grant and to perfect a first- priority Lien (subject to Permitted Liens) in favor of Agent, in 100% of all equity interests of such foreign Subsidiary owned by such Credit Party, and (II) promptly and in any event within 20 days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) Agent (in each case acting at the direction of the Required Lenders)) after the effectiveness of any amendment of the Internal Revenue Code to allow for 100% of the voting equity interests of such foreign Subsidiary to be pledged to Agent without material adverse tax consequences to the Credit Parties and their Subsidiaries, 100% of such voting equity interests shall be pledged pursuant to this clause (c). For purposes hereof, Subsidiaries incorporated, formed or organized under the laws of Canada or any province or territory thereof shall not be considered foreign Subsidiaries.
Section 4.11[Reserved].
Section 4.12 Power of Attorney. After the occurrence and during the continuance of an Event of Default, each of the authorized representatives of Agent is hereby irrevocably made, constituted and appointed the true and lawful attorney for each Credit Party (without requiring any of them to act as such) with full power of substitution to do the following: (a) endorse the name of each Credit Party upon any and all checks, drafts, money orders, and other instruments for the payment of money that are payable to each Credit Party and constitute collections on such Credit Party’s Accounts; (b) so long as Agent has provided not less than three (3) Business Days’ prior written notice to Borrower to perform the same and Borrower has failed to take such action, execute in the name of any Credit Party any schedules, assignments, instruments, documents, and statements that Credit Parties are obligated to give Agent under this Agreement; (c) take any action Credit Parties are required to take under this Agreement; (d) so long as Agent has provided not less than three (3) Business Days’ prior written notice to Borrower to perform the same and Borrower has failed to take such action, do such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary or desirable to enforce any Account or other Collateral or perfect Agent’s security interest or Lien in any Collateral; and (e) do such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary or desirable to enforce its rights with regard to any Account or other Collateral. This power of attorney shall be irrevocable and coupled with an interest.
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Section 4.13****Borrowing Base Collateral Administration.
(a) All data and other information relating to Accounts or other intangible Collateral shall at all times be kept by Credit Parties, at their respective principal offices and shall not be moved from such locations without (i) providing prior written notice to Agent, and (ii) obtaining the prior written consent of Agent, which consent shall not be unreasonably withheld.
(b) Credit Parties shall provide prompt written notice to each Person who either is currently an Account Debtor or becomes an Account Debtor at any time following the date of this Agreement that directs each Account Debtor to make payments into the Lockbox, and hereby authorizes Agent, upon Credit Parties’ failure to send such notices within ten (10) days after the date of this Agreement (or ten (10) days after the Person becomes an Account Debtor), to send any and all similar notices to such Person. Agent reserves the right to notify Account Debtors that Agent has been granted a Lien upon all Accounts.
Section 4.14 Maintenance of Management . Borrower will cause its business to be continuously managed by its present chief executive officer and chief financial officer or such other individuals serving in such capacities as shall be reasonably satisfactory to Agent. Borrower will notify Agent promptly in writing of any change in its board of directors or executive officers.
ARTICLE5 - NEGATIVE COVENANTS
Each Credit Party agrees that, so long as any Credit Exposure exists:
Section5.1****Debt; Contingent Obligations. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, incur, assume, guarantee or otherwise become or remain directly or indirectly liable with respect to, any Debt, except for Permitted Debt. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist any Contingent Obligations, except for Permitted Contingent Obligations.
Section5.2 Liens . No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except for Permitted Liens.
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Section5.3 Restricted Distributions. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Distribution, except for Permitted Distributions.
The Borrowers, in their sole discretion, may classify any Permitted Distribution or Permitted Investment as being made in part under one of the clauses or subclauses of the definitions of “Permitted Distribution” and “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 5.3 to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (i), (k), (p) and (q) of the definition of “Permitted Investments.”
Section 5.4 Restrictive Agreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) enter into or assume any agreement (other than the Financing Documents, the Term Loan Documents, the Exit Notes and the B. Riley Credit Agreement (and extensions, modifications and replacements of any of the foregoing that are not materially more restrictive with respect to dividend and payment restrictions), any agreement or instrument of a Person acquired by a Credit Party or a Subsidiary in existence at the time of such acquisition (which restriction is not applicable to any Person, or the assets of any Person, other than the Person, or the assets of the Person, so acquired), any secured Permitted Debt that limits the right of the debtor to dispose of the assets securing such Debt, any agreements for purchase money debt permitted under clause (c) of the definition of Permitted Debt, and any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets pending such sale or other disposition) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or (b) create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind (except as provided by the Financing Documents, the Term Loan Documents, the Exit Notes and the B. Riley Credit Agreement (and extensions, modifications and replacements of any of the foregoing that are not materially more restrictive with respect to dividend and payment restrictions)), any agreement or instrument of a Person acquired by a Credit Party or a Subsidiary in existence at the time of such acquisition (which restriction is not applicable to any Person, or the assets of any Person, other than the Person, or the assets of the Person, so acquired), any secured Permitted Debt that limits the right of the debtor to dispose of the assets securing such Debt, any agreements for purchase money debt permitted under clause (c) of the definition of Permitted Debt and customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business or consistent with industry norm), on the ability of any Subsidiary to: (i) pay or make Restricted Distributions to any Credit Party or any Subsidiary; (ii) pay any Debt owed to any Credit Party or any Subsidiary; (iii) make loans or advances to any Borrower or any Subsidiary; or (iv) transfer any of its property or assets to any Credit Party or any Subsidiary.
Section5.5 Payments and Modifications of Subordinated Debt. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) declare, pay, make or set aside any amount for payment in respect of Subordinated Debt, except for payments made in full compliance with and expressly permitted under the Subordination Agreement and payments permitted by Section 5.3, (b) amend or otherwise modify the terms of any Subordinated Debt, except for amendments or modifications made in full compliance with the Subordination Agreement, (c) declare, pay, make or set aside any amount for payment in respect of any Debt hereinafter incurred that, by its terms, or by separate agreement, is payment subordinated to the Obligations, except for payments made in full compliance with and expressly permitted under the subordination provisions applicable thereto and payments permitted by Section 5.3, or (d) amend or otherwise modify the terms of any such Debt if the effect of such amendment or modification is to (i) increase the interest rate or fees on, or change the manner or timing of payment of, such Debt, (ii) accelerate or shorten the dates upon which payments of principal or interest are due on, or the principal amount of, such Debt, (iii) change in a manner adverse to any Credit Party or Agent any event of default or add or make more restrictive any covenant with respect to such Debt, (iv) change the prepayment provisions of such Debt or any of the defined terms related thereto, (v) change the subordination provisions thereof (or the subordination terms of Section 12.7 hereof or any other guarantee thereof), or (vi) change or amend any other term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Debt in a manner adverse to any Credit Party, any Subsidiaries, Agents or Lenders. Credit Parties shall, prior to entering into any such amendment or modification, deliver to Agent reasonably in advance of the execution thereof, any final or execution form copy thereof.
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Section5.6 Consolidations, Mergers and Sales of Assets; Changein Control. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) consolidate or merge or amalgamate with or into any other Person unless the surviving Person is such Credit Party (or if no Credit Party is a party thereto, the surviving person is a Guarantor, or if no Credit Party is a party thereto, the surviving Person is such Subsidiary), or (b) consummate any Asset Dispositions other than Permitted Asset Dispositions. No Credit Party will suffer or permit to occur any Change in Control.
Section5.7 Purchase of Assets, Investments. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) acquire or enter into any agreement to acquire any assets other than in the Ordinary Course of Business or as permitted under the definition of Permitted Investments; or (b) acquire or own or enter into any agreement to acquire or own any Investment in any Person other than Permitted Investments.
The Borrowers, in their sole discretion, may classify any Permitted Investment as being made in part under one of the clauses or subclauses of the definitions of “Permitted Distribution” and “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 5.7 to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (i), (k), (p) and (q) of the definition of “Permitted Investments.”
Section5.8 Transactions with Affiliates. Except as otherwise disclosed on Schedule 5.8, and except for transactions which contain terms that are no less favorable to the applicable Credit Party or any Subsidiary, as the case may be, than those which might be obtained from a third party not an Affiliate of any Credit Party or that do not involve consideration in excess of $ 5,000,000, no Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Credit Party (each, an “Affiliate Transaction”), other than:
(a) any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25,000,000, in connection with which the Credit Parties deliver to Agent (i) a resolution adopted in good faith by a majority of disinterested directors of the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions) approving such Affiliate Transaction and set forth in an officer’s certificate certifying that such Affiliate Transaction complies with the above requirements of this Section 5.8 or (ii) if there are no directors on the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions) that are disinterested with respect to such transaction(s), a letter from an independent financial advisor stating that such transaction is fair to the applicable Credit Party or such Subsidiary from a financial point of view;
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(b) the Transactions, the payment of professional fees and expenses in connection therewith (provided that, with respect to the payment of professional fees and expenses of Cleary Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP, such payment shall be made as follows and on the following dates: (i) on the Closing Date, each legal advisor shall be paid a sum equal to (x) one third of the estimated amount of such advisor’s professional fees and expenses as set forth on the funds flow delivered by the Borrower as of the Closing Date, plus (y) 50% of any amount that is in excess of $25,900,000 retained by the Borrower on the Closing Date (provided that such excess amonut shall not exceed $1,000,000), (ii) on the date that is forty -five (45) days following the Closing Date, each legal advisor shall be paid a sum equal to 50% of the outstanding amount of such advisor’s total professional fees and expenses, and (iii) on the date that is ninety (90) days following the Closing Date, each legal advisor shall be paid a sum equal to the remaining 50% of each legal advisor’s total professoinal fees and expenses), the issuance of equity interests (other than disqualified stock) of the Borrowers to any Person, and any Affiliate Transaction that constitutes a Permitted Distribution, a Permitted Investment or a Permitted Asset Disposition;
(c) any Affiliate Transaction the only parties thereto constitute Credit Parties;
(d) (i) sales or contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility in effect as of the date hereof or (ii) the purchase of participation interests by any Credit Party in the B. Riley Credit Agreement;
(e) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the applicable Credit Party, any Subsidiary, or any direct or indirect parent of the Credit Parties in the ordinary course of business, provided that the payment of any such fees or reimbursements to, on behalf of, or for the account of, shareholders of Parent, Affiliates of Parent or any of their respective Affiliates (other than the Parent and its Subsidiaries) shall not be permitted other than payment or reimbursement of fees and expenses incurred by Ernst & Young in connection with Ernst & Young’s determination or re-determination (if any) of the Transaction Tax Liability (as defined in the Plan of Reorganization), and provided, further, that no such payments shall be permitted under this clause (e) to any of ETI or its Affiliates (other than the Parent and its Subsidiaries) for, or in respect of, or as reimbursement for, any consultants;
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(f) transactions between or among the Borrowers and/or any of their Subsidiaries (or an entity that becomes a Subsidiary as a result of such transaction) in the ordinary course of business and any merger, consolidation or amalgamation of the Borrowers and any direct parent of the Borrowers; provided, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the capital stock of the Borrowers and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Agreement and effected for a bona fide business purpose;
(g) incurrence, transfer or assignment of loans in accordance with the terms of the Term Loan Agreement and performance of the obligations thereunder and issuance, transfer or assignment of Exit Notes in accordance with the terms of the Exit Notes Indenture and performance of the obligations thereunder;
(h) the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under the terms of, any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Closing Date shall only be permitted by this clause (h) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the Lenders in any material respect than the original transaction, agreement or arrangement as in effect on the Closing Date, as determined in good faith by the Borrowers;
(i) intercompany transactions for the purpose of improving the consolidated tax efficiency of the Borrowers and their respective Subsidiaries and not for the purpose of circumventing any covenant set forth in this Agreement; and
(j) the entering into of any tax sharing agreement or arrangement that complies with clause (e) of the definition of “Permitted Distributions” and the performance under any such agreement or arrangement.
Section5.9****Modification of Organizational Documents. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify any Organizational Documents of such Person, except for Permitted Modifications.
Section5.10 Modification of Certain Agreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify any Material Contract, which amendment or modification in any case: (a) is contrary to the terms of this agreement or any other Financing Document; or (b) could reasonably be expected to be materially adverse to the rights, interests or privileges of Agent or the Lenders or their ability to enforce the same. Each Credit Party shall, prior to entering into any material amendment or other modification of any of the foregoing documents, deliver to Agent reasonably in advance of the execution thereof, any final or execution form copy of amendments or other modifications to such documents.
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Section5.11 Conduct of Business. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, engage in any line of business other than those businesses engaged in on the Closing Date and described on Schedule 5.11 and businesses reasonably related thereto. No Credit Party will, or will permit any Subsidiary to, other than in the Ordinary Course of Business, change its normal billing payment and reimbursement policies and procedures with respect to its Accounts (including, without limitation, the amount and timing of finance charges, fees and write-offs).
Section5.12 Lease Payments. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, incur or assume (whether pursuant to a guarantee or otherwise) any liability for rental payments except in the Ordinary Course of Business.
Section5.13 Limitation on Sale and Leaseback Transactions. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into any arrangement with any Person whereby, in a substantially contemporaneous transaction, any Credit Party or any Subsidiaries sells or transfers all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back the right to use such asset.
Section5.14 Deposit Accounts and Securities Accounts; Payroll and BenefitsAccounts. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, establish any new Deposit Account or Securities Account without prior written notice to Agent, and unless Agent, such Credit Party or such Subsidiary and the bank, financial institution or securities intermediary at which the account is to be opened enter into a Control Agreement prior to or concurrently with the establishment of such Deposit Account or Securities Account (expect with respect to Excluded Accounts). Each Credit Party represents and warrants that Schedule 5.14 lists all of the Deposit Accounts and Securities Accounts of each Credit Party as of the Closing Date. The provisions of this Section requiring Control Agreements shall not apply to Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Credit Party’s employees and identified to Agent by each Credit Party as such (such Accounts, the “Excluded Accounts ”); provided, however, that at all times that any Obligations remain outstanding, Credit Party shall maintain one or more separate Deposit Accounts to hold any and all amounts to be used for payroll, payroll taxes and other employee wage and benefit payments, and shall not commingle any monies allocated for such purposes with funds in any other Deposit Account.
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Section 5.15 Compliance with Anti-Terrorism Laws. Agent hereby notifies Credit Parties that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s policies and practices, Agent is required to obtain, verify and record certain information and documentation that identifies Credit Parties and its principals, which information includes the name and address of each Credit Party and its principals and such other information that will allow Agent to identify such party in accordance with Anti-Terrorism Laws. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, knowingly enter into any Material Contracts with any Blocked Person or any Person listed on the OFAC Lists. Each Credit Party shall immediately notify Agent if such Credit Party has knowledge that any Credit Party, any Subsidiaries, any additional Credit Party or any of their respective Affiliates or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is or becomes a Blocked Person or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti -Terrorism Law. The foregoing will not apply to any Person that qualifies as a corporation that is registered or incorporated under the laws of Canada or any province or territory thereof and that carries on business in whole or in part in Canada within the meaning of Section 2 of the Foreign Extraterritorial Measures (United States) Order, 1992 passed under the Foreign Extraterritorial Measures Act (Canada) in so far as such representations would result in a violation of or conflict with the Foreign Extraterritorial Measures Act (Canada) or any similar law.
Section5.16****Canadian Defined Benefit Plans. No Credit Party shall establish, sponsor, maintain, administer, contribute to or otherwise incur liability under any Canadian Defined Benefit Plan or acquire an interest in any Person that sponsors, maintains, administers, contributes to or otherwise has incurred liability under any Canadian Defined Benefit Plan.
ARTICLE6 - FINANCIAL COVENANTS
Section6.1 Fixed Charge Coverage Ratio. Credit Parties shall not permit the Fixed Charge Coverage Ratio of the Borrower Representative and its Subsidiaries, as follows: (i) to be tested quarterly until and including the Defined Period ending December 31, 2025, to be less than 0.85 to 1.00, (ii) to be tested monthly until and including (a) for the Defined Period beginning January 1, 2026 until and including June 30, 2026, to be less than 0.85 to 1.00, and (b) for the Defined Period beginning July 1, 2026, until and including the Termination Date, to be less than 1.00 to 1.00.
Section6.2 Minimum Excess Availability. During the period commencing as of the Closing Date through and including June 30, 2026, Excess Availability shall not be less than $7,500,000 at any time for three (3) or more consecutive Business Days.
Section6.3****Evidence of Compliance. Credit Parties shall furnish to Agent, together with the financial reporting required of Credit Parties in Section 4.1 hereof, a Compliance Certificate as evidence of Credit Parties’ compliance with the covenants in this Article and evidence that no Event of Default specified in this Article has occurred. The Compliance Certificate shall include, without limitation, (a) a statement and report, on a form approved by Agent, detailing Borrower's’ calculations, and (b) if requested by Agent, back-up documentation (including, without limitation, invoices, receipts and other evidence of costs incurred during such quarter as Agent shall reasonably require) evidencing the propriety of the calculations.
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ARTICLE7 - CONDITIONS
Section7.1 Conditions to Closing. The obligation of each Lender to make the initial Loans on the Closing Date shall be subject to the receipt by Agent of each agreement, document and instrument set forth on the closing checklist prepared by Agent or its counsel, each in form and substance satisfactory to Agent, and such other closing deliverables reasonably requested by Agent and Lenders, and to the satisfaction of the following conditions precedent, each to the satisfaction of Agent and Lenders and their respective counsel in their sole discretion:
(a) Consummationof Transactions. Evidence of the consummation of the Transactions (other than the funding of the Loan and the closing of any acquisition for which the proceeds of the Loan are purchase money) contemplated by the Operative Documents including, without limitation, the funding of any and all investments contemplated by the Operative Documents;
(b) SecretaryCertificates; Corporate Deliverables. Agent shall have received:
(i) copies of the certificate or articles of incorporation and by-laws (or other similar governing documents serving the purposes) of each Credit Party, certified as of the Closing Date as complete and correct copies thereof by a Responsible Officer or another authorized representative of each Credit Party;
(ii) a copy of the resolutions or equivalent action, in form and substance reasonably satisfactory to Agent, of each Credit Party authorizing, as applicable, the execution and delivery of this Agreement and the other Financing Documents and the performance of this Agreement and the transactions contemplated hereby and thereby, certified by a Responsible Officer or another authorized representative of each Credit Party as of the Closing Date, which certificate shall state that the resolutions or other action thereby certified have not been amended, restated, amended and restated, modified (except as any later such resolution or other action may modify any earlier such resolution or other action), revoked or rescinded and are in full force and effect as of the Closing Date;
(iii) such certificates of good standing (to the extent such concept exists) from the applicable secretary of state of the state of organization of each Credit Party, certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Financing Documents to which such Credit Party is a party or is to be a party on the Closing Date;
(c) FinancingDocuments. Agent shall have received an executed Canadian Security Agreement, each dated as of the Closing Date, together with all other applicable Financing Documents;
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(d) Closing Certificate. Agent shall have received a certificate of Credit Parties, dated as of the Closing Date, substantially in the form of Exhibit E;
(e) Solvency Certificate. Agent shall have received a solvency certificate signed by the chief financial officer on behalf of the Credit Parties, substantially in the form of Exhibit G, after giving effect to the Transactions or, at the Credit Parties’ option, a solvency opinion from an independent investment bank or valuation firm of nationally recognized standing;
(f) Representationsand Warranties. Each of the representations and warranties of each Credit Party contained in or pursuant to the Financing Documents shall be true, correct and complete on and as of the Closing Date, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date;
(g) Legal Opinions. Agent shall have received an executed legal opinion of (i) Latham & Watkins LLP, special New York counsel to the Credit Parties, (ii) Gowling WLG (Canada) LLP, counsel to the Credit Parties in Ontario, Canada, and (iii) legal counsel of the Credit Parties in Iowa, Minnesota, South Carolina and each of the other jurisdictions of organization or formation of the Credit Parties requested by the Agent, in each case in form and substance reasonably satisfactory to Agent;
(h) Approvals. Borrower and the other Credit Parties shall have received all governmental, shareholder and third-party approvals, consents, licenses and permits required in connection with this Agreement, the Transactions and the related financings and transactions contemplated thereby, which such approvals, consents, licenses and permits remain in full force and effect;
(i) NoLitigation. Other than the Chapter 11 Cases, as of the Closing Date, there shall not be any litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding pending or, to the knowledge of the Credit Parties, threatened against any Credit Party or any of their Subsidiaries or against of any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Operative Documents, or (b) that could reasonably be expected to have a Material Adverse Effect on the Credit Parties and their Subsidiaries, taken as a whole;
(j) NoDefault. Immediately before and after the Closing Date, no Default or Event of Default shall have occurred and be continuing;
(k) Term Loan Facility. Agent shall have received true and correct copies of the Term Loan Documents, which shall be in full force and effect;
(l) ClosingDate Debt . In connection with the Transactions, as of the Closing Date, the Borrower and the other Credit Parties shall not have incurred more than (i) $200,988,002 of Exit Notes and (ii) $60,000,000 of term loans under the Term Loan Agreement;
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(m) Payoff Documentation. Agent shall have received true and correct copies of the pay-off letters and other evidence (together with accompanying termination statements and lien releases) confirming the termination of all obligations and release of all Liens under each of the third party Debt for borrowed money described to be paid off on the Closing Date pursuant to the Confirmation Order;
(n) Fees; Costs and Expenses. Agent shall have received all fees due and payable on or prior to the Closing Date, to the extent invoiced at least two (2) Business Days prior to the Closing Date (or such later date as the Borrower may reasonably agree), shall have been reimbursed for all reasonable and documented expenses (including the reasonable fees, charges and disbursements of Proskauer Rose LLP, counsel to Agent, and Norton Rose Fulbright Canada LLP, Canadian counsel to Agent) required to be reimbursed or paid by Borrowers hereunder or under any other Financing Document;
(o) Material Adverse Change. Since the Petition Date, there shall not have occurred any changes, events, circumstances, effects, developments, occurrences or state of facts that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect;
(p) BorrowingBase Certificate. Agent shall have received the initial Borrowing Base Certificate, prepared as of the Closing Date.
(q) Plan of Reorganization Effective Date; Confirmation Order
(i) All conditions precedent to the confirmation and effect, shall have been satisfied or waived in accordance with the terms thereof;
(ii) Agent shall have received a docketed copy of the Confirmation Order, and the Confirmation Order shall not have been reversed, vacated, amended, supplemented or otherwise modified in any matter that could reasonably be expected to materially adversely affect the interests of Agent or the Lenders;
(iii) the effective date under the Plan of Reorganization shall have occurred (or occur contemporaneously with the Closing Date);
(iv) there shall not be any Bankruptcy Court order or any action, suit, investigation or proceeding pending or, to the knowledge of the Credit Parties, threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect or to prevent or restrain the consummation of this Agreement and the transactions contemplated hereby;
(r) Emergence. Debtors shall have successfully consummated the Plan of Reorganization and emerged from the Chapter 11 Cases in accordance with the terms of the Plan of Reorganization;
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(s) Insurance. Except as set forth in Section 7.4, Agent shall have received evidence of all insurance required to be maintained, and evidence that Agent shall have been named as an additional insured and loss payee, as applicable, on all insurance policies covering loss or damage to Collateral and on all liability insurance policies as to which Agent has reasonably requested to be so named or, in the case of the Term Priority Collateral, the Term Agent, as applicable, as additional insured party or loss payee;
(t) USAPatriot Act; Proceeds of Crime Act; Beneficial Ownership Certification. Agent shall have received from Borrower and each of the other Credit Parties, at least three (3) Business Days prior to the Closing Date, (A) all documentation and other information reasonably requested by Agent or any Lender no less than ten (10) calendar days prior to the Closing Date that such Agent or Lender reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act and the Proceeds of Crime Act and (B) a Beneficial Ownership Certification in relation to Credit Parties and each Subsidiary that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation;
(u) Filings. Each Uniform Commercial Code financing statement, PPSA financings statement and each intellectual property security agreement required by the Security Documents to be filed with the U.S. Patent and Trademark Office, the U.S. Copyright Office or the Canadian Intellectual Property Office, as applicable, in order to create in favor of Agent, for the benefit of Lenders, a first priority perfected Lien (or, with respect to the Term Priority Collateral, a fully perfected Lien with the priority set forth in the ABL Intercreditor Agreement) on the Collateral described therein shall have been delivered to Agent in proper form for filing;
(v) Capital Structure. Agent shall have received and be satisfied with the business plan and shall be satisfied with the capital structure of Credit Parties;
(w) Minimum Availability. Evidence that, as of the Closing Date after consummation of the Transactions and payment of all current liabilities, Credit Parties have Excess Availability plus unrestricted cash and Cash Equivalents (exclusive of any cash or Cash Equivalents in Cash Collateral Accounts) of at least $25,000,000; and
(x) DueDiligence Review. Agent shall have completed to its satisfaction its due diligence review of each Credit Party and its management, controlling owners, systems and operations.
Each Lender, by delivering its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Financing Document, each additional Operative Document and each other document, agreement and/or instrument required to be approved by Agent, Required Lenders or Lenders, as applicable, on the Closing Date.
Section7.2 Conditions to Each Loan. The obligation of the Lenders to make a Loan or an advance in respect of any Loan, is subject to the satisfaction of the following additional conditions:
(a) BorrowingNotice. In the case of a Revolving Loan Borrowing, receipt by Agent of a Notice of Borrowing (or telephonic notice if permitted by this Agreement) and an updated “roll-forward” Borrowing Base Certificate as required pursuant to Exhibit D;
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(b) RevolvingLoan Limit. Immediately after such borrowing and after application of the proceeds thereof or after such issuance, the Revolving Loan Outstandings will not exceed the Revolving Loan Limit;
(c) NoDefault. Immediately before and after such advance or issuance, no Default or Event of Default shall have occurred and be continuing; and
(d) Representations and Warranties. Each of the representations and warranties of each Credit Party contained in this Agreement or pursuant to the Financing Documents shall be true and correct in all material respects on and as of the date of such borrowing or issuance, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date; provided, however, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof.
Each giving of a Notice of Borrowing hereunder and each acceptance by any Borrower of the proceeds of any Loan made hereunder shall be deemed to be (y) a representation and warranty by each Credit Party on the date of such notice or acceptance as to the facts specified in this Section, and (z) a restatement by each Credit Party that each and every one of the representations made by it in any of the Financing Documents is true and correct as of such date (except to the extent that such representations and warranties expressly relate solely to an earlier date).
Section7.3 Searches. Before the Closing Date, and thereafter (as and when determined by Agent in its discretion), Agent shall have the right to perform, all at Credit Parties’ expense, the searches described in clauses (a), (b), and (c) below against Borrowers and any other Credit Party, the results of which are to be consistent with Credit Parties’ representations and warranties under this Agreement and the satisfactory results of which shall be a condition precedent to all advances of Loan proceeds: (a) UCC searches with the Secretary of State of the jurisdiction in which the applicable Person is organized, PPSA and Bank Act searches in the jurisdiction in which each Canadian Credit Party is organized and in the jurisdiction where each Person maintains tangible Collateral; (b) judgment, pending litigation, federal tax lien, personal property tax lien, and corporate and partnership tax lien searches, in each jurisdiction searched under clause (a) above; and (c) searches of applicable corporate, limited liability company, partnership and related records to confirm the continued existence, organization and good standing of the applicable Person and the exact legal name under which such Person is organized.
Section7.4 Post Closing Requirements. Credit Parties shall complete each of the post closing obligations and/or provide to Agent each of the documents, instruments, agreements and information listed on Schedule 7.4 attached hereto on or before the date set forth for each such item thereon, each of which shall be completed or provided in form and substance satisfactory to Agent.
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ARTICLE 8 -[RESERVED]
ARTICLE 9 -SECURITY AGREEMENT
Section9.1 Generally. As security for the payment and performance of the Obligations, and without limiting any other grant of a Lien and security interest in any Security Document, Borrowers and each other Credit Party, in their capacity as a Guarantor, hereby assign and grant to Agent, for the benefit of itself and Lenders, a continuing first priority Lien on and security interest in (or, with respect to the Term Priority Collateral, a continuing Lien on and security interest in (with the priority set forth in the ABL Intercreditor Agreement)), upon, and to the personal property set forth on Schedule 9.1 attached hereto and made a part hereof.
Section 9.2 Representationsand Warranties and Covenants Relating to Collateral.
(a) The security interest granted pursuant to this Agreement constitutes a valid and, to the extent such security interest is required to be perfected by this Agreement and any other Financing Document, continuing perfected security interest in favor of Agent in all Collateral subject, for the following Collateral, to the occurrence of the following:(i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC or the PPSA, as applicable, the completion of the filings and other actions specified on Schedule 9.2(b) (which, in the case of all filings and other documents referred to on such schedule, have been delivered to Agent in completed and duly authorized form), (ii) with respect to any Deposit Account domiciled in the United States, the execution of Control Agreements (except with respect to any Excluded Accounts), (iii) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a contractual obligation granting control to Agent or to the Term Agent over such letter-of-credit rights, (iv) in the case of electronic chattel paper, the completion of all steps necessary to grant control to Agent or the Term Agent over such electronic chattel paper, (v) in the case of all certificated stock, debt instruments and investment property, the delivery thereof to Agent or the Term Agent of such certificated stock, debt instruments and investment property consisting of instruments and certificates, in each case properly endorsed for transfer to Agent or in blank, (vi) in the case of all investment property not in certificated form, the execution of control agreements with respect to such investment property and (vii) in the case of all other instruments and tangible chattel paper that are not certificated stock, debt instructions or investment property, the delivery thereof to Agent or the Term Agent of such instruments and tangible chattel paper. Such security interest shall be prior to all other Liens on the Collateral except for Permitted Liens and subject to the ABL Intercreditor Agreement. Except to the extent not required pursuant to the terms of this Agreement, all actions by each Credit Party necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
(b) Schedule 9.2(b) sets forth (i) each chief executive office and principal place of business of each Credit Party and each of their respective Subsidiaries, and (ii) all of the addresses (including all warehouses) at which any of the Collateral is located and/or books and records of Credit Parties regarding any of the Collateral are kept, which such Schedule 9.2(b) indicates in each case which Credit Parties have Collateral and/or books and records located at such address, and, in the case of any such address not owned by one or more of the Credit Parties, indicates the nature of such location (e.g., leased business location operated by Credit Parties, third party warehouse, consignment location, processor location, etc.) and the name and address of the third party owning and/or operating such location.
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(c) Without limiting the generality of Section 3.2, except as set forth in the ABL Intercreditor Agreement or as indicated on Schedule 3.19 with respect to any rights of any Credit Party as a licensee under any license of Intellectual Property owned by another Person, and except for the filing of financing statements under the UCC or the PPSA, as applicable, no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or consent of any other Person is required for (i) the grant by each Credit Party to Agent of the security interests and Liens in the Collateral provided for under this Agreement and the other Security Documents (if any), or (ii) the exercise by Agent of its rights and remedies with respect to the Collateral provided for under this Agreement and the other Security Documents or under any applicable Law, including the UCC and the PPSA and neither any such grant of Liens in favor of Agent or exercise of rights by Agent shall violate or cause a default under any agreement between any Credit Party and any other Person relating to any such collateral, including any license to which a Credit Party is a party, whether as licensor or licensee, with respect to any Intellectual Property, whether owned by such Credit Party or any other Person.
(d) As of the Closing Date, except as set forth on Schedule 9.2(d), no Credit Party has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC or the PPSA, as applicable), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Credit Party disclosed on Schedule 3.4) and Credit Parties shall give notice to Agent promptly (but in any event not later than fifteen (15) Business Days thereafter (or such longer period as agreed to by the Agent in writing in its reasonable discretion)) upon the acquisition by any Credit Party of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than Agent or the Term Agent or (if applicable) any Lender has “control” (as defined in Article 9 of the UCC or the STA) over any Deposit Account, investment property (including Securities Accounts, commodities accounts and futures accounts), letter of credit rights or electronic chattel paper in which any Credit Party has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, Securities Account, commodities account or futures account of Credit Parties is maintained).
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(e) Credit Parties shall not, and shall not permit any Credit Party to, take any of the following actions or make any of the following changes unless such Credit Parties have given at least fifteen (15) days prior written notice to Agent of Credit Parties’ intention to take any such action (which such written notice shall include an updated version of any Schedule impacted by such change) and have executed any and all documents, instruments and agreements and taken any other actions which Agent may request after receiving such written notice in order to protect and preserve the Liens, rights and remedies of Agent with respect to the Collateral: (i) change the legal name or organizational identification number of any Credit Party as it appears in official filings in the jurisdiction of its organization, (ii) change the jurisdiction of incorporation or formation of any Borrower or Credit Party or allow any Borrower or Credit Party to designate any jurisdiction as an additional jurisdiction of incorporation for such Borrower or Credit Party, or change the type of entity that it is, or (iii) change its chief executive office, principal place of business, or the location of its records concerning the Collateral or move any Collateral to or place any Collateral on any location that is not then listed on the Schedules and/or establish any business location at any location that is not then listed on the Schedules.
(f) Credit Parties shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the Ordinary Course of Business, made while no Default exists and in amounts which are not material, taking into consideration all Accounts, with respect to the Account and which, after giving effect thereto, do not cause the Borrowing Base to be less than the Revolving Loan Outstandings) without the prior written consent of Agent. Without limiting the generality of this Agreement or any other provisions of any of the Financing Documents relating to the rights of Agent after the occurrence and during the continuance of an Event of Default, Agent shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Credit Parties with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Credit Parties and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(g) Without limiting the generality of Sections 9.2(c) and 9.2(e) and in each case subject to the ABL Intercreditor Agreement:
(i) Credit Parties shall deliver to Agent or the Term Agent all tangible Chattel Paper and all Instruments and documents owned by any Credit Party and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Agent. Credit Parties shall provide Agent or the Term Agent with “control” (as defined in Article 9 of the UCC or the PPSA, as applicable) of all electronic Chattel Paper owned by any Credit Party and constituting part of the Collateral by having Agent identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC or the PPSA, as applicable. Credit Parties also shall deliver to Agent or the Term Agent all security agreements securing any such Chattel Paper and securing any such Instruments. Credit Parties will mark conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to Agent or the Term Agent, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Agent created pursuant to this Agreement and the Security Documents. Credit Parties shall comply with all the provisions of Section 5.14 with respect to the Deposit Accounts and Securities Accounts of Credit Parties.
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(ii) Credit Parties shall deliver to Agent all letters of credit on which any Credit Party is the beneficiary and which give rise to letter of credit rights owned by such Credit Party which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Agent. Credit Parties shall take any and all actions as may be necessary or desirable, or that Agent may request, from time to time, to cause Agent or the Term Agent to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to Agent.
(iii) Credit Parties shall promptly advise Agent upon any Credit Party becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Credit Parties shall, with respect to any such commercial tort claim, execute and deliver to Agent or the Term Agent such documents as Agent shall request to perfect, preserve or protect the Liens, rights and remedies of Agent with respect to any such commercial tort claim.
(iv) [reserved].
(v) [reserved].
(vi) Each Credit Party hereby authorizes Agent to file without the signature of such Credit Party one or more UCC financing statements or PPSA financing statements, or both, relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Agent as the “secured party” and such Credit Party as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Financing Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Credit Party now owned or hereafter acquired), in such jurisdictions as Agent from time to time determines are appropriate, and to file without the signature of such Credit Party any continuations of or corrective amendments to any such financing statements, in any such case in order for Agent to perfect, preserve or protect the Liens, rights and remedies of Agent with respect to the Collateral. Each Credit Party also ratifies its authorization for Agent to have filed in any jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.
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(vii) After the Closing Date, Credit Parties shall promptly notify Agent in writing upon creation or acquisition by any Credit Party of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, (A) the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law and (B) the federal government of Canada or any province or territory thereof, or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the Financial Administration Act (Canada) and any other comparable Law. Upon the request of Agent (including with respect to Collateral owned as of the Closing Date which constitutes a claim against any Governmental Authority of the type described above), Credit Parties shall take such steps as may be necessary or desirable, or that Agent may request, to comply with any such applicable Law.
(viii) Credit Parties shall furnish to Agent from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Agent may reasonably request from time to time.
Section 9.3 ULC Limitation. Notwithstanding any provisions to the contrary contained in this Agreement or any other Financing Document, with respect to each applicable Credit Party which is a registered and beneficial owner of Pledged ULC Shares, such Credit Party owns and will remain so until such time as such Pledged ULC Shares are fully and effectively transferred into the name of Agent or any other person on the books and records of such ULC. Nothing in this Agreement or any other Financing Document is intended to or shall constitute Agent or any person other than a Credit Party to be a member or shareholder of any ULC until such time as written notice is given to the applicable Credit Party and all further steps are taken so as to register Agent or other person as holder of the Pledged ULC Shares. The granting of the pledge and security interest pursuant to Section 9.1 or in any other Financing Document does not make Agent a successor to any Credit Party as a member or shareholder of any ULC, and neither Agent nor any of its respective successors or assigns hereunder shall be deemed to become a member or shareholder of any ULC by accepting this Agreement or any other Financing Document or exercising any right granted herein unless and until such time, if any, when Agent or any successor or assign expressly becomes a registered member or shareholder of any ULC. Each applicable Credit Party shall be entitled to receive and retain for its own account any dividends or other distributions if any, in respect of the Collateral, and shall have the right to vote such Pledged ULC Shares and to control the direction, management and policies of the ULC issuing such Pledged ULC Shares to the same extent as such Credit Party would if such Pledged ULC Shares were not pledged to Agent or to any other person pursuant hereto. To the extent any provision herein or in any other Financing Document would have the effect of constituting Agent to be a member or shareholder of any ULC prior to such time, such provision shall be severed herefrom and therefrom and ineffective with respect to the relevant Pledged ULC Shares without otherwise invalidating or rendering unenforceable this Agreement or any other Financing Document or invalidating or rendering unenforceable such provision insofar as it relates to Collateral other than Pledged ULC Shares. Notwithstanding anything herein or in any other Financing Document to the contrary (except to the extent, if any, that Agent or any of its successors or assigns hereafter expressly becomes a registered member or shareholder of any ULC), neither Agent nor any of its respective successors or assigns shall be deemed to have assumed or otherwise become liable for any debts or obligations of any ULC. Except upon the exercise by Agent or other persons of rights to sell or otherwise dispose of Pledged ULC Shares or other remedies following the occurrence and during the continuance of an Event of Default, each applicable Credit Party shall not cause or permit, or enable any ULC in which it holds Pledged ULC Shares to cause or permit, Agent to: (a) be registered as member or shareholder of such ULC; (b) have any notation entered in its favor in the share register of such ULC; (c) be held out as member or shareholder of such ULC; (d) receive, directly or indirectly, any dividends, property or other distributions from such ULC by reason of Agent or other person holding a security interest in the Pledged ULC Shares; or (e) act as a member or shareholder of such ULC, or exercise any rights of a member or shareholder of such ULC, including the right to attend a meeting of such ULC or vote the shares of such ULC.
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ARTICLE 10 -EVENTS OF DEFAULT
Section10.1****Events of Default. For purposes of the Financing Documents, the occurrence of any of the following conditions and/or events, whether voluntary or involuntary, by operation of law or otherwise, shall constitute an “Event of Default”:
(a) (i) any Credit Party shall fail to pay when due any principal, interest, premium or fee under any Financing Document or any other amount payable under any Financing Document (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such default (other than with respect to failure to pay principal when due) shall continue uncured for three (3) Business Days, (ii) there shall occur any default in the performance of or compliance with Section 2.11, Section 4.2(b), Section 4.3, Section 4.4(c) or (d), Section 4.6, Article 5, Section 6.1 or Section 6.3, (iii) there shall occur any default in the performance of or compliance with Section 4.1 and such default shall continue uncured for five (5) Business Days after the earlier of notice from Agent or Required Lenders or knowledge by any Credit Party of such default, or (iv) there shall occur any default in the performance of or compliance with Section 6.2 and such default shall continue uncured for fifteen (15) calendar days after the earlier of notice from Agent or Required Lenders or knowledge by any Credit Party of such default;
(b) any Credit Party defaults in the performance of or compliance with any term contained in this Agreement or in any other Financing Document (other than occurrences described in other provisions of this Section 10.1 for which a different grace or cure period is specified or for which no grace or cure period is specified and thereby constitute immediate Events of Default) and such default is not remedied by the Credit Party or waived by Agent within fifteen (15) days after the earlier of (i) receipt by Borrower Representative of notice from Agent or Required Lenders of such default, or (ii) actual knowledge of any Borrower or any other Credit Party of such default;
(c) any representation, warranty, certification or statement made by any Credit Party or any other Person in any Financing Document or in any certificate, financial statement or other document delivered pursuant to any Financing Document is incorrect in any respect (or in any material respect if such representation, warranty, certification or statement is not by its terms already qualified as to materiality) when made (or deemed made);
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(d) (i) failure of the Borrowers or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount on the Exit Notes, the Term Loan Agreement, the B. Riley Credit Agreement, the Debt in respect of the Unsecured Cash Pool, or any other Debt (excluding Debt evidenced by this Agreement) having an aggregate principal amount in excess of $25,000,000, and such failure shall continue after the applicable grace period, if any, specified in the applicable agreement or instrument relating to such Debt, or any other default, condition, or event under any agreement or instrument relating to any such Debt, or any other event shall occur and shall continue after the applicable grace period, if any, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared due and payable, or required to be prepaid, redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made (other than by a regularly scheduled required prepayment), in each case, prior to the state maturity thereof;
(e) any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Debtor Relief Law now or hereafter in effect or seeking the appointment of a trustee, monitor, receiver, interim receiver, receiver and manager, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;
(f) an involuntary case or other proceeding shall be commenced against any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Debtor Relief Law now or hereafter in effect or seeking the appointment of a trustee, monitor, receiver, interim receiver, receiver and manager, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty (30) days; or an order for relief shall be entered against any Credit Party or any other Significant Subsidiary under applicable federal bankruptcy, insolvency or other similar law in respect of (i) bankruptcy, liquidation, winding-up, dissolution or suspension of general operations, (ii) composition, rescheduling, reorganization, arrangement or readjustment of, or other relief from, or stay of proceedings to enforce, some or all of the debts or obligations, or (iii) possession, foreclosure, seizure or retention, sale or other disposition of, or other proceedings to enforce security over, all or any substantial part of the assets of such Borrower or such Significant Subsidiary;
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(g) (i) institution of any steps by any Person to terminate a Pension Plan or Canadian Pension Plan if as a result of such termination any Credit Party or any member of the Controlled Group could be required to make a contribution to such Pension Plan or Canadian Pension Plan, or could incur a liability or obligation to such Pension Plan or Canadian Pension Plan, in excess of $25,000,000, (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA, (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of such withdrawal (including any outstanding withdrawal liability that any Credit Party or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds $25,000,000, or (iv) a Canadian Pension Event shall occur which individually or in the aggregate results in or would reasonably be expected to result in liability in excess of the Threshold Amount;
(h) one or more judgments or orders for the payment of money (not paid or fully covered by insurance maintained in accordance with the requirements of this Agreement and as to which the relevant insurance company has acknowledged coverage) aggregating in excess of $25,000,000 shall be rendered against any of the Parent, the Borrowers or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgments or orders, or (ii) there shall be any period of ten (10) consecutive days during which a stay of enforcement of any such judgments or orders, by reason of a pending appeal, bond or otherwise, shall not be in effect;
(i) any Lien created by any of the Security Documents shall at any time fail to constitute a valid and perfected Lien on all of the Collateral purported to be encumbered thereby, subject to no prior or equal Lien except Permitted Liens, or any Credit Party shall so assert;
(j) [reserved];
(k) a default or event of default occurs under any Guarantee of any portion of the Obligations;
(l) any Credit Party makes any payment on account of any Debt that has been subordinated to any of the Obligations, other than payments specifically permitted by the terms of such subordination;
(m) if any Credit Party is or becomes an entity whose equity is registered with the SEC, and/or is publicly traded on and/or registered with a public securities exchange, such Credit Party’s equity fails to remain registered with the SEC in good standing, and/or such equity fails to remain publicly traded on and registered with a public securities exchange;
(n) an event or development occurs which could reasonably be expected to have a Material Adverse Effect, which default shall have continued unremedied for a period of ten (10) days after written notice from Agent;
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(o) any Borrower or any Significant Subsidiary is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than fifteen (15) days;
(p) the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by any Borrower or any Significant Subsidiary, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
(q) any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of any Borrower, or any Significant Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect;
(r) the indictment, or the threatened indictment of the Parent, any Borrower, or any Significant Subsidiary under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against the Parent, any Borrower or any Significant Subsidiary, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of such Person;
(s) Any Credit Party fails to make timely and full payments of any and all Taxes required by, under or in connection with the Plan of Reorganization except (i) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization or otherwise satisfied in accordance with the Plan of Reorganization (provided*,* that, for the avoidance of doubt, the Credit Parties shall pay Taxes to the extent required under and in accordance with the Plan of Reorganization) and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP; or
(t) the ABL Intercreditor Agreement ceases to be in full force and effect (other than because all other Debt subject thereto is no longer outstanding).
All cure periods provided for in this Section 10.1 shall run concurrently with any cure period provided for in any applicable Financing Documents under which the default occurred.
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Section 10.2 Acceleration and Suspension or Termination of Revolving Loan Commitment. Upon the occurrence and during the continuance of an Event of Default, Agent may, and shall if requested by Required Lenders, (a) by notice to Borrower Representative suspend or terminate the Revolving Loan Commitment and the obligations of Agent and the Lenders with respect thereto, in whole or in part (and, if in part, each Lender’s Revolving Loan Commitment shall be reduced in accordance with its Pro Rata Share), and/or (b) by notice to Borrower Representative declare all or any portion of the Obligations to be, and the Obligations shall thereupon become, immediately due and payable, with accrued interest thereon, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party and Credit Parties will pay the same; provided, however, that in the case of any of the Events of Default specified in Section 10.1(e) or 10.1(f) above, without any notice to any Credit Party or any other act by Agent or the Lenders, the Revolving Loan Commitment and the obligations of Agent and the Lenders with respect thereto shall thereupon immediately and automatically terminate and all of the Obligations shall become immediately and automatically due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party and Credit Parties will pay the same.
Section 10.3 UCCand PPSA Remedies.
(a) Upon the occurrence of and during the continuance of an Event of Default under this Agreement or the other Financing Documents, Agent, in addition to all other rights, options, and remedies granted to Agent under this Agreement or at law or in equity, may exercise, either directly or through one or more assignees or designees, all rights and remedies granted to it under all Financing Documents and under the UCC and PPSA in effect in the applicable jurisdiction(s) and under any other applicable law; including, without limitation:
(i) the right to take possession of, send notices regarding, and collect directly the Collateral, with or without judicial process;
(ii) the right to (by its own means or with judicial assistance) enter any of Credit Parties’ premises and take possession of the Collateral, or render it unusable, or to render it usable or saleable, or dispose of the Collateral on such premises in compliance with subsection (iii) below and to take possession of any Credit Party’s original books and records, to obtain access to such Credit Party’s data processing equipment, computer hardware and software relating to the Collateral and to use all of the foregoing and the information contained therein in any manner Agent deems appropriate, without any liability for rent, storage, utilities, or other sums, and Credit Parties shall not resist or interfere with such action (if Credit Parties’ books and records are prepared or maintained by an accounting service, contractor or other third party agent, Credit Parties hereby irrevocably authorize such service, contractor or other agent, upon notice by Agent to such Person that an Event of Default has occurred and is continuing, to deliver to Agent or its designees such books and records, and to follow Agent’s instructions with respect to further services to be rendered);
(iii) the right to require any Credit Party at the Credit Parties’ expense to assemble all or any part of the Collateral and make it available to Agent at any place designated by Lender;
(iv) the right to notify postal authorities to change the address for delivery of any Credit Party’s mail to an address designated by Agent and to receive, open and dispose of all mail addressed to any Credit Party; and/or
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(v) the right to enforce any Credit Party’s rights against Account Debtors and other obligors, including, without limitation, (i) the right to collect Accounts directly in Agent’s own name (as agent for Lenders) and to charge the collection costs and expenses, including attorneys’ fees, to a Credit Party, and (ii) the right, in the name of Agent or any designee of Agent or Credit Parties, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone, telegraph or otherwise, including, without limitation, verification of Credit Parties’ compliance with applicable Laws. Credit Parties shall cooperate fully with Agent in an effort to facilitate and promptly conclude such verification process. Such verification may include contacts between Agent and applicable federal, state and local regulatory authorities having jurisdiction over the Credit Parties’ affairs, all of which contacts Credit Parties hereby irrevocably authorize.
(b) Each Credit Party agrees that a notice received by it at least ten (10) days before the time of any intended public sale, or the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. If permitted by applicable law, any perishable Collateral which threatens to speedily decline in value or which is sold on a recognized market may be sold immediately by Agent without prior notice to Credit Parties. At any sale or disposition of Collateral, Agent may (to the extent permitted by applicable law) purchase all or any part of the Collateral, free from any right of redemption by Credit Parties, which right is hereby waived and released. Each Credit Party covenants and agrees not to interfere with or impose any obstacle to Agent’s exercise of its rights and remedies with respect to the Collateral. Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. Agent may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Agent may sell the Collateral without giving any warranties as to the Collateral. Agent may specifically disclaim any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. If Agent sells any of the Collateral upon credit, Credit Parties will be credited only with payments actually made by the purchaser, received by Agent and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Agent may resell the Collateral and Credit Parties shall be credited with the proceeds of the sale. Credit Parties shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Obligations.
(c) Without restricting the generality of the foregoing and for the purposes aforesaid, each Credit Party hereby appoints and constitutes Agent its lawful attorney-in-fact with full power of substitution in the Collateral, upon the occurrence and during the continuance of an Event of Default, to (i) use unadvanced funds remaining under this Agreement or which may be reserved, escrowed or set aside for any purposes hereunder at any time, or to advance funds in excess of the face amount of the Notes, (ii) pay, settle or compromise all existing bills and claims, which may be Liens or security interests, or to avoid such bills and claims becoming Liens against the Collateral, (iii) execute all applications and certificates in the name of such Credit Party and to prosecute and defend all actions or proceedings in connection with the Collateral, and (iv) do any and every act which such Credit Party might do in its own behalf; it being understood and agreed that this power of attorney in this subsection (c) shall be a power coupled with an interest and cannot be revoked.
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(d) Agent and each Lender is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Credit Parties’ labels, mask works, rights of use of any name, any other Intellectual Property and advertising matter, and any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Agent’s exercise of its rights under this Article, Credit Parties’ rights under all licenses (whether as licensor or licensee) and all franchise agreements inure to Agent’s and each Lender’s benefit.
Section 10.4 [Reserved].
Section10.5 Default Rate of Interest. At the election of Agent or Required Lenders, after the occurrence of an Event of Default and for so long as it continues, the Loans and other Obligations shall bear interest at rates that are two percent (2.0%) per annum in excess of the rates otherwise payable under this Agreement; provided, however, that in the case of any Event of Default specified in Section 10.1(e) or 10.1(f) above, such default rates shall apply immediately and automatically without the need for any election or action of any kind on the part of Agent or any Lender.
Section 10.6 Setoff Rights. During the continuance of any Event of Default, each Lender is hereby authorized by each Credit Party at any time or from time to time, with reasonably prompt subsequent notice to such Credit Party (any prior or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply any and all (a) balances held by such Lender or any of such Lender’s Affiliates at any of its offices for the account of such Credit Party or any of its Subsidiaries (regardless of whether such balances are then due to such Credit Party or its Subsidiaries), and (b) other property at any time held or owing by such Lender to or for the credit or for the account of such Credit Party or any of its Subsidiaries, against and on account of any of the Obligations; except that no Lender shall exercise any such right without the prior written consent of Agent. Any Lender exercising a right to set off shall purchase for cash (and the other Lenders shall sell) interests in each of such other Lender’s Pro Rata Share of the Obligations as would be necessary to cause all Lenders to share the amount so set off with each other Lender in accordance with their respective Pro Rata Share of the Obligations. Each Credit Party agrees, to the fullest extent permitted by law, that any Lender and any of such Lender’s Affiliates may exercise its right to set off with respect to the Obligations as provided in this Section 10.6.
Section 10.7 Application of Proceeds.
(a) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, each Credit Party irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of such Credit Party or any Guarantor of all or any part of the Obligations, and, as between Credit Parties on the one hand and Agent and Lenders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable notwithstanding any previous application by Agent.
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(b) Following the occurrence and continuance of an Event of Default, but absent the occurrence and continuance of an Acceleration Event, Agent shall apply any and all payments received by Agent in respect of the Obligations, and any and all proceeds of Collateral received by Agent, in such order as Agent may from time to time elect.
(c) Notwithstanding anything to the contrary contained in this Agreement, if an Acceleration Event shall have occurred, and so long as it continues, Agent shall apply any and all payments received by Agent in respect of the Obligations, and any and all proceeds of Collateral received by Agent, in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Financing Documents or the Collateral; second, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents or the Collateral; third, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of any applicable Debtor Relief Law, would have accrued on such amounts); fourth, to the principal amount of the Obligations outstanding; fifth to any other indebtedness or obligations of Credit Parties owing to Agent or any Lender under the Financing Documents; and sixth, to the Obligations owing to any Eligible Swap Counterparty in respect of any Swap Contracts. Any balance remaining shall be delivered to Borrowers or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out the foregoing, (y) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (z) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its Pro Rata Share of amounts available to be applied pursuant thereto for such category.
Section 10.8 Waivers.
(a) Except as otherwise provided for in this Agreement and to the fullest extent permitted by applicable law, each Credit Party waives: (i) presentment, demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all Financing Documents, the Notes or any other notes, commercial paper, accounts, contracts, documents, Instruments, Chattel Paper and guarantees at any time held by Lenders on which any Credit Party may in any way be liable, and hereby ratifies and confirms whatever Lenders may do in this regard; (ii) all rights to notice and a hearing prior to Agent’s or any Lender’s taking possession or control of, or to Agent’s or any Lender’s replevy, attachment or levy upon, any Collateral or any bond or security which might be required by any court prior to allowing Agent or any Lender to exercise any of its remedies; and (iii) the benefit of all valuation, appraisal and exemption Laws. Each Credit Party acknowledges that it has been advised by counsel of its choices and decisions with respect to this Agreement, the other Financing Documents and the transactions evidenced hereby and thereby.
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(b) Each Credit Party for itself and all its successors and assigns, (i) agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Lender; (ii) consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Agent or any Lender with respect to the payment or other provisions of the Financing Documents, and to any substitution, exchange or release of the Collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any Credit Party, endorsers, guarantors, or sureties, or whether primarily or secondarily liable, without notice to any other Credit Party and without affecting its liability hereunder; (iii) agrees that its liability shall be unconditional and without regard to the liability of any other Credit Party, Agent or any Lender for any tax on the indebtedness; and (iv) to the fullest extent permitted by law, expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.
(c) To the extent that Agent or any Lender may have acquiesced in any noncompliance with any requirements or conditions precedent to the closing of the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute a waiver by Agent or any Lender of such requirements with respect to any future disbursements of Loan proceeds and Agent may at any time after such acquiescence require Credit Parties to comply with all such requirements. Any forbearance by Agent or Lender in exercising any right or remedy under any of the Financing Documents, or otherwise afforded by applicable law, including any failure to accelerate the maturity date of the Loans, shall not be a waiver of or preclude the exercise of any right or remedy nor shall it serve as a novation of the Notes or as a reinstatement of the Loans or a waiver of such right of acceleration or the right to insist upon strict compliance of the terms of the Financing Documents. Agent’s or any Lender’s acceptance of payment of any sum secured by any of the Financing Documents after the due date of such payment shall not be a waiver of Agent’s and such Lender’s right to either require prompt payment when due of all other sums so secured or to declare a default for failure to make prompt payment. The procurement of insurance or the payment of taxes or other Liens or charges by Agent as the result of an Event of Default shall not be a waiver of Agent’s right to accelerate the maturity of the Loans, nor shall Agent’s receipt of any condemnation awards, insurance proceeds, or damages under this Agreement operate to cure or waive any Credit Party’s default in payment of sums secured by any of the Financing Documents.
(d) Without limiting the generality of anything contained in this Agreement or the other Financing Documents, each Credit Party agrees that if an Event of Default is continuing (i) Agent and Lenders shall not be subject to any “one action” or “election of remedies” law or rule, and (ii) all Liens and other rights, remedies or privileges provided to Agent or Lenders shall remain in full force and effect until Agent or Lenders have exhausted all remedies against the Collateral and any other properties owned by Credit Parties and the Financing Documents and other security instruments or agreements securing the Loans have been foreclosed, sold and/or otherwise realized upon in satisfaction of Credit Parties’ obligations under the Financing Documents.
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(e) Nothing contained herein or in any other Financing Document shall be construed as requiring Agent or any Lender to resort to any part of the Collateral for the satisfaction of any of Credit Parties’ obligations under the Financing Documents in preference or priority to any other Collateral, and Agent may seek satisfaction out of all of the Collateral or any part thereof, in its absolute discretion in respect of Credit Parties’ obligations under the Financing Documents. In addition, Agent shall have the right from time to time to partially foreclose upon any Collateral in any manner and for any amounts secured by the Financing Documents then due and payable as determined by Agent in its sole discretion, including, without limitation, the following circumstances: (i) in the event any Credit Party defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and/or interest, Agent may foreclose upon all or any part of the Collateral to recover such delinquent payments, or (ii) in the event Agent elects to accelerate less than the entire outstanding principal balance of the Loans, Agent may foreclose all or any part of the Collateral to recover so much of the principal balance of the Loans as Lender may accelerate and such other sums secured by one or more of the Financing Documents as Agent may elect. Notwithstanding one or more partial foreclosures, any unforeclosed Collateral shall remain subject to the Financing Documents to secure payment of sums secured by the Financing Documents and not previously recovered.
(f) To the fullest extent permitted by law, each Credit Party, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Collateral any equitable right otherwise available to any Credit Party which would require the separate sale of any of the Collateral or require Agent or Lenders to exhaust their remedies against any part of the Collateral before proceeding against any other part of the Collateral; and further in the event of such foreclosure each Credit Party does hereby expressly consent to and authorize, at the option of Agent, the foreclosure and sale either separately or together of each part of the Collateral.
Section10.9 Injunctive Relief. The parties acknowledge and agree that, in the event of a breach or threatened breach of any Credit Party’s obligations under any Financing Documents, Agent and Lenders may have no adequate remedy in money damages and, accordingly, shall be entitled to an injunction (including, without limitation, a temporary restraining order, preliminary injunction, writ of attachment, or order compelling an audit) against such breach or threatened breach, including, without limitation, maintaining any cash management and collection procedure described herein. However, no specification in this Agreement of a specific legal or equitable remedy shall be construed as a waiver or prohibition against any other legal or equitable remedies in the event of a breach or threatened breach of any provision of this Agreement. Each Credit Party waives, to the fullest extent permitted by law, the requirement of the posting of any bond in connection with such injunctive relief. By joining in the Financing Documents as a Credit Party, each Credit Party specifically joins in this Section as if this Section were a part of each Financing Document executed by such Credit Party.
Section10.10 Marshalling; Payments Set Aside. Neither Agent nor any Lender shall be under any obligation to marshal any assets in payment of any or all of the Obligations. To the extent that a Credit Party makes any payment or Agent enforces its Liens or Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such enforcement or set-off is subsequently invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by anyone, then to the extent of such recovery, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred.
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ARTICLE 11 -AGENT
Section11.1 Appointment and Authorization. Each Lender hereby irrevocably appoints and authorizes Agent to enter into each of the Financing Documents to which it is a party (other than this Agreement) on its behalf and to take such actions as Agent on its behalf and to exercise such powers under the Financing Documents as are delegated to Agent by the terms thereof, together with all such powers as are reasonably incidental thereto, including the authority to enter into any intercreditor agreement. Subject to the terms of Section 11.16 and Article 12 and to the terms of the other Financing Documents, Agent is authorized and empowered to enter into (or acknowledge and consent to) or amend, restate, amend and restate, extend, replace, supplement, modify, or waive any provisions of this Agreement or the other Financing Documents on behalf of Lenders and any intercreditor agreement with the collateral agent or other representatives of the holders of Debt that is permitted to be secured by a Lien on the Collateral that is not prohibited (including with respect to priority) under this Agreement and, to the extent applicable, the ABL Intercreditor Agreement, and to subject the Liens on the Collateral securing the Obligations to the provisions thereof. The provisions of this Article 11 and Article 12 are solely for the benefit of Agent and Lenders and neither any Borrower nor any other Credit Party shall have any rights as a third-party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, Agent shall act solely as agent of Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any Borrower or any other Credit Party. Agent may perform any of its duties hereunder, or under the Financing Documents, by or through its agents, servicers, trustees, investment managers or employees. The Lenders irrevocably agree that (x) Agents may rely exclusively on a certificate of a Responsible Officer of the Credit Parties as to whether any such other Liens are permitted and (y) the ABL Intercreditor Agreement and any junior intercreditor agreement entered into by Agent shall be binding on the Lenders, and each Lender hereby agrees that it will take no actions contrary to the provisions of any intercreditor agreement.
Section11.2 Agent and Affiliates. Agent shall have the same rights and powers under the Financing Documents as any other Lender and may exercise or refrain from exercising the same as though it were not Agent, and Agent and its Affiliates may lend money to, invest in and generally engage in any kind of business with each Credit Party or Affiliate of any Credit Party as if it were not Agent hereunder.
Section 11.3 Actionby Agent. The duties of Agent shall be mechanical and administrative in nature. Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any of the Financing Documents is intended to or shall be construed to impose upon Agent any obligations in respect of this Agreement or any of the Financing Documents except as expressly set forth herein or therein.
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Section11.4 Consultation with Experts. Agent may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.
Section11.5 Liability of Agent. Neither Agent nor any of its directors, officers, agents, trustees, investment managers, servicers or employees shall be liable to any Lender for any action taken or not taken by it in connection with the Financing Documents, except that Agent shall be liable with respect to its specific duties set forth hereunder but only to the extent of its own gross negligence or willful misconduct in the discharge thereof as determined by a final non-appealable judgment of a court of competent jurisdiction. Neither Agent nor any of its directors, officers, agents, trustees, investment managers, servicers or employees shall be responsible for or have any duty to ascertain, inquire into or verify (a) any statement, warranty or representation made in connection with any Financing Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements specified in any Financing Document; (c) the satisfaction of any condition specified in any Financing Document; (d) the validity, effectiveness, sufficiency or genuineness of any Financing Document, any Lien purported to be created or perfected thereby or any other instrument or writing furnished in connection therewith; (e) the existence or non-existence of any Default or Event of Default; or (f) the financial condition of any Credit Party. Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, facsimile or electronic transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them).
Section11.6 Indemnification. Each Lender shall, in accordance with its Pro Rata Share, indemnify Agent (to the extent not reimbursed by Credit Parties) upon demand against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction) that Agent may suffer or incur in connection with the Financing Documents or any action taken or omitted by Agent hereunder or thereunder. If any indemnity furnished to Agent for any purpose shall, in the opinion of Agent, be insufficient or become impaired, Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against even if so directed by Required Lenders until such additional indemnity is furnished.
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Section 11.7 Rightto Request and Act on Instructions. Agent may at any time request instructions from Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Financing Documents Agent is permitted or desires to take or to grant, and if such instructions are promptly requested, Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Financing Documents until it shall have received such instructions from Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting under this Agreement or any of the other Financing Documents in accordance with the instructions of Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and, notwithstanding the instructions of Required Lenders (or such other applicable portion of the Lenders), Agent shall have no obligation to take any action if it believes, in good faith, that such action would violate applicable Law or exposes Agent to any liability for which it has not received satisfactory indemnification in accordance with the provisions of Section 11.6.
Section11.8 Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon Agent or any other Lender, 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 also acknowledges that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Financing Documents.
Section11.9 Collateral Matters. Lenders irrevocably authorize Agent, at its option and in its discretion, to (a) release any Lien granted to or held by Agent under any Security Document
(i) upon termination of the Revolving Loan Commitment and payment in full of all Obligations, and, to the extent required by Agent in its sole discretion, the expiration, termination or cash collateralization (to the satisfaction of Agent) of all Swap Contracts secured, in whole or in part, by any Collateral; or (ii) constituting property sold or disposed of as part of or in connection with any disposition permitted under any Financing Document (it being understood and agreed that Agent may conclusively rely without further inquiry on a certificate of a Responsible Officer as to the sale or other disposition of property being made in full compliance with the provisions of the Financing Documents); and (b) subordinate any Lien granted to or held by Agent under any Security Document to a Permitted Lien that is allowed to have priority over the Liens granted to or held by Agent pursuant to the definition of “Permitted Liens”. Upon request by Agent at any time, Lenders will confirm Agent’s authority to release and/or subordinate particular types or items of Collateral pursuant to this Section 11.9.
Section11.10 Agency for Perfection. Agent and each Lender hereby appoint each other Lender as agent for the purpose of perfecting Agent’s security interest in assets which, in accordance with the Uniform Commercial Code in any applicable jurisdiction, can be perfected by possession or control. Should any Lender (other than Agent) obtain possession or control of any such assets, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor, shall deliver such assets to Agent or in accordance with Agent’s instructions or transfer control to Agent in accordance with Agent’s instructions. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Security Document or to realize upon any Collateral for the Loan unless instructed to do so by Agent (or consented to by Agent), it being understood and agreed that such rights and remedies may be exercised only by Agent.
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Section11.11 Notice of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to Agent for the account of Lenders, unless Agent shall have received written notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. Agent will notify each Lender of its receipt of any such notice. Agent shall take such action with respect to such Default or Event of Default as may be requested by Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof. Unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interests of Lenders.
Section 11.12 Assignmentby Agent; Resignation of Agent; Successor Agent.
(a) Agent may at any time assign its rights, powers, privileges and duties hereunder to (i) another Lender, or (ii) any Person to whom Agent, in its capacity as a Lender, has assigned (or will assign, in conjunction with such assignment of agency rights hereunder) 50% or more of its Loan, in each case without the consent of the Lenders or Borrowers. Following any such assignment, Agent shall give notice to the Lenders and Borrowers. An assignment by Agent pursuant to this subsection (a) shall not be deemed a resignation by Agent for purposes of subsection (b) below.
(b) Without limiting the rights of Agent to designate an assignee pursuant to subsection (a) above, Agent may at any time give notice of its resignation to the Lenders and Borrowers. Upon receipt of any such notice of resignation, Required Lenders shall have the right to appoint a successor Agent. If no such successor shall have been so appointed by Required Lenders and shall have accepted such appointment within ten (10) Business Days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders, appoint a successor Agent; provided, however, that if Agent shall notify Borrowers and the Lenders that no Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice from Agent that no Person has accepted such appointment and, from and following delivery of such notice, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Financing Documents, and (ii) all payments, communications and determinations provided to be made by, to or through Agent shall instead be made by or to each Lender directly, until such time as Required Lenders appoint a successor Agent as provided for above in this paragraph.
(c) Upon (i) an assignment permitted by subsection (a) above, or (ii) the acceptance of a successor’s appointment as Agent pursuant to subsection (b) above, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder and under the other Financing Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by Credit Parties to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Agent’s resignation hereunder and under the other Financing Documents, the provisions of this Article and Section 11.12 shall continue in effect for the benefit of such retiring Agent and its sub-agents in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting or was continuing to act as Agent.
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Section 11.13 Paymentand Sharing of Payment.
(a) Revolving Loan Advances, Payments and Settlements; Interest and Fee Payments.
(i) Agent shall have the right, on behalf of Revolving Lenders to disburse funds to Borrowers for all Revolving Loans requested or deemed requested by Borrowers pursuant to the terms of this Agreement. Agent shall be conclusively entitled to assume, for purposes of the preceding sentence, that each Revolving Lender, other than any Non- Funding Lenders, will fund its Pro Rata Share of all Revolving Loans requested by Borrowers. Each Revolving Lender shall reimburse Agent on demand, in accordance with the provisions of the immediately following paragraph, for all funds disbursed on its behalf by Agent pursuant to the first sentence of this clause (i), or if Agent so requests, each Revolving Lender will remit to Agent its Pro Rata Share of any Revolving Loan before Agent disburses the same to a Borrower. If Agent elects to require that each Revolving Lender make funds available to Agent, prior to a disbursement by Agent to a Borrower, Agent shall advise each Revolving Lender by telephone, facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of the Revolving Loan requested by such Borrower no later than noon (Eastern time) on the date of funding of such Revolving Loan, and each such Revolving Lender shall pay Agent on such date such Revolving Lender’s Pro Rata Share of such requested Revolving Loan, in same day funds, by wire transfer to the Payment Account, or such other account as may be identified by Agent to Revolving Lenders from time to time. If any Lender fails to pay the amount of its Pro Rata Share of any funds advanced by Agent pursuant to the first sentence of this clause (i) within one (1) Business Day after Agent’s demand, Agent shall promptly notify Borrower Representative, and Borrowers shall immediately repay such amount to Agent. Any repayment required by Borrowers pursuant to this Section 11.13 shall be accompanied by accrued interest thereon from and including the date such amount is made available to a Borrower to but excluding the date of payment at the rate of interest then applicable to Revolving Loans. Nothing in this Section 11.13 or elsewhere in this Agreement or the other Financing Documents shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that Agent or any Borrower may have against any Lender as a result of any default by such Lender hereunder.
(ii) On a Business Day of each week as selected from time to time by Agent, or more frequently (including daily), if Agent so elects (each such day being a “Settlement Date”), Agent will advise each Revolving Lender by telephone, facsimile or e-mail of the amount of each such Revolving Lender’s percentage interest of the Revolving Loan balance as of the close of business of the Business Day immediately preceding the Settlement Date. In the event that payments are necessary to adjust the amount of such Revolving Lender’s actual percentage interest of the Revolving Loans to such Lender’s required percentage interest of the Revolving Loan balance as of any Settlement Date, the Revolving Lender from which such payment is due shall pay Agent, without setoff or discount, to the Payment Account before 1:00 p.m. (Eastern time) on the Business Day following the Settlement Date the full amount necessary to make such adjustment. Any obligation arising pursuant to the immediately preceding sentence shall be absolute and unconditional and shall not be affected by any circumstance whatsoever. In the event settlement shall not have occurred by the date and time specified in the second preceding sentence, interest shall accrue on the unsettled amount at the rate of interest then applicable to Revolving Loans.
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(iii) On each Settlement Date, Agent shall advise each Revolving Lender by telephone, facsimile or e-mail of the amount of such Revolving Lender’s percentage interest of principal, interest and fees paid for the benefit of Revolving Lenders with respect to each applicable Revolving Loan, to the extent of such Revolving Lender’s Revolving Loan Exposure with respect thereto, and shall make payment to such Revolving Lender before 1:00 p.m. (Eastern time) on the Business Day following the Settlement Date of such amounts in accordance with wire instructions delivered by such Revolving Lender to Agent, as the same may be modified from time to time by written notice to Agent; provided, however, that, in the case such Revolving Lender is a Defaulted Lender, Agent shall be entitled to set off the funding short-fall against that Defaulted Lender’s respective share of all payments received from any Borrower.
(iv) On the Closing Date, Agent, on behalf of Lenders, may elect to advance to Borrowers the full amount of the initial Loans to be made on the Closing Date prior to receiving funds from Lenders, in reliance upon each Lender’s commitment to make its Pro Rata Share of such Loans to Borrowers in a timely manner on such date. If Agent elects to advance the initial Loans to Borrower in such manner, Agent shall be entitled to receive all interest that accrues on the Closing Date on each Lender’s Pro Rata Share of such Loans unless Agent receives such Lender’s Pro Rata Share of such Loans before 3:00 p.m. (Eastern time) on the Closing Date.
(v) It is understood that for purposes of advances to Borrowers made pursuant to this Section 11.13, Agent will be using the funds of Agent, and pending settlement, (A) all funds transferred from the Payment Account to the outstanding Revolving Loans shall be applied first to advances made by Agent to Borrowers pursuant to this Section 11.13, and (B) all interest accruing on such advances shall be payable to Agent.
(vi) The provisions of this Section 11.13(a) shall be deemed to be binding upon Agent and Lenders notwithstanding the occurrence of any Default or Event of Default, or any insolvency or bankruptcy proceeding pertaining to any Borrower or any other Credit Party.
(b) [reserved].
(c) Return of Payments.
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(i) If Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Agent from a Borrower and such related payment is not received by Agent, then Agent will be entitled to recover such amount from such Lender on demand without setoff, counterclaim or deduction of any kind, together with interest accruing on a daily basis at the Federal Funds Rate.
(ii) If Agent determines at any time that any amount received by Agent under this Agreement must be returned to any Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or any other Financing Document, Agent will not be required to distribute any portion thereof to any Lender. In addition, each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to such Lender, together with interest at such rate, if any, as Agent is required to pay to any Borrower or such other Person, without setoff, counterclaim or deduction of any kind.
(d) Defaulted Lenders. The failure of any Defaulted Lender to make any payment required by it hereunder shall not relieve any other Lender of its obligations to make payment, but neither any other Lender nor Agent shall be responsible for the failure of any Defaulted Lender to make any payment required hereunder. Notwithstanding anything set forth herein to the contrary, a Defaulted Lender shall not have any voting or consent rights under or with respect to any Financing Document or constitute a “Lender” (or be included in the calculation of “Required Lenders” hereunder) for any voting or consent rights under or with respect to any Financing Document.
(e) Sharing of Payments. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan (other than pursuant to the terms of Section 2.8(d)) in excess of its Pro Rata Share of payments entitled pursuant to the other provisions of this Section 11.13, such Lender shall purchase from the other Lenders such participations in extensions of credit made by such other Lenders (without recourse, representation or warranty) as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter required to be returned or otherwise recovered from such purchasing Lender, such portion of such purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such return or recovery, without interest. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this clause (e) may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 10.6) with respect to such participation as fully as if such Lender were the direct creditor of Borrowers in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this clause (e) applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this clause (e) to share in the benefits of any recovery on such secured claim.
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Section11.14 Right to Perform, Preserve and Protect. If any Credit Party fails to perform any obligation hereunder or under any other Financing Document, Agent itself may, but shall not be obligated to, cause such obligation to be performed at Credit Parties’ expense. Agent is further authorized by Credit Parties and the Lenders to make expenditures from time to time which Agent, in its reasonable business judgment, deems necessary or desirable to (a) preserve or protect the business conducted by Credit Parties, the Collateral, or any portion thereof, and/or (b) enhance the likelihood of, or maximize the amount of, repayment of the Loan and other Obligations. Each Borrower hereby agrees to reimburse Agent on demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.14. Each Lender hereby agrees to indemnify Agent upon demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.14, in accordance with the provisions of Section 11.6.
Section11.15 Additional Titled Agents. Except for rights and powers, if any, expressly reserved under this Agreement to any bookrunner, arranger or to any titled agent named on the cover page of this Agreement, other than Agent (collectively, the “Additional Titled Agents”), and except for obligations, liabilities, duties and responsibilities, if any, expressly assumed under this Agreement by any Additional Titled Agent, no Additional Titled Agent, in such capacity, has any rights, powers, liabilities, duties or responsibilities hereunder or under any of the other Financing Documents. Without limiting the foregoing, no Additional Titled Agent shall have nor be deemed to have a fiduciary relationship with any Lender. At any time that any Lender serving as an Additional Titled Agent shall have transferred to any other Person (other than any Affiliates) all of its interests in the Loan, such Lender shall be deemed to have concurrently resigned as such Additional Titled Agent.
Section 11.16 Amendmentsand Waivers.
(a) No provision of this Agreement or any other Financing Document may be materially amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise approved by Borrowers, the Required Lenders and any other Lender to the extent required under Section 11.16(b); provided, however, that Agent shall be entitled, in its sole and absolute discretion, to provide its written consent to a proposed Swap Contract, in each case without the consent of any other Lender.
(b) In addition to the required signatures under Section 11.16(a), no provision of this Agreement or any other Financing Document may be amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise approved by the following Persons:
(i) if any amendment, waiver or other modification would increase a Lender’s funding obligations in respect of any Loan, by such Lender; and/or
(ii) if the rights or duties of Agent are affected thereby, by Agent;
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provided, however , that, in each of (i) and (ii) above, no such amendment, waiver or other modification shall, unless signed or otherwise approved in writing by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Loan; (B) postpone the date fixed for, or waive, any payment (other than any mandatory prepayment pursuant to Section 2.1(b)(ii)) of principal of any Loan, or of interest on any Loan (other than default interest) or any fees provided for hereunder (other than late charges) or postpone the date of termination of any commitment of any Lender hereunder; (C) change the definition of the term Required Lenders or Supermajority Lenders or the percentage of Lenders which shall be required for Lenders to take any action hereunder; (D) release all or substantially all of the Collateral, authorize any Borrower to sell or otherwise dispose of all or substantially all of the Collateral or release any Guarantor of all or any portion of the Obligations or its Guarantee obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be provided in this Agreement or the other Financing Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 11.16(b) or the definitions of the terms used in this Section 11.16(b) insofar as the definitions affect the substance of this Section 11.16(b); (F) consent to the assignment, delegation or other transfer by any Credit Party of any of its rights and obligations under any Financing Document or release any Borrower of its payment obligations under any Financing Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; or (G) amend any of the provisions of Section 10.7 or amend any of the definitions Pro Rata Share, Revolving Loan Commitment, Revolving Loan Commitment Amount, Revolving Loan Commitment Percentage, or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; and provided, further, that no such amendment, waiver or other modification shall, unless signed or otherwise approved in writing by the Supermajority Lenders, amend, supplement or otherwise modify or waive any of the terms and provisions (and related definitions) related to the Borrowing Base, any provisions (including advance rates) relating to eligibility, including, without limitation, Eligible Accounts, Eligible Billed Accounts, Eligible Exar Billed Accounts, Eligible Unbilled Accounts, Eligible Exar Unbilled Accounts, Eligible Investment Grade Billed Accounts and Eligible Cash, if the effect of such amendment, supplement, modification or waiver would be to increase the amount available to be borrowed by the Borrowers hereunder. It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F) and (G) of the preceding sentence.
(c) Without limitation of the provisions of the preceding clause (a) and (b), no waiver, amendment or other modification to this Agreement shall, unless signed by each Eligible Swap Counterparty then in existence, modify the provisions of Section 10.7 in any manner adverse to the interests of each such Eligible Swap Counterparty.
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Section 11.17 Assignmentsand Participations.
(a) Assignments.
(i) Any Lender may at any time assign to one or more Eligible Assignees all or any portion of such Lender’s Loan together with all related obligations of such Lender hereunder. Except as Agent may otherwise agree, the amount of any such assignment (determined as of the date of the applicable Assignment Agreement or, if a “Trade Date” is specified in such Assignment Agreement, as of such Trade Date) shall be in a minimum aggregate amount equal to the Threshold Amount or, if less, the assignor’s entire interests in the outstanding Loan; provided, however, that, in connection with simultaneous assignments to two or more related Approved Funds, such Approved Funds shall be treated as one assignee for purposes of determining compliance with the minimum assignment size referred to above. Borrowers and Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned to an Eligible Assignee until Agent shall have received and accepted an effective Assignment Agreement executed, delivered and fully completed by the applicable parties thereto and a processing fee of $3,500 to be paid by the assigning Lender; provided,however, that only one processing fee shall be payable in connection with simultaneous assignments to two or more related Approved Funds.
(ii) From and after the date on which the conditions described above have been met, (A) such Eligible Assignee shall be deemed automatically to have become a party hereto and, to the extent of the interests assigned to such Eligible Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder, and (B) the assigning Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights and obligations hereunder (other than those that survive termination pursuant to Section 13.1). Upon the request of the Eligible Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, each Borrower shall execute and deliver to Agent for delivery to the Eligible Assignee (and, as applicable, the assigning Lender) Notes in the aggregate principal amount of the Eligible Assignee’s Loan (and, as applicable, Notes in the principal amount of that portion of the principal amount of the Loan retained by the assigning Lender). Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to Borrower Representative any prior Note held by it.
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(iii) Agent, acting solely for this purpose as a non-fiduciary agent of Borrower, shall maintain at the office of its servicer located in Bethesda, Maryland a copy of each Assignment Agreement delivered to it and a register (the “Register”) for the recordation of the names and addresses of each Lender, and the commitments of, and principal amount and stated interest of the Loan owing to, such Lender pursuant to the terms hereof. The entries in such register shall be conclusive, and Borrower, Agent and Lenders may treat each Person whose name is recorded therein pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Such register shall be available for inspection by Borrower and any Lender, at any reasonable time upon reasonable prior notice to Agent. Each Lender that sells a participation shall, acting solely for this purpose as an agent of 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 Obligations (each, a “Participant Register”). The entries in the Participant Registers shall be conclusive, absent manifest error. Each Participant Register shall be available for inspection by Borrowers and Agent at any reasonable time upon reasonable prior notice to the applicable Lender; 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 Financing Document) to any Person (including Borrowers) 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) and proposed Section 1.163-5(b) of the United States Treasury Regulations (and any amended or successor versions). For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a participant register. This Section 11.17(a)(iii) shall be construed so that all Obligations are at all times maintained in “registered form” within the meaning of Section 163(f), 871(h)(2) and 881(c)(2) of the Code and any related U.S. Treasury Regulations (or any other relevant or successor provisions of the Code or of such U.S. Treasury Regulations).
(iv) Notwithstanding the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, 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, however, 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.
(v) Notwithstanding the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, Agent has the right, but not the obligation, to effectuate assignments of Loan via an electronic settlement system acceptable to Agent as designated in writing from time to time to the Lenders by Agent (the “Settlement Service”). At any time when Agent elects, in its sole discretion, to implement such Settlement Service, each such assignment shall be effected by the assigning Lender and proposed assignee pursuant to the procedures then in effect under the Settlement Service, which procedures shall be consistent with the other provisions of this Section 11.17(a). Each assigning Lender and proposed Eligible Assignee shall comply with the requirements of the Settlement Service in connection with effecting any assignment of Loan pursuant to the Settlement Service. With the prior written approval of Agent, Agent’s approval of such Eligible Assignee shall be deemed to have been automatically granted with respect to any transfer effected through the Settlement Service. Assignments and assumptions of the Loan shall be effected by the provisions otherwise set forth herein until Agent notifies Lenders of the Settlement Service as set forth herein.
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(b) Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or Agent, sell to one or more Persons (other than any Borrower or any Borrower’s Affiliates) participating interests in its Loan, commitments or other interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a participating interest to a Participant, (i) such Lender’s obligations hereunder shall remain unchanged for all purposes, (ii) Borrowers and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder, and (iii) all amounts payable by each Borrower shall be determined as if such Lender had not sold such participation and shall be paid directly to such Lender. Each Borrower agrees that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided,however, that such right of set-off shall be subject to the obligation of each Participant to share with Lenders, and Lenders agree to share with each Participant, as provided in Section 11.5.
(c) Replacement of Lenders. Within thirty (30) days after: (i) receipt by Agent of notice and demand from any Lender for payment of additional costs as provided in Section 2.8(d), which demand shall not have been revoked, (ii) any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8(a) through (h), (iii) any Lender is a Defaulted Lender, and the circumstances causing such status shall not have been cured or waived; or (iv) any failure by any Lender to consent to a requested amendment, waiver or modification to any Financing Document in which Required Lenders have already consented to such amendment, waiver or modification but the consent of each Lender, or each Lender affected thereby, is required with respect thereto (each relevant Lender in the foregoing clauses (i) through (iv) being an “Affected Lender”) each of Borrower Representative and Agent may, at its option, notify such Affected Lender and, in the case of Borrowers’ election, Agent, of such Person’s intention to obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for such Lender, which Replacement Lender shall be an Eligible Assignee and, in the event the Replacement Lender is to replace an Affected Lender described in the preceding clause (iv), such Replacement Lender consents to the requested amendment, waiver or modification making the replaced Lender an Affected Lender. In the event Borrowers or Agent, as applicable, obtains a Replacement Lender within ninety (90) days following notice of its intention to do so, the Affected Lender shall sell, at par, and assign all of its Loan and funding commitments hereunder to such Replacement Lender in accordance with the procedures set forth in Section 11.17(a); provided, however, that (A) Borrowers shall have reimbursed such Lender for its increased costs and additional payments for which it is entitled to reimbursement under Section 2.8(a) through (h), as applicable, of this Agreement through the date of such sale and assignment, and (B) Borrowers shall pay to Agent the $3,500 processing fee in respect of such assignment. In the event that a replaced Lender does not execute an Assignment Agreement pursuant to Section 11.17(a) within five (5) Business Days after receipt by such replaced Lender of notice of replacement pursuant to this Section 11.17(c) and presentation to such replaced Lender of an Assignment Agreement evidencing an assignment pursuant to this Section 11.17(c), such replaced Lender shall be deemed to have consented to the terms of such Assignment Agreement, and any such Assignment Agreement executed by Agent, the Replacement Lender and, to the extent required pursuant to Section 11.17(a), Borrowers, shall be effective for purposes of this Section 11.17(c) and Section 11.17(a).
Upon any such assignment and payment, such replaced Lender shall no longer constitute a “Lender” for purposes hereof, other than with respect to such rights and obligations that survive termination as set forth in Section 13.1.
(d) Credit Party Assignments. No Credit Party may assign, delegate or otherwise transfer any of its rights or other obligations hereunder or under any other Financing Document without the prior written consent of Agent and each Lender.
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Section11.18 Funding andSettlement Provisions Applicable When Non-Funding Lenders Exist.
So long as Agent has not waived the conditions to the funding of Revolving Loans set forth in Section 7.2, any Lender may deliver a notice to Agent stating that such Lender shall cease making Revolving Loans due to the non-satisfaction of one or more conditions to funding Loans set forth in Section 7.2, and specifying any such non-satisfied conditions. Any Lender delivering any such notice shall become a non-funding Lender (a “Non-FundingLender”) for purposes of this Agreement commencing on the Business Day following receipt by Agent of such notice, and shall cease to be a Non-Funding Lender on the date on which such Lender has either revoked the effectiveness of such notice or acknowledged in writing to each of Agent the satisfaction of the condition(s) specified in such notice, or Required Lenders waive the conditions to the funding of such Loans giving rise to such notice by Non-Funding Lender. Each Non-Funding Lender shall remain a Lender for purposes of this Agreement to the extent that such Non-Funding Lender has Revolving Loan Outstandings in excess of $0; provided, however, that during any period of time that any Non-Funding Lender exists, and notwithstanding any provision to the contrary set forth herein, the following provisions shall apply:
(a) For purposes of determining the Pro Rata Share of each Revolving Lender under clause (c) of the definition of such term, each Non-Funding Lender shall be deemed to have a Revolving Loan Commitment Amount as in effect immediately before such Lender became a Non-Funding Lender.
(b) Except as provided in clause (a) above, the Revolving Loan Commitment Amount of each Non-Funding Lender shall be deemed to be $0.
(c) The Revolving Loan Commitment at any date of determination during such period shall be deemed to be equal to the sum of (i) the aggregate Revolving Loan Commitment Amounts of all Lenders, other than the Non-Funding Lenders as of such date plus (ii) the aggregate Revolving Loan Outstandings of all Non-Funding Lenders as of such date.
(d) [reserved].
(e) Agent shall have no right to make or disburse Revolving Loans for the account of any Non-Funding Lender pursuant to Section 2.1(b)(i) to pay interest, fees, expenses and other charges of any Credit Party.
(f) To the extent that Agent applies proceeds of Collateral or other payments received by Agent to repayment of Revolving Loans pursuant to Section 10.7, such payments and proceeds shall be applied first in respect of Revolving Loans made at the time any Non-Funding Lenders exist, and second in respect of all other outstanding Revolving Loans.
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Section11.19 Buy-Out UponRefinancing. MidCap Financial Trust shall have the right to purchase from the other Lenders all of their respective interests in the Loan at par in connection with any refinancing of the Loan upon one or more new economic terms, but which refinancing is structured as an amendment and restatement of the Loan rather than a payoff of the Loan.
Section11.20 Erroneous Payments.
(a) Each Lender and any other party hereto hereby severally agrees that if (i) Agent notifies (which such notice shall be conclusive absent manifest error) such Lender (or the Lender which is an Affiliate of a Lender) or any other Person that has received funds from Agent or any of its Affiliates, either for its own account or on behalf of a Lender (each such recipient, but in any event excluding the Credit Parties and their Affiliates, a “Payment Recipient”) that Agent has determined in its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives any payment from 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 Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts specified in clauses (i) or (ii) of this Section 11.20(a), whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise; individually and collectively, an “Erroneous Payment”), then, in each case, such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided that nothing in this Section shall require Agent to provide any of the notices specified in clauses (i) or (ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by Agent for the return of any Erroneous Payments, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
(b) Without limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall promptly notify Agent in writing of such occurrence.
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(c) In the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of Agent, and upon demand from Agent such Payment Recipient shall (or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later than one Business Day thereafter, return to Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds and 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 Agent at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by Agent for any reason, after demand therefor by Agent in accordance with immediately preceding clause (c), from any Lender that is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Lender, an “Erroneous Payment Return Deficiency”), then at the sole discretion of Agent and upon Agent’s written notice to such Lender (i) such Lender shall be deemed to have made a cashless assignment of the full face amount of the portion of its Loans (but not its Revolving Loan Commitment Amount) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Loans”) to Agent or, at the option of Agent, Agent’s applicable lending affiliate (such assignee, the “Agent Assignee”) in an amount that is equal to the Erroneous Payment Return Deficiency (or such lesser amount as Agent may specify) (such assignment of the Loans (but not its Revolving Loan Commitment Amount) of the Erroneous Payment Impacted Loans, the “Erroneous Payment Deficiency Assignment”) plus any accrued and unpaid interest on such assigned amount, without further consent or approval of any party hereto and without any payment by Agent Assignee as the assignee of such Erroneous Payment Deficiency Assignment. Without limitation of its rights hereunder, following the effectiveness of the Erroneous Payment Deficiency Assignment, Agent may make a cashless reassignment to the applicable assigning Lender of any Erroneous Payment Deficiency Assignment at any time by written notice to the applicable assigning Lender and upon such reassignment all of the Loans assigned pursuant to such Erroneous Payment Deficiency Assignment shall be reassigned to such Lender without any requirement for payment or other consideration. The parties hereto acknowledge and agree that (1) any assignment contemplated in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms and conditions of Section 11.17 and (3) Agent may reflect such assignments in the Register without further consent or action by any other Person.
(e) Each party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, Agent (1) shall be subrogated to all the rights of such Payment Recipient and (2) is authorized to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Financing Document, or otherwise payable or distributable by Agent to such Payment Recipient from any source, against any amount due to Agent under this Section 11.20 or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other satisfaction of any Obligations owed by the Borrower or any other Credit 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 Agent from the Borrower or any other Credit Party for the purpose of making for a payment on the Obligations and (z) to the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Obligations, the Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received.
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(f) Each party’s obligations under this Section 11.20 shall survive the resignation or replacement of Agent or any transfer of right or obligations by, or the replacement of, a Lender, the termination of the Revolving Loan Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Financing Document.
(g) The provisions of this Section 11.20 to the contrary notwithstanding, (i) nothing in this Section 11.20 will constitute a waiver or release of any claim of any party hereunder arising from any Payment Recipient’s receipt of an Erroneous Payment and (ii) there will only be deemed to be a recovery of the Erroneous Payment to the extent that Agent has received payment from the Payment Recipient in immediately available funds the Erroneous Payment Return Deficiency, whether directly from the Payment Recipient, as a result of the exercise by Agent of its rights of subrogation or set off as set forth above in clause (e) or as a result of the receipt by Agent Assignee of a payment of the outstanding principal balance of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment, but excluding any other amounts in respect thereof (it being agreed that any payments of interest, fees, expenses or other amounts (other than principal) received by Agent Assignee in respect of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment shall be the sole property of Agent Assignee and shall not constitute a recovery of the Erroneous Payment).
Section11.21 Definitions. As used in this Article 11, the following terms have the following meanings:
“Approved Fund” means any (a) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the Ordinary Course of Business, or (b) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (a) and that, with respect to each of the preceding clauses (a) and (b), is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.
“Assignment Agreement” means an assignment agreement in form and substance acceptable to Agent substantially in the form of Exhibit A hereto.
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“Defaulted Lender” means, so long as such failure shall remain in existence and uncured, any Lender which shall have failed to make any Loan or other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Financing Document.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by Agent and (other than in the case of any assignment by Midcap Financial Trust and its Affiliates), so long as no Event of Default has occurred and is continuing, the Borrower Representative (such consent not to be unreasonably withheld or delayed); provided, however, that notwithstanding the foregoing, (x) “Eligible Assignee” shall not include any Borrower or any of a Borrower’s Affiliates, and (y) no proposed assignee intending to assume all or any portion of the Revolving Loan Commitment shall be an Eligible Assignee unless such proposed assignee either already holds a portion of such Revolving Loan Commitment, or has been approved as an Eligible Assignee by Agent.
“Federal Funds Rate” means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided,however, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day, and (b) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Agent on such day on such transactions as determined by Agent.
Section11.22****Appointmentas Hypothecary Representative. Without limiting the powers of Agent, for the purposes of holding any hypothec granted to the Attorney (as defined below) pursuant to the laws of the Province of Quebec to secure the prompt payment and performance of any and all Obligations by any Credit Party, each of the Lenders hereby irrevocably appoints and authorizes Agent and, to the extent necessary, ratifies the appointment and authorization of Agent, to act as the hypothecary representative of the creditors as contemplated under Article 2692 of the Civil Code of Quebec (in such capacity, the “Attorney”), and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon the Attorney under any related deed of hypothec. The Attorney shall: (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to the Attorney pursuant to any such deed of hypothec and applicable law, and (b) benefit from and be subject to all provisions hereof with respect to Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders and Credit Parties. Any person who becomes a Lender shall, by its execution of an Assignment Agreement, be deemed to have consented to and confirmed the Attorney as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the Attorney in such capacity. The substitution of Agent pursuant to the provisions of this Section 11 also constitutes the substitution of the Attorney.
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Article 12
- GUARANTEE
Section12.1 [Reserved].
Section12.2****Guarantee;Limitation of Liability.
(a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Credit Party now or hereafter existing under or in respect of the Financing Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether for principal, interest, premiums, fees, indemnities, or reasonable and documented out-of-pocket expenses (such Obligations being the “Guaranteed Obligations”), including, without limitation, reasonable and documented out- of-pocket fees and expenses of counsel incurred by Agent in enforcing any rights under the Guarantee under this Section 12 or under any other Financing Document. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Credit Party to Agent or any Lender under or in respect of the Financing Documents but for the fact that they are unenforceable or not allowed due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Credit Party.
(b) [Reserved].
Section12.3****GuaranteeAbsolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Financing Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Agent or any Lender with respect thereto. The liability of each Guarantor under the Guarantee under this Section 12 shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses (other than payment of the Obligations to the extent of such payment) it may now have or hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Financing Documents or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Credit Party under or in respect of the Financing Documents, or any other amendment or waiver of or any consent to departure from any Financing Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Credit Party;
(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guarantee, for all or any of the Guaranteed Obligations;
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(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Credit Party under the Financing Documents or any other assets of any Credit Party;
(e) any change, restructuring or termination of the corporate structure or existence of any Credit Party;
(f) any failure of Agent or any Lender to disclose to any Credit Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Credit Party now or hereafter known to Agent or such Lender (each Guarantor waiving any duty on the part of Agent or Lenders to disclose such information) provided that each Guarantor shall have any contractual defenses that the applicable Credit Party has under any Financing Document including payment in full of the Obligations;
(g) the failure of any other Person to execute or deliver any Guarantee Supplement or any other guarantee or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, any Credit Party or any other guarantor or surety other than payment in full of the Guaranteed Obligations; provided that each Guarantor shall have any contractual defenses that the applicable Credit Party has under any Financing Document.
The Guarantee under this Section 12 shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of Borrowers or any other Credit Party or otherwise, all as though such payment had not been made.
Section12.4****Waiversand Acknowledgments.
(a) To the extent allowed under applicable Law, each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and the Guarantee under this Section 12 and any requirement that Agent or any Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Credit Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke the Guarantee under this Section 12 and acknowledges that the Guarantee under this Section 12 is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
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(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by Agent or any Lender that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Credit Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under the Guarantee under this Section 12, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by Agent and the other Lenders against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable Law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of Agent or any Lender to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Credit Party now or hereafter known by Agent or such Lender.
(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Financing Documents and that the waivers set forth in Section 12.3 and this Section 12.4 are knowingly made in contemplation of such benefits.
Section12.5****Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrowers, any other Credit Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of the Guarantee under this Section 12 or any other Financing Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of Agent or any Lender against the Borrowers, any other Credit Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrowers, any other Credit Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 shall have been paid in full in cash. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Guaranteed Obligations (other than unasserted contingent indemnification obligations) and all other amounts payable under the Guarantee under this Section 12, such amount shall be received and held in trust for the benefit of Agent and the Lenders, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12, whether matured or unmatured, in accordance with the terms of the Financing Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under the Guarantee under this Section 12 thereafter arising. If (a) any Guarantor shall make payment to Agent or any Lender of all or any part of the Guaranteed Obligations, (b) all of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 shall have been paid in full in cash and (c) the Termination Date shall have occurred, Agent or the Lenders will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to the Guarantee under this Section 12.
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Section12.6[Reserved].
Section12.7****Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Credit Party, except for any Obligations otherwise set forth hereunder (the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 12.7:
(a) Prohibited Payments, Etc. Unless Agent otherwise agrees, upon a Default or the occurrence and during the continuance of an Event of Default, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under Debtor Relief Laws relating to any other Credit Party, each Guarantor agrees that Agent and the Lenders shall be entitled to receive payment in full in cash of all Guaranteed Obligations before such Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any Event of Default, each Guarantor shall, if Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for Agent and the Lenders and deliver such payments to Agent on account of the Guaranteed Obligations, together with any necessary endorsements or other instruments of transfer.
(d) Agent Authorization. After the occurrence and during the continuance of any Event of Default, Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations, and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations, and (B) to pay any amounts received on such obligations to Agent for application to the Guaranteed Obligations.
Section12.8****ContinuingGuarantee; Assignments. The Guarantee under this Section 12 is a continuing guarantee and shall (a) remain in full force and effect until the payment in full in cash of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 and termination of all other Obligations hereunder, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by Agent, the Lenders and their respective successors, transferees and assigns. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of Agent.
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Article 13
- MISCELLANEOUS
Section13.1****Survival. All agreements, representations and warranties made herein and in every other Financing Document shall survive the execution and delivery of this Agreement and the other Financing Documents and the other Operative Documents. The provisions of Section 2.9 and Articles 11 and 12 shall survive the payment of the Obligations (both with respect to any Lender and all Lenders collectively) and any termination of this Agreement and any judgment with respect to any Obligations, including any final foreclosure judgment with respect to any Security Document, and no unpaid or unperformed, current or future, Obligations will merge into any such judgment.
Section13.2****NoWaivers. No failure or delay by Agent or any Lender in exercising any right, power or privilege under any Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein and therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Any reference in any Financing Document to the “continuing” nature of any Event of Default shall not be construed as establishing or otherwise indicating that any Borrower or any other Credit Party has the independent right to cure any such Event of Default, but is rather presented merely for convenience should such Event of Default be waived in accordance with the terms of the applicable Financing Documents.
Section13.3****Notices.
(a) All notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier, e-mail or similar writing) and shall be given to such party at its address or e-mail address set forth on the signature pages hereof (or, in the case of any such Lender who becomes a Lender after the date hereof, in an assignment agreement or in a notice delivered to Borrower Representative and Agent by the assignee Lender forthwith upon such assignment) or at such other address or e-mail address as such party may hereafter specify for the purpose by notice to Agent and Borrower Representative; provided, however, that notices, requests or other communications shall be permitted by electronic means only in accordance with the provisions of Section 13.3(b) and (c). Each such notice, request or other communication shall be effective (i) if given by electronic means, in accordance with the provisions of Section 13.3(b) and (c), or (ii) if given by mail, prepaid overnight courier or any other means, when received or when receipt is refused at the applicable address specified by this Section 13.3(a).
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(b) Notices and other communications to the parties hereto may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved from time to time by Agent, provided, however, that the foregoing shall not apply to notices sent directly to any Lender if such Lender has notified Agent that it is incapable of receiving notices by electronic communication. Agent or Borrower Representative may, in their discretion, agree to accept notices and other communications to them hereunder by electronic communications pursuant to procedures approved by it, provided, however, that approval of such procedures may be limited to particular notices or communications.
(c) Unless 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 acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), 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, however, that if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day.
Section13.4Severability. In case any provision of or obligation under this Agreement or any other Financing Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section13.5****Headings. Headings and captions used in the Financing Documents (including the Exhibits, Schedules and Annexes hereto and thereto) are included for convenience of reference only and shall not be given any substantive effect.
Section13.6****Confidentiality.
(a) Each Credit Party agrees (i) not to transmit or disclose provisions of any Financing Document to any Person (other than to Borrowers’ advisors and officers on a need-to-know basis or as otherwise may be required by Law) without Agent’s prior written consent, (ii) to inform all Persons of the confidential nature of the Financing Documents and to direct them not to disclose the same to any other Person and to require each of them to be bound by these provisions.
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(b) Agent and each Lender shall hold all non-public information regarding the Credit Parties and their respective businesses identified as such by Borrowers and obtained by Agent or any Lender pursuant to the requirements hereof in accordance with such Person’s customary procedures for handling information of such nature, except that disclosure of such information may be made (i) to their respective agents, employees, Subsidiaries, Affiliates, attorneys, auditors, professional consultants, rating agencies, insurance industry associations and portfolio management services, (ii) to prospective transferees or purchasers of any interest in the Loans, Agent or a Lender, and to prospective contractual counterparties (or the professional advisors thereto) in Swap Contracts permitted hereby, provided, however, that any such Persons are bound by obligations of confidentiality, (iii) as required by Law, subpoena, judicial order or similar order and in connection with any litigation, (iv) as may be required in connection with the examination, audit or similar investigation of such Person, and (v) as Agent or any Lender considers appropriate in exercising remedies under the Financing Documents or at any time an Event of Default exists hereunder, and (vi) to a Person that is a trustee, investment advisor or investment manager, collateral manager, servicer, noteholder or secured party in a Securitization (as hereinafter defined) in connection with the administration, servicing and reporting on the assets serving as collateral for such Securitization. For the purposes of this Section, “Securitization” shall mean (A) the pledge of the Loans as collateral security for loans to a Lender, or (B) a public or private offering by a Lender or any of its Affiliates or their respective successors and assigns, of securities which represent an interest in, or which are collateralized, in whole or in part, by the Loans. Confidential information shall include only such information identified as such at the time provided to Agent and shall not include information that either: (y) is in the public domain, or becomes part of the public domain after disclosure to such Person through no fault of such Person, or (z) is disclosed to such Person by a Person other than a Credit Party, provided, however, Agent does not have actual knowledge that such Person is prohibited from disclosing such information. The obligations of Agent and Lenders under this Section 13.6 shall supersede and replace the obligations of Agent and Lenders under any confidentiality agreement in respect of this financing executed and delivered by Agent or any Lender prior to the date hereof.
Section13.7 Waiverof Consequential and Other Damages. To the fullest extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee (as defined below), 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 Financing Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee 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 Financing Documents or the transactions contemplated hereby or thereby, except for any such damages resulting from the gross negligence or willful misconduct of such Indemnitee or any of such Indemnitee’s related parties, as determined by a final non-appealable court of competent jurisdiction.
Section13.8 GOVERNINGLAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL DISPUTES AND OTHER MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), OR THE PERFORMANCE BY AGENT OR ANY OF ITS AFFILIATE’S OF THE SERVICES CONTEMPLATED THEREBY, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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(b) EACH CREDIT PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED WITHIN THE COUNTY OF MONTGOMERY, NEW YORK OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH CREDIT PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
(c) Each Borrower, Agent and each Lender agree that each Loan (including those made on the Closing Date) shall be deemed to be made in, and the transactions contemplated hereunder and in any other Financing Document shall be deemed to have been performed in, the State of New York.
Section13.9****WAIVEROF JURY TRIAL. EACH CREDIT PARTY, AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH CREDIT PARTY, AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH CREDIT PARTY, AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
Section13.10 Publication;Advertisement.
(a) Publication. No Credit Party will directly or indirectly publish, disclose or otherwise use in any public disclosure, advertising material, promotional material, press release or interview, any reference to the name, logo or any trademark of MCF or any of its Affiliates or any reference to this Agreement or the financing evidenced hereby, in any case except (i) as required by Law, subpoena or judicial or similar order, in which case the applicable Credit Party shall give Agent prior written notice of such publication or other disclosure, or (ii) with MCF’s prior written consent.
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(b) Advertisement. Each Lender and each Credit Party hereby authorizes MCF to publish the name of such Lender and Credit Party, the existence of the financing arrangements referenced under this Agreement, the primary purpose and/or structure of those arrangements, the amount of credit extended under each facility, the title and role of each party to this Agreement, and the total amount of the financing evidenced hereby in any “tombstone”, comparable advertisement or press release which MCF elects to submit for publication. In addition, each Lender and each Credit Party agrees that MCF may provide lending industry trade organizations with information necessary and customary for inclusion in league table measurements after the Closing Date. With respect to any of the foregoing, MCF shall provide Credit Parties with an opportunity to review and confer with MCF regarding the contents of any such tombstone, advertisement or information, as applicable, prior to its submission for publication and, following such review period, MCF may, from time to time, publish such information in any media form desired by MCF, until such time that Credit Parties shall have requested MCF cease any such further publication.
Section13.11Counterparts; Integration. This Agreement and the other Financing Documents may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures by facsimile or by electronic mail delivery of an electronic version of any executed signature page shall bind the parties hereto. In furtherance of the foregoing, the words “execution”, “signed”, “signature”, “delivery” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries 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, physical delivery thereof 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. As used herein, “ElectronicSignature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or other record. This Agreement and the other Financing Documents constitute the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
Section13.12****No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
Section13.13****Lender Approvals. Unless expressly provided herein to the contrary, any approval, consent, waiver or satisfaction of Agent or Lenders with respect to any matter that is the subject of this Agreement, the other Financing Documents may be granted or withheld by Agent and Lenders in their sole and absolute discretion and credit judgment.
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Section 13.14 Expenses; Indemnity.
(a) Credit Parties hereby agree to promptly pay (i) all costs and expenses of Agent (including, without limitation, the fees, costs and expenses of counsel to, and independent appraisers and consultants retained by Agent) in connection with the examination, review, due diligence investigation, documentation, negotiation, closing and syndication of the transactions contemplated by the Financing Documents, in connection with the performance by Agent of its rights and remedies under the Financing Documents and in connection with the continued administration of the Financing Documents including (A) any amendments, modifications, consents and waivers to and/or under any and all Financing Documents, and (B) any periodic public record searches conducted by or at the request of Agent (including, without limitation, title investigations, UCC searches, PPSA searches, searches under the Bank Act (Canada), fixture filing searches, judgment, pending litigation and tax lien searches and searches of applicable corporate, limited liability, partnership and related records concerning the continued existence, organization and good standing of certain Persons); (ii) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with the creation, perfection and maintenance of Liens pursuant to the Financing Documents; (iii) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with (A) protecting, storing, insuring, handling, maintaining or selling any Collateral, (B) any litigation, dispute, suit or proceeding relating to any Financing Document, and (C) any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all of the Financing Documents; (iv) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with Agent’s reservation of funds in anticipation of the funding of the initial Loans to be made hereunder; and (v) all costs and expenses incurred by Lenders in connection with any litigation, dispute, suit or proceeding relating to any Financing Document and in connection with any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all Financing Documents, whether or not Agent or Lenders are a party thereto. If Agent or any Lender uses in-house counsel for any of these purposes, Credit Parties further agree that the Obligations include reasonable charges for such work commensurate with the fees that would otherwise be charged by outside legal counsel selected by Agent or such Lender for the work performed.
(b) Each Credit Party hereby agrees to indemnify, pay and hold harmless Agent and Lenders and the officers, directors, employees, trustees, agents, investment advisors and investment managers, collateral managers, servicers, and counsel of Agent and Lenders (collectively called the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnitee) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnitee shall be designated a party thereto and including any such proceeding initiated by or on behalf of a Credit Party, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Agent or Lenders) asserting any right to payment for the transactions contemplated hereby, which may be imposed on, incurred by or asserted against such Indemnitee as a result of or in connection with the transactions contemplated hereby or by the other Operative Documents (including (i)(A) as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or release from, any property now or previously owned, leased or operated by each Credit Party, any Subsidiary or any other Person of any Hazardous Materials, (B) arising out of or relating to the offsite disposal of any materials generated or present on any such property, or (C) arising out of or resulting from the environmental condition of any such property or the applicability of any governmental requirements relating to Hazardous Materials, whether or not occasioned wholly or in part by any condition, accident or event caused by any act or omission of Credit Party or any Subsidiary, and (ii) proposed and actual extensions of credit under this Agreement) and the use or intended use of the proceeds of the Loans, except that Credit Party shall have no obligation hereunder to an Indemnitee with respect to any liability resulting from the gross negligence or willful misconduct of such Indemnitee or any of such Indemnitee’s related parties, as determined by a final non-appealable judgment of a court of competent jurisdiction. To the extent that the undertaking set forth in the immediately preceding sentence may be unenforceable, Credit Parties shall contribute the maximum portion which it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all such indemnified liabilities incurred by the Indemnitees or any of them. This Section 13.14 shall not apply with respect to Taxes other than any Taxes that represent losses, damages, liabilities, actions, suits, judgments, obligations, penalties, fees, claims or reasonable costs and expenses arising from any non-Tax claim.
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(c) Notwithstanding any contrary provision in this Agreement, the obligations of Credit Parties under this Section 13.14 shall survive the payment in full of the Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE RESPONSIBLE OR LIABLE TO THE CREDIT PARTIES OR TO ANY OTHER PARTY TO ANY FINANCING DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
Section13.15 Confession of Judgment. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, EACH CREDIT PARTY AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO APPEAR ON BEHALF OF SUCH CREDIT PARTY IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST CREDIT PARTY IN FAVOR OF AGENT (FOR THE BENEFIT OF ALL LENDERS) IN THE FULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS’ FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT DUE (EXCEPT THAT AGENT SHALL NOT SEEK TO COLLECT AN AMOUNT IN EXCESS OF ITS ACTUAL ATTORNEYS’ FEES), PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF SUCH CREDIT PARTY FOR PRIOR HEARING. EACH CREDIT PARTY AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF MONTGOMERY COUNTY OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST A CREDIT PARTY SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS AGENT SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.
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Section13.16Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition or other proceeding be filed by or against any Credit Party for liquidation or reorganization, should any Credit Party become insolvent or make an assignment for the benefit of any creditor or creditors or should an interim receiver, receiver, receiver and manager, monitor or trustee be appointed for all or any significant part of any Credit Party’s assets, and shall continue to be effective or to be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a fraudulent preference reviewable transaction or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
Section13.17Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Credit Parties and Agent and each Lender and their respective successors and permitted assigns.
Section13.18USA PATRIOT Act Notification. Agent (for itself and not on behalf of any Lender) and each Lender hereby notifies Credit Parties that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record certain information and documentation that identifies Credit Parties, which information includes the name and address of Credit Parties and such other information that will allow Agent or such Lender, as applicable, to identify any Credit Party in accordance with the USA PATRIOT Act.
Section13.19Judgment Currency.If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or under any other Financing Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Credit Party in respect of any such sum due from it to Agent or any Lender hereunder or under the other Financing Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to Agent or any Lender from any Credit Party in the Agreement Currency, such Credit Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to Agent or any Lender in such currency, Agent or such Lender, as the case may be, agrees to return the amount of any excess to such Credit Party (or to any other Person who may be entitled thereto under applicable Law).
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Section13.20Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Financing 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 Financing 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 Financing 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.
Section13.21Canadian Anti-Money Laundering Legislation.
(a) Each Credit Party acknowledges that, pursuant to Anti-Terrorism Laws and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” Laws (collectively, including any guidelines or orders thereunder, “AMLLegislation”), the Lenders may be required to obtain, verify and record information regarding the Credit Parties and their respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of the Credit Parties, and the transactions contemplated hereby. Each Credit Party shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or any prospective assignee or participant of a Lender or Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence.
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(b) If Agent has ascertained the identity of any Credit Party or any authorized signatories of the Credit Parties for the purposes of applicable AML Legislation, then Agent:
(i) shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and Agent within the meaning of the applicable AML Legislation; and
(ii) shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that neither Agent nor any other agent has any obligation to ascertain the identity of the Credit Parties or any authorized signatories of the Credit Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from any Credit Party or any such authorized signatory in doing so.
Section13.22****Parent.. The parties hereto acknowledge and agree that the Parent is not a party to this Agreement or any other Financing Document and shall not be deemed a Borrower, Guarantor or other obligor with respect to the Obligations.
[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]
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IN WITNESS WHEREOF, intending to be legally bound, and intending that this Agreement constitute an agreement executed under seal, each of the parties have caused this Agreement to be executed under seal the day and year first above mentioned.
| BORROWERS: | EXELA TECHNOLOGIES BPA, LLC | |
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| Address: | ||
| --- | --- | |
| 6641 N. Belt Line Road | ||
| Suite 100 | ||
| Irving, TX 75063 USA | ||
| Attn: | Suresh Yannamani | |
| Facsimile: | 972.821.4320 | |
| E-Mail: | suresh.yannamani@exelatech.com |
[Signature Page to Credit and Security Agreement]
| GUARANTORS: | ||
|---|---|---|
| EXELA INTERMEDIATE LLC | ||
| --- | --- | --- |
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA FINANCE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV HOLDINGS, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| CORPSOURCE HOLDINGS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| SOURCECORP, INCORPORATED | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP BPS INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DELIVEREX, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| UNITED INFORMATION SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| ECONOMIC RESEARCH SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP LEGAL INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| RUST CONSULTING, INC. | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV HEALTHCARE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| KINSELLA MEDIA LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV SERVICES, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV ENTERPRISE SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| MERIDIAN CONSULTING GROUP, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| RUSTIC CANYON III, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| CHARTER LASON, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| LASON INTERNATIONAL, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP MANAGEMENT, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| PANGEA ACQUSITIONS INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC GROUP LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| BANCTEC, INC. | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC (PUERTO RICO), INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DOCUDATA SOLUTIONS, L.C. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BTC VENTURES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| RECOGNITION MEXICO HOLDING INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC INTERMEDIATE HOLDING, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| RC4 CAPITAL, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DFG2 HOLDINGS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DFG2, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| PLEXUS GLOBAL FINANCE, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOVG, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| TRAC HOLDINGS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| MANAGED CARE PROFESSIONALS, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| FTS PARENT INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| TRANSCENTRA, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| J & B SOFTWARE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS HOLDING INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS GROUP LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| REGULUS GROUP II LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS AMERICA LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS INTERGRATED SOLUTIONS LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA RE LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS WEST LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| NOVITEX HOLDINGS, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| NOVITEX INTERMEDIATE, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| NOVITEX GOVERNMENT SOLUTIONS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA XBP, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC (CANADA), INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV CANADA COMPANY | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| AFFILIATED GUARANTORS: | ||
|---|---|---|
| XCV-EMEA, LLC | ||
| By: | /s/ Matt Brown | |
| Name: | Matt Brown | |
| Title: | President of Manager | |
| NEON ACQUISITION, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| NOVITEX ENTERPRISE SOLUTIONS CANADA, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA ENTERPRISE SOLUTIONS, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SERVICES INTEGRATION GROUP, L.P. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SIG - GP L.L.C., A LIMITED LIABILITY COMPANY | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to Credit and Security Agreement]
| AGENT: | MIDCAP FUNDING IV TRUST | |
|---|---|---|
| By: Apollo Capital Management, L.P., its investment manager | ||
| By: Apollo Capital Management GP, LLC, its general partner | ||
| By: | /s/ Maurice Amsellem | |
| Name: Maurice Amsellem | ||
| Title: Authorized Signatory | ||
| LENDER: | MIDCAP FINANCIAL TRUST | |
| By: Apollo Capital Management, L.P., its investment manager By: Apollo Capital Management GP, LLC, its general partner | ||
| By: | /s/ Maurice Amsellem | |
| Name: Maurice Amsellem | ||
| Title: Authorized Signatory |
[Signature Page to Credit and Security Agreement]
ANNEXES,EXHIBITS AND SCHEDULES
ANNEXES
| Annex A | Commitment Annex |
|---|
EXHIBITS
| Exhibit A | Form of Assignment and Assumption Agreement |
|---|---|
| Exhibit B | Form of Compliance Certificate |
| Exhibit C | Borrowing Base Certificate |
| Exhibit D | Form of Notice of Borrowing |
| Exhibit E | Form of Closing Certificate |
| Exhibit F-1 | Form of U.S. Tax Compliance Certificate |
| Exhibit F-2 | Form of U.S. Tax Compliance Certificate |
| Exhibit F-3 | Form of U.S. Tax Compliance Certificate |
| Exhibit F-4 | Form of U.S. Tax Compliance Certificate |
| Exhibit G | Form of Solvency Certificate |
| Exhibit H | Form of ABL Intercreditor Agreement |
| Exhibit I | Form of Information Certificate |
| Exhibit J | Form of Copyright Security Agreement |
| Exhibit K | Form of Patent Security Agreement |
| Exhibit L | Form of Trademark Security Agreement |
SCHEDULES
| Schedule 1.1 | Eligible Investment Grade Account Debtors |
|---|---|
| Schedule 3.1 | Existence, Organizational ID Numbers, Foreign Qualification, Prior Names |
| Schedule 3.4 | Capitalization |
| Schedule 3.6 | Litigation |
| Schedule 3.17(a) | Material Contracts |
| Schedule 3.17(b) | Leased Properties |
| Schedule 3.18 | Environmental Compliance |
| Schedule 3.19 | Intellectual Property |
| Schedule 4.4 | Insurance |
| Schedule 4.9 | Litigation, Governmental Proceedings and Other Notice Events |
| Schedule 5.1 | Debt; Contingent Obligations |
| Schedule 5.2 | Liens |
| Schedule 5.7 | Permitted Investments |
| Schedule 5.8 | Affiliate Transactions |
| Schedule 5.11 | Business Description |
| Schedule 5.14 | Deposit Accounts and Securities Accounts |
| Schedule 7.4 | Post-Closing Obligations |
| Schedule 9.1 | Collateral |
| Schedule 9.2(b) | Location of Collateral |
| Schedule 9.2(d) | Chattel Paper, Letters of Credit Rights, Commercial Tort Claims, Instruments,<br> Documents, Investment Property |
AnnexA to Credit Agreement (Commitment Annex)
| Lender | Revolving Loan Commitment<br><br> Amount | Revolving Loan Commitment<br><br> Percentage | |||
|---|---|---|---|---|---|
| MidCap Financial Trust | $ | 150,000,000 | 100 | % | |
| TOTALS | $ | 150,000,000 | 100 | % |
Exhibit Ato Credit Agreement (Form of assignment and assumption)
[See attached]
FORM OF
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). [It is understood and agreed that the rights and obligations of the [Assignors][Assignees]^1^ hereunder are several and not joint].^2^ Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, amended and restated, waived, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Agent (as defined below) as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
| 1. | Assignor: | ||||
|---|---|---|---|---|---|
| 2. | Assignee: | ||||
| [and is an Affiliate/Approved<br> Fund of [identify Lender]^3^] | |||||
| 3. | Borrower: | Exela Technologies BPA, LLC, a Delaware limited liability company (the “Borrower”) | |||
| ^1^ | Select as applicable. | ||||
| --- | --- | ||||
| ^2^ | Include bracketed language if there are either multiple Assignors or multiple Assignees. | ||||
| ^3^ | Select as applicable. | ||||
| 4. | Agent: | MidCap Funding IV Trust, as the administrative agent under the Credit Agreement (the “Agent”) | |||
| --- | --- | --- | |||
| 5. | Credit Agreement: | The Credit and Security Agreement, dated as of July 29, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time) among the Borrower, the Lenders and the Agent. | |||
| 6. | Assigned Interest: | ||||
| Assignor | Assignee | Aggregate<br><br> Amount of<br><br> Revolving<br><br> Loan <br><br>Commitment /<br><br> Loans for all<br><br> Lenders | Amount of Revolving Loan<br> Commitment / Loans Assigned3 | CUSIP <br> Number | |
| --- | --- | --- | --- | --- | --- |
| $ | % | ||||
| $ | % | ||||
| $ | % |
All values are in US Dollars.
Effective Date: ______________ ___, 20___ [TO BE INSERTED BY AGENT IN ACCORDANCE WITH THE CREDIT AGREEMENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliverto the Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-levelinformation (which may contain material non-public information about the Credit Parties and their related parties or their respectivesecurities) will be made available and who may receive such information in accordance with the Assignee’s compliance proceduresand applicable laws, including Federal and state securities laws.
The terms set forth in this Assignment and Assumption are hereby agreed to:
| ASSIGNOR | ||
|---|---|---|
| [NAME OF ASSIGNOR] | ||
| By: | ||
| Name: | ||
| Title: | ||
| ^4^ | Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. | |
| --- | --- | |
| ASSIGNEE | ||
| --- | --- | |
| [NAME OF ASSIGNEE] | ||
| By: | ||
| Name: | ||
| Title: | ||
| [Consented to and]^5^ Accepted: | ||
| --- | --- | --- |
| MIDCAP FUNDING IV TRUST, as Agent | ||
| By: | Apollo Capital Management, L.P., its investment manager | |
| By: | Apollo Capital Management GP, LLC, its General Partner | |
| By: | ||
| Name: | ||
| Title: | Authorized Signatory | |
| [Consented to: | ||
| EXELA TECHNOLOGIES BPA, LLC, | ||
| as Borrower | ||
| By: | ||
| Name: | ||
| Title:]^6^ | ||
| ^5^ | To be added only if the consent of the Agent is required by the terms of the Credit Agreement. | |
| --- | --- | |
| ^6^ | To be added only if the consent of the Borrower is required by the terms of the Credit Agreement. |
ANNEX 1
The Credit and Security Agreement, dated as of July 29, 2025 (as amended, restated, amended and restated, waived, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Exela Technologies BPA, LLC, a Delaware limited liability company (the “Borrower”), the Lenders and MidCap Funding IV Trust, a Delaware statutory trust (“MidCap”), as administrative agent. Capitalized terms used but not defined herein have the meanings given to them in the Credit Agreement.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is not a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Financing Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Documents or any collateral thereunder, (iii) the financial condition of Borrower, any Credit Party, Subsidiary or Affiliate thereof or any other Person obligated in respect of any Financing Document or (iv) the performance or observance by any Credit Party, any Subsidiary or Affiliate thereof or any other Person of any of their respective obligations under any Financing Document.
1.2. Assignee. The Assignee (a) repeats each Lender representation set forth in the Credit Agreement; (b) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement and the other Financing Documents as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 4.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, (vi) it has independently and without reliance upon the Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, and (vii) if it is a Non-US Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; (c) agrees that (i) it will, independently and without reliance on the Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Financing Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Financing Documents are required to be performed by it as a Lender; and (d) appoints and authorizes the Agent, to take such action as agent in their respective capacities on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Financing Documents and any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agent, by the terms thereof, together with such powers as are incidental thereto.
2. Payments. From and after the Effective Date, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by electronic mail shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption and the rights and obligations of the parties under this Assignment and Assumption shall be governed by, and construed and interpreted in accordance with, the law of the State of New York without regard to principles of conflicts of laws to the extent that the same are not mandatorily applicable by statute and the application of the laws of another jurisdiction would be required thereby.
Exhibit Bto Credit Agreement (Compliance Certificate)
COMPLIANCECERTIFICATE
Date: __________, 20__
This Compliance Certificate is given by _____________________, a Responsible Officer of ________________ (the “Borrower Representative”), pursuant to that certain Credit and Security Agreement dated as of ____________, 20__ among the Borrower Representative, ____________________ and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
The undersigned Responsible Officer hereby certifies to Agent and Lenders that:
(a) the financial statements delivered with this certificate in accordance with Section 4.1(a) of the Credit Agreement fairly present in all material respects the results of operations and financial condition of Borrowers and their Consolidated Subsidiaries as of the dates and the accounting period covered by such financial statements;
(b) the representations and warranties of each Credit Party contained in the Financing Documents are true, correct and complete in all material respects on and as of the date hereof, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct in all material respects as of such earlier date; provided, however, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
(c) I have reviewed the terms of the Credit Agreement and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and conditions of Borrowers and their Consolidated Subsidiaries during the accounting period covered by such financial statements and such review has not disclosed the existence during or at the end of such accounting period, and I have no knowledge of the existence as of the date hereof, of any condition or event that constitutes a Default or an Event of Default, except as set forth in Schedule 1 hereto, which includes a description of the nature and period of existence of such Default or an Event of Default and what action Borrowers have taken, are undertaking and propose to take with respect thereto;
(d) [except as noted on Schedule 2 attached hereto, the Credit Agreement contains a complete and accurate list of all business locations of Borrowers and Guarantors and all names under which Borrowers and Guarantors currently conduct business; Schedule 2 specifically notes any changes in the names under which any Borrower or Guarantor conduct business;]
(e) The amount of Eligible Cash on deposit in the Cash Collateral Account is equal to $[·];
Exhibit B – Page 1
(f) [except as noted on Schedule 3 attached hereto, the undersigned has no knowledge of (i) any material federal or state tax liens having been filed against any Borrower, Guarantor or any Collateral or (ii) any failure of any Borrower or Guarantors to make required payments of material withholding or other material tax obligations of any Borrower or Guarantors during the accounting period to which the attached statements pertain or any subsequent period;]
(g) [Schedule 5.14 to the Credit Agreement contains a complete and accurate statement of all deposit accounts and investment accounts maintained by Borrowers and Guarantors;]
(h) [except as noted on Schedule 4 attached hereto and Schedule 3.6 to the Credit Agreement, the undersigned has no knowledge of any current, pending or threatened: (i) material litigation against any Borrower or Guarantor; (ii) material inquiries, investigations or proceedings concerning the business affairs, practices, licensing or reimbursement entitlements of any Borrower or Guarantor; or (iii) any material default by any Borrower or Guarantor under any Material Contract to which it is a party;]^7^
(i) except as noted on Schedule 5 attached hereto, no Borrower or Guarantor has acquired, by purchase, by the approval or granting of any application for registration (whether or not such application was previously disclosed to Agent by Borrowers) or otherwise, any Intellectual Property that is registered with any United States or foreign Governmental Authority, or has filed with any such United States or foreign Governmental Authority, any new application for the registration of any Intellectual Property, or acquired rights under a license as a licensee with respect to any such registered Intellectual Property (or any such application for the registration of Intellectual Property) owned by another Person, that has not previously been reported to Agent on Schedule 3.17 to the Credit Agreement or any Schedule 5 to any previous Compliance Certificate delivered by Borrower to Agent;
(j) except as noted on Schedule 6 attached hereto, no Borrower or Guarantor has acquired, by purchase or otherwise, any Chattel Paper, Letter of Credit Rights, Instruments, Documents or Investment Property that has not previously been reported to Agent on any Schedule 6 to any previous Compliance Certificate delivered by Borrower Representative to Agent;
(k) except as noted on Schedule 7 attached hereto, no Borrower or Guarantor is aware of any commercial tort claim that has not previously been reported to Agent on any Schedule 7 to any previous Compliance Certificate delivered by Borrower Representative to Agent; and
(l) Borrowers and Guarantors are in compliance with the covenants contained in Article 6 of the Credit Agreement, and in any Guarantee constituting a part of the Financing Documents, as demonstrated by the calculation of such covenants below, except as set forth below; in determining such compliance, the following calculations have been made: [See attached worksheets]. Such calculations and the certifications contained therein are true, correct and complete.
| ^7^ | This clause (h) and clauses (d), (f) and (g) above to be included only in Compliance Certificates delivered together with the monthly<br>financial statements for the months ended March, June, September and December. |
|---|
Exhibit B – Page 2
The foregoing certifications and computations are made as of ________________, 20__ (end of month) and as of _____________, 20__.
| Sincerely, |
|---|
| [BORROWER REPRESENTATIVE] |
| By: |
| Name: |
| Title: |
Exhibit B – Page 3
[Fixed Charge Coverage Ratio Worksheet (Attachmentto Compliance Certificate)
| Fixed Charges for the applicable Defined Period is calculated as follows: | |
|---|---|
| · Fixed Charges: | $ |
| · Pro Forma Adjustments: | $ |
| Adjusted Fixed Charges for the applicable Defined Period: | $ |
| EBITDA for the applicable Defined Period is calculated as follows: | |
| · EBITDA: | $ |
| · Unfinanced Capital Expenditures: | $ |
| · Capitalized Software Expenditures | $ |
| · Pro Forma Adjustments: | $ |
| Adjusted EBITDA for the Defined Period: | $ |
| FCCR Compliance:<br><br> <br><br><br> <br>Fixed Charge Coverage Ratio (Adjusted EBITDA/Adjusted Fixed Charges)<br>for the Defined Period | ___ to 1.0 |
| --- | --- |
| Minimum Fixed Charge Coverage for the Defined Period | ___ to 1.0 |
| In Compliance | Yes/No] |
| [Minimum Excess Availability:<br><br> <br><br><br> <br>Has Excess Availability been less than $7,5000,000 at any time<br>during the test period for three (3) or more consecutive Business Days? | Y/N |
| --- | --- |
| In Compliance | Yes/No]^8^ |
| ^8^ | NTD: To be included for each Defined Period from the Closing Date through June 30, 2026. |
| --- | --- |
Exhibit B – Page 4
Exhibit Cto Credit Agreement (Borrowing Base Certificate)
Exhibit Dto Credit Agreement (Notice of Borrowing)
NOTICEOF BORROWING
This Notice of Borrowing is given by _____________________, a Responsible Officer of ________________ (the “Borrower Representative”), pursuant to that certain Credit and Security Agreement dated as of ____________, 20__ among the Borrower Representative, and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
The undersigned Responsible Officer hereby gives notice to Agent of Borrower Representative’s request to on _______________, 20__ borrow $_______________ of Loans on , 20 . Attached as Annex I is a “roll-forward” Borrowing Base Certificate complying in all respects with the Credit Agreement and confirming that, after giving effect to the requested advance, the Revolving Loan Outstandings will not exceed the Revolving Loan Limit.^9^
The undersigned officer hereby certifies that, both before and after giving effect to the request above (a) each of the conditions precedent set forth in Section 7.2 have been satisfied, (b) all of the representations and warranties contained in the Credit Agreement and the other Financing Documents are true and correct in all material respects as of the date hereof, except to the extent such representation or warranty relates to a specific date, in which case such representation or warranty is true and correct in all material respects as of such earlier date, and (c) no Default or Event of Default has occurred and is continuing on the date hereof.
IN WITNESS WHEREOF, the undersigned officer has executed and delivered this Notice of Borrowing this ____ day of ___________, 20__.
| Sincerely, <br><br><br><br>[BORROWER REPRESENTATIVE] | |
|---|---|
| By: | |
| Name: | |
| Title: | |
| ^9^ | For the avoidance of doubt, any Borrowing Base Certificate delivered pursuant to Section 7.2(a) of the Credit Agreement shall, unless<br>otherwise elected by the Borrower, not require reporting on Collateral included in Borrowing Base as of such proposed borrowing date,<br>but rather shall require reporting only on repayments and borrowings of Loans since the last Borrowing Base certificate was delivered. |
| --- | --- |
ANNEX I
BORROWING BASE CERTIFICATE
Exhibit E****to Credit Agreement (Form of Closing Certificate)
[See attached]
Exhibit F-1 to Credit Agreement (Form of U.S.Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement dated as of July 29, 2025, among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 Agent and the Borrower Representative with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower Representative and Agent, and (2) the undersigned shall have at all times furnished the Borrower Representative and 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.
| [NAME OF LENDER] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-2 to Credit Agreement (Form of U.S.Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement dated as of July 29, 2025, among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 or IRS Form W-8BEN-E. 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.
| [NAME OF PARTICIPANT] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-3 to Credit Agreement (Form of U.S.Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement dated as of July 29, 2025, among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E 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.
| [NAME OF PARTICIPANT] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-4 to Credit Agreement (Form of U.S.Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Credit Agreement dated as of July 29, 2025, among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 Financing 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 Agent and the Borrower Representative 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 or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E 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 Borrower Representative and Agent, and (2) the undersigned shall have at all times furnished the Borrower Representative and 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.
| [NAME OF LENDER] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit G to Credit Agreement (Form of SolvencyCertificate)
FORM OF SOLVENCY CERTIFICATE
[Insert Date]
To Agent and each of the Lenders party to the Credit Agreement referred to below:
I, the undersigned interim chief financial officer of [•], a [•] (the “Borrower”), in that capacity only and not in my individual capacity (and without personal liability), do hereby certify as of the date hereof, and based upon facts and circumstances as they exist as of the date hereof (and disclaiming any responsibility for changes in such facts and circumstances after the date hereof), that:
1. This certificate is furnished to Agent and the Lenders pursuant to Section 7.1(d) of the Credit Agreement, dated as of July 29, 2025, among the Credit Parties, the Lenders and MidCap Funding IV Trust (“MidCap”), as administrative agent and collateral agent (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used in this certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this certificate, the terms below shall have the following definitions:
(a) “Fair Value”
The amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.
(b) “Present Fair Salable Value”
The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.
(c) “Liabilities”
The recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions, determined in accordance with GAAP consistently applied.
(d) “Will be able to pay their Liabilities as they mature”
For the period from the date hereof through the Termination Date, the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions will have sufficient assets, credit capacity and cash flow to pay their Liabilities as those Liabilities mature or (in the case of contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by the Borrower and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.
(e) “Do not have Unreasonably Small Capital”
The Borrower and its Subsidiaries taken as a whole after consummation of the Transactions is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern for the period from the date hereof through the Termination Date. I understand that “unreasonably small capital” depends upon the nature of the particular business or businesses conducted or to be conducted, and I have reached my conclusion based on the needs and anticipated needs for capital of the business conducted or anticipated to be conducted by the Borrower and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.
3. For purposes of this certificate, I, or officers of the Borrower under my direction and supervision, have performed the following procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements of the Borrower and its Subsidiaries.
(b) I have knowledge of and have reviewed to my satisfaction the Credit Agreement.
(c) As interim chief financial officer of the Borrower, I am familiar with the financial condition of the Borrower and its Subsidiaries.
4. Based on and subject to the foregoing, I hereby certify on behalf of the Borrower that after giving effect to the consummation of the Transactions, it is my opinion that (i) the Fair Value of the assets of the Borrower and its Subsidiaries taken as a whole exceeds their Liabilities, (ii) the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries taken as a whole exceeds their Liabilities; (iii) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; (iv) the Borrower and its Subsidiaries taken as a whole will be able to pay their Liabilities as they mature, (v) the Borrower and each of its Subsidiaries is (on a consolidated basis) Solvent and (vi) no Canadian Credit Party is, on a stand alone basis, an “insolvent person” as defined in the Bankruptcy and Insolvency Act (Canada) as of the date any Accounts of such Canadian Credit Party are initially included on any Borrowing Base Certificate (and, for the avoidance of doubt, the Solvency Certificate delivered on such date shall only include the certification set forth in this clause (vi)).
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed on its behalf by its chief financial officer as of the date first written above.
| By: | |
|---|---|
| Name: | |
| Title: |
Exhibit H to Credit Agreement (Form of ABL IntercreditorAgreement)
[See attached]
Exhibit I to Credit Agreement (Form of InformationCertificate)
[See attached]
Exhibit J to Credit Agreement (Form of CopyrightSecurity Agreement)
[See attached]
Exhibit K to Credit Agreement (Form of PatentSecurity Agreement)
[See attached]
Exhibit L to Credit Agreement (Form of TrademarkSecurity Agreement)
[See attached]
Exhibit 10.7
EXECUTION VERSION
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
dated as of July 29, 2025
by and among
EXELA TECHNOLOGIES BPA, LLC,
as Borrower,
and
BRF FINANCE CO. LLC,
as Agent,
and
THE LENDERS
FROM TIME-TO-TIME PARTY HERETO
tableof contents
Page
| Article 1 - DEFINITIONS | 2 | |
|---|---|---|
| Section 1.1 | Certain Defined Terms | 2 |
| --- | --- | --- |
| Section 1.2 | Accounting Terms and Determinations | 51 |
| Section 1.3 | Other Definitional and Interpretive Provisions | 52 |
| Section 1.4 | Time is of the Essence | 52 |
| Article 2 - LOANS | 52 | |
| --- | --- | |
| Section 2.1 | Loans | 52 |
| --- | --- | --- |
| Section 2.2 | Interest, Interest Calculations and Certain Fees | 54 |
| Section 2.3 | Notes | 56 |
| Section 2.4 | Extension of Termination Date | 56 |
| Section 2.5 | [Reserved]. | 56 |
| Section 2.6 | General Provisions Regarding Payment; Loan Account | 56 |
| Section 2.7 | Maximum Interest | 57 |
| Section 2.8 | Taxes; Capital Adequacy; Increased Costs; Inability<br> to Determine Rates; Illegality | 57 |
| Section 2.9 | Appointment of Borrower Representative | 63 |
| Section 2.10 | Joint and Several Liability; Rights of Contribution;<br> Subordination and Subrogation | 64 |
| Section 2.11 | [Reserved] | 66 |
| Section 2.12 | Termination; Restriction on Termination | 66 |
| Article 3 - REPRESENTATIONS AND WARRANTIES | 67 | |
| --- | --- | |
| Section 3.1 | Existence and Power | 67 |
| --- | --- | --- |
| Section 3.2 | Organization and Governmental Authorization; No Contravention | 67 |
| Section 3.3 | Binding Effect | 67 |
| Section 3.4 | Capitalization | 68 |
| Section 3.5 | Financial Information | 68 |
| Section 3.6 | Litigation | 68 |
| Section 3.7 | Ownership of Property | 68 |
| Section 3.8 | No Default | 68 |
| Section 3.9 | Labor Matters | 68 |
i
| Section 3.10 | Regulated Entities | 69 |
|---|---|---|
| Section 3.11 | Margin Regulations | 69 |
| Section 3.12 | Compliance With Laws; Anti-Terrorism Laws | 69 |
| Section 3.13 | Taxes | 69 |
| Section 3.14 | Compliance with ERISA | 70 |
| Section 3.15 | Consummation of Operative Documents; Brokers | 70 |
| Section 3.16 | Related Transactions | 70 |
| Section 3.17 | Material Contracts | 71 |
| Section 3.18 | Compliance with Environmental Requirements; No Hazardous<br> Materials | 71 |
| Section 3.19 | Intellectual Property | 71 |
| Section 3.20 | Solvency | 72 |
| Section 3.21 | Full Disclosure | 72 |
| Section 3.22 | [Reserved] | 72 |
| Section 3.23 | Subsidiaries | 72 |
| Article 4 - AFFIRMATIVE COVENANTS | 73 | |
| --- | --- | |
| Section 4.1 | Financial Statements and Other Reports | 73 |
| --- | --- | --- |
| Section 4.2 | Payment and Performance of Obligations | 76 |
| Section 4.3 | Maintenance of Existence | 76 |
| Section 4.4 | Maintenance of Property; Insurance | 76 |
| Section 4.5 | Compliance with Laws and Material Contracts | 78 |
| Section 4.6 | Inspection of Property, Books and Records | 78 |
| Section 4.7 | Use of Proceeds | 78 |
| Section 4.8 | Notices of Litigation and Defaults | 78 |
| Section 4.9 | Hazardous Materials; Remediation | 79 |
| Section 4.10 | Further Assurances | 79 |
| Section 4.11 | [Reserved] | 81 |
| Section 4.12 | Power of Attorney | 81 |
| Section 4.13 | [Reserved] | 81 |
| Section 4.14 | Maintenance of Management | 81 |
| Article 5<br> - NEGATIVE COVENANTS | 81 | |
| --- | --- | |
| Section 5.1 | Debt; Contingent Obligations | 81 |
| --- | --- | --- |
| Section 5.2 | Liens | 81 |
ii
| Section 5.3 | Restricted Distributions | 81 |
|---|---|---|
| Section 5.4 | Restrictive Agreements | 82 |
| Section 5.5 | Payments and Modifications of Subordinated Debt | 82 |
| Section 5.6 | Consolidations, Mergers and Sales of Assets; Change<br> in Control | 83 |
| Section 5.7 | Purchase of Assets, Investments | 83 |
| Section 5.8 | Transactions with Affiliates | 83 |
| Section 5.9 | Modification of Organizational Documents | 85 |
| Section 5.10 | Modification of Certain Agreements | 85 |
| Section 5.11 | Conduct of Business | 85 |
| Section 5.12 | Lease Payments | 86 |
| Section 5.13 | Limitation on Sale and Leaseback Transactions | 86 |
| Section 5.14 | Deposit Accounts and Securities Accounts; Payroll and<br> Benefits Accounts | 86 |
| Section 5.15 | Compliance with Anti-Terrorism Laws | 86 |
| Article 6<br> - FINANCIAL COVENANTS | 87 | |
| --- | --- | |
| Section 6.1 | Fixed Charge Coverage Ratio | 87 |
| --- | --- | --- |
| Section 6.2 | Evidence of Compliance | 87 |
| Article 7<br> - CONDITIONS | 87 | |
| --- | --- | |
| Section 7.1 | Conditions to Closing | 87 |
| --- | --- | --- |
| Section 7.2 | [Reserved] | 91 |
| Section 7.3 | Searches | 91 |
| Section 7.4 | Post Closing Requirements | 91 |
| Article 8<br> - [RESERVED] | 91 | |
| --- | --- | |
| Article 9<br> - SECURITY AGREEMENT | 91 | |
| --- | --- | |
| Section 9.1 | Generally | 91 |
| --- | --- | --- |
| Section 9.2 | Representations and Warranties and Covenants Relating<br> to Collateral | 92 |
| Article 10<br> - EVENTS OF DEFAULT | 96 | |
| --- | --- | |
| Section 10.1 | Events of Default | 96 |
| --- | --- | --- |
| Section 10.2 | [Reserved] | 99 |
| Section 10.3 | UCC Remedies | 99 |
| Section 10.4 | [Reserved]. | 101 |
iii
| Section 10.5 | Default Rate of Interest | 101 |
|---|---|---|
| Section 10.6 | Setoff Rights | 101 |
| Section 10.7 | Application of Proceeds | 102 |
| Section 10.8 | Waivers | 103 |
| Section 10.9 | Injunctive Relief | 104 |
| Section 10.10 | Marshalling; Payments Set Aside | 105 |
| Article 11<br> - AGENT | 105 | |
| --- | --- | |
| Section 11.1 | Appointment and Authorization | 105 |
| --- | --- | --- |
| Section 11.2 | Agent and Affiliates | 106 |
| Section 11.3 | Action by Agent | 106 |
| Section 11.4 | Consultation with Experts | 106 |
| Section 11.5 | Liability of Agent | 106 |
| Section 11.6 | Indemnification | 106 |
| Section 11.7 | Right to Request and Act on Instructions | 107 |
| Section 11.8 | Credit Decision | 107 |
| Section 11.9 | Collateral Matters | 107 |
| Section 11.10 | Agency for Perfection | 108 |
| Section 11.11 | Notice of Default | 108 |
| Section 11.12 | Assignment by Agent; Resignation of Agent; Successor<br> Agent | 108 |
| Section 11.13 | Payment and Sharing of Payment | 109 |
| Section 11.14 | Right to Perform, Preserve and Protect | 110 |
| Section 11.15 | Additional Titled Agents | 110 |
| Section 11.16 | Amendments and Waivers | 111 |
| Section 11.17 | Assignments and Participations | 112 |
| Section 11.18 | [Reserved] | 114 |
| Section 11.19 | [Reserved] | 114 |
| Section 11.20 | Erroneous Payments | 114 |
| Section 11.21 | Definitions | 117 |
| Article 12<br> - GUARANTEE | 117 | |
| --- | --- | |
| Section 12.1 | [Reserved] | 117 |
| --- | --- | --- |
| Section 12.2 | Guarantee; Limitation of Liability | 118 |
| Section 12.3 | Guarantee Absolute | 118 |
| Section 12.4 | Waivers and Acknowledgments | 119 |
iv
| Section 12.5 | Subrogation | 120 |
|---|---|---|
| Section 12.6 | [Reserved] | 121 |
| Section 12.7 | Subordination | 121 |
| Section 12.8 | Continuing Guarantee; Assignments | 121 |
| Article 13<br> - MISCELLANEOUS | 121 | |
| --- | --- | |
| Section 13.1 | Survival | 121 |
| --- | --- | --- |
| Section 13.2 | No Waivers | 122 |
| Section 13.3 | Notices | 122 |
| Section 13.4 | Severability | 123 |
| Section 13.5 | Headings | 123 |
| Section 13.6 | Confidentiality | 123 |
| Section 13.7 | Waiver of Consequential and Other Damages | 124 |
| Section 13.8 | GOVERNING LAW; SUBMISSION TO JURISDICTION | 124 |
| Section 13.9 | WAIVER OF JURY TRIAL | 125 |
| Section 13.10 | Publication and Advertisement | 125 |
| Section 13.11 | Counterparts; Integration | 126 |
| Section 13.12 | No Strict Construction | 126 |
| Section 13.13 | Lender Approvals | 126 |
| Section 13.14 | Expenses; Indemnity | 127 |
| Section 13.15 | Confession of Judgment | 128 |
| Section 13.16 | Reinstatement | 129 |
| Section 13.17 | Successors and Assigns | 129 |
| Section 13.18 | USA PATRIOT Act Notification | 129 |
| Section 13.19 | Judgment Currency. | 129 |
| Section 13.20 | Acknowledgement and Consent to Bail-In of Affected<br> Financial Institutions | 130 |
| Section 13.21 | Parent. | 130 |
| Section 13.22 | ROFR. | 130 |
| Article 14<br> Amendment and Restatement of Existing 2L Note. | 130 | |
| --- | --- | |
| Section 14.1 | Acknowledgment of Assignment and<br> Assumption | 130 |
| --- | --- | --- |
| Section 14.2 | Amendment and Restatement | 131 |
v
AMENDEDAND RESTATED CREDIT AND SECURITY AGREEMENT
THISAMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Agreement”) is dated as of July 29, 2025 by and among Exela Technologies BPA, LLC, a Delaware limited liability company, and any additional borrower that may hereafter be added to this Agreement (each individually as a “Borrower”, and collectively as “Borrowers”), BRF FINANCE CO., LLC, a Delaware limited liability company, individually as a Lender, and as Agent (as defined below), and the financial institutions or other entities from time to time parties hereto, each as a Lender (as defined below).
RECITALS
WHEREAS, on March 3, 2025 (the “Petition Date”), DocuData Solutions, L.C., the Borrower and certain other Affiliates (each, a “Debtor” and collectively, the “Debtors”) filed voluntary petitions with the Bankruptcy Court initiating their respective cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (such court, the “BankruptcyCourt”; and each such case of the Debtors, a “Chapter 11 Case” and collectively, the “Chapter 11Cases”) and continued in the possession of their assets and the management of their business pursuant to Section 1107 and 1108 of the Bankruptcy Code;
WHEREAS, on June 23, 2025, the Bankruptcy Court entered the Confirmation Order (as defined herein) approving the Plan of Reorganization of the Debtors, and concurrently with the making of the Loans hereunder, the effective date with respect to the Plan of Reorganization has occurred;
WHEREAS, Exela Receivables 3 Holdco, LLC, a Delaware limited liability company (“ER3 Holdco”), is currently a party to that certain Secured Promissory Note, dated as of February 27, 2023 (the “Existing 2L Note”), in favor of BRF Finance Co., LLC (the “Existing 2L Noteholder”);
WHEREAS, ER3 Holdco and the Existing 2L Noteholder have agreed to assign all the obligations of ER3 Holdco under the Existing 2L Note to the Borrowers;
WHEREAS, by execution and delivery of this Agreement and the other Financing Documents and entry of the Confirmation Order in respect of the Chapter 11 Cases, as applicable, agree to guarantee the Obligations, and the Borrower and each Guarantor agrees to secure all of the Obligations by granting to Agent, for the benefit of the Lenders, a lien and security interest in respect of, and on, the Collateral, on and subject to the terms and priorities set forth in the other Financing Documents.
1
AGREEMENT
NOW,THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:
Article 1 - DEFINITIONS
Section 1.1****CertainDefined Terms. The following terms have the following meanings:
“ABL Agreement” means that certain Credit and Security Agreement, dated as of the Closing Date, among the Borrowers, the Guarantors, the lenders party thereto from time to time and MidCap Funding IV Trust, as administrative agent (the “ABL Agent”), and the other parties from time-to-time party thereto, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time (in each case, to the extent permitted under the ABL Intercreditor Agreement).
“ABL Documents” means the collective reference to the ABL Agreement and any other document, agreement and instrument executed and/or delivered in connection therewith or relating thereto, together with any amendment, supplement, waiver, or other modification to any of the foregoing (in each case, to the extent permitted under the ABL Intercreditor Agreement).
“ABL IntercreditorAgreement” means that certain Intercreditor Agreement, dated as of the Closing Date, among the Borrowers, the Guarantors, the Agent, the ABL Agent, the administrative agent and collateral agent under the Term Loan Documents, the Trustee, the Exit Notes Collateral Agent, and the other parties from time-to-time party thereto, as the same may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time.
“ABL Priority Collateral” has the meaning specified therefor in the ABL Intercreditor Agreement.
“Acceleration Event” means the occurrence of an Event of Default (a) in respect of which Agent has declared all or any portion of the Obligations to be immediately due and payable pursuant to Section 10.2 and/or (b) pursuant to either Section 10.1(e) and/or Section 10.1(f).
“Account Debtor” means “account debtor” as defined in Article 9 of the UCC.
“Accounts” means, collectively, (a) any right to payment of a monetary obligation, whether or not earned by performance, (b) without duplication, any “account” (as defined in the UCC), any accounts receivable (whether in the form of payments for services rendered or goods sold, rents, license fees or otherwise), any “health-care-insurance receivables” (as defined in the UCC), any “payment intangibles” (as defined in the UCC), and all other rights to payment and/or reimbursement of every kind and description, whether or not earned by performance, (c) all accounts, “general intangibles” (as defined in the UCC), Intellectual Property, rights, remedies, guarantees, “supporting obligations” (as defined in the UCC), “letter-of-credit rights” (as defined in the UCC) and security interests in respect of the foregoing, all rights of enforcement and collection, all books and records evidencing or related to the foregoing, and all rights under the Financing Documents in respect of the foregoing, (d) all information and data compiled or derived by any Borrower or to which any Borrower is entitled in respect of or related to the foregoing, and (e) all proceeds of any of the foregoing.
2
“Additional Notes” means the notes issued under the terms of the Exit Notes Indenture subsequent to the Closing Date.
“Affected FinancialInstitution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” means, with respect to any Person, (a) any Person that directly or indirectly controls such Person, (b) any Person which is controlled by or is under common control with such controlling Person, and (c) each of such Person’s (other than, with respect to any Lender, any Lender’s) officers or directors (or Persons functioning in substantially similar roles) and the spouses, parents, descendants and siblings of such officers, directors or other Persons. As used in this definition, the term “control” of a Person means the possession, directly or indirectly, of the power to vote ten percent (10%) or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agent” means B. Riley, in its capacity as administrative agent for itself and for Lenders hereunder, as such capacity is established in, and subject to the provisions of, Article 11, and the successors and assigns of B. Riley in such capacity.
“Agent Assignee” has the meaning specified therefor in Section 11.20(d).
“Anti-TerrorismLaws” means any Laws relating to terrorism or money laundering, including, without limitation, Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act and the Laws administered by OFAC.
“Applicable Law” means, with respect to any Person, any Law (x) that is applicable to such Person or any of its property, (y) to which such Person is a party or (z) by which any of such Person’s property is bound. For the avoidance of doubt, FATCA shall constitute an “Applicable Law” for all purposes of this Agreement.
“Applicable Rate” means the per annum rate equal to the Term SOFR Rate plus 7.5%.
“Asset Disposition” means any sale, lease, license, transfer, assignment or other consensual disposition (including by merger, allocation of assets (including allocation of assets to any series of a limited liability company), division, consolidation or amalgamation) by any Credit Party of any asset.
“B. Riley” means BRF Finance Co. LLC, a Delaware limited liability company.
“Bail-In Action” means 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-InLegislation” means (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).
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“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto.
“BlockedPerson” means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) that is named a “specially designated national” or “blocked person” on the most current list published by OFAC, or other similar list or is named as a “listed person” or “listed entity” on other lists made under any Anti-Terrorism Law.
“Borrower” and “Borrowers” mean the entity(ies) described in the first paragraph of this Agreement and each of their successors and permitted assigns.
“Borrower Representative” means Exela Technologies BPA, LLC, in its capacity as Borrower Representative pursuant to the provisions of Section 2.9, or any successor Borrower Representative selected by Borrowers and approved by Agent.
“Borrowing BaseCertificate” refers to the “Borrowing Base Certificate” (or any substitute or replacement definition thereof) in the ABL Agreement.
“Business Day” means any day except a Saturday, Sunday or other day on which either the New York Stock Exchange is closed, or on which commercial banks in Washington, DC and New York City are authorized by law to close; provided, however, that when used in the context of a SOFR Loan, the term “Business Day” shall also exclude any day that is not also a SOFR Business Day.
“Capital Expenditures” means any expenditure that would be classified as a capital expenditure on a statement of cash flow of Borrowers prepared in accordance with GAAP.
“Capitalized SoftwareExpenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Subsidiaries.
“Capital Stock” means:
(1) in the case of a corporation, corporate stock or shares;
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(2) in the case of an association or business entity, any and all shares,
(3) interests, participations, rights or other equivalents (however designated) of corporate stock;
(4) in the case of a partnership or limited liability company, partnership or
(5) membership interests (whether general or limited); and
(6) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Cash Equivalents” means, as of any date of determination, any of the following: (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally; (d) certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s.
“Cash ManagementAgreement” means any agreement to provide to the Borrower Representative or any of its Subsidiaries cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. § 9601 et seq., as the same may be amended from time to time.
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“Change in Control” means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Borrowers and their respective Subsidiaries, taken as a whole, to a Person;
(2) the Borrowers become aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the direct or indirect acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the holders of such interests as of the Closing Date, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the voting equity interests of the Borrower Representative or the Parent; or
(3) except as expressly permitted pursuant to Section 5.6, the Borrower shall cease to, directly or indirectly own and control one hundred percent (100%) of each class of the outstanding equity interests of any Subsidiary the assets of which contribute more than $5,000,000 to the Borrowing Base.
“Claims AdministrationArrangements” means any and all arrangements entered into by any Exar Originator and any Claims Administration Bank whereby short-term loans (which loans shall be secured solely by Claim Administration Liens) are made by such Claims Administration Bank to any Exar Originator; provided, that the proceeds of such loans are deposited in one or more segregated deposit or securities accounts and are solely used to purchase Claims Administration Investments (which shall be held in such segregated accounts) and pay transaction costs in connection therewith.
“Claims AdministrationBank” means any third-party financial institution having capital and surplus in excess of $250,000,000 and whole long-term debt is rated “A” or the equivalent by Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) that is designated by any Exar Originator to hold and distribute certain legal settlement funds administered by any Exar Originator in connection with such Exar Originator’s claims administration business.
“Claims AdministrationIndebtedness” means Indebtedness for borrowed money of any Exar Originator in favor of the Claims Administration Bank in respect of loans made pursuant to Claims Administration Arrangements.
“Claims AdministrationInvestments” means Cash Equivalents invested with proceeds of Claims Administration Indebtedness.
“Claims AdministrationLiens” means Liens in favor of the Claims Administration Bank on Claims Administration Investments and related segregated deposit and securities accounts securing Claims Administration Indebtedness solely to the extent the amount of such Claims Administration Investment equals or exceeds the amount of such Claims Administration Indebtedness.
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“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.
“Collateral” means, subject to the ABL Intercreditor Agreement, all property, now existing or hereafter acquired, mortgaged or pledged to, or purported to be subjected to a Lien in favor of, Agent, for the benefit of Agent and Lenders, pursuant to this Agreement and the Security Documents, including, without limitation, all of the property described in Schedule 9.1 hereto.
“Collateral MonitoringFee” shall have the meaning set forth in Section 2.2(b).
“Compliance Certificate” means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit B hereto.
“ConfirmationOrder” means the Order (I) Approving Debtors’ Disclosure Statement and (II) Confirming Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code Docket No. 834 entered by the Bankruptcy Court on June 23, 2025.
“Connection IncomeTaxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Depreciationand Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including, without limitation, the amortization of intangible assets, deferred financing fees, capitalized contract incentives, Capitalized Software Expenditures and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Consolidated Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.
“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Consolidated Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including the interest component of capitalized lease obligations and net payments and receipts (if any) pursuant to interest rate Swap Contracts and excluding amortization of deferred financing fees and original issue discount, debt issuance costs, commissions, fees and expenses, expensing of any bridge, commitment or other financing fees and non-cash interest expense attributable to movement in mark to market valuation of Swap Contracts or other derivatives (in each case permitted hereunder) under GAAP); plus
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(2) consolidated capitalized interest of such Person and its Consolidated Subsidiaries for such period, whether paid or accrued; minus
(3) interest income for such period.
For purposes of this definition, interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP.
“Consolidated NetIncome” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Consolidated Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(2) (a) the Net Income for such period of any Person that is not a Consolidated Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Consolidated Subsidiary thereof in respect of such period and (b) the Net Income for such period shall include any dividend, distribution or other payment in cash (or to the extent converted into cash) received by the referent Person or a Consolidated Subsidiary thereof from any Person in excess of, but without duplication of, the amounts included in subclause (a);
(3) accruals and reserves that are established or adjusted within 12 months after the Closing Date and that are so required to be established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded;
(4) (i) cash received from landlords for tenant allowances shall be included and (ii) to the extent not already included in Net Income, the cash portion of sublease rentals received shall be included;
(5) any deductions attributable to minority interests shall be excluded;
(6) non cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP and related interpretations shall be excluded;
(7) any gain, loss, income, expense or charge resulting from the application of any LIFO shall be excluded; and
(8) an amount equal to the amount of Tax Distributions actually made to any parent or equity holder of such Person in respect of such period in accordance with clause (e) of the definition of “Permitted Distributions” shall be included as though such amounts had been paid as income taxes directly by such Person for such period.
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“Consolidated Non-CashCharges” means, with respect to any Person for any period, the non-cash expenses (other than Consolidated Depreciation and Amortization Expense) of such Person and its Consolidated Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP; provided, that if any such non-cash expenses represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from EBITDA in such future period to the extent paid, but excluding from this proviso, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period.
“Consolidated Subsidiary” means, at any date, any Subsidiary the accounts of which would be consolidated with those of “parent” Borrower (or any other Person, as the context may require hereunder) in its consolidated financial statements if such statements were prepared as of such date.
“Consolidated Taxes” means, with respect to any Person for any period, the provision for taxes based on income, profits or capital, including, without limitation, federal, state, provincial, franchise, property and similar taxes, foreign withholding taxes (including penalties and interest related to such taxes or arising from tax examinations) and, without duplication, any Tax Distributions taken into account in calculating Consolidated Net Income.
“Consolidated TotalIndebtedness” means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate principal amount of all outstanding Debt of the Borrowers and their respective Subsidiaries (excluding letters of credit or bank guarantees, to the extent undrawn, cash collateralized or backstopped) consisting of capitalized lease obligations and Debt for borrowed money, plus (2) the aggregate amount of all outstanding customary disqualified equity interests of the Borrowers and their respective Subsidiaries and all preferred stock of the Subsidiaries, with the amount of such disqualified equity interests and preferred stock equal to the greater of their respective voluntary or involuntary liquidation preferences, in each case determined on a consolidated basis in accordance with GAAP.
“ContingentObligation” means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect to any Debt of another Person (a “Third Party Obligation”) if the purpose or intent of such Person incurring such liability, or the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation will be protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing; (c) under any Swap Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant to any guarantee or pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to preserve the solvency, financial condition or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determinable amount, the maximum amount so guaranteed or otherwise supported.
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“Control Agreement” means any Deposit Account Control Agreement or Securities Account Control Agreement.
“Controlled Group” means all members of any group of corporations and all members of a group of trades or businesses (whether or not incorporated) under common control which, together with any Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.
“Credit Party” means each Borrower and each Guarantor; and “Credit Parties” means all such Persons, collectively.
“Debt” of a Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business, (d) all capital leases of such Person, (e) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit, banker’s acceptance or similar instrument, (f) all equity securities of such Person subject to repurchase or redemption other than at the sole option of such Person, (g) all obligations secured by a Lien on any asset of such Person, whether or not such obligation is otherwise an obligation of such Person, (h) “earnouts” (until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of purchase and sale contracts, (i) all Debt of others guaranteed by such Person, (j) off-balance sheet liabilities and/or Pension Plan or Multiemployer Plan liabilities of such Person, (k) obligations arising under non-compete agreements, and (l) obligations arising under bonus, deferred compensation, incentive compensation or similar arrangements, other than those arising in the Ordinary Course of Business. Without duplication of any of the foregoing, Debt of Borrowers shall include any and all Loans.
Notwithstanding the foregoing, Debt shall be deemed not to include (1) Contingent Obligations incurred in the Ordinary Course of Business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) [reserved]; (5) trade and other ordinary course payables, accrued expenses and intercompany liabilities, including with respect to working capital advancements, arising in the Ordinary Course of Business; (6) obligations in respect of Third Party Funds; (7) in the case of the Borrowers and their respective Subsidiaries (x) all intercompany Debt having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the Ordinary Course of Business and (y) intercompany liabilities in connection with cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries; (8) any Claims Administration Indebtedness of the Exar Originators (except to the extent that any such Claims Administration Indebtedness exceeds the Claims Administration Investments of such Exar Originator); and (9) any obligations under Swap Contracts, provided, that such agreements are entered into for bona fide hedging purposes of the Borrowers or their respective Subsidiaries (as determined in good faith by the Board of Directors or senior management of the Borrower Representative, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of the Borrowers or their Subsidiaries entered into in the Ordinary Course of Business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Debt of the Borrowers or their Subsidiaries incurred without violation of this Agreement.
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Notwithstanding anything in this Agreement to the contrary, Debt shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Debt for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Debt; and any such amounts that would have constituted Debt under this Agreement but for the application of this sentence shall not be deemed an incurrence of Debt under this Agreement.
“DebtorRelief Laws” means the Bankruptcy Code, any corporate statute which is used by a Person to propose an arrangement in connection with a compromise of such Person’s debt obligations each as now and hereafter in effect, any successors to such statutes, 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 and affecting the rights of creditors generally.
“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.
“Default Rate” means the Applicable Rate plus two percent (2.0%).
“Defined Period” means, for purposes of calculating the Fixed Charge Coverage Ratio for any given calendar month, the twelve (12) month period immediately preceding any such calendar month.
“Deposit Account” means a “deposit account” (as defined in Article 9 of the UCC), bank account or an investment account, or other account in which funds are deposited, held or invested for credit to or for the benefit of any Credit Party.
“Deposit AccountControl Agreement” means either (i) an account control agreement, in form and substance satisfactory to the ABL Agent, among ABL Agent, any Credit Party and each financial institution in which such Credit Party maintains a Deposit Account or (ii) an account control agreement, in form and substance satisfactory to the Agent, among Agent, any Credit Party and each financial institution in which such Credit Party maintains a Deposit Account.
“Dollars” means the lawful currency of the United States of America.
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“EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Consolidated Subsidiaries for such period plus, without duplication and to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) (i) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, (ii) all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Consolidated Subsidiaries and (iii) costs of surety bonds in connection with financing activities; plus
(3) Consolidated Depreciation and Amortization Expense; plus
(4) Consolidated Non-Cash Charges; plus
(5) any (x) net after-tax extraordinary, nonrecurring or unusual losses (plus all fees and expenses relating thereto) or (y) expenses or charges, including, without limitation, severance expenses, relocation expenses, restructuring expenses, curtailments or modifications to pension and post- retirement employee benefit plans, excess pension charges, any expenses related to any New Project or any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternate uses and fees, expenses or charges relating to facility rebranding costs, acquisition integration costs, facility opening costs, project and contract start- up costs, business optimization costs, recruiting costs, signing, retention or completion bonuses, and any fees, expenses, charges or change in control payments related to the Transactions (including any costs relating to auditing prior periods, any transition-related expenses, and transaction expenses incurred before, on or after the Closing Date) for such period, in each case, to the extent not already added back in clause (21) or (23) below; plus
(6) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such Person and such Consolidated Subsidiaries and including, without limitation, the effects of adjustments to (A) deferred rent, (B) capitalized lease obligations or other obligations or deferrals attributable to capital spending funds with suppliers or (C) any other deferrals of income) in amounts required or permitted by GAAP, resulting from the application of purchase accounting or the amortization or write-off of any amounts thereof, net of taxes, for such period; plus
(7) any net after-tax loss from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax losses on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets during such period; plus
(8) any net after-tax losses (plus all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Borrower Representative) during such period; plus
(9) any net after-tax losses (plus all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Swap Contracts or other derivative instruments during such period; plus
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(10) [reserved];
(11) any impairment charges and asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles and other fair value adjustments to good will and other intangible assets arising pursuant to GAAP for such period; plus
(12) any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights, in each case to the extent not otherwise added back pursuant to clause (13) or (24); plus
(13) any (a) non-cash compensation charges, (b) [reserved], or (c) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Closing Date of officers, directors and employees, in each case of such Person or any Consolidated Subsidiary, to the extent not already added back pursuant to clause (12); plus
(14) (a) the non-cash portion of “straight-line” rent expense and (b) the non-cash amortization of tenant allowances; plus
(15) any currency translation gains and losses related to currency remeasurements of Debt, and any net loss or gain resulting from hedging transactions for currency exchange risk, for such period; plus
(16) (a) amounts received or estimated in good faith to be received from insurance in respect of lost revenues or earnings in respect of liability or casualty events or business interruption during such period, to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), and (b) expenses with respect to liability or casualty events or business interruption during such period; plus
(17) Capitalized Software Expenditures for such period; plus
(18) non-cash charges for deferred tax asset valuation allowances for such period; plus
(19) any other costs, expenses or charges resulting from facility closures or sales, including income (or losses) from such facility closures or sales, to the extent not already added back pursuant to clause (5)(y); plus
(20) business optimization expenses and other restructuring charges, reserves or expenses not related to the Transactions (which, for the avoidance of doubt, shall include, without limitation, the effect of inventory optimization programs, facility closures, facility consolidations, retention, severance, systems establishment costs, contract termination costs, future lease commitments and excess pension charges) and Pre-Opening Expenses; to the extent not already added back pursuant to clause (5)(y); plus
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(21) any expenses or charges (other than Consolidated Depreciation and Amortization Expense) (i) related to any issuance of equity interests, Investment, acquisition, New Project, disposition, loan origination, recapitalization or the incurrence, modification or repayment of Indebtedness permitted to be incurred by this Agreement (including a refinancing thereof) (whether or not successful) or (ii) incurred in connection with the Transactions, including (A) such fees, expenses or charges related to the Transactions, the Obligations or any Debt and (B) any amendment or other modification of the Obligations or other Debt, in each case, to the extent not already added back pursuant to clause (5)(y); plus
(22) [reserved];
(23) [reserved];
(24) any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of a Borrower or a Guarantor or net cash proceeds of an issuance of equity interests of the Borrowers (other than customary disqualified equity interests), and to the extent not otherwise added back pursuant to clause (12) or (13); plus
(25) the amount of any loss attributable to a New Project, until the date that is 12 months after the date of completing the construction, acquisition, assembling or creation of such New Project, as the case may be; provided, that (a) such losses are reasonably identifiable and factually supportable and certified by a responsible financial or accounting officer of the Borrowers and (b) losses attributable to such New Project after 12 months from the date of completing such construction, acquisition, assembling or creation, as the case may be, shall not be included in this clause (25); plus
(26) [reserved];
(27) with respect to any joint venture that is not a Subsidiary and solely to the extent relating to any net income referred to in clause (2) of the definition of “Consolidated Net Income” an amount equal to the proportion of those items described in clauses (1) and (2) above relating to such joint venture corresponding to the Borrower’s and the Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Subsidiary); plus
(28) [reserved];
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(29) [reserved]; and
less, without duplication, to the extent the same increased Consolidated Net Income,
(30) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any prior period and any items for which cash was received in a prior period); plus
(31) any net after-tax extraordinary, nonrecurring or unusual gains (less all fees and expenses relating thereto); plus
(32) any net after-tax income from disposed, abandoned, transferred, closed or discontinued operations or fixed assets and any net after-tax gains on disposal of disposed, abandoned, transferred, closed or discontinued operations or fixed assets during such period; plus
(33) any net after-tax gains (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by management of the Borrower Representative) during such period; plus
(34) any net after-tax gains (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness, Swap Contracts or other derivative instruments during such period;
provided that for all purposes, the individual amount added back to EBITDA pursuant to any of clauses (5), (13), (14), (19), (20), (21)(i), (23), (24) or (25) above shall not be more than 15% of EBITDA for the most recently ended twelve month period (calculated prior to giving effect to such adjustments and exclusions) and, together with the aggregate amount added back pursuant to clauses (5), (13), (14), (19), (20), (21)(i), (23), (24) or (25) above, shall not be more than 30% of EBITDA for the most recently ended twelve month period (calculated prior to giving effect to such adjustments and exclusions).
Notwithstanding the foregoing, for purposes of determining EBITDA for any period that includes any of the months set forth below, EBITDA for such month shall equal the respective amount set forth opposite such month in the table set forth below:
| Month | EBITDA (in thousands) | |
|---|---|---|
| July 2024 | $ | 6,321 |
| August 2024 | $ | 4,863 |
| September 2025 | $ | 6,989 |
| October 2024 | $ | 9,035 |
| November 2024 | $ | 8,412 |
| December 2024 | $ | 10,912 |
| January 2025 | $ | 4,269 |
| February 2025 | $ | 8,143 |
| March 2025 | $ | 9,504 |
| April 2025 | $ | 7,596 |
| May 2025 | $ | 4,069 |
| June 2025 | $ | 6,059 |
15
“EEA Financial Institution” means (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” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA ResolutionAuthority” means any public administrative authority, or any person entrusted with public administrative authority of any EEA Member Country (including any delegee), having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the effective date of the Plan of Reorganization.
“Environmental Laws” means any present and future federal, state, provincial, territorial, municipal and local laws, statutes, ordinances, rules, regulations, standards, policies and other governmental directives or requirements, as well as common law, pertaining to the environment, natural resources, pollution, health (including any environmental clean-up statutes and all regulations adopted by any local, state, provincial, territorial, municipal, federal or other Governmental Authority, and any statute, ordinance, code, order, decree, law rule or regulation all of which pertain to or impose liability or standards of conduct concerning medical waste or medical products, equipment or supplies), safety or clean-up that apply to any Borrower and relate to Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. § 4851 et seq.), any analogous federal, state, municipal or local laws, any amendments thereto, and the regulations promulgated pursuant to said laws, together with all amendments from time to time to any of the foregoing and judicial interpretations thereof.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock.
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“Equity Issuance” means either (a) the sale or issuance by any Credit Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by any Credit Party of any cash capital contributions from any Person not a Credit Party.
“ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.
“ERISA Plan” means any “employee benefit plan”, as such term is defined in Section 3(3) of ERISA (other than a Multiemployer Plan), which any Credit Party maintains, sponsors or contributes to, or, in the case of an employee benefit plan which is subject to Section 412 of the Code or Title IV of ERISA, to which any Credit Party or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five (5) years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
“Erroneous Payment” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentDeficiency Assignment” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentImpacted Loans” has the meaning specified therefor in Section 11.20.
“Erroneous PaymentReturn Deficiency” has the meaning specified therefor in Section 11.20.
“ETI” means Exela Technologies, Inc.
“ETI Funding Obligation” has the meaning assigned to it in the Plan of Reorganization.
“EU Bail-In LegislationSchedule” means 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” has the meaning set forth in Section 10.1.
“Exar Facility” means the receivables purchase facility established pursuant to that certain Receivables Purchase Agreement, dated as of February 12, 2024, among Exela BR SPV LLC, a Delaware limited liability company (“Exar SPV”), as seller, BR EXAR, LLC, a Delaware limited liability company (as successor by assignment to B. Riley Securities, Inc.), as buyer (the “Exar Buyer”), and the originators party thereto as of the Closing Date (the “Exar Originators”), as amended, restated, amended and restated, supplemented or otherwise modified from time to time (for the avoidance of doubt, other than with respect to amendments, restatements amendments and restatements, supplements or modifications which change the identities of the Exar Originators) (the “Exar RPA”).
“Exar Originator” has the meaning specified therefore in the definition of Exar Facility.
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“Exar RPA” has the meaning in the definition of “Exar Facility”.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Account” has the meaning specified therefor in Section 5.14.
“ExcludedEquity” means (a) in the event that any Borrower or any of its Subsidiaries forms any Subsidiary in accordance with this Agreement, the issuance by such Subsidiary of Equity Interests to a Borrower or such Subsidiary, as applicable, or (b) the issuance of Equity Interests of a Borrower to directors, officers and employees of such Borrower and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors of the Lead Borrower.
“Excluded Subsidiary” means, with respect to any Subsidiary of the Borrowers, (a) each Subsidiary that is prohibited from Guaranteeing the Obligations by any Requirement of Law or that would require consent, approval, license or authorization of a governmental (including regulatory) authority to Guarantee the Obligations (unless such consent, approval, license or authorization has been received); provided, that, for the avoidance of doubt, such Subsidiary shall have no obligation to seek such consent, approval, license or authorization, (b) each Subsidiary that is prohibited by any applicable contractual requirement from Guaranteeing the Obligations on the Closing Date or at the time such Subsidiary becomes a Subsidiary (in each case for so long as such restriction or any replacement or renewal thereof is in effect and only to the extent that such prohibition was not implemented or consented to with the intent of evading the requirements of Section 4.10), (c) [reserved], (d) any Subsidiary that (i) did not, as of the last day of the fiscal quarter of the Borrowers most recently ended, have assets with a value in excess of 5.0% of the total assets or revenues representing in excess of 5.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date and (ii) taken together with all other such Subsidiaries being excluded pursuant to this clause (d), as of the last day of the fiscal quarter of the Borrowers most recently ended, did not have assets with a value in excess of 10.0% of the total assets or revenues representing in excess of 10.0% of total revenues of the Borrowers and their respective Subsidiaries on a consolidated basis as of such date, (e) any Subsidiary for which providing a Guarantee or granting Liens required by the Financing Documents to secure Indebtedness could reasonably be expected to result in material tax consequences as determined in good faith by the Borrowers in consultation with the Required Lenders, and (f) any Subsidiary not organized under the laws of any state of the United States, in each case pursuant to clauses (a) through (f) hereof, only for so long as it remains as such; provided that any Subsidiary that incurs or provides a guarantee under (or has pledged its assets to secure the obligations of) any Indebtedness for borrowed money shall not be an Excluded Subsidiary.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to Agent, any Lender or any other recipient of any payment to be made by or on behalf of any obligation of Credit Parties hereunder or the Obligations or required to be withheld or deducted from a payment to Agent, such Lender or such recipient: (a) Taxes to the extent imposed on or measured by Agent’s, any Lender’s or such other recipient’s net income (however denominated), branch profits Taxes, and franchise Taxes, in each case, (i) imposed by the jurisdiction (or any political subdivision thereof) under which Agent, such Lender or such other recipient is organized, has its principal office or, in the case of any Lender, has its applicable lending office or (ii) that are Other Connection Taxes; (b) in the case of a Lender, United States withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in the Loans pursuant to a Law in effect on the date on which (i) such Lender acquires such interest in the Loans other than as a result of an assignment requested by a Credit Party under the terms hereof or (ii) such Lender changes its lending office for funding its Loan, except in each case to the extent that, pursuant to Section 2.8, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or to such Lender immediately before it changed its lending office; (c) Taxes attributable to Agent’s, such Lender’s or such other recipient’s failure to comply with Section 2.8(c); and (d) any Taxes imposed under FATCA.
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“Exit Notes” means the notes under the Exit Notes Indenture.
“Exit Notes Collateral Agent” means Ankura Trust Company, LLC, as the collateral agent under the Exit Notes Indenture.
“Exit NotesIndenture” means the indenture dated as of the date hereof among the Exela Technologies BPA, LLC, Exela Finance Inc., the guarantors named therein, the financial institutions named therein, the Trustee and the Exit Notes Collateral Agent, as in effect on the date hereof.
“Fair Value” means the amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury regulations or official interpretations thereof and any agreement entered into pursuant to the implementation of Section 1471(b)(1) of the Code, and any intergovernmental agreement, treaty or convention between the United States Internal Revenue Service, the U.S. Government and any governmental or taxation authority under any other jurisdiction which agreement’s principal purposes deals with the implement such sections of the Code.
“Financing Documents” means this Agreement, the ABL Intercreditor Agreement, any other intercreditor agreements, any Notes, the Security Documents, any subordination or intercreditor agreement pursuant to which any Debt and/or any Liens securing such Debt is subordinated to all or any portion of the Obligations and all other documents, instruments and agreements (other than any Swap Contract) related to the Obligations and heretofore executed, executed concurrently herewith or executed at any time and from time to time hereafter, as any or all of the same may be amended, supplemented, restated or otherwise modified from time to time.
“Fixed Charge CalculationDate” has the meaning assigned in the “Fixed Charge Coverage Ratio” definition.
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“FixedCharge Coverage Ratio” means, with respect to any Person for any period, the ratio of (a) (i) EBITDA of such Person for such period minus (ii) the Unfinanced Capital Expenditures of the Borrower and its Subsidiaries during such period minus (iii) Capitalized Software Expenditures to (b) the Fixed Charges of such Person for such period. In the event that the Borrowers or any of its Subsidiaries incurs, repays, repurchases or redeems any Debt or issues, repurchases or redeems disqualified equity interests or preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, repayment, repurchase or redemption of Debt, or such issuance, repurchase or redemption of disqualified equity interests or preferred stock, as if the same had occurred at the beginning of the applicable period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project or initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project or initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable reference period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in a Responsible Officer’s certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the reference period (including, to the extent applicable, the Transactions); provided, that for all purposes of determining EBITDA hereunder all adjustments (to the extent such adjustment is effected pursuant to the definition of EBITDA) shall not be more than the amount of applicable adjustments permitted pursuant to the applicable provision(s) of the definition of EBITDA, as the case may be for the most recently ended reference period (calculated prior to giving effect to such capped adjustments and exclusions (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
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If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Debt shall be calculated as if the rate in effect on the Fixed Charge Calculation Date had been the applicable rate for the entire period (taking into account any Swap Contracts applicable to such Debt if such Swap Contract has a remaining term in excess of 12 months). Interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Debt under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Debt during the applicable period. Interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of: (a) Consolidated Interest Expense (excluding amortization or write-off of deferred financing costs) of such Person for such period, (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or customary disqualified equity interests of such Person and its Subsidiaries, (c) regularly scheduled payments of principal on Debt for borrowed money that were paid or payable (but without duplication) during such period (excluding, for the avoidance of doubt, that attributable to Capitalized Lease Obligations and the Exar Facility) and (d) the aggregate amount of cash payments made in respect of Taxes (other than payroll taxes, sales taxes and Transaction Tax Liability (as defined in the Plan of Reorganization)) during such period.
“Floor” means the rate per annum of interest equal to 1.00%.
“Foreign Lender” has the meaning specified therefor in Section 2.8(c)(i).
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“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the United States accounting profession), which are applicable to the circumstances as of the date of determination. “General Intangible” means any “general intangible” as defined in Article 9 of the UCC, and any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas or other minerals before extraction, but including payment intangibles and software.
“Governmental Authority” means any nation or federal government, any state, province, territory, municipality or other political subdivision thereof, and any agency, department or Person exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other Person owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing, whether domestic or foreign.
“guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that the term guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business. The term “guarantee” used as a verb has a corresponding meaning.
“Guarantee” means the guarantee of the Guaranteed Obligations made by the Guarantors as set forth in Section 12 of this Agreement or in such other form as may be accepted by Agent in its reasonable discretion.
“Guarantee Supplement” has the meaning specified in Section 12.6.
“Guaranteed Obligations” has the meaning specified therefor in Section 12.2(a).
“Guarantor” means each Subsidiary of the Borrowers (other than an Excluded Subsidiary or other Person designated in writing by Agent as not required to be a Guarantor). For the avoidance of doubt, each Guarantor shall be jointly and severally liable for the Obligations to the extent provided in this Agreement and the other Financing Documents.
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“Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing materials; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which is prohibited by any Environmental Laws; toxic mold, any substance that requires special handling; and any other material or substance now or in the future defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” or other words of similar import within the meaning of any Environmental Law, including: (a) any “hazardous substance” defined as such in (or for purposes of) CERCLA, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (c) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d) any petroleum or petroleum by-products, including crude oil or any fraction thereof; (e) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (f) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; (g) any toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without limitation, asbestos, polychlorinated biphenyls (“PCB’s”), flammable explosives, radioactive materials, infectious substances, materials containing lead-based paint or raw materials which include hazardous constituents); and (h) any other toxic substance or contaminant that is subject to any Environmental Laws or other past or present requirement of any Governmental Authority.
“Hazardous MaterialsContamination” means contamination (whether now existing or hereafter occurring) of the improvements, buildings, facilities, personalty, soil, groundwater, air or other elements on or of the relevant property by Hazardous Materials, or any derivatives thereof, or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating from or disposed of in connection with the relevant property.
“IndemnifiedTaxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrowers or any other Credit Party under any Financing Documents and (b) to the extent not otherwise described in (a), Other Taxes.
“Instrument” means “instrument”, as defined in Article 9 of the UCC.
“Intellectual Property” means, with respect to any Person, all patents, patent applications, industrial designs, industrial design applications and like protections, including improvements divisions, continuation, renewals, reissues, extensions and continuations in part of the same, trademarks, trade names, trade styles, trade dress, service marks, logos and other business identifiers and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of such Person connected with and symbolized thereby, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative works, whether published or unpublished, technology, know-how and processes, operating manuals, trade secrets, computer hardware and software, rights to unpatented inventions and all applications and licenses therefor, used in or necessary for the conduct of business by such Person and all claims for damages by way of any past, present or future infringement of any of the foregoing.
“Interest PaymentDate” means subject to Section 2.1, beginning with July 31, 2025, the last Business Day of each month of each year that the Loan is outstanding, and the Termination Date.
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“Interest Period” means any period commencing on the first day of a calendar month and ending on the last day of such calendar month.
“Inventory” means “inventory” as defined in Article 9 of the UCC.
“Investment” means any investment in any Person, whether by means of acquiring (whether for cash, property, services, securities or otherwise), making or holding Debt, securities, capital contributions, loans, time deposits, advances, guarantees or otherwise. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect thereto.
“IRS” has the meaning specified therefor in Section 2.8(c)(i).
“Junior Lien Obligations” means the obligations with respect to Debt permitted to be incurred under this Agreement, which is by its terms intended to be secured by the Collateral on a basis junior to the Obligations, excluding the Term Loan Agreement and the Exit Notes.
“Laws” means any and all federal, state, provincial, territorial, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, governmental agreements and governmental restrictions, whether now or hereafter in effect, which are applicable to any Credit Party in any particular circumstance. “Laws” includes, without limitation, Environmental Laws.
“Lender” means each of (a) B. Riley, in its capacity as a lender hereunder, (b) each other Person party hereto in its capacity as a lender hereunder, (c) each other Person that becomes a party hereto as Lender pursuant to Section 11.17, and (d) the respective successors of all of the foregoing, and “Lenders” means all of the foregoing.
“Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the Closing Date after giving effect to the consummation of the Transactions determined in accordance with GAAP consistently applied.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, in respect of such asset. For the purposes of this Agreement and the other Financing Documents, any Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Litigation” means any action, suit or proceeding before any court, mediator, arbitrator or Governmental Authority.
“Loan(s)” means the term loan(s) outstanding under this Agreement.
“Loan Account” has the meaning specified therefor in Section 2.6(b).
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“Material AdverseEffect” means a material adverse effect on any of (a) the operations, assets, liabilities, financial condition or prospects of the Credit Parties taken as a whole, (b) the ability of the Credit Parties taken as a whole to perform any of their obligations under any Financing Document, (c) the legality, validity or enforceability of this Agreement or any other Financing Document, (d) the rights and remedies of any Agent or any Lender under any Financing Document, or (e) the validity, perfection or priority of a Lien in favor of Agent on Collateral having a fair market value in excess of $25,000,000.
“Material Contracts” means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $10,000,000 or more in any fiscal year (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium) and (b) all other contracts or agreements as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“Maximum LawfulRate” has the meaning specified therefor in Section 2.7.
“Monthly Purchase” has the meaning assigned to such term in the Exar Facility as in effect on the Closing Date.
“Multiemployer Plan” means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to which any Credit Party or any other member of the Controlled Group (or any Person who in the last five years was a member of the Controlled Group) is making or accruing an obligation to make contributions or has within the preceding five plan years (as determined on the applicable date of determination) made contributions.
“Net Income” means, with respect to any Person, the net income (loss) of such Person and its Consolidated Subsidiaries, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.
“New Project” means (x) each contract or project with respect to new customers and any expansions of contracts or projects with respect to existing customers and (y) each creation (in one or a series of related transactions) of a business unit to the extent such business unit commences operations or each expansion (in one or a series of related transactions) of business into a new market in each case, to the extent and for so long as not capitalized in the Ordinary Course of Business of the Borrowers and their Subsidiaries.
“Notes” has the meaning specified therefor in Section 2.3.
“Obligations” means all obligations, liabilities and indebtedness (monetary (including, without limitation, the payment of interest and other amounts arising after the commencement of any case with respect to any Credit Party under any Debtor Relief Laws or any similar statute which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case) or otherwise) of each Credit Party under this Agreement or any other Financing Document, in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due. In addition to, but without duplication of, the foregoing, the Obligations shall include, without limitation, all obligations, liabilities and indebtedness arising from or in connection with all Swap Contracts entered into with any swap counterparty for purposes of hedging the Obligations to the extent permitted under the terms of this Agreement.
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“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.
“Operative Documents” means the Financing Documents, the Term Loan Documents, the Exit Notes Indenture and the ABL Documents.
“Ordinary Courseof Business” means, in respect of any transaction involving any Credit Party, the ordinary course of business of such Credit Party, as conducted by such Credit Party in accordance with past practices.
“OrganizationalDocuments” means, with respect to any Person other than a natural person, the documents by which such Person was organized or formed (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Person (such as by-laws, memoranda of association, a partnership agreement or an operating, limited liability company or members agreement), including any and all shareholder agreements or voting agreements relating to the capital stock or other equity interests of such Person.
“Other ConnectionTaxes” means, with respect to a Lender or Agent, taxes imposed as a result of a present or former connection between Agent or any Lender and the jurisdiction imposing such tax (other than connections arising solely from Agent or such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, engaged in any other transaction pursuant to or enforced any Financing Document, or sold or assigned an interest in any Loans or any Financing Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Financing Document, except any such taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.8(i)).
“Parent” means XBP Europe Holdings Inc., a Delaware corporation, and any successor thereto.
“Participant Register” has the meaning specified therefor in Section 11.17(a)(iii).
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“Payment Account” means the account specified on the signature pages hereof into which all payments by or on behalf of each Borrower to Agent under the Financing Documents shall be made, or such other account as Agent shall from time to time specify by notice to Borrower Representative.
“Prepayment Conditions” has the meaning assigned to the term “Payment Conditions” in the ABL Agreement (as in effect on the date of any calculation; provided that such Payment Conditions shall be no more restrictive than the Payment Conditions on Closing Date); provided that, (i) for purposes of the calculation of the ratio thereunder, such ratio shall be determined on a pro forma basis (including a pro forma application of the prepayment and Equity Issuance (if applicable)) and (ii) for purposes of the Excess Availability (as defined in the ABL Agreement) any required period shall be with respect to the date of such prepayment. Upon request by the Agent in connection with a mandatory prepayment by the Borrowers under Section 2.01(iii)(C)), the Borrowers shall provide an officer’s certificate (in form and substance satisfactory to the Agent) to the Agent, certifying that the Payment Conditions have been met (upon which the Agent may conclusively rely without further inquiry).
For purposes of the definition of “Prepayment Conditions”, terms defined by reference to the Term Loan Agreement or the ABL Agreement (including embedded terms used in such defined terms) shall be defined by reference to the Term Agreement and the ABL Agreement as in effect on the date of such calculation. For the avoidance of doubt, no prepayment conditions shall apply after the discharge of the obligations under the ABL Agreement (in respect of the obligations under the ABL Agreement existing on the Closing Date and not any refinancing thereof).
“Payment Recipient” has the meaning specified therefor in Section 11.20.
“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding to any or all of its functions under ERISA.
“Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code or Title IV of ERISA.
“Permits” means all governmental licenses, authorizations, provider numbers, supplier numbers, registrations, permits, drug or device authorizations and approvals, certificates, franchises, qualifications, accreditations, consents and approvals of a Credit Party required under all applicable Laws and required for such Credit Party in order to carry on its business as now conducted.
“Permitted Affiliate” means with respect to any Person (a) any Person that directly or indirectly controls such Person, and (b) any Person which is controlled by or is under common control with such controlling Person. As used in this definition, the term “control” of a Person means the possession, directly or indirectly, of the power to vote eighty percent (80%) or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
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“PermittedAsset Dispositions” means the following Asset Dispositions: (a) dispositions of Inventory in the Ordinary Course of Business and not pursuant to any bulk sale, (b) dispositions of furniture, fixtures and equipment in the Ordinary Course of Business that the applicable Borrower or Subsidiary determines in good faith is no longer used or useful in the business of such Borrower and its Subsidiaries, (c) dispositions approved by Agent, (d) licensing, on a non-exclusive basis, intellectual property rights in the ordinary course of business of the Borrowers or any Subsidiary, (e) leasing or subleasing assets in the ordinary course of business of the Borrower or any Subsidiary, (f) so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from the Borrower or any Subsidiary to a Credit Party and (ii) from any Subsidiary that is not a Credit Party to any other Subsidiary, (g) any Asset Disposition occurring in accordance with the terms of the Tax Funding Agreement, (h) any involuntary loss, damage or destruction of property and any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property, (i) any involuntary loss, damage or destruction of property, (j) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property, (k)(i) the lapse of Registered Intellectual Property of the Borrowers or any Subsidiary of the Borrowers to the extent not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of their business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lenders, and (l) sales and contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility.
“Permitted Contest” means, with respect to any tax obligation or other obligation allegedly or potentially owing from any Borrower or its Subsidiary to any governmental tax authority or other third party, a contest maintained in good faith by appropriate proceedings promptly instituted and diligently conducted and with respect to which such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made on the books and records and financial statements of the applicable Credit Party(ies); provided, however, that (a) compliance with the obligation that is the subject of such contest is effectively stayed during such challenge; (b) Borrowers’ and its Subsidiaries’ title to, and its right to use, the Collateral is not adversely affected thereby and Agent’s Lien and priority on the Collateral are not adversely affected, altered or impaired thereby; (c) Borrowers have given prior written notice to Agent of a Borrower’s or its Subsidiary’s intent to so contest the obligation; (d) the Collateral or any part thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by Borrowers or its Subsidiaries; (e) Borrowers have given Agent notice of the commencement of such contest and upon request by Agent, from time to time, notice of the status of such contest by Borrowers and/or confirmation of the continuing satisfaction of this definition; and (f) upon a final determination of such contest, Borrowers and its Subsidiaries shall promptly comply with the requirements thereof.
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“PermittedContingent Obligations” means (a) Contingent Obligations arising in respect of the Debt under or permitted by the Financing Documents; (b) Contingent Obligations resulting from endorsements for collection or deposit in the Ordinary Course of Business; (c) Contingent Obligations outstanding on the date of this Agreement and set forth on Schedule 5.1 (but not including any refinancings, extensions, increases or amendments to the indebtedness underlying such Contingent Obligations other than extensions of the maturity thereof without any other change in terms); (d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations; (e) Contingent Obligations arising under indemnity agreements with title insurers to cause such title insurers to issue to Agent mortgagee title insurance policies; (f) Contingent Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions of personal property assets permitted under Section 5.6; (g) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction, Contingent Obligations existing or arising under any Swap Contract, provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation; and (h) other Contingent Obligations not permitted by clauses (a) through (h) above, not to exceed the Threshold Amount in the aggregate at any time outstanding.
“Permitted Debt” means:
(a) Borrowers’ and its Subsidiaries’ Debt to Agent and each Lender under this Agreement and the other Financing Documents;
(b) Debt incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business;
(c) purchase money Debt for property acquired and capital lease obligations not to exceed $35,000,000 at any time (whether in the form of a loan or a lease and including any refinancing of such indebtedness pursuant to clause (ll) below) used solely to acquire, lease, construct, repair, replace or improve property or equipment used in the Ordinary Course of Business and secured only by such equipment;
(d) Debt existing on the date of this Agreement and described on Schedule 5.1 (but not including any refinancings, extensions, increases or amendments to such Debt other than extensions of the maturity thereof without any other change in terms);
(e) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction, Debt existing or arising under any Swap Contract, provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation;
(f) Debt in the form of insurance premiums financed through the applicable insurance company;
(g) trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business;
(h) Borrowers’ and its Subsidiaries’ Debt incurred in connection with the Term Loan Documents (subject to the terms of the ABL Intercreditor Agreement);
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(i) [reserved];
(j) Debt of any Credit Party in an aggregate amount not to exceed $25,000,000 so long as (x) the Fixed Charge Coverage Ratio of the Borrower Representative and its Subsidiaries for the most recently ended four fiscal quarters for which financial statements have been delivered to Agent would have been at least 2.00 to 1.00 determined on a pro forma basis and (y) any such Debt shall be subordinated in right of payment to the Obligations and, if secured, subordinated in respect of lien priority to the Liens securing the Obligations on terms acceptable to Agent;
(k) [reserved];
(l) Debt in an aggregate amount not to exceed $5,000,000 so long as the Senior Secured Leverage Ratio for the most recently ended four fiscal quarters for which financial statements have been delivered to Agent does not exceed 3.75 to 1.00 determined on a pro forma basis;
(m) the Exit Notes issued on the Closing Date (subject to the terms of the ABL Intercreditor Agreement);
(n) [reserved];
(o) Debt (x) incurred to finance an acquisition or (y) of Persons that are acquired, in each case so long as (A)(i) the Borrowers would be permitted to incur at least $1.00 of additional Debt pursuant to the Fixed Charge Coverage Ratio test set forth in clause (j) above or (ii) the Fixed Charge Coverage Ratio of the Borrowers would be no less than immediately prior to such acquisition, (B) the aggregate principal amount of Debt under clause (o)(x) shall not exceed $10,000,000, and (C) any such Debt shall be subordinated in right of payment to the Obligations on terms acceptable to Agent;
(p) Debt of any Subsidiary that is not a Credit Party in an aggregate amount not to exceed $4,000,000;
(q) Debt incurred on behalf of, or representing guarantees of Debt of, joint ventures of any Borrower or any Subsidiary in an aggregate principal amount not to exceed $10,000,000, so long as any such Debt shall be subordinated in right of payment to the Obligations on terms acceptable to Agent;
(r) [reserved];
(s) Debt of the Borrowers or any Subsidiary in respect of the ABL Agreement (subject to the terms of the ABL Intercreditor Agreement);
(t) [reserved];
(u)(i) Additional Notes issued in connection with the ETI Funding Obligation and (ii) Additional Notes issued other than in connection with the ETI Funding Obligation in an amount not to exceed $10,000,000;
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(v) Debt of the Borrowers to any of the Subsidiaries; provided, that (x) any such Debt owed to a Subsidiary that is not a Borrower or a Guarantor is subordinated in right of payment to the Obligations on terms acceptable to Agent and (y) the aggregate amount of all such Debt owed to a Borrower or a Guarantor by any Subsidiary that is not a Borrower or a Guarantor shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any equity interests or any other event which results in any such Subsidiary ceasing to be a Subsidiary or any other subsequent transfer of any such Debt (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Debt constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence of such debt not permitted by this clause (v);
(w) Debt of any Subsidiary to the Borrowers or any other Subsidiary; provided, that (x) if a Subsidiary that is a Guarantor incurs such Debt to a Subsidiary that is not a Borrower or a Guarantor, such Debt is subordinated in right of payment to the Guarantee of such Subsidiary on terms acceptable to Agent and (y) if any Subsidiaries that are not a Guarantor incur Debt to any Borrower or Guarantor, the aggregate amount of such Debt shall not exceed $25,000,000; provided, further, that any subsequent issuance or transfer of any equity interests or any other event which results in any Subsidiary of the Borrowers holding such Debt ceasing to be a Subsidiary of the Borrowers or any other subsequent transfer of any such Debt (except to the Borrowers or another Subsidiary of the Borrowers or any pledge of such Debt constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence of such Debt not permitted by this clause (w);
(x) Debt of the Borrowers or any Subsidiary in respect of the Unsecured Cash Pool;
(y) Debt incurred by the Borrowers or any Subsidiary of the Borrowers owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrowers or any of the Borrowers’ Subsidiaries , respectively, pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the ordinary course of business or consistent with industry practices;
(z) Debt arising from agreements of the Borrowers or any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Debt incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition, in each case, to the extent such obligation or transaction is permitted by this Agreement;
(aa) Debt of the Borrowers and the Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Borrowers and the Subsidiaries, respectively, as conducted in accordance with good and prudent business industry practices and otherwise as permitted by this Agreement;
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(bb) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business (provided that such Debt is extinguished within five Business Days of its incurrence) or other cash management services in the ordinary course of business;
(cc) Debt of the Borrowers or Subsidiary supported by a letter of credit or bank guarantee issued pursuant to Debt otherwise permitted by Section 5.1, in a principal amount not in excess of the stated amount of such letter of credit;
(dd) Debt of the Borrowers or Subsidiary consisting of (A) the financing of insurance premiums or (B) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(ee) Debt of the Borrowers and its respective Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Debt) in the ordinary course of business;
(ff) to the extent constituting Debt of the Borrowers and the Subsidiaries, all premium (if any), defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Debt otherwise permitted to be incurred pursuant to Section 5.1;
(gg) Debt in respect of obligations of the Borrowers or Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services for such Person; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money or any Swap Contracts;
(hh) deposits raised by any Subsidiary that is subject to state and/or federal banking regulations that constitute Debt owing to such depositor;
(ii) Debt consisting of earn outs and obligations of the Borrowers or Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with any Permitted Investment by such Person;
(jj) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(kk) obligations in respect of Cash Management Agreements; and
(ll) the incurrence by the Borrowers or any of their Subsidiaries of Debt that serves to refund, refinance or defease any Debt as permitted under clauses (c), (d), (l), (n), (o), (p), (q) and (s) of the definition of “Permitted Debt” in an aggregate amount not to exceed the then- outstanding principal amount (or, if applicable, the liquidation preference face amount of the Debt being so refunded, refinanced or defeased), together with any accrued interest and any related fees, expenses and premiums (subject to the following proviso, “RefinancingIndebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(i) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Debt being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Debt being refunded or refinanced that were due on or after the date that is one year following the last maturity date of the Obligations;
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(ii) to the extent such Refinancing Indebtedness refinances Debt subordinated in right of payment to the Obligations or a Guarantee, as applicable, such Refinancing Indebtedness is subordinated in rights of payment to the Obligations or the Guarantee, as applicable, on terms acceptable to Agent;
(iii) shall not have any of the Borrower Representative or any Subsidiary of the Borrower Representative as an obligor thereon except to the extent such Person was an obligor on the Debt being extended, refinanced or modified, and shall not be secured by any Lien on any asset other than the assets that secured such Debt being extended, refinanced or modified or, if applicable, shall be unsecured;
(iv) shall not (if secured) have a Lien priority greater than such Debt being extended, refinanced or modified; and
(v) shall not include Debt (including any guarantees) of a Subsidiary that is not a Borrower or a Guarantor that refinances Debt of a Borrower or a Subsidiary that is a Guarantor.
For purposes of determining compliance with Section 5.1:
(A) in the event that an item of Debt (or any portion thereof) meets the criteria of more than one of the categories of permitted Debt described in clauses (a) through (ll) of the definition of “Permitted Debt”, then the Borrower Representative may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such item of Debt (or any portion thereof) in any manner that complies with Section 5.1; provided, that (1) any Exit Notes issued on the Effective Date (as defined therein) (but for the avoidance of doubt, not any Additional Notes) shall be incurred under clause (m) of the definition of “Permitted Debt” and Debt under the Term Loan Documents and ABL Agreement shall be incurred under clauses (h) and (s), respectively, of the definition of “Permitted Debt”, (2) the Obligations shall be incurred under clause (a) of the definition of “Permitted Debt”, (3) [reserved], (4) the Unsecured Cash Pool shall be incurred under clause (x) of the definition of “Permitted Debt”, (5) Additional Notes incurred in connection with the ETI Funding Obligation shall be incurred under clause (u)(i) of the definition of “Permitted Debt” and (6) Additional Notes other than those issued pursuant to clause (u)(i) of the definition of “Permitted Debt” shall be incurred under clause (u)(ii) of the definition of “Permitted Debt”, and in each case, may not be reclassified;
(B) at the time of incurrence, classification or reclassification, the Borrowers will be entitled to divide and classify an item of Debt in more than one of the categories of Debt described in the definition of “Permitted Debt” (or any portion thereof) without giving pro forma effect to the Debt incurred, classified or reclassified pursuant to any other clause or paragraph of the definition of “Permitted Debt” (or any portion thereof) when calculating the amount of Debt that may be incurred, classified or reclassified pursuant to any such clause or paragraph (or any portion thereof) at such time; provided, that, for the avoidance of doubt, it is understood and agreed that for any Debt incurred, classified or reclassified in reliance on a category of permitted Debt involving the calculation of a ratio, such Debt will be included in the calculation of such ratio at the time of such incurrence, classification or reclassification; and
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(C) in connection with (x) the incurrence or issuance, as applicable, of revolving loan Debt under Section 5.1 or (y) any commitment to incur or issue Debt under Section 5.1, the Borrowers or applicable Subsidiary may designate such incurrence or issuance as having occurred on the date of first incurrence of such revolving loan Debt or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or issuance will be deemed for all purposes under this Agreement to have been incurred or issued on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Senior Secured Leverage Ratio and EBITDA (and all such calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed incurrence or issuance and related transactions in connection therewith).
Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Debt, amortization of original issue discount, the accretion of liquidation preference and increases in the amount of Debt outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence of Debt for purposes of Section 5.1. Guarantees of, or obligations in respect of letters of credit relating to, Debt which is otherwise included in the determination of a particular amount of Debt shall not be included in the determination of such amount of Debt; provided, that the incurrence of the Debt represented by such guarantee or letter of credit, as the case may be, was in compliance with Section 5.1.
For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Debt was incurred, in the case of term debt, or first committed or first incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt. However, if the Debt is incurred to refinance other Debt denominated in a foreign currency, and the refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of the refinancing, the U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of the refinancing Debt does not exceed the principal amount of the Debt being refinanced.
Notwithstanding any other provision of Section 5.1, the maximum amount of Debt that Borrowers and their respective Subsidiaries may incur pursuant to Section 5.1 shall not be deemed to be exceeded, with respect to any outstanding Debt, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Debt incurred to refinance other Debt, if incurred in a different currency from the Debt being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which the respective Debt is denominated that is in effect on the date of the refinancing.
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“Permitted Distributions” means the following Restricted Distributions:
(a) dividends by any Subsidiary of any Credit Party to such parent Credit Party;
(b) dividends payable solely in common stock;
(c) repurchases of stock of former employees, directors or consultants pursuant to stock purchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase; provided however that such repurchase does not exceed the Threshold Amount in the aggregate per fiscal year;
(d) amounts required for any direct or indirect parent of any Borrower to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of any Borrower and general corporate operating and overhead expenses of any direct or indirect parent of the Borrower in each case to the extent such fees and expenses are attributable to the ownership or operation of the Borrowers, if applicable, and its Subsidiaries;
(e) with respect to any taxable period (or portion thereof) for which the Borrowers and any of their Subsidiaries are members (or are disregarded from a member) of a consolidated, combined, affiliated, unitary or similar income tax group for U.S. federal and/or applicable state or local income tax purposes of which Parent is the common parent, dividends or distributions by the Borrowers or such applicable Subsidiaries, as the case may be, to such direct or indirect parent of the Borrowers in an amount not to exceed the lesser of (i) the sum of the amount of the relevant U.S. federal, state or local income Taxes reduced by any such income Taxes directly paid or withheld at the level of the Borrowers or such Subsidiaries or (ii) the amount of any U.S. federal, state or local income taxes that the Borrowers and/or its Subsidiaries, as applicable, would have paid for such taxable period (taking into account prior year losses) had the Borrowers and/or its Subsidiaries, as applicable, been a stand-alone corporate taxpayer or a stand-alone corporate group; provided that distributions pursuant to this clause shall not exceed the actual Tax liability of Parent in respect of the relevant U.S. federal, state, local or non-U.S. income Taxes;
(f) any Restricted Distribution used to fund the payment of professional fees and expenses of Loeb & Loeb LLP, Cleary Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP in connection with the Transactions to the extent permitted by Section 5.8;
(g) the payment of any dividend or distribution or the consummation of any redemption within 60 days after the date of declaration thereof, if at the date of declaration or the giving notice of such redemption, as applicable, such payment would have otherwise complied with the provisions of this Agreement;
(h) voluntary prepayments of the Term Loans or the Exit Notes, so long as after giving effect to such voluntary prepayments of the Term Loans or the Exit Notes, the Payment Conditions (as defined in the ABL Agreement as in effect on the date hereof, including defined terms herein) are satisfied; and
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(i) the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Debt of a Borrower or Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Subordinated Debt of such Borrower or Guarantor, which is incurred in accordance with Section 5.1 so long as:
(i) the principal amount (or accreted value, if applicable) of such new Debt does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Debt being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Debt being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, fees and expenses incurred in connection therewith),
(ii) such Debt s is subordinated to the Obligations or the related Guarantee of such Guarantor, as the case may be, on terms acceptable to Agent, at least to the same extent as such Subordinated Debt so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(iii) such Debt has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Debt being so redeemed, repurchased, acquired or retired and (y) 91 days following the last maturity date of any Obligations then outstanding, and
(iv) such Debt has a Weighted Average Life to Maturity at the time incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Debt being so redeemed, repurchased, defeased, acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Debt being redeemed, repurchased, defeased, acquired or retired that were due on or after the date that is one year following the last maturity date of any Exit Notes then outstanding were instead due on such date.
“Permitted Investments” means:
(a) Investments shown on Schedule 5.7 and existing on the Closing Date;
(b) cash and Cash Equivalents;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary Course of Business;
(d) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the Ordinary Course of Business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrowers or their Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrowers’ Board of Directors (or other governing body), but the aggregate of all such loans outstanding may not exceed the Threshold Amount at any time;
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(e) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the Ordinary Course of Business;
(f) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the Ordinary Course of Business, provided, however, that this subpart (f) shall not apply to Investments of Borrowers in any Subsidiary;
(g) Investments consisting of deposit accounts in which ABL Agent or Agent has received a Deposit Account Control Agreement;
(h) Investments by any Borrower or any Subsidiary in any Credit Party;
(i) other Investments in an amount not exceeding $5,000,000 in the aggregate;
(j) Investments in a Person if as a result of such Investment (i) such Person becomes a Guarantor, or (ii) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, a Credit Party;
(k) Investments in any Subsidiary that is not a Guarantor not to exceed, at any one time in the aggregate outstanding under this clause (k), the Threshold Amount;
(l) Investments constituting Permitted Asset Dispositions under clause (l) thereof;
(m) Investments in joint ventures (as determined in good faith by the Borrower at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed, at any one time in the aggregate outstanding under this clause (m), the Threshold Amount;
(n) any Investment occurring in accordance with the terms of the Tax Funding Agreement;
(o)(i) Investments consisting of the licensing or contribution of intellectual property (on a non-exclusive basis) pursuant to joint marketing arrangements with other Persons in the ordinary course of business; (ii) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property (on a non-exclusive basis) in each case in the ordinary course of business;
(p) Investments of a Subsidiary acquired after the Closing Date or of an entity merged into, amalgamated with, or consolidated with the Borrowers or a Subsidiary of the Borrowers that is a Guarantor in a transaction that is not prohibited by 5.7 after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(q) any Investment consisting of intercompany current liabilities in connection with the cash management, tax and accounting operations of the Borrowers and their respective Subsidiaries;
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(r) any Investment in the form of a participation interest in the Note held by B. Riley which the Borrower and its Subsidiaries are required to make pursuant to the Exar Facility, so long as such Investment is immediately contributed to the Credit Parties and is not transferred to any Person other than a Credit Party;
(s) guarantees by the Borrowers or any Subsidiary of the Borrowers of operating leases or of other obligations that do not constitute Debt, in each case, entered into by the Borrowers or any Subsidiary of the Borrowers in the Ordinary Course of Business; and
(t) Investments the payment for which consists of equity interests of the Borrowers (other than disqualified stock) or any direct or indirect parent of the Borrowers, as applicable.
“Permitted Liens” means:
(a) deposits or pledges of cash to secure obligations under workmen’s compensation, social security or similar laws, or under unemployment insurance (but excluding Liens arising under ERISA) pertaining to a Credit Party’s or its Subsidiary’s employees, if any;
(b) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money or the deferred purchase price of property or services), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business;
(c) carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s or other like Liens on Collateral, arising in the Ordinary Course of Business with respect to obligations which are not due, or which are being contested pursuant to a Permitted Contest;
(d) Liens on Collateral, other than Accounts, for taxes or other governmental charges not due and payable or the subject of a Permitted Contest, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
(e) attachments, appeal bonds, judgments and other similar Liens on Collateral, not exceeding $15,000,000 in value, arising in connection with court proceedings and not giving rise to an Event of Default; provided, however, that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are the subject of a Permitted Contest;
(f) Liens and encumbrances in favor of Term Agent under the Term Loan Documents in accordance with the ABL Intercreditor Agreement;
(g) Liens and encumbrances in favor of ABL Agent under the ABL Documents in accordance with the ABL Intercreditor Agreement;
(h) Liens on Collateral existing on the date hereof and set forth on Schedule 5.2;
(i) any Lien on any property or equipment securing Debt permitted under subpart (c) of the definition of Permitted Debt, provided, however, that such Lien attaches concurrently with or within twenty (20) days after the acquisition thereof;
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(j) [reserved];
(k) [reserved];
(l) Liens securing obligations in respect of Debt incurred pursuant to clause (l) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(m) Liens securing obligations in respect of Debt incurred pursuant to the Exit Notes in accordance with the ABL Intercreditor Agreement;
(n) Liens securing obligations in respect of Debt incurred pursuant to clause (j) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(o) Liens securing obligations in respect of Debt incurred pursuant to clause (o) of the definition of “Permitted Debt” so long as such Liens secure Debt not created or incurred in connection with, or in contemplation of, the acquisition and only extend to the property or assets acquired in such acquisition (and accessions and additions thereto and proceeds and products thereof);
(p) Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary of a Borrower, or on assets or property acquired by a Borrower or a Subsidiary, so long as in each case such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary or such acquisition and do not extend to any other property of the Borrowers or their Subsidiaries (other than pursuant to after-acquired property clauses in effect at the time of the acquisition);
(q) Liens (i) on not more than $2,000,000 of deposits securing Swap Contracts entered into for non-speculative purposes and (ii) on cash or Cash Equivalents securing Swap Contracts in the Ordinary Course of Business submitted for clearing in accordance with applicable requirements of law;
(r) Claims Administration Liens;
(s) Liens securing obligations in respect of Debt incurred pursuant to the Financing Documents in accordance with the ABL Intercreditor Agreement;
(t) Liens of the Borrower or any Subsidiary securing obligations the outstanding principal amount of which does not, taken together with the principal amount of all other obligations secured by Liens incurred under this clause (t) that are at that time outstanding, exceed (i) in the event such Liens incurred under this clause (t) are subordinated to the Liens securing the Obligations on terms acceptable to the Agent and the Required Lenders, $15,000,000 or (ii) otherwise, $1,000,000;
(u) Liens on non-Collateral assets in an aggregate amount not to exceed $5,000,000;
(v) [reserved];
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(w) non-consensual Liens (not incurred in connection with borrowed money) on equipment of any of the Borrowers or any of their Subsidiaries not exceeding $5,000,000 in value and granted in the ordinary course of business to any client of a Borrower or such Subsidiary at which such equipment is located;
(x) Liens securing obligations in respect of Debt incurred pursuant to the clause (u) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(y) Liens securing obligations in respect of Debt incurred pursuant to clause (x) of the definition of “Permitted Debt” so long as any such Liens shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent;
(z) Liens securing obligations in respect of Debt incurred pursuant to clause (p) of the definition of “Permitted Debt” so long as any such Liens do not extend to the property or assets of the Borrowers or any Subsidiary of the Borrowers other than a Subsidiary that is not a Borrower or a Guarantor;
(aa) Liens securing obligations in respect of Debt incurred pursuant to clause (q) of the definition of “Permitted Debt”;
(bb) licenses of intellectual property and software that are not material to the conduct of any of the business lines of the Borrowers or any Subsidiary of the Borrowers and the value of which does not constitute a material portion of the assets of the Borrowers and their respective Subsidiaries, taken as a whole, respectively, and such license does not materially interfere with the ordinary course of conduct of the business of the Borrowers or any of their Subsidiaries;
(cc) Liens that (i) are contractual rights of set-off (and related pledges) (a) relating to the establishment of depository relations with banks and other financial institutions not given in connection with the issuance of Indebtedness or (b) relating to pooled deposits, sweep accounts, reserve accounts or similar accounts of the Borrowers or any Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrowers or any Subsidiary, including with respect to credit card charge-backs and similar obligations, or (ii) relate to purchase orders and other agreements entered into with customers, suppliers or service providers of the Borrowers or any Subsidiary (a) in the ordinary course of business or (b) in connection with implementation of business optimization programs;
(dd) [reserved];
(ee) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code in effect in the State of New York or similar provisions in similar codes, statutes or laws in other jurisdictions on items in the course of collection, (ii) attaching to commodity trading accounts, other commodity brokerage accounts or securities incurred in the ordinary course of business, (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, (iv) encumbering customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes, (v) in respect of Third Party Funds or (vi) in favor of credit card companies pursuant to agreements therewith;
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(ff) any interest or title of a lessor or sublessor under any leases or subleases entered into by the Borrowers or any Subsidiary in the ordinary course of business;
(gg) Liens on the Collateral securing Junior Lien Obligations (subject to a junior lien intercreditor agreement in form and substance reasonably satisfactory to Agent) in an aggregate amount not to exceed the Threshold Amount; provided that the Obligations are secured on a senior priority basis to the obligations so secured until such time as such obligations are no longer secured by a Lien;
(hh) Liens to secure cash management services in the ordinary course of business; provided, that such Liens are not incurred in connection with, and do not secure, any borrowings or Indebtedness;
(ii) Liens granted by (i) each Exar Originator in favor of Exar SPV and (ii) Exar SPV to the Exar Buyer, in each case, in Receivables Assets, pursuant to the Exar Facility; and
(jj) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Debt secured by any Lien referred to in clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p), (q), (s), (t), (v), (x), (y), (z), (aa) and (gg) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Debt being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the applicable Indebtedness described under clauses (f), (g), (h), (i), (k), (l), (m), (n), (o), (p), (q), (s), (t), (v), (x), (y), (z), (aa) and (gg) of this definition at the time the original Lien became a Permitted Lien under this Agreement, (B) unpaid accrued interest and premiums (including tender premiums), and (C) an amount necessary to pay any underwriting discounts, defeasance costs, commissions, fees and expenses related to such refinancing, refunding, extension, renewal or replacement; provided, further, that in the case of any Liens to secure any refinancing, refunding, extension or renewal of Indebtedness secured by a Lien referred to in clauses (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition, the principal amount of any Debt incurred for such refinancing, refunding, extension or renewal shall be deemed secured by a Lien under clause (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition and not this clause (jj) of this definition for purposes of determining the principal amount of Debt outstanding under clause (f), (i), (m), (n), (o), (s), (x), (y), (z) or (aa) of this definition; provided, further, however, that any Lien securing any refinancing of any Debt secured by a Lien referred to in clause (gg) shall be a junior Lien (subject to a junior lien intercreditor agreement in form and substance reasonably satisfactory to Agent) and any Lien securing any refinancing of any Debt referenced to in clauses (s), (x) and (y) shall be subordinated to the Liens securing the Obligations on terms acceptable to Agent; provided, further*,* that Liens securing the ABL Agreement, the Term Loan Agreement and the Exit Notes shall be subject to the ABL Intercreditor Agreement.
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For purposes of determining compliance with Section 5.2, (i) a Lien need not be permitted solely by reference to one category of permitted Liens described in the definition of “Permitted Liens” but may be permitted in part under any combination thereof and (ii) in the event that a Lien meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens”, the Borrower Representative may, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such Lien in any manner that complies with this covenant and will be entitled to only include the amount and type of such Lien in one of the categories of permitted Liens (or any portion thereof) described in the definition of “Permitted Liens” and, in such event, such Lien will be treated as being incurred or existing pursuant to only such clause or clauses (or any portion thereof) without giving pro forma effect to such item (or portion thereof) when calculating the amount of Liens or Indebtedness that may be incurred pursuant to any other clause or paragraph (or portion thereof) at such time. In addition, with respect to any revolving loan Debt or commitment to incur Debt that is designated to be incurred on any Deemed Date pursuant to clause (C) of the definition of “Permitted Debt”, any Lien that does or that shall secure such Debt may also be designated by the Borrower Representative or any Subsidiary to be incurred on such Deemed Date and, in such event, any related subsequent actual incurrence of such Lien shall be deemed for all purposes under this Agreement to be incurred on such prior date, including for purposes of calculating usage of any “Permitted Lien” (and any calculations on and after the Deemed Date until the termination of such commitments shall be made on a pro forma basis after giving effect to the deemed incurrence or issuance and related transactions in connection therewith).
With respect to any Lien securing Debt that was permitted to secure such Debt at the time of the incurrence of such Debt, such Lien shall also be permitted to secure any Increased Amount of such Debt. The “Increased Amount” of any Debt shall mean any increase in the amount of such Debt in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Debt with the same terms or in the form of common stock of the Borrowers, the payment of dividends on equity interests constituting Debt in the form of additional shares of equity interests of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Debt outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Debt described in clause (g) of the definition of “Debt.”
“Permitted Modifications” means (a) such amendments or other modifications to a Borrower’s or Subsidiary’s Organizational Documents as are required under this Agreement or by applicable Law and fully disclosed to Agent within thirty (30) days after such amendments or modifications have become effective, and (b) such amendments or modifications to a Borrower’s or Subsidiary’s Organizational Documents (other than those involving a change in the name of a Borrower or Subsidiary or involving a reorganization of a Borrower or Subsidiary under the laws of a different jurisdiction) that would not materially adversely affect the rights and interests of Agent or Lenders and fully disclosed to Agent within thirty (30) days after such amendments or modifications have become effective.
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“Person” means any natural person, corporation, limited liability company, unlimited liability company, professional association, limited partnership, general partnership, joint stock company, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and any Governmental Authority.
“Planof Reorganization” means the Amended Joint Plan of Reorganization of DocuData Solutions, L.C. and its Debtor Affiliates Under Chapter 11 of the Bankruptcy Code, attached to the Confirmation Order as Exhibit A, and all exhibits, supplements, appendices, and schedules thereto, as may be altered, amended, supplemented, or otherwise modified from time to time in accordance with the terms thereof.
“Pre-Opening Expenses” means, with respect to any fiscal period, the amount of expenses (other than interest expense) incurred with respect to facilities which are classified as “pre-opening expenses” (or any similar or equivalent caption) on the applicable financial statements of the Borrowers and their respective Subsidiaries for such period, prepared in accordance with GAAP.
“Pro Rata Share” means, with respect to any Lender, the percentage obtained by dividing (i) the sum of the outstanding Loan of such Lender, by (ii) the sum of the outstanding Loans of all Lenders.
“Public ReportingEntity” has the meaning specified therefor in Section 4.1.
“Receivables Assets” means accounts receivable (including any bills of exchange) from time to time originated, acquired or otherwise owned by the Exar Originators and all right, title and interests in and to (i) all security interests or liens securing payment of such accounts receivable, (ii) any obligations supporting such accounts receivable, including all guarantees, insurance and other agreements or arrangements supporting or securing payment of such accounts receivable, (iii) all books and records relating to such accounts receivables and the related obligor and (iv) all payments and collections with respect to, and other proceeds of, such accounts receivable.
“Register” has the meaning specified therefor in Section 11.17(a)(iii).
“Registered IntellectualProperty” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.
“Relevant GovernmentalBody” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Required Lenders” means at any time Lenders holding fifty percent (50%) or more of the then aggregate outstanding principal balance of the Loans.
“Requirements ofLaw” means, with respect to any Person, collectively, the common law and any and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities), and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
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“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means any of the Chief Executive Officer, Chief Financial Officer or any other officer of the applicable Borrower acceptable to Agent.
“Restricted Cash” means cash and Cash Equivalents held by Subsidiaries of the Borrowers that would appear as “restricted” on a consolidated balance sheet of the Borrowers or any of their respective Subsidiaries.
“Restricted Distribution” means as to any Person (a) any dividend or other distribution (whether in cash, securities or other property) on any equity interest in such Person (except those payable solely in its equity interests of the same class), (b) any payment by such Person on account of (i) the purchase, redemption, retirement, defeasance, surrender, cancellation, termination or acquisition of any equity interests in such Person or any claim respecting the purchase or sale of any equity interest in such Person, or (ii) any option, warrant or other right to acquire any equity interests in such Person, (c) any management fees, salaries or other fees or compensation to any Person holding an equity interest in a Borrower or a Subsidiary of a Borrower (other than (i) payments of salaries to individuals, (ii) directors fees, and (iii) advances and reimbursements to employees or directors, all in the Ordinary Course of Business), an Affiliate of a Borrower or an Affiliate of any Subsidiary of a Borrower, (d) any lease or rental payments to an Affiliate or Subsidiary of a Borrower, or (e) repayments of or debt service on Subordinated Debt (other than Debt permitted under clauses (v) and (w) of the definition of “Permitted Debt”) unless permitted under and made pursuant to a Subordination Agreement applicable to such loans or other indebtedness and voluntary prepayments of the Term Loans or the Exit Notes.
“Revolving Loans” has the meaning specified therefor in the ABL Agreement.
“SEC” means the United States Securities and Exchange Commission.
“Secured Indebtedness” means any Consolidated Total Indebtedness secured by a Lien.
“Securities Account” means a “securities account” (as defined in Article 9 of the UCC), an investment account, or other account in which investment property or securities are held or invested for credit to or for the benefit of any Borrower.
“Securities AccountControl Agreement” means either (i) an agreement, in form and substance satisfactory to the ABL Agent, among ABL Agent, any applicable Borrower and each securities intermediary in which such Borrower maintains a Securities Account pursuant to which the ABL Agent shall obtain “control” (as defined in Article 9 of the UCC) over such Securities Account or (ii) an agreement, in form and substance satisfactory to the Agent, among Agent, any applicable Borrower and each securities intermediary in which such Borrower maintains a Securities Account pursuant to which the Agent shall obtain “control” (as defined in Article 9 of the UCC) over such Securities Account.
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“Security Document” means this Agreement, and any other agreement, document or instrument executed concurrently herewith or at any time hereafter pursuant to which one or more Credit Parties or any other Person either (a) guarantees payment or performance of all or any portion of the Obligations, and/or (b) provides, as security for all or any portion of the Obligations, a Lien on any of its assets in favor of Agent for its own benefit and the benefit of the Lenders, as any or all of the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Senior Secured Leverage CalculationDate” has the meaning assigned in the “Senior Secured Leverage Ratio” definition.
“Senior SecuredLeverage Ratio” means, with respect to any Person, at any date, the ratio of (i) Secured Indebtedness of such Person and its Subsidiaries constituting Obligations hereunder, Obligations (as defined in the ABL Agreement), Notes Obligations (as defined in the Exit Notes Indenture), Obligations (as defined in the Term Loan Agreement), in each case as of such date of calculation (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Subsidiaries and held by such Person and its Subsidiaries as of such date of determination to (ii) EBITDA of such Person for the four full fiscal quarters for which financial statements have been delivered to Agent immediately preceding such date on which such additional Debt is incurred. In the event that the Borrowers or any Subsidiary incurs, repays, repurchases or redeems any Debt subsequent to the commencement of the period for which the Senior Secured Leverage Ratio is being calculated but prior to the event for which the calculation of the Senior Secured Leverage Ratio is made (the “Senior Secured Leverage CalculationDate”), then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect to such incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of customary disqualified equity interests or preferred stock as if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations that the Borrowers or any Subsidiary has made during the four-quarter reference period (each, for purposes of this definition, a “pro forma event”) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations, discontinued operations and other operational changes, business realignment projects or initiatives, New Projects, restructurings or reorganizations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Subsidiary or was merged with or into the Borrowers or any Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation, discontinued operation, operational change, business realignment project of initiative, New Project, restructuring or reorganization, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Senior Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation, consolidation, operational change, business realignment project of initiative, New Project, restructuring or reorganization had occurred at the beginning of the applicable four-quarter period.
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Borrowers as set forth in an Responsible Officer’s certificate, to reflect operating expense reductions and other operating improvements, synergies or cost savings that would have resulted if such operating expense reductions and other operating improvements, synergies or cost savings had occurred on the first day of the four-quarter reference period (including, to the extent applicable, the Transactions); provided, that for all purposes of determining EBITDA hereunder all adjustments and exclusions (to the extent such adjustment or exclusion is effected pursuant to the definition of EBITDA) shall not be more than the amount of applicable adjustments or exclusions permitted pursuant to the applicable provision(s) of the definitions of EBITDA and/or Consolidated Net Income, as the case may be for the most recently ended twelve month period (calculated prior to giving effect to such capped adjustments and exclusions (but, for the avoidance of doubt, after giving effect to other uncapped pro forma adjustments)); provided, that the limitations set forth in the immediately preceding proviso shall not apply to any operating expense reductions, other operating improvements or synergies and adjustments resulting from the Transactions, and information and calculations supporting them in reasonable detail.
If any Debt bears a floating rate of interest and is being given pro forma effect, the interest on such Debt shall be calculated as if the rate in effect on the Senior Secured Leverage Calculation Date had been the applicable rate for the entire period (taking into account any Swap Contracts applicable to such Debt if such Swap Contract has a remaining term in excess of 12 months). Interest on a capitalized lease obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrowers to be the rate of interest implicit in such capitalized lease obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Debt under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Debt during the applicable period. Interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrowers may designate.
For purposes of making the computation referred to above, in giving effect to each New Project which commences operations and records not less than one full fiscal quarter’s operations during such period, the operating results of such New Project shall be annualized on a straight-line basis during such period, taking into account any seasonality adjustments determined by the Borrowers in good faith.
For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.
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“Significant Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the Borrowers within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).
“Solvent” means, with respect to any Person, that such Person (a) owns and will own assets the fair saleable value of which are (i) greater than the total amount of its liabilities (including Contingent Obligations), and (ii) greater than the amount that will be required to pay the probable liabilities of its then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to it; (b) has capital that is not unreasonably small in relation to its business as presently conducted or after giving effect to any contemplated transaction; and (c) does not intend to incur and does not believe that it will incur debts beyond its ability to pay such debts as they become due.
“SpecifiedDebt” means any Debt (i) incurred that does not constitute Permitted Debt, or (ii) incurred under clauses (j), (l), or (p) under the definition of “Permitted Debt” and any refinancing thereunder under clause (ll) thereof; provided, however, with respect to any Debt incurred under the ABL Agreement, the Term Agreement, the Exit Note Indenture or any Exit Note, such Debt is permitted under the terms of the ABL Intercreditor Agreement and any Liens securing such Debt are permitted under the terms of the ABL Intercreditor Agreement and the Liens securing such Debt have the same priority set forth in the ABL Intercreditor Agreement (as in effect on the Closing Date).
“Specified Default” shall mean an Event of Default arising under Section 10.1(a), Section 4.13, Section 6.1, Section 4.1(m), or Section 5.14, Section 10. 1(e), Section 10.1(f) or Section 10.1(p).
“SpecifiedEquity” means Equity Interests, hybrid securities or other securities (whether issued or sold through a public or private offering or issued or sold in connection with a Cure Right under as defined in the Term Agreement) other than any Excluded Equity.
“SpotRate” means, on any date, as determined by Agent, the spot selling rate posted by Reuters on its website for the sale of the applicable currency for Dollars at approximately 11:00 a.m., New York City time, on such date; provided, that if, for any reason, no such spot rate is being quoted, the spot selling rate shall be determined by reference to such publicly available services for displaying exchange rates as may be reasonably selected by Agent, or, in the event no such service is selected, such spot selling rate shall instead be the rate reasonably determined by Agent as the spot rate of exchange in the market where its foreign currency exchange operations in respect of the applicable currency are then being conducted, at or about 11:00 a.m., New York City time, on the applicable date for the purchase of the relevant currency for delivery two Business Days later; provided, that, Agent may obtain such spot rate from another financial institution designated by Agent if Agent does not have a spot rate for any such currency as of the date of determination.
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“Subordinated Debt” means any Debt of Borrowers incurred pursuant to the terms of the Subordinated Debt Documents and with the prior written consent of Agent, not to be unreasonably withheld, all of which documents must be in form and substance reasonably acceptable to Agent. For the avoidance of doubt, neither the Debt under the Term Loan Agreement nor the Exit Notes shall constitute Subordinated Debt solely by virtue of their respective junior lien priority with respect to the ABL Priority Collateral.
“Subordinated DebtDocuments” means any documents evidencing and/or securing Debt governed by a Subordination Agreement, all of which documents must be in form and substance reasonably acceptable to Agent.
“Subordinated Obligations” has the meaning specified therefor in Section 12.7.
“Subordination Agreement” means any agreement between Agent and another creditor of Borrowers, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, pursuant to which the Debt owing from any Borrower(s) and/or the Liens securing such Debt granted by any Borrower(s) to such creditor are subordinated in any way to the Obligations and the Liens created under the Security Documents, the terms and provisions of such Subordination Agreements to have been agreed to by and be acceptable to Agent in the exercise of its sole discretion.
“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than fifty percent (50%) of such capital stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership, limited liability company or unlimited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
“Swap Contract” means any “swap agreement”, as defined in Section 101 of the Bankruptcy Code, that is obtained by Borrower to provide protection against fluctuations in interest or currency exchange rates, but only if Agent provides its prior written consent to the entry into such “swap agreement”.
“Tax Distributions” means any distributions described in clause (e) of the definition of “Permitted Distributions”.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Tax Funding Agreement” means that certain Tax Funding Agreement, dated as of the date hereof, by and among the Exela Technologies BPA, LLC and each of its debtor affiliates, Exela Technologies BPA, LLC, in its capacity as agent, the Parent, ETI, GP 3XCV LLC and XCV-STS, LLC.
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“TermAgent” as defined in the ABL Intercreditor Agreement.
“Term Loan Agreement” means that certain Financing Agreement, dated as of the Closing Date, by and among Exela Technologies BPA, LLC, the Guarantors, Ankura Trust Company, LLC, as administrative agent and collateral agent, and the other financial institutions party thereto, as the same may be amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time.
“Term Loan Documents” means the collective reference to the Term Loan Agreement and any other document, agreement and instrument executed and/or delivered in connection therewith or relating thereto, together with any amendment, supplement, waiver, or other modification to any of the foregoing.
“Term Priority Collateral” has the meaning specified therefor in the ABL Intercreditor Agreement.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited or a successor administrator of the Term SOFR Reference Rate selected by the Agent in its reasonable discretion.
“Term SOFR Rate” means, for any date of determination, the forward-looking term rate based on SOFR with a one-month tenor, published by the Term SOFR Administrator (the “Term SOFR Reference Rate”), as adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation; provided, however, that if, as of any date of determination, the Term SOFR Reference Rate has not been published by the Term SOFR Administrator then the Term SOFR Reference Rate will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding day for which such Term SOFR Reference Rate was published by the Term SOFR Administrator. If at any time the Term SOFR Reference Rate is less than one percent (1.0%), such rate shall be deemed to be one percent (1.0%).
“Termination Date” means the earlier to occur of (a) March 30, 2026, as may be extended pursuant to Section 2.4, (b) any date on which the Agent accelerates the maturity of the Loans pursuant to Section 10.2, or (c) the termination date stated in any notice of termination of this Agreement provided by Borrowers in accordance with Section 2.12; provided that, in each case, if such date is not a Business Day the Termination Date will be the next succeeding Business Day.
“Third Party Funds” means any accounts or funds, or any portion thereof, received by the Borrowers or any of its Subsidiaries as agent on behalf of third parties in accordance with a written agreement that imposes a duty upon the Borrowers or one or more of its Subsidiaries to collect and remit those funds to such third parties.
“Threshold Amount” means $3,000,000.
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“Transaction Costs” has the meaning specified therefor in the definition of “Transactions.”
“Transactions” means each of the following transactions:
(a) the execution, delivery and performance of the Operative Documents;
(b) the execution, delivery and performance of the ABL Documents and the extensions of credit thereunder on the Closing Date;
(c) the execution, delivery and performance of the Term Loan Documents and the extensions of credit thereunder on the Closing Date;
(d) the transactions under or pursuant to or contemplated by the Plan of Reorganization, including the Restructuring Transactions (as defined in the Plan of Reorganization); and
(e) the payment of all fees, costs and expenses incurred in connection with the transactions described in the foregoing provisions of this definition (the “Transaction Costs”).
“Trustee” means U.S. Bank Trust Company, National Association, as trustee under the Exit Notes Indenture.
“U.S. Tax ComplianceCertificate” has the meaning specified therefor in Section 2.8(c)(i).
“UCC” means the Uniform Commercial Code of the State of New York or of any other state the laws of which are required to be applied in connection with the perfection of security interests in any Collateral.
“UKFinancial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unfinanced CapitalExpenditures” means, for any period, the amount equal to Capital Expenditures which are not financed by the incurrence of any Indebtedness (except to the extent funded with the proceeds of the Revolving Loans; it being understood and agreed that, to the extent any Capital Expenditures are financed with Revolving Loans, such Capital Expenditures shall be deemed Unfinanced Capital Expenditures).
“United States” means the United States of America.
“Unsecured CashPool” has the meaning specified in the Plan of Reorganization.
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“Weighted AverageLife to Maturity” means, when applied to any Debt, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Debt multiplied by the amount of such payment, by (2) the sum of all such payments.
“Withholding Agent” means any Borrower or Agent.
“Write-Downand Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.2****AccountingTerms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder (including, without limitation, determinations made pursuant to the exhibits hereto) shall be made, and all financial statements required to be delivered hereunder shall be prepared on a consolidated basis in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of each Borrower and its Consolidated Subsidiaries delivered to Agent and each of the Lenders on or prior to the Closing Date. If at any time any change in GAAP would affect the computation of any financial ratio or financial requirement set forth in any Financing Document, and either Borrowers or the Required Lenders shall so request, Agent, the Lenders and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided, however, that until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Borrowers shall provide to Agent and the Lenders financial statements and other documents required under this Agreement which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Debt or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”, as defined therein.
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Section 1.3****OtherDefinitional and Interpretive Provisions. References in this Agreement to “Articles”, “Sections”, “Annexes”, “Exhibits”, or “Schedules” shall be to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement unless otherwise specifically provided. Any term defined herein may be used in the singular or plural. “Include”, “includes” and “including” shall be deemed to be followed by “without limitation”. Except as otherwise specified or limited herein, references to any Person include the successors and assigns of such Person. References “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively. Unless otherwise specified herein, the settlement of all payments and fundings hereunder between or among the parties hereto shall be made in lawful money of the United States and in immediately available funds. References to any statute or act shall include all related current regulations and all amendments and any successor statutes, acts and regulations. All amounts used for purposes of financial calculations required to be made herein shall be without duplication. References to any statute or act, without additional reference, shall be deemed to refer to federal statutes and acts of the United States. References to any agreement, instrument or document shall include all schedules, exhibits, annexes and other attachments thereto. References to capitalized terms that are not defined herein, but are defined in the UCC, shall have the meanings given them in the UCC. All references herein to times of day shall be references to daylight or standard time, as applicable. All references herein to a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or analogous term, will be construed to mean also a division of or by a limited liability company, as if it were a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term, as applicable. Any series of limited liability company shall be considered a separate Person.
Section 1.4****Timeis of the Essence. Time is of the essence in Borrower’s and each other Credit Party’s performance under this Agreement and all other Financing Documents.
Article 2****- LOANS
Section 2.1****Loans.
(i) Closing Date Loans. Subject to the terms and conditions of this Agreement, the Lenders agree that the outstanding principal amount of the term loan made under the Existing 2L Note constitutes a Loan hereunder as if an advance had been made hereunder. As of the Closing Date, the outstanding amount of the Loans hereunder is $31,500,000. The Loan under this Agreement to the extent repaid or prepaid, may not be reborrowed.
(ii) Optional Prepayments. Borrowers may from time to time prepay the Loans in whole or in part; provided, however, that any such partial prepayment shall be in an amount equal to $1,000,000 or a higher integral multiple of $250,000.
(iii) Mandatory Prepayments. Borrowers shall be required to make each of the following payments which shall be applied as a permanent reduction in the outstanding principal amount of the Loans:
(A) On the earlier of (i) 60 days after the fourth and final Monthly Purchase and (ii) the third (3rd) Business Day after the termination of the Exar Facility upon the Collections Milestone (as defined therein) being achieved following the fourth Monthly Purchase, the Borrowers shall make a prepayment of the Loans in an amount equal to $1,250,000.
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(B) On the fifth (5th) Business Day of the seventh (7th) calendar month following the Effective Date and on the fifth (5th) Business Day of each calendar month thereafter until the Loans have been repaid in full, the Borrowers shall make a prepayment of the Loans in an amount equal to $1,000,000 (or, if less, the remaining outstanding principal balance of the Loans).
(C) Promptly upon, and in any event within three (3) Business Days of, receipt of any net cash proceeds (as defined below) by any Credit Party or any of its Subsidiaries, directly or indirectly, from the incurrence, sale or issuance of any Specified Debt or Specified Equity, or any Equity Issuance by any Credit Party or any of its Subsidiaries (each such event, a “Specified Mandatory Prepayment Event”), following the date of the final Monthly Purchase scheduled to occur pursuant to Section 5.18 of the Exar RPA and subject to the satisfaction of the Prepayment Conditions, the Borrowers shall prepay the outstanding principal amount of the Loans in an amount equal to twenty percent (20%) of such net cash proceeds thereof. The Borrowers shall promptly (and in any event, no later than three (3) Business Days prior to any Specified Mandatory Prepayment Event) determine whether the Prepayment Conditions will be satisfied on the date of such Specified Mandatory Prepayment Event and, if the Borrowers determine that, as of the date of the Specified Mandatory Prepayment Event, the Prepayment Conditions will be satisfied, the Borrowers shall deliver to the Agent a certificate (in form and substance satisfactory to the Agent) signed by an officer of the Borrowers attaching supporting calculations in respect of the Prepayment Conditions and determining the aggregate principal amount of Loans the Borrowers can prepay in satisfaction of the Prepayment Conditions on a pro forma basis, and such amount shall be prepaid upon such Specified Mandatory Prepayment Event. If the Borrowers determine that, as of the date of any Specified Mandatory Prepayment Event, the Prepayment Condition will not be satisfied, the Borrowers shall deliver to the Agent a certificate (in form and substance satisfactory to the Agent) signed by an officer of the Borrowers attaching supporting calculations in respect of the Prepayment Conditions and determining the aggregate principal amount of Loans the Borrowers can prepay in satisfaction of the Prepayment Conditions on a pro forma basis, and such amount shall be prepaid upon such Specified Mandatory Prepayment Event. The provisions of this sub-clause (C) shall not be deemed to be implied consent to any such Specified Mandatory Prepayment Event otherwise prohibited by the terms and conditions of this Agreement. As used herein, “net cash proceeds” means cash proceeds net of underwriting discounts or commissions, and documented legal, accounting and other expenses directly related to such issuance, sale incurrence or offering.
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Anything contained in this sub-clause (C) to the contrary notwithstanding, in the event that the Borrowers are required to make a mandatory prepayment (a “WaivableMandatory Prepayment”) of the Loans pursuant to this sub-clause (C), not less than three (3) Business Days by 11:00 a.m. prior to the date on which the Borrowers are required to make such Waivable Mandatory Prepayment (such date, the “Required PrepaymentDate”), the Borrower Representative shall notify the Agent in writing of the date on which the Borrowers are required to make such mandatory prepayment, the amount of such mandatory prepayment (including a reasonably detailed calculation thereof, and the basis for such mandatory prepayment). The Agent will promptly thereafter notify each Lender of the amount of such Lender’s Pro Rata Share of such Waivable Mandatory Prepayment and such Lender’s option to refuse such amount. Each such Lender may exercise such option to refuse by giving written notice to the Borrower Representative and the Agent of its election to refuse its portion of such mandatory prepayment on or before 12:00 p.m. (New York City time) one (1) Business Day prior to the Required Prepayment Date (it being understood that any Lender that does not notify the Borrower Representative and the Agent of its election to waive receipt of its portion of such mandatory prepayment on or before 12:00 p.m (New York City time) one (1) Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, to receive its portion of such mandatory prepayment). On the Required Prepayment Date, the Borrowers shall pay to the Agent the amount of the mandatory prepayment required hereunder, which amount shall be applied (x) in an amount equal to that portion of the mandatory prepayment payable to those Lenders that have elected not to waive their rights to receive its portion thereof as set forth herein, to prepay the Loans of such Lenders (which prepayment shall be applied to prepay the outstanding principal amount of the Obligations in accordance with this Agreement) and (y) to the extent of any excess, to return to the Borrowers for working capital and general corporate purposes.
(D) On the Termination Date.
Section 2.2****Interest, InterestCalculations and Certain Fees.
(a) Interest Rate.
(i) Interest Payment Dates. Interest shall be payable in arrears to the Agent on behalf of the Lender on each Interest Payment.
(ii) Default Interest. Default interest accruing at the Default Rate as set forth in Section 10.5 hereof shall be payable on demand.
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(iii) Except as otherwise provided herein, the outstanding principal amount of the Loan made hereunder shall bear interest at the Applicable Rate from the date of the advance was made until the date the Loan is paid in full, whether at maturity, upon acceleration, by prepayment, or otherwise.
(iv) The Agent shall determine in consultation with the Borrower the SOFR rate from time to time. Agent may select information sources or services in its reasonable discretion to ascertain SOFR pursuant to the terms of this Agreement and shall have no liability to Borrower or any other Person 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.
(v) The interest rate on the Loans is subject to change from time to time based on changes in a published index which is currently the Term SOFR Rate (the “Index”). If the Agent determines, in its sole discretion, that the Term SOFR Rate has been or will be: (a) discontinued; or (b) becomes impractical or infeasible as the Index; or (c) otherwise will be superseded by an alternative index as an industry-accepted reference rate for loans of similar type to the Loans, the Agent may adopt a substitute Index in consultation with but without any action or further consent of the Borrower (the “Substitute Index Rate”). Notwithstanding the foregoing, if, at the time of implementation of the Substitute Index Rate, the average of the Substitute Index Rate has differed from the average of the Term SOFR Rate for loans of the same tenor for the six (6) months prior to the date of the implementation of the Substitute Index Rate, then the spread or margin applicable to the Loan shall be adjusted by the amount of the excess of the average Substitute Index Rate over the average Term SOFR Rate for such period, or by the amount of the excess of the average Term SOFR Rate over the average Substitute Index Rate for such period, as the case may be, such that the initial calculation of the interest rate using the Substitute Index Rate remains consistent with the interest rate in effect prior to the implementation of the Substitute Index Rate (the “Substitute Spread”). The Substitute Spread shall remain in effect from the date of the Substitute Index Rate implementation until the Termination Date, and as such may be extended, unless such an instance occurs where the Substitute Index Rate is no longer available, or becomes infeasible or is replaced by an industry-accepted substitute, in which case the provisions of this paragraph will again apply for purposes of replacing the Substitute Index Rate.
(vi) Monitoring Fee. Borrower shall pay to the Agent a collateral monitoring fee of Twelve Thousand Five Hundred and 00/100 Dollars ($12,500.00) per month (the “Collateral Monitoring Fee”), which fee shall be payable in advance, on the last day of each calendar month for the next succeeding month, commencing July 31, 2025, and on the Termination Date.
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(b) Computation of Interest and Related Fees. All computations of interest shall be made on the basis of a year of 360 days for the actual number of days elapsed. Interest shall accrue on the Loan on the day on which the Loan is made, and shall not accrue on any portion of the Loan paid for the day on which it is paid.
Section 2.3****Notes. The portion of the Loans made by each Lender shall be evidenced, if so requested by such Lender, by one or more promissory notes executed by Borrowers on a joint and several basis (each, a “Note”) in an original principal amount equal to such Lender’s Pro Rata Share of the principal amount outstanding.
Section 2.4****Extensionof Termination Date. At the option of the Borrowers, with prior written notice to the Agent, the Termination Date shall be extended to September 30, 2026, provided that no Default or Event of Default then exists and subject to (i) payment of an extension fee by Borrowers to Lenders (to be allocated in accordance with their Pro Rata Share) in the amount of $300,000 in immediately available funds, and (ii) delivery of customary secretary’s certificates, resolutions and opinion letters with respect to corporate matters and security interests (but, for avoidance of doubt, will not include a true sale opinion), among other customary deliverables for such extensions.
Section 2.5**[Reserved].**
Section 2.6****GeneralProvisions Regarding Payment; Loan Account.
(a) All payments to be made by each Borrower under any Financing Document, including payments of principal and interest made hereunder and pursuant to any other Financing Document, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension (it being understood and agreed that, solely for purposes of calculating financial covenants and computations contained herein and determining compliance therewith, if payment is made, in full, on any such extended due date, such payment shall be deemed to have been paid on the original due date without giving effect to any extension thereto). Any payments received in the Payment Account before 12:00 Noon (Eastern time) on any date shall be deemed received by Agent on such date, and any payments received in the Payment Account at or after 12:00 Noon (Eastern time) on any date shall be deemed received by Agent on the next succeeding Business Day.
(b) Agent shall maintain a loan account (the “Loan Account”) on its books to record Loans and other extensions of credit made by the Lenders hereunder or under any other Financing Document, and all payments thereon made by each Borrower. All entries in the Loan Account shall be made in accordance with Agent’s customary accounting practices as in effect from time to time. The balance in the Loan Account, as recorded in Agent’s books and records at any time shall be conclusive and binding evidence of the amounts due and owing to Agent by each Borrower absent manifest error; provided, however, that any failure to so record or any error in so recording shall not limit or otherwise affect any Borrower’s duty to pay all amounts owing hereunder or under any other Financing Document. Agent shall endeavor to provide Borrowers with a monthly statement regarding the Loan Account (but neither Agent nor any Lender shall have any liability if Agent shall fail to provide any such statement). Unless any Borrower notifies Agent of any objection to any such statement (specifically describing the basis for such objection) within ninety (90) days after the date of receipt thereof, it shall be deemed final, binding and conclusive upon Borrowers in all respects as to all matters reflected therein.
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Section 2.7****MaximumInterest. In no event shall the interest charged with respect to the Loans or any other Obligations of any Borrower under any Financing Document exceed the maximum amount permitted under the laws of the State of New York or of any other applicable jurisdiction. Notwithstanding anything to the contrary herein or elsewhere, if at any time the rate of interest payable hereunder or under any Note or other Financing Document (the “Stated Rate”) would exceed the highest rate of interest permitted under any applicable law to be charged (the “Maximum Lawful Rate”), then for so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the Stated Rate is less than the Maximum Lawful Rate, each Borrower shall, to the extent permitted by law, continue to pay interest at the Maximum Lawful Rate until such time as the total interest received is equal to the total interest which would have been received had the Stated Rate been (but for the operation of this provision) the interest rate payable. Thereafter, the interest rate payable shall be the Stated Rate unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event this provision shall again apply. In no event shall the total interest received by any Lender exceed the amount which it could lawfully have received had the interest been calculated for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence, any Lender has received interest hereunder in excess of the Maximum Lawful Rate, such excess amount shall be applied to the reduction of the principal balance of the Loans or to other amounts (other than interest) payable hereunder, and if no such principal or other amounts are then outstanding, such excess or part thereof remaining shall be paid to Borrowers. In computing interest payable with reference to the Maximum Lawful Rate applicable to any Lender, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation is made.
Section 2.8****Taxes;Capital Adequacy; Increased Costs; Inability to Determine Rates; Illegality.
(a) All payments of principal and interest on the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction or withholding for any present or future Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law, and if any such withholding or deduction is in respect of any Indemnified Taxes, then the Borrowers shall pay such additional amount or amounts as is necessary to ensure that the net amount actually received by Agent and each Lender will equal the full amount Agent and such Lender would have received had no such withholding or deduction been required (including, without limitation, such withholdings and deductions applicable to additional amounts payable under this Section 2.8). After payment of any Tax by a Borrower to a Governmental Authority pursuant to this Section 2.8, such Borrower shall promptly forward to Agent the original or a certified copy of an official receipt, a copy of the return reporting such payment, or other documentation reasonably satisfactory to Agent evidencing such payment to such authority. In addition, Borrowers shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of Agent timely reimburse it for the payment of, any Other Taxes.
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(b) The Borrowers shall indemnify Agent and Lenders, within ten (10) days after demand thereof, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.8) payable or paid by Agent or any Lender or required to be withheld or deducted from a payment to Agent or any Lender and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(c) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments made under any Financing Document shall deliver to Borrower Representative and Agent, at the time or times prescribed by applicable Law or reasonably requested by Borrower Representative or Agent, such properly completed and executed documentation reasonably requested by Borrower Representative or 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 Borrower Representative or Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by Borrowers or Agent as will enable Borrowers or 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 Sections 2.8(c)(i), 2.8(c)(ii) and 2.8(e) below) shall not be required if in such 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.
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(i) Each Lender that is not a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) (each such Lender a “ForeignLender”) shall, to the extent permitted by Law, execute and deliver to Borrower Representative and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent) whichever of the following is applicable: (A) 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 Financing Document, executed copies of United States Internal Revenue Service (“IRS”) Forms W-8BEN or W-8BEN-E (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Financing Documents, executed copies of IRS Forms W-8BEN or W-8BEN-E (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty; (B) executed copies of Form W-8ECI or W-8EXP (or successor form); (C) 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 F-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax ComplianceCertificate”) and (y) executed copies of IRS Forms W-8BEN or W-8BEN-E (or successor form); (D) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8EXP, IRS Form W-8BEN or W-8BEN-E (or successor form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9 (or successor form), 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 F-4 on behalf of each such direct and indirect partner; or (E) other applicable forms, certificates or documents prescribed by the IRS. 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 Borrower Representative and Agent in writing of its legal inability to do so. In addition, to the extent permitted by applicable Law, such forms shall be delivered by each Foreign Lender upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. Each Foreign Lender shall promptly notify Borrower Representative at any time it determines that it is no longer in a position to provide any previously delivered certificate to Borrower Representative (or any other form of certification adopted by the U.S. taxing authorities for such purpose).
(ii) Each Lender that is a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes and is a party hereto on the Closing Date or purports to become an assignee of an interest pursuant to Section 11.17(a) after the Closing Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) shall, to the extent permitted by Law, provide to Borrower Representative and Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent), a properly completed and executed IRS Form W-9 or any successor form certifying as to such Lender’s entitlement to an exemption from U.S. backup withholding and other applicable forms, certificates or documents prescribed by the IRS or reasonably requested by Borrower Representative or Agent. Each such Lender shall promptly notify Borrowers at any time it determines that any certificate previously delivered to Borrower Representative (or any other form of certification adopted by the U.S. governmental authorities for such purposes) is no longer valid.
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(iii) Any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower Representative and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or Agent), executed copies of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrowers or Agent to determine the withholding or deduction required to be made.
(iv) Agent, and any sub-agent and any successor or supplemental Agent, shall deliver to the Borrowers on or prior to the date on which such person becomes Agent, sub-agent or successor or supplemental Agent hereunder (and from time to time thereafter upon the reasonable request of a Borrower), a properly completed and executed IRS Form W-9. Agent and any sub-agent and successor or supplemental Agent 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 in writing of its legal inability to do so. Agent hereby represents and warrants to the Credit Parties that it is a “U.S. person” and a “financial institution” and that it will comply with its “obligation to withhold,” each within the meaning of Treasury Regulations Section 1.1441-1(b)(2)(ii).
(d) If any Lender determines, in its sole discretion exercised in good faith, that it has received a refund in respect of any Taxes as to which it has been indemnified by any Borrower pursuant to this Section 2.8 (including by the payment of additional amounts pursuant to this Section 2.8), then it shall promptly pay an amount equal to such refund to Borrowers, net of all reasonable out-of-pocket expenses of such Lender or of Agent with respect thereto, including any Taxes; provided, however, that Borrowers, upon the written request of such Lender or Agent, agree to repay any amount paid over to Borrowers to such Lender or to Agent (plus any related penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such Lender or Agent is required, for any reason, to disgorge or otherwise repay such refund. Notwithstanding anything to the contrary in this Section 2.8, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.8(d) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.8 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.
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(e) If a payment made to a Lender under any Financing 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 Borrower Representative and Agent at the time or times prescribed by Law and at such time or times reasonably requested by Borrower Representative or Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower Representative or Agent as may be necessary for Borrowers and Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) Each Lender shall severally indemnify Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.17 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent in connection with any Financing Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Agent to set off and apply any and all amounts at any time owing to such Lender under any Financing Document or otherwise payable by Agent to such Lender from any other source against any amount due to Agent under this paragraph (f).
(g) If any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable Law regarding capital adequacy, in each instance, after the Closing Date, or any change after the Closing Date in the interpretation, administration or application thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation, administration or application thereof, or the compliance by any Lender or any Person controlling such Lender with any request, guideline or directive regarding capital adequacy (whether or not having the force of Law) of any such Governmental Authority, central bank or comparable agency adopted or otherwise taking effect after the Closing Date, has or would have the effect of reducing the rate of return on such Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations hereunder to a level below that which such Lender or such controlling Person could have achieved but for such adoption, taking effect, change, interpretation, administration, application or compliance (taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) then from time to time, upon demand by such Lender (which demand shall be accompanied by a certificate setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to Agent), Borrowers shall promptly pay to such Lender such additional amount as will compensate such Lender or such controlling Person for such reduction, so long as such amounts have accrued on or after the day which is two hundred seventy (270) days prior to the date on which such Lender first made demand therefor; provided that notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “change in applicable Law”, regardless of the date enacted, adopted or issued.
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(h) If any Lender shall reasonably determine that the adoption or taking effect of, or any change in, any applicable Law shall (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, (ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, or any SOFR Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes, Connection Income Taxes and Taxes covered in (b) through (d) in the definition of Excluded Taxes); or (iii) impose on any Lender any other condition, cost or expense (other than a Tax) affecting this Agreement or SOFR Loans made by such Lender, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Loan the interest on which is determined by reference to Term SOFR (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
(i) If any Lender requests compensation under any of the clauses in this Section 2.8), or requires Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.8, then, upon the written request of Borrower Representative, such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder (subject to the provisions of Section 11.17) to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or materially reduce amounts payable pursuant to any such Section, as the case may be, in the future, (ii) would not subject such Lender to any unreimbursed cost or expense and (iii) would not otherwise be disadvantageous to such Lender (as determined in its sole good faith discretion). Without limitation of the provisions of Section 12.14, each Borrower hereby agrees to pay all reasonable and documented, out-of-pocket costs and expenses incurred by any Lender in connection with any such designation or assignment.
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(j) [Reserved].
(k) [Reserved].
(l) Each party’s obligations under this Section 2.8 shall survive the resignation or replacement of Agent or any assignment of rights by, or the replacement of, a Lender, and the repayment, satisfaction or discharge of all Obligations hereunder.
Section 2.9****Appointmentof Borrower Representative.
(a) Each Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent and attorney-in-fact to request and receive Loans in the name or on behalf of such Borrower and any other Borrowers, give instructions with respect to the disbursement of the proceeds of the Loans, giving and receiving all other notices and consents hereunder or under any of the other Financing Documents and taking all other actions (including in respect of compliance with covenants) in the name or on behalf of any Borrower or Borrowers pursuant to this Agreement and the other Financing Documents. Agent and Lenders may disburse the Loans to such bank account of Borrower Representative or a Borrower or otherwise make such Loans to a Borrower, in each case as Borrower Representative may designate or direct, without notice to any other Borrower. Notwithstanding anything to the contrary contained herein, Agent may at any time and from time to time require that Loans to or for the account of any Borrower be disbursed directly to an operating account of such Borrower.
(b) Borrower Representative hereby accepts the appointment by Borrowers to act as the agent and attorney-in-fact of Borrowers pursuant to this Section 2.9. Borrower Representative shall ensure that the disbursement of any Loans that are at any time requested by or to be remitted to or for the account of a Borrower shall be remitted or issued to or for the account of such Borrower.
(c) Each Borrower hereby irrevocably appoints and constitutes Borrower Representative as its agent to receive statements on account and all other notices from Agent and Lenders with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Documents.
(d) Any notice, election, representation, warranty, agreement or undertaking made or delivered by or on behalf of any Borrower by Borrower Representative shall be deemed for all purposes to have been made or delivered by such Borrower, as the case may be, and shall be binding upon and enforceable against such Borrower to the same extent as if made or delivered directly by such Borrower.
(e) No resignation by or termination of the appointment of Borrower Representative as agent and attorney-in-fact as aforesaid shall be effective, except after ten (10) Business Days’ prior written notice to Agent. If the Borrower Representative resigns under this Agreement, Borrowers shall be entitled to appoint a successor Borrower Representative (which shall be a Borrower and shall be reasonably acceptable to Agent as such successor). Upon the acceptance of its appointment as successor Borrower Representative hereunder, such successor Borrower Representative shall succeed to all the rights, powers and duties of the retiring Borrower Representative and the term “Borrower Representative” shall mean such successor Borrower Representative for all purposes of this Agreement and the other Financing Documents, and the retiring or terminated Borrower Representative’s appointment, powers and duties as Borrower Representative shall be thereupon terminated.
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Section 2.10****Jointand Several Liability; Rights of Contribution; Subordination and Subrogation.
(a) Borrowers are defined collectively to include all Persons named as one of the Borrowers herein; provided, however, that any references herein to “any Borrower”, “each Borrower” or similar references, shall be construed as a reference to each individual Person named as one of the Borrowers herein. Each Person so named shall be jointly and severally liable for all of the obligations of Borrowers under this Agreement. Each Borrower, individually, expressly understands, agrees and acknowledges, that the credit facilities would not be made available on the terms herein in the absence of the collective credit of all of the Persons named as the Borrowers herein, the joint and several liability of all such Persons, and the cross-collateralization of the collateral of all such Persons. Accordingly, each Borrower individually acknowledges that the benefit to each of the Persons named as one of the Borrowers as a whole constitutes reasonably equivalent value, regardless of the amount of the credit facilities actually borrowed by, advanced to, or the amount of collateral provided by, any individual Borrower. In addition, each entity named as one of the Borrowers herein hereby acknowledges and agrees that all of the representations, warranties, covenants, obligations, conditions, agreements and other terms contained in this Agreement shall be applicable to and shall be binding upon and measured and enforceable individually against each Person named as one of the Borrowers herein as well as all such Persons when taken together. By way of illustration, but without limiting the generality of the foregoing, the terms of Section 10.1 of this Agreement are to be applied to each individual Person named as one of the Borrowers herein (as well as to all such Persons taken as a whole), such that the occurrence of any of the events described in Section 10.1 of this Agreement as to any Person named as one of the Borrowers herein shall constitute an Event of Default even if such event has not occurred as to any other Persons named as the Borrowers or as to all such Persons taken as a whole.
(b) Notwithstanding any provisions of this Agreement to the contrary, it is intended that the joint and several nature of the liability of each Borrower for the Obligations and the Liens granted by Borrowers to secure the Obligations, not constitute a Fraudulent Conveyance (as defined below). Consequently, Agent, Lenders and each Borrower agree that if the liability of a Borrower for the Obligations, or any Liens granted by such Borrower securing the Obligations would, but for the application of this sentence, constitute a Fraudulent Conveyance, the liability of such Borrower and the Liens securing such liability shall be valid and enforceable only to the maximum extent that would not cause such liability or such Lien to constitute a Fraudulent Conveyance, and the liability of such Borrower and this Agreement shall automatically be deemed to have been amended accordingly. For purposes hereof, the term “Fraudulent Conveyance” means a fraudulent conveyance under Section 548 of Chapter 11 of Title II of the Bankruptcy Code or a fraudulent conveyance, fraudulent transfer or transfer at undervalue under the applicable provisions of any fraudulent conveyance or fraudulent transfer law or similar law of any state, province, territory, nation or other governmental unit, as in effect from time to time.
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(c) Agent is hereby authorized, without notice or demand (except as otherwise specifically required under this Agreement) and without affecting the liability of any Borrower hereunder, at any time and from time to time, to (i) renew, extend or otherwise increase the time for payment of the Obligations; (ii) with the written agreement of any Borrower, change the terms relating to the Obligations or otherwise modify, amend or change the terms of any Note or other agreement, document or instrument now or hereafter executed by any Borrower and delivered to Agent for any Lender; (iii) accept partial payments of the Obligations; (iv) take and hold any Collateral for the payment of the Obligations or for the payment of any guaranties of the Obligations and exchange, enforce, waive and release any such Collateral; (v) apply any such Collateral and direct the order or manner of sale thereof as Agent, in its sole discretion, may determine; and (vi) settle, release, compromise, collect or otherwise liquidate the Obligations and any Collateral therefor in any manner, all guarantor and surety defenses being hereby waived by each Borrower. Without limitations of the foregoing, with respect to the Obligations, each Borrower hereby makes and adopts each of the agreements and waivers set forth in the Guarantee set forth under Section 12 hereof. Except as specifically provided in this Agreement or any of the other Financing Documents, Agent shall have the exclusive right to determine the time and manner of application of any payments or credits, whether received from any Borrower or any other source, and such determination shall be binding on all Borrowers. All such payments and credits may be applied, reversed and reapplied, in whole or in part, to any of the Obligations that Agent shall determine, in its sole discretion, without affecting the validity or enforceability of the Obligations of the other Borrower.
(d) Each Borrower hereby agrees that, except as hereinafter provided, its obligations hereunder shall be unconditional, irrespective of (i) the absence of any attempt to collect the Obligations from any obligor or other action to enforce the same; (ii) the waiver or consent by Agent with respect to any provision of any instrument evidencing the Obligations, or any part thereof, or any other agreement heretofore, now or hereafter executed by a Borrower and delivered to Agent; (iii) failure by Agent to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Obligations; (iv) the institution of any proceeding under any Debtor Relief Law, or any similar proceeding, by or against any Credit Party or Agent’s election in any such proceeding of the application of Section 1111(b)(2) of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws); (v) any borrowing or grant of a security interest by a Borrower as debtor-in-possession, under Section 364 of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws); (vi) the disallowance, under Section 502 of the Bankruptcy Code (or any similar provision of any Debtor Relief Laws), of all or any portion of Agent’s claim(s) for repayment of any of the Obligations; or (vii) any other circumstance other than payment in full of the Obligations which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety.
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(e) The Borrowers hereby agree, as between themselves, that to the extent that Agent, on behalf of Lenders, shall have received from any Borrower any Recovery Amount (as defined below), then the paying Borrower shall have a right of contribution against each other Borrower in an amount equal to such other Borrower’s contributive share of such Recovery Amount; provided, however, that in the event any Borrower suffers a Deficiency Amount (as defined below), then the Borrower suffering the Deficiency Amount shall be entitled to seek and receive contribution from and against the other Borrowers in an amount equal to the Deficiency Amount; and provided, further, that in no event shall the aggregate amounts so reimbursed by reason of the contribution of any Borrower equal or exceed an amount that would, if paid, constitute or result in Fraudulent Conveyance. Until all Obligations have been paid and satisfied in full, no payment made by or for the account of a Borrower including, without limitation, (i) a payment made by such Borrower on behalf of the liabilities of any other Borrower, or (ii) a payment made by any other Guarantor under any Guarantee, shall entitle such Borrower, by subrogation or otherwise, to any payment from such other Borrower or from or out of such other Borrower’s property. The right of each Borrower to receive any contribution under this Section 2.10(e) or by subrogation or otherwise from any other Borrower shall be subordinate in right of payment to the Obligations and such Borrower shall not exercise any right or remedy against such other Borrower or any property of such other Borrower by reason of any performance of such Borrower of its joint and several obligations hereunder, until the Obligations have been indefeasibly paid and satisfied in full, and no Borrower shall exercise any right or remedy with respect to this Section 2.10(e) until the Obligations have been indefeasibly paid and satisfied in full. As used in this Section 2.10(e), the term “Recovery Amount” means the amount of proceeds received by or credited to Agent from the exercise of any remedy of the Lenders under this Agreement or the other Financing Documents, including, without limitation, the sale of any Collateral. As used in this Section 2.10(e), the term “Deficiency Amount” means any amount that is less than the entire amount a Borrower is entitled to receive by way of contribution or subrogation from, but that has not been paid by, the other Borrowers in respect of any Recovery Amount attributable to the Borrower entitled to contribution, until the Deficiency Amount has been reduced to $0 through contributions and reimbursements made under the terms of this Section 2.10(e) or otherwise.
Section 2.11**[Reserved]**.
Section 2.12****Termination;Restriction on Termination.
(a) Termination by Lenders. In addition to the rights set forth in Section 10.2, Agent may, and at the direction of Required Lenders shall, terminate this Agreement without notice upon or after the occurrence and during the continuance of an Event of Default.
(b) Termination by Borrowers. Upon at least thirty (30) days’ prior written notice to Agent and Lenders, Borrowers may, at its option, terminate this Agreement. Any notice of termination given by Borrowers shall be irrevocable unless all Lenders otherwise agree in writing and no Lender shall have any obligation to make any Loans on or after the termination date stated in such notice. Borrowers may elect to terminate this Agreement in its entirety only. No section of this Agreement or type of Loan available hereunder may be terminated singly.
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(c) Effectiveness of Termination. All of the Obligations shall be immediately due and payable upon the Termination Date. All undertakings, agreements, covenants, warranties and representations of Borrowers contained in the Financing Documents shall survive any such termination and Agent shall retain its Liens in the Collateral and Agent and each Lender shall retain all of its rights and remedies under the Financing Documents notwithstanding such termination until all Obligations have been discharged or paid, in full, in immediately available funds and the terms of any fee letter resulting from such termination.
Article 3 - REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this Agreement and to make the Loans and other credit accommodations contemplated hereby, each Credit Party hereby represents and warrants to Agent and each Lender that (after giving effect to the Transactions):
Section 3.1****Existenceand Power. Each Credit Party is an entity as specified on Schedule 3.1, is duly organized, validly existing and in good standing under the laws of the jurisdiction specified on Schedule 3.1 and no other jurisdiction, has the same legal name as it appears in such Credit Party’s Organizational Documents and an organizational identification number (if any), in each case as specified on Schedule 3.1, and has all powers and all Permits necessary or desirable in the operation of its business as presently conducted or as proposed to be conducted, except where the failure to have such Permits could not reasonably be expected to have a Material Adverse Effect. Each Credit Party is qualified to do business as a foreign entity in each jurisdiction in which it is required to be so qualified, which jurisdictions as of the Closing Date are specified on Schedule 3.1, except where the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party (a) has had, over the five (5) year period preceding the Closing Date, any name other than its current name, or (b) was incorporated or organized under the laws of any jurisdiction other than its current jurisdiction of incorporation or organization.
Section 3.2****Organizationand Governmental Authorization; No Contravention. The execution, delivery and performance by each Credit Party of the Operative Documents to which it is a party are within its powers, have been duly authorized by all necessary action pursuant to its Organizational Documents, require no further action by or in respect of, or filing with, any Governmental Authority and do not violate, conflict with or cause a breach or a default under (a)(i) any Law applicable to any Credit Party or (ii) any of the Organizational Documents of any Credit Party, or (b) any agreement or instrument binding upon it, except for such violations, conflicts, breaches or defaults as could not, with respect to clause (a)(i) or clause (b), reasonably be expected to have a Material Adverse Effect.
Section 3.3****BindingEffect. Each of the Operative Documents to which any Credit Party is a party constitutes a valid and binding agreement or instrument of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable principles.
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Section 3.4****Capitalization. The authorized equity securities of each of the Credit Parties as of the Closing Date are as set forth on Schedule 3.4. All issued and outstanding equity securities of each of the Credit Parties are duly authorized and validly issued, fully paid, nonassessable, free and clear of all Liens other than those in favor of Agent for the benefit of Agent and Lenders, and such equity securities were issued in compliance with all applicable Laws. The identity of the holders of the equity securities of each of the Credit Parties and the percentage of their fully-diluted ownership of the equity securities of each of the Credit Parties as of the Closing Date is set forth on Schedule 3.4. No shares of the capital stock or other equity securities of any Credit Party, other than those described above, are issued and outstanding as of the Closing Date. Except as set forth on Schedule 3.4, as of the Closing Date there are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from any Credit Party of any equity securities of any such entity.
Section 3.5****FinancialInformation. All information delivered to Agent and pertaining to the financial condition of any Credit Party fairly presents the financial position of such Credit Party as of such date in conformity with GAAP (and as to unaudited financial statements, subject to normal year-end adjustments and the absence of footnote disclosures). Since the Petition Date, there has been no material adverse change in the business, operations, properties, prospects or condition (financial or otherwise) of any Credit Party.
Section 3.6****Litigation. Except as set forth on Schedule 3.6 as of the Closing Date, and except as hereafter disclosed to Agent in writing, there is no Litigation pending against, or to such Credit Party’s knowledge threatened against or affecting, any Credit Party or, to such Credit Party’s knowledge, any party to any Operative Document other than a Credit Party. There is no Litigation pending in which an adverse decision could reasonably be expected to have a Material Adverse Effect or which in any manner draws into question the validity of any of the Operative Documents.
Section 3.7****Ownershipof Property. Each Credit Party and each of its Subsidiaries is the lawful owner of, has good and marketable title to and is in lawful possession of, or has valid leasehold interests in, all properties and other assets (real or personal, tangible, intangible or mixed) material to its business and purported or reported to be owned or leased (as the case may be) by such Person.
Section 3.8****NoDefault. No Event of Default, or to such Credit Party’s knowledge, Default, has occurred and is continuing. No Credit Party is in breach or default under or with respect to any contract, agreement, lease or other instrument to which it is a party or by which its property is bound or affected, which breach or default could reasonably be expected to have a Material Adverse Effect.
Section 3.9****LaborMatters. As of the Closing Date, there are no strikes or other labor disputes pending or, to any Credit Party’s knowledge, threatened against any Credit Party. Hours worked and payments made to the employees of the Credit Parties have not been in violation of the Fair Labor Standards Act or any other applicable Law dealing with such matters. All payments due from the Credit Parties, or for which any claim may be made against any of them, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on their books, as the case may be, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. The consummation of the transactions contemplated by the Financing Documents will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which it is a party or by which it is bound.
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Section 3.10****RegulatedEntities. No Credit Party is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” all within the meaning of the Investment Company Act of 1940.
Section 3.11****MarginRegulations. None of the proceeds from the Loans have been or will be used, directly or indirectly, for the purpose of purchasing or carrying any “margin stock” (as defined in Regulation U of the Federal Reserve Board), for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any “margin stock” or for any other purpose which might cause any of the Loans to be considered a “purpose credit” within the meaning of Regulation T, U or X of the Federal Reserve Board.
Section 3.12****ComplianceWith Laws; Anti-Terrorism Laws.
(a) Each Credit Party is in compliance with the requirements of all applicable Laws, except for such noncompliance which could not reasonably be expected to have a Material Adverse Effect.
(b) None of the Credit Parties and, to the knowledge of the Credit Parties, none of their Affiliates (i) is in violation of any Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked Person, or is controlled by a Blocked Person, (iv) is acting or will act for or on behalf of a Blocked Person, (v) is associated with, or will become associated with, a Blocked Person or (vi) is providing, or will provide, material, financial or technical support or other services to or in support of acts of terrorism of a Blocked Person. No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (A) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (B) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.
Section 3.13****Taxes. (i) All Tax returns and other reports required by applicable law to be filed by any Credit Party have been timely filed and (ii) all Taxes imposed upon any Credit Party or any property of any Credit Party which have become due and payable on or prior to the date hereof have been paid, except (A) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization and paid in accordance with the Plan of Reorganization, and (B) Taxes subject to a Permitted Contest.
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Section 3.14****Compliancewith ERISA.
(a) Each ERISA Plan (and the related trusts and funding agreements) complies in form and in operation with, has been administered in compliance with, and the terms of each ERISA Plan satisfy, the applicable requirements of ERISA and the Code in all material respects. Each ERISA Plan which is intended to be qualified under Section 401(a) of the Code is so qualified, and the United States Internal Revenue Service has issued a favorable determination letter with respect to each such ERISA Plan which may be relied on currently. No Credit Party has incurred liability for any material excise tax under any of Sections 4971 through 5000 of the Code.
(b) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Credit Party and each Subsidiary is in compliance with the applicable provisions of ERISA and the provision of the Code relating to ERISA Plans and the regulations and published interpretations therein. During the thirty-six (36) month period prior to the (i) no steps have been taken to terminate any Pension Plan, and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by any Credit Party of any material liability, fine or penalty. No Credit Party has incurred liability to the PBGC (other than for current premiums) with respect to any employee Pension Plan. All contributions (if any) have been made on a timely basis to any Multiemployer Plan that are required to be made by any Credit Party or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable Law; no Credit Party nor any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan, and no Credit Party nor any member of the Controlled Group has received any notice that any Multiemployer Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.
Section 3.15****Consummationof Operative Documents; Brokers. Except for fees payable to Agent and/or Lenders, no broker, finder or other intermediary has brought about the obtaining, making or closing of the transactions contemplated by the Operative Documents, and no Credit Party has or will have any obligation to any Person in respect of any finder’s or brokerage fees, commissions or other expenses in connection herewith or therewith.
Section 3.16****RelatedTransactions. All transactions contemplated by the Operative Documents to be consummated on or prior to the date hereof have been so consummated (including, without limitation, the disbursement and transfer of all funds in connection therewith) in all material respects pursuant to the provisions of the applicable Operative Documents, true and complete copies of which have been delivered to Agent, and in compliance with all applicable Law, except for such Laws the noncompliance with which would not reasonably be expected to have a Material Adverse Effect.
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Section 3.17****MaterialContracts. Except for the agreements set forth on Schedule 3.17(a), as of the Closing Date there are no Material Contracts. Schedule 3.17(b) sets forth, with respect to each real estate lease agreement to which any Credit Party is a party (as a lessee) as of the Closing Date, the address of the subject property and the annual rental (or, where applicable, a general description of the method of computing the annual rental). The consummation of the transactions contemplated by the Financing Documents will not give rise to a right of termination in favor of any party to any Material Contract (other than any Credit Party), except any such termination which would not reasonably be expected to have a Material Adverse Effect.
Section 3.18****Compliancewith Environmental Requirements; No Hazardous Materials. Except in each case as set forth on Schedule 3.18:
(a) no notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has been filed, no penalty has been assessed and no investigation or review is pending, or to such Credit Party’s knowledge, threatened by any Governmental Authority or other Person with respect to any (i) alleged violation by any Credit Party of any Environmental Law, (ii) alleged failure by any Credit Party to have any Permits required in connection with the conduct of its business or to comply with the terms and conditions thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of any Hazardous Materials, or (iv) release of Hazardous Materials; and
(b) no property now owned or leased by any Credit Party and, to the knowledge of each Credit Party, no such property previously owned or leased by any Credit Party, to which any Credit Party has, directly or indirectly, transported or arranged for the transportation of any Hazardous Materials, is listed or, to such Credit Party’s knowledge, proposed for listing, on the National Priorities List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list or is the subject of federal, state or local enforcement actions or, to the knowledge of such Credit Party, other investigations which may lead to claims against any Credit Party for clean-up costs, remedial work, damage to natural resources or personal injury claims, including, without limitation, claims under CERCLA.
(c) For purposes of this Section 3.18, each Credit Party shall be deemed to include any business or business entity (including a corporation) that is, in whole or in part, a predecessor of such Credit Party.
Section 3.19****IntellectualProperty. Each Credit Party owns, is licensed to use or otherwise has the right to use, all Intellectual Property that is material to the condition (financial or other), business or operations of such Credit Party. All Intellectual Property existing as of the Closing Date which is issued, registered or pending with any United States or foreign Governmental Authority (including, without limitation, any and all applications for the registration of any Intellectual Property with any such United States or foreign Governmental Authority) and all licenses under which any Credit Party is the licensee of any such registered Intellectual Property (or any such application for the registration of Intellectual Property) owned by another Person are set forth on Schedule 3.19. Such Schedule 3.19 indicates in each case whether such registered Intellectual Property (or application therefor) is owned or licensed by such Credit Party, and in the case of any such licensed registered Intellectual Property (or application therefor), lists the name and address of the licensor and the name and date of the agreement pursuant to which such item of Intellectual Property is licensed and whether or not such license is an exclusive license and indicates whether there are any purported restrictions in such license on the ability to such Credit Party to grant a security interest in and/or to transfer any of its rights as a licensee under such license. Except as indicated on Schedule 3.19, the applicable Credit Party is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to each such registered Intellectual Property (or application therefor) purported to be owned by such Credit Party, free and clear of any Liens and/or licenses in favor of third parties or agreements or covenants not to sue such third parties for infringement. All registered Intellectual Property of each Credit Party is duly and properly registered, filed or issued in the appropriate office and jurisdictions for such registrations, filings or issuances, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. No Credit Party is party to, nor bound by, any material license or other agreement with respect to which any Credit Party is the licensee that prohibits or otherwise restricts such Credit Party from granting a security interest in such Credit Party’s interest in such license or agreement or other property. To such Credit Party’s knowledge, each Credit Party conducts its business without infringement or claim of infringement of any Intellectual Property rights of others and there is no infringement or claim of infringement by others of any Intellectual Property rights of any Credit Party, which infringement or claim of infringement could reasonably be expected to have a Material Adverse Effect.
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Section 3.20****Solvency. As of the Closing Date, the Borrower and each other Credit Party is (on a consolidated basis), and immediately after giving effect to the Transactions to occur on the Closing Date, is Solvent.
Section 3.21****FullDisclosure. None of the written information (financial or otherwise) (other than any projections, budgets, pro forma financial statements, estimates and other forward-looking information (collectively, “Projections”), information of a general economic nature and third party reports and memoranda) concerning the Credit Parties, their Subsidiaries and the transactions contemplated hereby furnished by or on behalf of any Credit Party to Agent or any Lender in connection with the consummation of the transactions contemplated by the Operative Documents, when furnished and taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which such statements were made (in each case, after giving effect to all supplements and updates thereto from time to time). All Projections delivered to Agent and the Lenders by Borrowers (or their agents) have been prepared on the basis of the assumptions stated therein and such assumptions are believed by such Borrower to be fair and reasonable as of the date furnished in light of current business conditions; provided, however, that Borrowers can give no assurance that such Projections will be attained, such Projections are subject to significant uncertainties and contingencies many of which are beyond the Borrowers’ control, and actual results may vary materially.
Section 3.22**[Reserved]**.
Section 3.23****Subsidiaries. Credit Parties do not own any stock, partnership interests, limited liability company interests or other equity securities except for Permitted Investments.
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Article 4****- AFFIRMATIVE COVENANTS
Each Credit Party agrees that:
Section 4.1****FinancialStatements and Other Reports. The Borrower Representative shall deliver to Agent, on behalf of itself and each other Credit Party:
| (a) | as soon as available, but no later than<br> thirty (30) days after the last day of each month, a company prepared consolidated balance<br> sheet, cash flow and income statement (including year-to-date results) covering the Borrower<br> Representative’s and its Consolidated Subsidiaries’ consolidated operations during<br> the period, prepared under GAAP, consistently applied, setting forth in comparative form<br> the corresponding figures as at the end of the corresponding month of the previous fiscal<br> year and the projected figures for such period based upon the projections required hereunder,<br> all in reasonable detail, certified by a Responsible Officer and in a form acceptable to<br> Agent; provided that solely for the period commencing as of the Closing Date through and<br> including December 31, 2025, the cash flow statements may be delivered quarterly; |
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| (b) | together with the financial reporting<br> package described in (a) above, evidence of payment and satisfaction of all payroll,<br> withholding and similar taxes due and owing by the Credit Parties with respect to the payroll<br> period(s) occurring during such month; |
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| (c) | (x) prior to any initial public<br> offering with respect to Borrower’s equity interests as soon as available, but no later<br> than one hundred twenty (120) days after the last day of Borrower’s fiscal year, audited<br> consolidated financial statements prepared under GAAP, consistently applied, together with<br> an unqualified opinion on the financial statements from an independent certified public accounting<br> firm acceptable to Agent in its reasonable discretion (except for a qualification solely<br> related to a going concern or with respect to any Debt which matures within twelve months<br> from the time such opinion is delivered) or (y) following any such initial public offering,<br> within fifteen (15) days after the time period specified in the SEC’s rules and<br> regulations for non-accelerated filers, annual reports of the Public Reporting Entity for<br> such fiscal year containing the information that would have been required to be contained<br> in an annual report on Form 10-K (or any successor or comparable form) if the Public<br> Reporting Entity had been a reporting company under the Exchange Act, except to the extent<br> permitted to be excluded by the SEC; |
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| (d) | within five (5) days of delivery<br> or filing thereof, copies of all statements, reports and notices made available to the Borrower<br> Representative’s security holders, to the ABL Agent or to any holders of Subordinated<br> Debt and copies of all reports and other filings made by a Credit Party with any stock exchange<br> on which any securities of any Credit Party are traded and/or the SEC; |
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| (e) | a prompt written notice of any legal<br> actions pending against any Credit Party or any Subsidiaries thereof that could reasonably<br> be expected to result in damages or costs to any Credit Party or any of Subsidiaries thereof<br> equal to or in excess of $10,000,000 or may be reasonably expected to result in a Material<br> Adverse Effect; |
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| --- | | (f) | prompt written notice of an event that<br> materially and adversely affects the value of any material Intellectual Property owned by<br> a Credit Party; | | --- | --- | | (g) | promptly after the same become available,<br> copies of any amendments, waivers or other modifications of or relating to the ABL Documents,<br> Term Loan Documents or the Exit Notes and the Exit Notes Indenture; | | --- | --- | | (h) | budgets, sales projections, operating<br> plans and other financial information and information, reports or statements regarding the<br> Credit Parties, their business and the Collateral as Agent may from time to time reasonably<br> request; | | --- | --- | | (i) | along<br> with the monthly reports delivered pursuant to Section 4.1(a) above, evidence reasonably<br> satisfactory to Agent of each Credit Party’s compliance with any payment plan or arrangement<br> with any taxing authority with respect to Priority Tax Claims (as defined in the Plan of<br> Reorganization), including copies of payment confirmations, material correspondence with<br> taxing authorities and a schedule of outstanding Priority Tax Claims; | | --- | --- | | (j) | concurrently with the delivery thereof<br> to the ABL Agent, an updated Schedule 1.1 to the ABL Agreement identifying the credit ratings<br> of Investment Grade Account Debtors (as defined in the ABL Agreement)used in determination<br> of Eligible Investment Grade Billed Accounts (as defined in the ABL Agreement); | | --- | --- | | (k) | within thirty (30) days after the last<br> day of each month, together with the monthly financial statements described in clause (a) above,<br> a duly completed Compliance Certificate signed by a Responsible Officer setting forth calculations<br> showing compliance with the financial covenants set forth in this Agreement; | | --- | --- | | (l) | promptly upon their becoming available,<br> copies of all Swap Contracts and Material Contracts, in each case that are required to be<br> publicly filed; | | --- | --- | | (m) | concurrently with the delivery of the<br> Borrowing Base Certificate to the ABL Agent, delivery of such Borrowing Base Certificate<br> signed by a Responsible Officer, together with all information, calculations, supporting<br> documentation or other documentation or information delivered therewith; and | | --- | --- | | (n) | thirty (30) days’ advance written<br> notice (or as much advance notice is as reasonably practicable) of a payoff of the ABL Agreement<br> initiated by the Borrowers under the ABL Agreement. | | --- | --- |
At the option of the Borrowers, the Borrowers may make available to Agent and such requesting Lenders the information required to be provided pursuant to clause (c) of the immediately preceding paragraph by posting such information to its website (or the website of any of the Borrower Representative’s parent companies, including the Public Reporting Entity) on IntraLinks or any comparable online data system or website to which each Lender and Agent have access; provided, that the Borrower Representative shall notify (which may be by electronic mail) Agent of the posting of any such documents and provide to Agent by electronic mail electronic versions (i.e., soft copies) of such documents. If at any time the Borrowers or any direct or indirect parent of the Borrowers has made a good faith determination to file a registration statement with the SEC with respect to an initial public offering of such entity’s equity interests, the Borrowers will not be required to disclose any information or take any actions that, in the good faith view of the Borrowers would violate the securities laws or the SEC’s “gun jumping” rules.
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Notwithstanding the foregoing, (A) neither the Credit Parties nor another Public Reporting Entity will be required to deliver any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain financial information required by Rule 3- 09, Rule 3-10 or Rule 3-16 of Regulation S-X or include any exhibits or certifications required by Form 10-K, Form 10-Q or Form 8-K (or any successor or comparable forms) or related rules under Regulation S-K and (C) such reports shall not be required to present compensation or beneficial ownership information.
The financial statements, information and other documents required to be provided as described in clause (c) of the first paragraph of this Section 4.1 may be those of (i) the Borrower Representative and its Subsidiaries (on a combined basis) or (ii) any direct or indirect parent of all of the Credit Parties (any such entity, a “Public Reporting Entity”); provided, that, if the financial information so delivered relates to such direct or indirect parent of the Credit Parties the same is accompanied by consolidating financial statements (including statements of cash flows) that explain in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Borrower Representative and its Subsidiaries on a standalone basis, on the other hand, for the applicable period. Notwithstanding any of the foregoing herein, to the extent any of the Credit Parties’ parent companies is subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act, such information described in this paragraph shall be included in the Form 10-K reports of the Public Reporting Entity described in clause (c) of the first paragraph of this Section 4.1 filed with the SEC.
Notwithstanding the foregoing, the Credit Parties will be deemed to have delivered such reports and information referred to in this Section 4.1 to the Lenders and Agent for all purposes of this Agreement if the Credit Parties or another Public Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, except as required by the last sentence of the immediately preceding paragraph, the requirements of this Section 4.1 shall be deemed satisfied and the Credit Parties will be deemed to have delivered such reports and information referred to this Section 4.1 to Agent, holders, prospective investors, market makers and securities analysts for all purposes of this Agreement by the posting of reports and information that would be required to be provided on the Borrower’s website (or that of any of the Credit Parties’ parent companies, including the Public Reporting Entity). Agent shall have no obligation to monitor whether the Credit Parties post such reports, information and documents on the Borrower’s website (or that of any of the Credit Parties’ parent companies, including the Public Reporting Entity) or the SEC’s EDGAR service, or collect or re-post any such information from any Credit Party (or any of the Credit Parties’ parent companies) website or the SEC’s EDGAR service.\
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Section 4.2****Paymentand Performance of Obligations. Each Credit Party (a) will pay and discharge, and cause each Subsidiary to pay and discharge, on a timely basis as and when due, in accordance with Applicable Law, all of their respective obligations and liabilities, except for such obligations and/or liabilities (i) that may be the subject of a Permitted Contest or (ii) the nonpayment or nondischarge of which could not reasonably be expected to have a Material Adverse Effect or result in a Lien against any Collateral, except for Permitted Liens, (b) without limiting anything contained in the foregoing clause (a), pay all amounts due and owing in respect of Taxes (including without limitation, payroll and withholdings tax liabilities) on a timely basis as and when due, and in any case prior to the date on which any material fine, penalty, interest, late charge or loss may be added thereto for nonpayment thereof, except (i) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization or otherwise satisfied in accordance with the Plan of Reorganization (provided, that, for the avoidance of doubt, the Credit Parties shall pay Taxes to the extent required under and in accordance with the Plan of Reorganization), and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP, (c) will maintain, and cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of all of their respective obligations and liabilities, and (d) will not breach or permit any Subsidiary to breach, or permit to exist any default under, the terms of any lease, commitment, contract, instrument or obligation to which it is a party, or by which its properties or assets are bound, except for such breaches or defaults which could not reasonably be expected to have a Material Adverse Effect.
Section 4.3****Maintenanceof Existence. Each Credit Party will preserve, renew and maintain in full force and effect and in good standing under the laws of its jurisdiction of organization, and will cause each Subsidiary to preserve, renew and keep in full force and effect and in good standing under the laws of its jurisdiction of organization, their respective existence and (except in the case failure to do so could not reasonably be expected to have a Material Adverse Effect except solely with respect to any jurisdiction other than the jurisdiction of organization of such Credit Party or Subsidiary) their respective rights, privileges and franchises necessary or desirable in the normal conduct of business.
Section 4.4****Maintenanceof Property; Insurance.
(a) Each Credit Party will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted, except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect. If all or any part of the Collateral useful or necessary in its business, or upon which any Borrowing Base (as defined in the ABL Agreement) is calculated, becomes damaged or destroyed, each Credit Party will, and will cause each Subsidiary to, promptly and completely repair and/or restore the affected Collateral in a good and workmanlike manner (except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect), regardless of whether Agent agrees to disburse insurance proceeds or other sums to pay costs of the work of repair or reconstruction.
(b) Upon completion of any Permitted Contest, Credit Parties shall, and will cause each Subsidiary to, promptly pay the amount due, if any, and deliver to Agent proof of the completion of the contest and payment of the amount due, if any (except in each case to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect), following which Agent shall return the security, if any, deposited with Agent pursuant to the definition of Permitted Contest.
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(c) Each Credit Party will maintain (i) casualty insurance on all real and personal property on an all risks basis (including the perils of flood, windstorm and quake), covering the repair and replacement cost of all such property and coverage, business interruption and rent loss coverages with extended period of indemnity (for the period required by Agent from time to time) and indemnity for extra expense, in each case without application of coinsurance and with agreed amount endorsements, (ii) general and professional liability insurance (including products/completed operations liability coverage), and (iii) such other insurance coverage in such amounts and with respect to such risks as Agent may request from time to time, pursuant to the Insurance Requirements attached hereto as Schedule 4.4; provided, however, that, in no event shall such insurance be in amounts or with coverage less than, or with carriers with qualifications inferior to, any of the insurance or carriers in existence as of the Closing Date (or required to be in existence after the Closing Date under a Financing Document). All such insurance shall be provided by insurers having an A.M. Best policyholders rating reasonably acceptable to Agent.
(d) On or prior to the Closing Date (subject to Section 7.4 of the ABL Agreement), and at all times thereafter, each Credit Party will cause ABL Agent to be named as an additional insured, assignee and lender loss payee (which shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required to be maintained pursuant to this Section 4.4 pursuant to endorsements in form and substance acceptable to ABL Agent. Credit Parties shall deliver to ABL Agent and the Lenders (i) on the Closing Date (subject to Section 7.4 of the ABL Agreement), a certificate from Credit Parties’ insurance broker dated such date showing the amount of coverage as of such date, and that if all or any part of such policy is canceled, terminated or expires, the insurer will forthwith give notice thereof to each additional insured, assignee and loss payee and that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days after receipt by each additional insured, assignee and loss payee of written notice thereof, (ii) upon the request of any Lender through ABL Agent from time to time full information as to the insurance carried, (iii) within five (5) days of receipt of notice from any insurer, a copy of any notice of cancellation, nonrenewal or material change in coverage from that existing on the date of this Agreement, (iv) forthwith, notice of any cancellation or nonrenewal of coverage by any Credit Party, and (v) at least 60 days prior to expiration of any policy of insurance, evidence of renewal of such insurance upon the terms and conditions herein required. Following the payoff of the ABL Agreement the Agent shall receive the insurance certificates and rights hereunder previously provided to the ABL Agent.
(e) In the event any Credit Party fails to provide Agent with evidence of the insurance coverage required by this Agreement, following the payoff of the ABL Agreement, Agent may purchase insurance at Credit Party’s expense to protect Agent’s interests in the Collateral. This insurance may, but need not, protect such Credit Party’s interests. The coverage purchased by Agent may not pay any claim made by such Credit Party or any claim that is made against such Credit Party in connection with the Collateral. Such Credit Party may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that such Credit Party has obtained insurance as required by this Agreement. If Agent purchases insurance for the Collateral, Credit Parties will be responsible for the costs of that insurance to the fullest extent provided by law, including interest and other charges imposed by Agent in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The costs of the insurance may be more than the cost of insurance such Credit Party is able to obtain on its own.
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Section 4.5****Compliancewith Laws and Material Contracts. Each Credit Party will comply, and cause each Subsidiary to comply, with the requirements of all applicable Laws and Material Contracts, except to the extent that failure to so comply could not reasonably be expected to have a Material Adverse Effect.
Section 4.6****Inspectionof Property, Books and Records. Each Credit Party will keep, and will cause each Subsidiary to keep, proper books of record substantially in accordance with GAAP in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and will permit, and will cause each Subsidiary to permit representatives of Agent and of any Lender to visit and inspect any of their respective properties, to examine and make abstracts or copies from any of their respective books and records, to conduct a collateral audit and analysis of their respective operations and the Collateral, to review the billing practices of Credit Parties and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants as often as may reasonably be desired. In the absence of a Specified Default, Agent shall give the applicable Credit Party or any applicable Subsidiary commercially reasonable prior notice of such exercise. After the occurrence and during the continuation of a Specified Default, the Credit Parties shall be responsible for all documented fees, expenses and other costs pursuant to Section 2.2(i). At any time following the occurrence and during the continuance of a Specified Default, Agent may exercise its rights under this Section 4.6, without prior notice.
Section 4.7****Useof Proceeds. Credit Parties shall use the proceeds of Loans solely for working capital and general corporate needs of Borrowers and their Subsidiaries. No portion of the proceeds of the Loans will be used for family, personal, agricultural or household use.
Section 4.8****Noticesof Litigation and Defaults. Credit Parties will give prompt written notice to Agent (a) of any litigation or governmental proceedings pending or threatened (in writing) against Borrowers or any other Credit Party which would reasonably be expected to have a Material Adverse Effect with respect to Borrowers or any other Credit Party or which in any manner calls into question the validity or enforceability of any Financing Document, (b) upon any Credit Party becoming aware of the existence of any Default or Event of Default, (c) if any Credit Party is in breach or default under or with respect to any Material Contract, or if any Credit Party is in breach or default under or with respect to any other contract, agreement, lease or other instrument to which it is a party or by which its property is bound or affected, which breach or default could reasonably be expected to have a Material Adverse Effect, (d) of any strikes or other labor disputes pending or, to any Credit Party’s knowledge, threatened against any Credit Party, (e) if there is any infringement or claim of infringement by any other Person with respect to any Intellectual Property rights of any Credit Party, or if there is any claim by any other Person that any Credit Party in the conduct of its business is infringing on the Intellectual Property Rights of others, which in any such case could reasonably be expected to have a Material Adverse Effect, (f) the occurrence of any “default” or “event of default” under and as defined in the Term Loan Agreement, and (g) of all returns, recoveries, disputes and claims that involve more than the Threshold Amount. Each Credit Party represents and warrants that Schedule 4.9 sets forth a complete list of all matters existing as of the Closing Date for which notice could be required under this Section and all litigation or governmental proceedings pending or threatened (in writing) against any Credit Party as of the Closing Date.
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Section 4.9****HazardousMaterials; Remediation.
(a) If any release or disposal of Hazardous Materials shall occur or shall have occurred on any real property or any other assets of any Borrower or any other Credit Party, such Borrower or Credit Party will cause, or direct the applicable Subsidiary to cause, the prompt containment and removal of such Hazardous Materials and the remediation of such real property or other assets as is necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, each Credit Party shall, and shall cause each other Subsidiary to, comply with each Environmental Law requiring the performance at any real property by any Borrower or any other Credit Party of activities in response to the release or threatened release of a Hazardous Material.
(b) Credit Parties will provide Agent within thirty (30) days after written demand therefor with a bond, letter of credit or similar financial assurance evidencing to the reasonable satisfaction of Agent that sufficient funds are available to pay the cost of removing, treating and disposing of any Hazardous Materials or Hazardous Materials Contamination and discharging any assessment which may be established on any property as a result thereof, such demand to be made, if at all, upon Agent’s reasonable business determination that the failure to remove, treat or dispose of any Hazardous Materials or Hazardous Materials Contamination, or the failure to discharge any such assessment could reasonably be expected to have a Material Adverse Effect.
Section 4.10****FurtherAssurances.
(a) Each Credit Party will, and will cause each Subsidiary to, at its own cost and expense, promptly and duly take, execute, acknowledge and deliver all such further acts, documents and assurances as may from time to time be necessary or as Agent or the Required Lenders may from time to time reasonably request in order to carry out the intent and purposes of the Financing Documents and the transactions contemplated thereby, including all such actions to establish, create, preserve, protect and perfect a Lien (subject only to Permitted Liens and to the ABL Intercreditor Agreement) in favor of Agent for itself and for the benefit of the Lenders on the Collateral (including Collateral acquired after the date hereof).
(b) Upon receipt of an affidavit of an authorized representative of Agent or a Lender as to the loss, theft, destruction or mutilation of any Note or any other Financing Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other applicable Financing Document, Credit Parties will issue, in lieu thereof, a replacement Note or other applicable Financing Document, dated the date of such lost, stolen, destroyed or mutilated Note or other Financing Document in the same principal amount thereof and otherwise of like tenor.
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(c) Upon the formation or acquisition of a new Subsidiary (other than an Excluded Subsidiary), Credit Parties shall, within ten (10) Business Days (or such later date as consented to by the Required Lenders in their sole discretion, which consent may be provided via electronic mail from (x) counsel to the Required Lenders or (y) Agent (in each case acting at the direction of the Required Lenders)) after such formation or acquisition, (i) pledge, have pledged or cause or have caused to be pledged to the Term Agent or the Trustee as bailee, or to Agent, pursuant to a pledge agreement in form and substance satisfactory to the Term Agent, the Trustee or Agent, as applicable, all of the outstanding shares of equity interests or other equity interests of such new Subsidiary owned directly or indirectly by any Credit Party, along with undated stock or equivalent powers for such certificates, executed in blank; (ii) unless Agent shall agree otherwise in writing, cause the new Subsidiary to take such other actions (including entering into or joining any Security Documents) as are necessary or advisable in the reasonable opinion of Agent in order to grant Agent, acting on behalf of the Lenders, a Lien on all real and personal property of such Subsidiary in existence as of such date and in all after acquired property (subject only to Permitted Liens and to the ABL Intercreditor Agreement), which Liens are required to be granted pursuant to this Agreement; (iii) unless Agent shall agree otherwise in writing, cause such new Subsidiary to become a Guarantor of the obligations of Credit Parties hereunder and under the other Financing Documents pursuant to a Guarantee Supplement; and (iv) cause the new Subsidiary to deliver certified copies of such Subsidiary’s certificate or articles of incorporation, together with good standing certificates, by-laws (or other operating agreement or governing documents), resolutions of the Board of Directors or other governing body, approving and authorize the execution and delivery of the Security Documents, incumbency certificates and to execute and/or deliver such other documents and legal opinions or to take such other actions as may be reasonably requested by Agent, in each case, in form and substance reasonably satisfactory to Agent.
(d) Upon the termination of the ABL Agreement, the Credit Parties shall use their commercially reasonable efforts to (i) enter into Control Agreements over all then existing Deposit Accounts and Securities Accounts, in each case, with respect to which a Control Agreement had been in place with ABL Agent as secured party thereunder, with the applicable bank, financial institution or securities intermediary in favor of the Agent and (ii) cause Agent to be named as an additional insured, assignee and lender loss payee (which shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required to be maintained pursuant to Section 4.4 pursuant to endorsements in form and substance acceptable to Agent.
Notwithstanding the foregoing, no Excluded Subsidiary shall be required to become a Guarantor hereunder (and, as such, shall not be required to deliver the documents required by this clause (c) above).
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Section 4.11**[Reserved]**.
Section 4.12****Powerof Attorney. After the occurrence and during the continuance of an Event of Default, each of the authorized representatives of Agent is hereby irrevocably made, constituted and appointed the true and lawful attorney for each Credit Party (without requiring any of them to act as such) with full power of substitution to do the following: (a) endorse the name of each Credit Party upon any and all checks, drafts, money orders, and other instruments for the payment of money that are payable to each Credit Party and constitute collections on such Credit Party’s Accounts; (b) so long as Agent has provided not less than three (3) Business Days’ prior written notice to Borrower to perform the same and Borrower has failed to take such action, execute in the name of any Credit Party any schedules, assignments, instruments, documents, and statements that Credit Parties are obligated to give Agent under this Agreement; (c) take any action Credit Parties are required to take under this Agreement; (d) so long as Agent has provided not less than three (3) Business Days’ prior written notice to Borrower to perform the same and Borrower has failed to take such action, do such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary or desirable to enforce any Account or other Collateral or perfect Agent’s security interest or Lien in any Collateral; and (e) do such other and further acts and deeds in the name of Credit Parties that Agent may deem necessary or desirable to enforce its rights with regard to any Account or other Collateral. This power of attorney shall be irrevocable and coupled with an interest.
Section 4.13**[Reserved]**.
Section 4.14****Maintenanceof Management. Borrower will cause its business to be continuously managed by its present chief executive officer and chief financial officer or such other individuals serving in such capacities as shall be reasonably satisfactory to Agent. Borrower will notify Agent promptly in writing of any change in its board of directors or executive officers.
Article 5****- NEGATIVE COVENANTS
Each Credit Party agrees that:
Section 5.1****Debt;Contingent Obligations. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, incur, assume, guarantee or otherwise become or remain directly or indirectly liable with respect to, any Debt, except for Permitted Debt. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist any Contingent Obligations, except for Permitted Contingent Obligations.
Section 5.2****Liens. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except for Permitted Liens.
Section 5.3****RestrictedDistributions. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Distribution, except for Permitted Distributions.
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The Borrowers, in their sole discretion, may classify any Permitted Distribution or Permitted Investment as being made in part under one of the clauses or subclauses of the definitions of “Permitted Distribution” and “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 5.3 to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (i), (k), (p) and (q) of the definition of “Permitted Investments.”
Section 5.4****RestrictiveAgreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) enter into or assume any agreement (other than the Financing Documents, the ABL Documents, the Term Loan Documents and the Exit Notes (and extensions, modifications and replacements of any of the foregoing that are not materially more restrictive with respect to dividend and payment restrictions), any agreement or instrument of a Person acquired by a Credit Party or a Subsidiary in existence at the time of such acquisition (which restriction is not applicable to any Person, or the assets of any Person, other than the Person, or the assets of the Person, so acquired), any secured Permitted Debt that limits the right of the debtor to dispose of the assets securing such Debt, any agreements for purchase money debt permitted under clause (c) of the definition of Permitted Debt, any other Debt so long as such encumbrances and restrictions will not materially affect the Borrowers’ ability to make anticipated principal or interest payments on the Exit Notes, and any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets pending such sale or other disposition) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or (b) create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind (except as provided by the Financing Documents, the ABL Documents, the Term Loan Documents and the Exit Notes (and extensions, modifications and replacements of any of the foregoing that are not materially more restrictive with respect to dividend and payment restrictions), any agreement or instrument of a Person acquired by a Credit Party or a Subsidiary in existence at the time of such acquisition (which restriction is not applicable to any Person, or the assets of any Person, other than the Person, or the assets of the Person, so acquired), any secured Permitted Debt that limits the right of the debtor to dispose of the assets securing such Debt, any agreements for purchase money debt permitted under clause (c) of the definition of Permitted Debt, and customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business or consistent with industry norm), on the ability of any Subsidiary to: (i) pay or make Restricted Distributions to any Credit Party or any Subsidiary; (ii) pay any Debt owed to any Credit Party or any Subsidiary; (iii) make loans or advances to any Borrower or any Subsidiary; or (iv) transfer any of its property or assets to any Credit Party or any Subsidiary.
Section 5.5****Paymentsand Modifications of Subordinated Debt. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) declare, pay, make or set aside any amount for payment in respect of Subordinated Debt, except for payments made in full compliance with and expressly permitted under the Subordination Agreement and payments permitted by Section 5.3, (b) amend or otherwise modify the terms of any Subordinated Debt, except for amendments or modifications made in full compliance with the Subordination Agreement, (c) declare, pay, make or set aside any amount for payment in respect of any Debt hereinafter incurred that, by its terms, or by separate agreement, is payment subordinated to the Obligations, except for payments made in full compliance with and expressly permitted under the subordination provisions applicable thereto and payments permitted by Section 5.3, or (d) amend or otherwise modify the terms of any such Debt if the effect of such amendment or modification is to (i) increase the interest rate or fees on, or change the manner or timing of payment of, such Debt, (ii) accelerate or shorten the dates upon which payments of principal or interest are due on, or the principal amount of, such Debt, (iii) change in a manner adverse to any Credit Party or Agent any event of default or add or make more restrictive any covenant with respect to such Debt, (iv) change the prepayment provisions of such Debt or any of the defined terms related thereto, (v) change the subordination provisions thereof (or the subordination terms of Section 12.7 hereof or any other guarantee thereof), or (vi) change or amend any other term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Debt in a manner adverse to any Credit Party, any Subsidiaries, Agents or Lenders. Credit Parties shall, prior to entering into any such amendment or modification, deliver to Agent reasonably in advance of the execution thereof, any final or execution form copy thereof.
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Section 5.6****Consolidations,Mergers and Sales of Assets; Change in Control. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) consolidate or merge or amalgamate with or into any other Person unless the surviving Person is such Credit Party (or if no Credit Party is a party thereto, the surviving person is a Guarantor, or if no Credit Party is a party thereto, the surviving Person is such Subsidiary), or (b) consummate any Asset Dispositions other than Permitted Asset Dispositions. No Credit Party will suffer or permit to occur any Change in Control.
Section 5.7****Purchaseof Assets, Investments. No Credit Party will, or will permit any Subsidiary to, directly or indirectly (a) acquire or enter into any agreement to acquire any assets other than in the Ordinary Course of Business or as permitted under the definition of Permitted Investments; or (b) acquire or own or enter into any agreement to acquire or own any Investment in any Person other than Permitted Investments.
The Borrowers, in their sole discretion, may classify any Permitted Investment as being made in part under one of the clauses or subclauses of the definitions of “Permitted Distribution” and “Permitted Investments” and in part under one or more other such clauses or subclauses; provided, further, that, notwithstanding anything in this Section 5.7 to the contrary, Investments in Subsidiaries that are not Guarantors shall only be permitted to be made pursuant to clauses (i), (k), (p) and (q) of the definition of “Permitted Investments.”
Section 5.8****Transactionswith Affiliates. Except as otherwise disclosed on Schedule 5.8, and except for transactions which contain terms that are no less favorable to the applicable Credit Party or any Subsidiary, as the case may be, than those which might be obtained from a third party not an Affiliate of any Credit Party or that do not involve consideration in excess of $5,000,000, no Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Credit Party (each, an “Affiliate Transaction”), other than:
(a) any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25,000,000, in connection with which the Credit Parties deliver to Agent (i) a resolution adopted in good faith by a majority of disinterested directors of the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions) approving such Affiliate Transaction and set forth in an officer’s certificate certifying that such Affiliate Transaction complies with the above requirements of this Section 5.8 or (ii) if there are no directors on the Board of Directors of the Parent (or the committee thereof comprised of disinterested directors tasked with the review of such transactions) that are disinterested with respect to such transaction(s), a letter from an independent financial advisor stating that such transaction is fair to the applicable Credit Party or such Subsidiary from a financial point of view;
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(b) the Transactions, the payment of professional fees and expenses in connection therewith (provided that, with respect to the payment of professional fees and expenses of Cleary Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP, such payment shall, be made as follows and on the following dates: (i) on the Closing Date, each legal advisor shall be paid a sum equal to (x) one third of the estimated amount of each advisor’s professional fees and expenses as set forth on the funds flow delivered by the Borrower as of the Closing Date plus (y) 50% of any amount that is in excess of $25,900,000 retained by the Borrower on the Closing Date (provided that such excess amount shall not exceed $1,000,000), (ii) on the date that is forty-five (45) days following the Closing Date, each legal advisor shall be paid a sum equal to 50% of the total outstanding amount of such advisor’s professional fees and expenses and (iii) on the date that is ninety (90) days following the Closing Date, each legal advisor shall be paid a sum equal to the remaining 50% of each legal advisor’s total professional fees and expenses;
(c) any Affiliate Transaction the only parties thereto constitute Credit Parties;
(d) (i) sales or contributions of Receivables Assets by (i) each Exar Originator to Exar SPV and (ii) Exar SPV to the Exar Buyer pursuant to the Exar Facility in effect as of the date hereof or (ii) the purchase of participation interests by any Credit Party in this Agreement;
(e) the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the applicable Credit Party, any Subsidiary, or any direct or indirect parent of the Credit Parties in the ordinary course of business, provided that the payment of any such fees or reimbursements to, on behalf of, or for the account of, shareholders of Parent Affiliates of Parent or any of their respective Affiliates (other than the Parent and its Subsidiaries) shall not be permitted other than payment or reimbursement of fees and expenses incurred by Ernst & Young in connection with Ernst & Young’s determination or re-determination (if any) of the Transaction Tax Liability (as defined in the Plan of Reorganization), and provided, further, that no such payments shall be permitted under this clause (e) to any of ETI or its Affiliates (other than the Parent and its Subsidiaries) for, or in respect of, or as reimbursement for, any consultants;
(f) transactions between or among the Borrowers and/or any of their Subsidiaries (or an entity that becomes a Subsidiary as a result of such transaction) in the ordinary course of business and any merger, consolidation or amalgamation of the Borrowers and any direct parent of the Borrowers; provided, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the capital stock of the Borrowers and such merger, consolidation or amalgamation is otherwise in compliance with the terms of this Agreement and effected for a bona fide business purpose;
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(g) incurrence, transfer or assignment of loans in accordance with the terms of the Term Loan Agreement and performance of the obligations thereunder and issuance, transfer or assignment of Exit Notes in accordance with the terms of the Exit Notes Indenture and performance of the obligations thereunder;
(h) the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under the terms of, any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date and any amendment thereto or similar transactions, agreements or arrangements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under any similar transaction, agreement or arrangement entered into after the Closing Date shall only be permitted by this clause (h) to the extent that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole, or new transaction, agreement or arrangement are not otherwise more disadvantageous to the Lenders in any material respect than the original transaction, agreement or arrangement as in effect on the Closing Date, as determined in good faith by the Borrowers;
(i) intercompany transactions for the purpose of improving the consolidated tax efficiency of the Borrowers and their respective Subsidiaries and not for the purpose of circumventing any covenant set forth in this Agreement; and
(j) the entering into of any tax sharing agreement or arrangement that complies with clause (e) of the definition of “Permitted Distributions” and the performance under any such agreement or arrangement.
Section 5.9****Modificationof Organizational Documents. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify any Organizational Documents of such Person, except for Permitted Modifications.
Section 5.10****Modificationof Certain Agreements. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify any Material Contract, which amendment or modification in any case: (a) is contrary to the terms of this agreement or any other Financing Document; or (b) could reasonably be expected to be materially adverse to the rights, interests or privileges of Agent or the Lenders or their ability to enforce the same. Each Credit Party shall, prior to entering into any material amendment or other modification of any of the foregoing documents, deliver to Agent reasonably in advance of the execution thereof, any final or execution form copy of amendments or other modifications to such documents.
Section 5.11****Conductof Business. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, engage in any line of business other than those businesses engaged in on the Closing Date and described on Schedule 5.11 and businesses reasonably related thereto. No Credit Party will, or will permit any Subsidiary to, other than in the Ordinary Course of Business, change its normal billing payment and reimbursement policies and procedures with respect to its Accounts (including, without limitation, the amount and timing of finance charges, fees and write-offs).
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Section 5.12****LeasePayments. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, incur or assume (whether pursuant to a guarantee or otherwise) any liability for rental payments except in the Ordinary Course of Business.
Section 5.13****Limitationon Sale and Leaseback Transactions. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, enter into any arrangement with any Person whereby, in a substantially contemporaneous transaction, any Credit Party or any Subsidiaries sells or transfers all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back the right to use such asset.
Section 5.14****DepositAccounts and Securities Accounts; Payroll and Benefits Accounts. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, establish any new Deposit Account or Securities Account without prior written notice to Agent unless either (i) ABL Agent, such Credit Party or such Subsidiary and the bank, financial institution or securities intermediary at which the account is to be opened enter into a Control Agreement prior to or concurrently with the establishment of such Deposit Account or Securities Account (expect with respect to Excluded Accounts) and ABL Agent acts as bailee for purposes of Agent’s perfection by control in such Deposit Account or Securities Account, or (ii) Agent, such Credit Party or such Subsidiary and the bank, financial institution or securities intermediary at which the account is to be opened enter into a Control Agreement prior to or concurrently with the establishment of such Deposit Account or Securities Account (expect with respect to Excluded Accounts). Each Credit Party represents and warrants that Schedule 5.14 lists all of the Deposit Accounts and Securities Accounts of each Credit Party as of the Closing Date. The provisions of this Section requiring Control Agreements shall not apply to Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Credit Party’s employees and identified to Agent by each Credit Party as such (such Accounts, the “Excluded Accounts”); provided, however, that at all times that any Obligations remain outstanding, Credit Party shall maintain one or more separate Deposit Accounts to hold any and all amounts to be used for payroll, payroll taxes and other employee wage and benefit payments, and shall not commingle any monies allocated for such purposes with funds in any other Deposit Account.
Section 5.15****Compliancewith Anti-Terrorism Laws. Agent hereby notifies Credit Parties that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s policies and practices, Agent is required to obtain, verify and record certain information and documentation that identifies Credit Parties and its principals, which information includes the name and address of each Credit Party and its principals and such other information that will allow Agent to identify such party in accordance with Anti-Terrorism Laws. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, knowingly enter into any Material Contracts with any Blocked Person or any Person listed on the OFAC Lists. Each Credit Party shall immediately notify Agent if such Credit Party has knowledge that any Credit Party, any Subsidiaries, any additional Credit Party or any of their respective Affiliates or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is or becomes a Blocked Person or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering. No Credit Party will, or will permit any Subsidiary to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law. The foregoing will not apply to any Person that qualifies as a corporation that is registered or incorporated under the laws of Canada or any province or territory thereof and that carries on business in whole or in part in Canada within the meaning of Section 2 of the Foreign Extraterritorial Measures (United States) Order, 1992 passed under the Foreign Extraterritorial Measures Act (Canada) in so far as such representations would result in a violation of or conflict with the Foreign Extraterritorial Measures Act (Canada) or any similar law.
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Article 6****- FINANCIAL COVENANTS
Section 6.1****FixedCharge Coverage Ratio. Credit Parties shall not permit the Fixed Charge Coverage Ratio of the Borrower Representative and its Subsidiaries, as follows: (i) to be tested quarterly until and including the Defined Period ending December 31, 2025, to be less than 0.85 to 1.00, (ii) to be tested monthly until and including (a) for the Defined Period beginning January 1, 2026 until and including June 30, 2026, to be less than 0.85 to 1.00 and (b) for the Defined Period beginning July 1, 2026, until and including the Termination Date, to be less than 1.00 to 1.00.
Section 6.2****Evidenceof Compliance. Credit Parties shall furnish to Agent, together with the financial reporting required of Credit Parties in Section 4.1 hereof, a Compliance Certificate as evidence of Credit Parties’ compliance with the covenants in this Article and evidence that no Event of Default specified in this Article has occurred. The Compliance Certificate shall include, without limitation, (a) a statement and report, on a form approved by Agent, detailing Borrower’s calculations, and (b) if requested by Agent, back-up documentation (including, without limitation, invoices, receipts and other evidence of costs incurred during such quarter as Agent shall reasonably require) evidencing the propriety of the calculations.
Article 7 - CONDITIONS
Section 7.1****Conditionsto Closing. The obligation of each Lender to make the initial Loans on the Closing Date shall be subject to the receipt by Agent of each agreement, document and instrument set forth on the closing checklist prepared by Agent or its counsel, each in form and substance satisfactory to Agent, and such other closing deliverables reasonably requested by Agent and Lenders, and to the satisfaction of the following conditions precedent, each to the satisfaction of Agent and Lenders and their respective counsel in their sole discretion:
(a) Consummationof Transactions. Evidence of the consummation of the Transactions (other than the funding of the Loan and the closing of any acquisition for which the proceeds of the Loan are purchase money) contemplated by the Operative Documents including, without limitation, the funding of any and all investments contemplated by the Operative Documents;
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(b) SecretaryCertificates; Corporate Deliverables. Agent shall have received:
(i) copies of the certificate or articles of incorporation and by-laws (or other similar governing documents serving the purposes) of each Credit Party, certified as of the Closing Date as complete and correct copies thereof by a Responsible Officer or another authorized representative of each Credit Party;
(ii) a copy of the resolutions or equivalent action, in form and substance reasonably satisfactory to Agent, of each Credit Party authorizing, as applicable, the execution and delivery of this Agreement and the other Financing Documents and the performance of this Agreement and the transactions contemplated hereby and thereby, certified by a Responsible Officer or another authorized representative of each Credit Party as of the Closing Date, which certificate shall state that the resolutions or other action thereby certified have not been amended, restated, amended and restated, modified (except as any later such resolution or other action may modify any earlier such resolution or other action), revoked or rescinded and are in full force and effect as of the Closing Date;
(iii) such certificates of good standing (to the extent such concept exists) from the applicable secretary of state of the state of organization of each Credit Party, certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Financing Documents to which such Credit Party is a party or is to be a party on the Closing Date;
(c) FinancingDocuments. Agent shall have received an executed copy of the applicable Financing Documents;
(d) Closing Certificate. Agent shall have received a certificate of Credit Parties, dated as of the Closing Date, substantially in the form of Exhibit E;
(e) SolvencyCertificate. Agent shall have received a solvency certificate signed by the chief financial officer on behalf of the Credit Parties, substantially in the form of Exhibit G, after giving effect to the Transactions or, at the Credit Parties’ option, a solvency opinion from an independent investment bank or valuation firm of nationally recognized standing;
(f) Representationsand Warranties. Each of the representations and warranties of each Credit Party contained in or pursuant to the Financing Documents shall be true, correct and complete on and as of the Closing Date, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct as of such earlier date;
(g) LegalOpinions. Agent shall have received an executed legal opinion of (i) Latham & Watkins LLP, special New York counsel to the Credit Parties and (ii) legal counsel of the Credit Parties in each of the jurisdictions of organization or formation of the material Credit Parties in Iowa, Minnesota and South Carolina, in each case in form and substance reasonably satisfactory to Agent;
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(h) Approvals. Borrower and the other Credit Parties shall have received all governmental, shareholder and third-party approvals, consents, licenses and permits required in connection with this Agreement, the Transactions and the related financings and transactions contemplated thereby, which such approvals, consents, licenses and permits remain in full force and effect;
(i) NoLitigation. Other than the Chapter 11 Cases, as of the Closing Date, there shall not be any litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding pending or, to the knowledge of the Credit Parties, threatened against any Credit Party or any of their Subsidiaries or against of any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Operative Documents, or (b) that could reasonably be expected to have a Material Adverse Effect on the Credit Parties and their Subsidiaries, taken as a whole;
(j) NoDefault. Immediately before and after the Closing Date, no Default or Event of Default shall have occurred and be continuing;
(k) TermLoan Facility; ABL Facility. Agent shall have received true and correct copies of the Term Loan Documents, Exit Note Documents and the ABL Documents, which shall be in full force and effect;
(l) ClosingDate Debt. In connection with the Transactions, as of the Closing Date, the Borrower and the other Credit Parties shall not have incurred more than (i) $200,988,002 of Exit Notes and (ii) $60,000,000 of term loans under the Term Loan Agreement;
(m) PayoffDocumentation. Agent shall have received true and correct copies of the pay-off letters and other evidence (together with accompanying termination statements and lien releases) confirming the termination of all obligations and release of all Liens under each of the third party Debt for borrowed money described to be paid off on the Closing Date pursuant to the Confirmation Order;
(n) Fees;Costs and Expenses. Agent shall have received all fees due and payable on or prior to the Closing Date, to the extent invoiced at least two (2) Business Days prior to the Closing Date (or such later date as the Borrower may reasonably agree), shall have been reimbursed for all reasonable and documented expenses (including the reasonable fees, charges and disbursements of Duane Morris LLP, counsel to Agent, required to be reimbursed or paid by Borrower hereunder or under any other Financing Document;
(o) MaterialAdverse Change. Since the Petition Date, there shall not have occurred any changes, events, circumstances, effects, developments, occurrences or state of facts that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect;
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(p) BorrowingBase Certificate. Agent shall have received the initial Borrowing Base Certificate delivered under the ABL Agreement, prepared as of the Closing Date.
(q) Planof Reorganization Effective Date; Confirmation Order
(i) All conditions precedent to the confirmation and effect, shall have been satisfied or waived in accordance with the terms thereof;
(ii) Agent shall have received a docketed copy of the Confirmation Order, and the Confirmation Order shall not have been reversed, vacated, amended, supplemented or otherwise modified in any matter that could reasonably be expected to materially adversely affect the interests of Agent or the Lenders;
(iii) the effective date under the Plan of Reorganization shall have occurred (or occur contemporaneously with the Closing Date);
(iv) there shall not be any Bankruptcy Court order or any action, suit, investigation or proceeding pending or, to the knowledge of the Credit Parties, threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect or to prevent or restrain the consummation of this Agreement and the transactions contemplated hereby;
(r) Emergence. Debtors shall have successfully consummated the Plan of Reorganization and emerged from the Chapter 11 Cases in accordance with the terms of the Plan of Reorganization;
(s) Insurance. Except as set forth in Section 7.4, Agent shall have received evidence of all insurance required to be maintained, and evidence that ABL Agent shall have been named as an additional insured and loss payee, as applicable, on all insurance policies covering loss or damage to Collateral and on all liability insurance policies as to which ABL Agent has reasonably requested to be so named or, in the case of the Term Priority Collateral, the Term Agent, as applicable, as additional insured party or loss payee;
(t) USAPatriot Act; Beneficial Ownership Certification. Agent shall have received from Borrower and each of the other Credit Parties, at least three (3) Business Days prior to the Closing Date, (A) all documentation and other information reasonably requested by Agent or any Lender no less than ten (10) calendar days prior to the Closing Date that such Agent or Lender reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act and (B) a Beneficial Ownership Certification in relation to Credit Parties and each Subsidiary that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation;
(u) Filings. Each Uniform Commercial Code financing statement in order to create in favor of Agent, for the benefit of Lenders, a fully perfected Lien with the priority set forth in the ABL Intercreditor Agreement) on the Collateral described therein shall have been delivered to Agent in proper form for filing;
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(v) CapitalStructure. Agent shall have received and be satisfied with the business plan and shall be satisfied with the capital structure of Credit Parties; and
(w) [Reserved].
(x) DueDiligence Review. Agent shall have completed to its satisfaction its due diligence review of each Credit Party and its management, controlling owners, systems and operations.
Each Lender, by delivering its signature page to this Agreement, shall be deemed to have acknowledged receipt of, and consented to and approved, each Financing Document, each additional Operative Document and each other document, agreement and/or instrument required to be approved by Agent, Required Lenders or Lenders, as applicable, on the Closing Date.
Section 7.2**[Reserved]**.
Section 7.3****Searches. Before the Closing Date, and thereafter (as and when determined by Agent in its discretion), Agent shall have the right to perform, all at Credit Parties’ expense, the searches described in clauses (a), (b), and (c) below against Borrowers and any other Credit Party, the results of which are to be consistent with Credit Parties’ representations and warranties under this Agreement and the satisfactory results of which shall be a condition precedent to all advances of Loan proceeds: (a) UCC searches with the Secretary of State of the jurisdiction in which the applicable Person is organized; (b) judgment, pending litigation, federal tax lien, personal property tax lien, and corporate and partnership tax lien searches, in each jurisdiction searched under clause (a) above; and (c) searches of applicable corporate, limited liability company, partnership and related records to confirm the continued existence, organization and good standing of the applicable Person and the exact legal name under which such Person is organized.
Section 7.4****PostClosing Requirements. Credit Parties shall complete each of the post closing obligations and/or provide to Agent each of the documents, instruments, agreements and information listed on Schedule 7.4 attached hereto on or before the date set forth for each such item thereon, each of which shall be completed or provided in form and substance reasonably satisfactory to Agent.
Article 8 - [RESERVED]
Article 9 - SECURITY AGREEMENT
Section 9.1****Generally. As security for the payment and performance of the Obligations, and without limiting any other grant of a Lien and security interest in any Security Document, Borrowers and each other Credit Party, in their capacity as a Guarantor, hereby assign and grant to Agent, for the benefit of itself and Lenders, a continuing Lien on and security interest in (with the priority set forth in the ABL Intercreditor Agreement)), upon, and to the personal property set forth on Schedule 9.1 attached hereto and made a part hereof.
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Section 9.2****Representationsand Warranties and Covenants Relating to Collateral.
(a) The security interest granted pursuant to this Agreement constitutes a valid and, to the extent such security interest is required to be perfected by this Agreement and any other Financing Document, continuing perfected security interest in favor of Agent in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings and other actions specified on Schedule 9.2(b) (which, in the case of all filings and other documents referred to on such schedule, have been delivered to Agent in completed and duly authorized form), (ii) with respect to any Deposit Account domiciled in the United States, the execution of Control Agreements (except with respect to any Excluded Accounts), (iii) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a contractual obligation granting control to Agent or to the Term Agent or the Trustee, as bailee, over such letter-of-credit rights, (iv) in the case of electronic chattel paper, the completion of all steps necessary to grant control to Agent or the Term Agent or the Trustee, as bailee, over such electronic chattel paper, (v) in the case of all certificated stock, debt instruments and investment property, the delivery thereof to Agent or the Term Agent or the Trustee, as bailee, of such certificated stock, debt instruments and investment property consisting of instruments and certificates, in each case properly endorsed for transfer to Agent or in blank, (vi) in the case of all investment property not in certificated form, the execution of control agreements by the Agent or the Term Agent or the Trustee, as bailee, with respect to such investment property and (vii) in the case of all other instruments and tangible chattel paper that are not certificated stock, debt instructions or investment property, the delivery thereof to Agent or the Term Agent or Trustee, as bailee, of such instruments and tangible chattel paper. Such security interest shall be prior to all other Liens on the Collateral except for Permitted Liens and subject to the ABL Intercreditor Agreement. Except to the extent not required pursuant to the terms of this Agreement, all actions by each Credit Party necessary or desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
(b) Schedule 9.2(b) sets forth (i) each chief executive office and principal place of business of each Credit Party and each of their respective Subsidiaries, and (ii) all of the addresses (including all warehouses) at which any of the Collateral is located and/or books and records of Credit Parties regarding any of the Collateral are kept, which such Schedule 9.2(b) indicates in each case which Credit Parties have Collateral and/or books and records located at such address, and, in the case of any such address not owned by one or more of the Credit Parties, indicates the nature of such location (e.g., leased business location operated by Credit Parties, third party warehouse, consignment location, processor location, etc.) and the name and address of the third party owning and/or operating such location.
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(c) Without limiting the generality of Section 3.2, except as set forth in the ABL Intercreditor Agreement or as indicated on Schedule 3.19 with respect to any rights of any Credit Party as a licensee under any license of Intellectual Property owned by another Person, and except for the filing of financing statements under the UCC, no authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or consent of any other Person is required for (i) the grant by each Credit Party to Agent of the security interests and Liens in the Collateral provided for under this Agreement and the other Security Documents (if any), or (ii) the exercise by Agent of its rights and remedies with respect to the Collateral provided for under this Agreement and the other Security Documents or under any applicable Law, including the UCC and neither any such grant of Liens in favor of Agent or exercise of rights by Agent shall violate or cause a default under any agreement between any Credit Party and any other Person relating to any such collateral, including any license to which a Credit Party is a party, whether as licensor or licensee, with respect to any Intellectual Property, whether owned by such Credit Party or any other Person.
(d) As of the Closing Date, except as set forth on Schedule 9.2(d), no Credit Party has any ownership interest in any Chattel Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort claims, Instruments, documents or investment property (other than equity interests in any Subsidiaries of such Credit Party disclosed on Schedule 3.4) and Credit Parties shall give notice to Agent promptly (but in any event not later than the delivery by Borrowers of the next Compliance Certificate required pursuant to Section 4.1 above) upon the acquisition by any Credit Party of any such Chattel Paper, letter of credit rights, commercial tort claims, Instruments, documents, investment property. No Person other than Agent or the Term Agent or (if applicable) any Lender has “control” (as defined in Article 9 of the UCC) over any Deposit Account, investment property (including Securities Accounts, commodities accounts and futures accounts), letter of credit rights or electronic chattel paper in which any Credit Party has any interest (except for such control arising by operation of law in favor of any bank or securities intermediary or commodities intermediary with whom any Deposit Account, Securities Account, commodities account or futures account of Credit Parties is maintained).
(e) Credit Parties shall not, and shall not permit any Credit Party to, take any of the following actions or make any of the following changes unless such Credit Parties have given at least fifteen (15) days prior written notice to Agent of Credit Parties’ intention to take any such action (which such written notice shall include an updated version of any Schedule impacted by such change) and have executed any and all documents, instruments and agreements and taken any other actions which Agent may request after receiving such written notice in order to protect and preserve the Liens, rights and remedies of Agent with respect to the Collateral: (i) change the legal name or organizational identification number of any Credit Party as it appears in official filings in the jurisdiction of its organization, (ii) change the jurisdiction of incorporation or formation of any Borrower or Credit Party or allow any Borrower or Credit Party to designate any jurisdiction as an additional jurisdiction of incorporation for such Borrower or Credit Party, or change the type of entity that it is, or (iii) change its chief executive office, principal place of business, or the location of its records concerning the Collateral or move any Collateral to or place any Collateral on any location that is not then listed on the Schedules and/or establish any business location at any location that is not then listed on the Schedules.
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(f) Credit Parties shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than adjustments, settlements, compromises, credits and discounts in the Ordinary Course of Business, made while no Default exists and in amounts which are not material, taking into consideration all Accounts, with respect to the Account without the prior written consent of ABL Agent (or, following the payoff and termination of the ABL Agreement, Agent). Without limiting the generality of this Agreement or any other provisions of any of the Financing Documents relating to the rights of Agent after the occurrence and during the continuance of an Event of Default, subject to the ABL Intercreditor Agreement, Agent shall have the right at any time after the occurrence and during the continuance of an Event of Default to: (i) exercise the rights of Credit Parties with respect to the obligation of any Account Debtor to make payment or otherwise render performance to Credit Parties and with respect to any property that secures the obligations of any Account Debtor or any other Person obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such Accounts.
(g) Without limiting the generality of Sections 9.2(c) and 9.2(e) and in each case subject to the ABL Intercreditor Agreement:
(i) Credit Parties shall deliver to ABL Agent or the Term Agent all tangible Chattel Paper and all Instruments and documents owned by any Credit Party and constituting part of the Collateral duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Agent. Credit Parties shall provide ABL Agent or the Term Agent with “control” (as defined in Article 9 of the UCC) of all electronic Chattel Paper owned by any Credit Party and constituting part of the Collateral by having Agent identified as the assignee on the records pertaining to the single authoritative copy thereof and otherwise complying with the applicable elements of control set forth in the UCC. Credit Parties also shall deliver to ABL Agent or the Term Agent all security agreements securing any such Chattel Paper and securing any such Instruments. Credit Parties will mark conspicuously all such Chattel Paper and all such Instruments and documents with a legend, in form and substance satisfactory to ABL Agent or the Term Agent, indicating that such Chattel Paper and such instruments and documents are subject to the security interests and Liens in favor of Agent created pursuant to this Agreement and the Security Documents. Credit Parties shall comply with all the provisions of Section 5.14 with respect to the Deposit Accounts and Securities Accounts of Credit Parties.
(ii) Credit Parties shall deliver to ABL Agent all letters of credit on which any Credit Party is the beneficiary and which give rise to letter of credit rights owned by such Credit Party which constitute part of the Collateral in each case duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to ABL Agent. Credit Parties shall take any and all actions as may be necessary or desirable, or that ABL Agent may request, from time to time, to cause Agent or the Term Agent to obtain exclusive “control” (as defined in Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to ABL Agent.
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(iii) Credit Parties shall promptly advise ABL Agent upon any Credit Party becoming aware that it has any interests in any commercial tort claim that constitutes part of the Collateral, which such notice shall include descriptions of the events and circumstances giving rise to such commercial tort claim and the dates such events and circumstances occurred, the potential defendants with respect such commercial tort claim and any court proceedings that have been instituted with respect to such commercial tort claims, and Credit Parties shall, with respect to any such commercial tort claim, execute and deliver to ABL Agent or the Term Agent such documents as ABL Agent shall request to perfect, preserve or protect the Liens, rights and remedies of Agent with respect to any such commercial tort claim.
(iv) [reserved].
(v) Each Credit Party acknowledges and agrees that the ABL Agent and the Term Agent act as bailee for purposes of perfection on Collateral for which perfection is obtained and maintained by control (as defined in the UCC) for and on behalf of the Agent and the Lenders.
(vi) Each Credit Party hereby authorizes Agent to file without the signature of such Credit Party one or more UCC financing statements relating to liens on personal property relating to all or any part of the Collateral, which financing statements may list Agent as the “secured party” and such Credit Party as the “debtor” and which describe and indicate the collateral covered thereby as all or any part of the Collateral under the Financing Documents (including an indication of the collateral covered by any such financing statement as “all assets” of such Credit Party now owned or hereafter acquired), in such jurisdictions as Agent from time to time determines are appropriate, and to file without the signature of such Credit Party any continuations of or corrective amendments to any such financing statements, in any such case in order for Agent to perfect, preserve or protect the Liens, rights and remedies of Agent with respect to the Collateral. Each Credit Party also ratifies its authorization for Agent to have filed in any jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.
(vii) After the Closing Date, Credit Parties shall promptly notify Agent in writing upon creation or acquisition by any Credit Party of, any Collateral which constitutes a claim against any Governmental Authority, including, without limitation, the federal government of the United States or any instrumentality or agency thereof, the assignment of which claim is restricted by any applicable Law, including, without limitation, the federal Assignment of Claims Act and any other comparable Law.
(viii) Credit Parties shall furnish to Agent from time to time any statements and schedules further identifying or describing the Collateral and any other information, reports or evidence concerning the Collateral as Agent may reasonably request from time to time.
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Article 10****- EVENTS OF DEFAULT
Section 10.1****Eventsof Default. For purposes of the Financing Documents, the occurrence of any of the following conditions and/or events, whether voluntary or involuntary, by operation of law or otherwise, shall constitute an “Event of Default”:
(a) (i) any Credit Party shall fail to pay when due any principal, interest, premium or fee under any Financing Document or any other amount payable under any Financing Document (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such default (other than with respect to failure to pay principal when due) shall continue uncured for three (3) Business Days, , (ii) there shall occur any default in the performance of or compliance with Section 4.2(b), Section 4.3, Section 4.4(c) or (d), Section 4.6, Article 5, Section 6.1 or Section 6.2, (iii) there shall occur any default in the performance of or compliance with Section 4.1 and such default shall continue uncured for five (5) Business Days after the earlier of notice from Agent or Required Lenders or knowledge by any Credit Party of such default;
(b) any Credit Party defaults in the performance of or compliance with any term contained in this Agreement or in any other Financing Document (other than occurrences described in other provisions of this Section 10.1 for which a different grace or cure period is specified or for which no grace or cure period is specified and thereby constitute immediate Events of Default) and such default is not remedied by the Credit Party or waived by Agent within fifteen (15) days after the earlier of (i) receipt by Borrower Representative of notice from Agent or Required Lenders of such default, or (ii) actual knowledge of any Borrower or any other Credit Party of such default;
(c) any representation, warranty, certification or statement made by any Credit Party or any other Person in any Financing Document or in any certificate, financial statement or other document delivered pursuant to any Financing Document is incorrect in any respect (or in any material respect if such representation, warranty, certification or statement is not by its terms already qualified as to materiality) when made (or deemed made);
(d) (i) failure of the Borrowers or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount on the ABL Agreement, the Exit Notes, the Term Loan Agreement, the Debt in respect of the Unsecured Cash Pool, or any other Debt (excluding Debt evidenced by this Agreement) having an aggregate principal amount in excess of $25,000,000, and such failure shall continue after the applicable grace period, if any, specified in the applicable agreement or instrument relating to such Debt, or any other default, condition, or event under any agreement or instrument relating to any such Debt, or any other event shall occur and shall continue after the applicable grace period, if any, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared due and payable, or required to be prepaid, redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made (other than by a regularly scheduled required prepayment), in each case, prior to the state maturity thereof;
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(e) any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Debtor Relief Law now or hereafter in effect or seeking the appointment of a trustee, monitor, receiver, interim receiver, receiver and manager, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;
(f) an involuntary case or other proceeding shall be commenced against any Borrower or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary)_seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Debtor Relief Law now or hereafter in effect or seeking the appointment of a trustee, monitor, receiver, interim receiver, receiver and manager, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty (30) days; or an order for relief shall be entered against any Credit Party or any other Significant Subsidiary under applicable federal bankruptcy, insolvency or other similar law in respect of (i) bankruptcy, liquidation, winding-up, dissolution or suspension of general operations, (ii) composition, rescheduling, reorganization, arrangement or readjustment of, or other relief from, or stay of proceedings to enforce, some or all of the debts or obligations, or (iii) possession, foreclosure, seizure or retention, sale or other disposition of, or other proceedings to enforce security over, all or any substantial part of the assets of such Borrower or such Significant Subsidiary;
(g) (i) institution of any steps by any Person to terminate a Pension Plan if as a result of such termination any Credit Party or any member of the Controlled Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $25,000,000, (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA, (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of such withdrawal (including any outstanding withdrawal liability that any Credit Party or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds $25,000,000;
(h) one or more judgments or orders for the payment of money (not paid or fully covered by insurance maintained in accordance with the requirements of this Agreement and as to which the relevant insurance company has acknowledged coverage) aggregating in excess of $25,000,000 shall be rendered against any of the Parent, the Borrowers or any Significant Subsidiary (or any group of Subsidiaries that together would constitute a Significant Subsidiary) and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgments or orders, or (ii) there shall be any period of ten (10) consecutive days during which a stay of enforcement of any such judgments or orders, by reason of a pending appeal, bond or otherwise, shall not be in effect;
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(i) any Lien created by any of the Security Documents shall at any time fail to constitute a valid and perfected Lien on all of the Collateral purported to be encumbered thereby, subject to no prior or equal Lien except Permitted Liens, or any Credit Party shall so assert;
(j) [reserved];
(k) a default or event of default occurs under any Guarantee of any portion of the Obligations;
(l) any Credit Party makes any payment on account of any Debt that has been subordinated to any of the Obligations, other than payments specifically permitted by the terms of such subordination;
(m) if any Credit Party is or becomes an entity whose equity is registered with the SEC, and/or is publicly traded on and/or registered with a public securities exchange, such Credit Party’s equity fails to remain registered with the SEC in good standing, and/or such equity fails to remain publicly traded on and registered with a public securities exchange;
(n) an event or development occurs which could reasonably be expected to have a Material Adverse Effect, which default shall have continued unremedied for a period of ten (10) days after written notice from Agent;
(o) any Borrower or any Significant Subsidiary is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than fifteen (15) days;
(p) the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by any Borrower or any Significant Subsidiary, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
(q) any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of any Borrower, or any Significant Subsidiary, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect;
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(r) the indictment, or the threatened indictment of the Parent, any Borrower, or any Significant Subsidiary under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against the Parent, any Borrower or any Significant Subsidiary, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of such Person;
(s) Any Credit Party fails to make timely and full payments of any and all Taxes required by, under or in connection with the Plan of Reorganization except (i) for those Taxes which will be treated as general unsecured claims in accordance with the Plan of Reorganization or otherwise satisfied in accordance with the Plan of Reorganization (provided, that, for the avoidance of doubt, the Credit Parties shall pay Taxes to the extent required under and in accordance with the Plan of Reorganization) and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP; or
(t) the ABL Intercreditor Agreement ceases to be in full force and effect (other than because all other Debt subject thereto is no longer outstanding).
All cure periods provided for in this Section 10.1 shall run concurrently with any cure period provided for in any applicable Financing Documents under which the default occurred.
Section 10.2**[Reserved]**.
Section 10.3****UCCRemedies.
(a) Upon the occurrence of and during the continuance of an Event of Default under this Agreement or the other Financing Documents, Agent, in addition to all other rights, options, and remedies granted to Agent under this Agreement or at law or in equity, may exercise, either directly or through one or more assignees or designees, all rights and remedies granted to it under all Financing Documents and under the UCC in effect in the applicable jurisdiction(s) and under any other applicable law; including, without limitation:
(i) the right to take possession of, send notices regarding, and collect directly the Collateral, with or without judicial process;
(ii) the right to (by its own means or with judicial assistance) enter any of Credit Parties’ premises and take possession of the Collateral, or render it unusable, or to render it usable or saleable, or dispose of the Collateral on such premises in compliance with subsection (iii) below and to take possession of any Credit Party’s original books and records, to obtain access to such Credit Party’s data processing equipment, computer hardware and software relating to the Collateral and to use all of the foregoing and the information contained therein in any manner Agent deems appropriate, without any liability for rent, storage, utilities, or other sums, and Credit Parties shall not resist or interfere with such action (if Credit Parties’ books and records are prepared or maintained by an accounting service, contractor or other third party agent, Credit Parties hereby irrevocably authorize such service, contractor or other agent, upon notice by Agent to such Person that an Event of Default has occurred and is continuing, to deliver to Agent or its designees such books and records, and to follow Agent’s instructions with respect to further services to be rendered);
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(iii) the right to require any Credit Party at the Credit Parties’ expense to assemble all or any part of the Collateral and make it available to Agent at any place designated by Lender; and
(iv) the right to notify postal authorities to change the address for delivery of any Credit Party’s mail to an address designated by Agent and to receive, open and dispose of all mail addressed to any Credit Party; and/or
(v) the right to enforce (subject to the ABL Intercreditor Agreement) any Credit Party’s rights against Account Debtors and other obligors, including, without limitation, (i) the right to collect Accounts directly in Agent’s own name (as agent for Lenders) and to charge the collection costs and expenses, including attorneys’ fees, to a Credit Party, and (ii) the right, in the name of Agent or any designee of Agent or Credit Parties, to verify the validity, amount or any other matter relating to any Accounts by mail, telephone, telegraph or otherwise, including, without limitation, verification of Credit Parties’ compliance with applicable Laws. Credit Parties shall cooperate fully with Agent in an effort to facilitate and promptly conclude such verification process. Such verification may include contacts between Agent and applicable federal, state and local regulatory authorities having jurisdiction over the Credit Parties’ affairs, all of which contacts Credit Parties hereby irrevocably authorize.
(b) Each Credit Party agrees that a notice received by it at least ten (10) days before the time of any intended public sale, or the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition. If permitted by applicable law, any perishable Collateral which threatens to speedily decline in value or which is sold on a recognized market may be sold immediately by Agent without prior notice to Credit Parties. At any sale or disposition of Collateral, Agent may (to the extent permitted by applicable law) purchase all or any part of the Collateral, free from any right of redemption by Credit Parties, which right is hereby waived and released. Each Credit Party covenants and agrees not to interfere with or impose any obstacle to Agent’s exercise of its rights and remedies with respect to the Collateral. Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. Agent may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Agent may sell the Collateral without giving any warranties as to the Collateral. Agent may specifically disclaim any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. If Agent sells any of the Collateral upon credit, Credit Parties will be credited only with payments actually made by the purchaser, received by Agent and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Agent may resell the Collateral and Credit Parties shall be credited with the proceeds of the sale. Credit Parties shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Obligations.
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(c) Without restricting the generality of the foregoing and for the purposes aforesaid, each Credit Party hereby appoints and constitutes Agent its lawful attorney-in-fact with full power of substitution in the Collateral, upon the occurrence and during the continuance of an Event of Default, to (i) use unadvanced funds remaining under this Agreement or which may be reserved, escrowed or set aside for any purposes hereunder at any time, or to advance funds in excess of the face amount of the Notes, (ii) pay, settle or compromise all existing bills and claims, which may be Liens or security interests, or to avoid such bills and claims becoming Liens against the Collateral, (iii) execute all applications and certificates in the name of such Credit Party and to prosecute and defend all actions or proceedings in connection with the Collateral, and (iv) do any and every act which such Credit Party might do in its own behalf; it being understood and agreed that this power of attorney in this subsection (c) shall be a power coupled with an interest and cannot be revoked.
(d) Agent and each Lender is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Credit Parties’ labels, mask works, rights of use of any name, any other Intellectual Property and advertising matter, and any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Agent’s exercise of its rights under this Article, Credit Parties’ rights under all licenses (whether as licensor or licensee) and all franchise agreements inure to Agent’s and each Lender’s benefit.
Section 10.4**[Reserved].**
Section 10.5****DefaultRate of Interest. At the election of Agent or Required Lenders, after the occurrence of an Event of Default and for so long as it continues, the Loans and other Obligations shall bear interest at the Default Rate; provided, however, that in the case of any Event of Default specified in Section 10.1(e) or 10.1(f) above, such Default Rate shall apply immediately and automatically without the need for any election or action of any kind on the part of Agent or any Lender.
Section 10.6****SetoffRights. During the continuance of any Event of Default, each Lender is hereby authorized by each Credit Party at any time or from time to time, with reasonably prompt subsequent notice to such Credit Party (any prior or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply any and all (a) balances held by such Lender or any of such Lender’s Affiliates at any of its offices for the account of such Credit Party or any of its Subsidiaries (regardless of whether such balances are then due to such Credit Party or its Subsidiaries), and (b) other property at any time held or owing by such Lender to or for the credit or for the account of such Credit Party or any of its Subsidiaries, against and on account of any of the Obligations; except that no Lender shall exercise any such right without the prior written consent of Agent. Any Lender exercising a right to set off shall purchase for cash (and the other Lenders shall sell) interests in each of such other Lender’s Pro Rata Share of the Obligations as would be necessary to cause all Lenders to share the amount so set off with each other Lender in accordance with their respective Pro Rata Share of the Obligations. Each Credit Party agrees, to the fullest extent permitted by law, that any Lender and any of such Lender’s Affiliates may exercise its right to set off with respect to the Obligations as provided in this Section 10.6.
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Section 10.7****Applicationof Proceeds.
(a) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, each Credit Party irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of such Credit Party or any Guarantor of all or any part of the Obligations, and, as between Credit Parties on the one hand and Agent and Lenders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable notwithstanding any previous application by Agent.
(b) Following the occurrence and continuance of an Event of Default, but absent the occurrence and continuance of an Acceleration Event, Agent shall apply any and all payments received by Agent in respect of the Obligations, and any and all proceeds of Collateral received by Agent, in such order as Agent may from time to time elect.
(c) Notwithstanding anything to the contrary contained in this Agreement, if an Acceleration Event shall have occurred, and so long as it continues, Agent shall apply any and all payments received by Agent in respect of the Obligations, and any and all proceeds of Collateral received by Agent, in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Financing Documents or the Collateral; second, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents or the Collateral; third, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of any applicable Debtor Relief Law, would have accrued on such amounts); fourth, to the principal amount of the Obligations outstanding; and fifth to any other indebtedness or obligations of Credit Parties owing to Agent or any Lender under the Financing Documents. Any balance remaining shall be delivered to Borrowers or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out the foregoing, (y) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (z) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its Pro Rata Share of amounts available to be applied pursuant thereto for such category.
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Section 10.8****Waivers.
(a) Except as otherwise provided for in this Agreement and to the fullest extent permitted by applicable law, each Credit Party waives: (i) presentment, demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all Financing Documents, the Notes or any other notes, commercial paper, accounts, contracts, documents, Instruments, Chattel Paper and guarantees at any time held by Lenders on which any Credit Party may in any way be liable, and hereby ratifies and confirms whatever Lenders may do in this regard; (ii) all rights to notice and a hearing prior to Agent’s or any Lender’s taking possession or control of, or to Agent’s or any Lender’s replevy, attachment or levy upon, any Collateral or any bond or security which might be required by any court prior to allowing Agent or any Lender to exercise any of its remedies; and (iii) the benefit of all valuation, appraisal and exemption Laws. Each Credit Party acknowledges that it has been advised by counsel of its choices and decisions with respect to this Agreement, the other Financing Documents and the transactions evidenced hereby and thereby.
(b) Each Credit Party for itself and all its successors and assigns, (i) agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Lender; (ii) consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Agent or any Lender with respect to the payment or other provisions of the Financing Documents, and to any substitution, exchange or release of the Collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any Credit Party, endorsers, guarantors, or sureties, or whether primarily or secondarily liable, without notice to any other Credit Party and without affecting its liability hereunder; (iii) agrees that its liability shall be unconditional and without regard to the liability of any other Credit Party, Agent or any Lender for any tax on the indebtedness; and (iv) to the fullest extent permitted by law, expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.
(c) To the extent that Agent or any Lender may have acquiesced in any noncompliance with any requirements or conditions precedent to the closing of the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence shall not be deemed to constitute a waiver by Agent or any Lender of such requirements with respect to any future disbursements of Loan proceeds and Agent may at any time after such acquiescence require Credit Parties to comply with all such requirements. Any forbearance by Agent or Lender in exercising any right or remedy under any of the Financing Documents, or otherwise afforded by applicable law, including any failure to accelerate the maturity date of the Loans, shall not be a waiver of or preclude the exercise of any right or remedy nor shall it serve as a novation of the Notes or as a reinstatement of the Loans or a waiver of such right of acceleration or the right to insist upon strict compliance of the terms of the Financing Documents. Agent’s or any Lender’s acceptance of payment of any sum secured by any of the Financing Documents after the due date of such payment shall not be a waiver of Agent’s and such Lender’s right to either require prompt payment when due of all other sums so secured or to declare a default for failure to make prompt payment. The procurement of insurance or the payment of taxes or other Liens or charges by Agent as the result of an Event of Default shall not be a waiver of Agent’s right to accelerate the maturity of the Loans, nor shall Agent’s receipt of any condemnation awards, insurance proceeds, or damages under this Agreement operate to cure or waive any Credit Party’s default in payment of sums secured by any of the Financing Documents.
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(d) Without limiting the generality of anything contained in this Agreement or the other Financing Documents, each Credit Party agrees that if an Event of Default is continuing (i) Agent and Lenders shall not be subject to any “one action” or “election of remedies” law or rule, and (ii) all Liens and other rights, remedies or privileges provided to Agent or Lenders shall remain in full force and effect until Agent or Lenders have exhausted all remedies against the Collateral and any other properties owned by Credit Parties and the Financing Documents and other security instruments or agreements securing the Loans have been foreclosed, sold and/or otherwise realized upon in satisfaction of Credit Parties’ obligations under the Financing Documents.
(e) Nothing contained herein or in any other Financing Document shall be construed as requiring Agent or any Lender to resort to any part of the Collateral for the satisfaction of any of Credit Parties’ obligations under the Financing Documents in preference or priority to any other Collateral, and Agent may seek satisfaction out of all of the Collateral or any part thereof, in its absolute discretion in respect of Credit Parties’ obligations under the Financing Documents. In addition, Agent shall have the right from time to time to partially foreclose upon any Collateral in any manner and for any amounts secured by the Financing Documents then due and payable as determined by Agent in its sole discretion, including, without limitation, the following circumstances: (i) in the event any Credit Party defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and/or interest, Agent may foreclose upon all or any part of the Collateral to recover such delinquent payments, or (ii) in the event Agent elects to accelerate less than the entire outstanding principal balance of the Loans, Agent may foreclose all or any part of the Collateral to recover so much of the principal balance of the Loans as Lender may accelerate and such other sums secured by one or more of the Financing Documents as Agent may elect. Notwithstanding one or more partial foreclosures, any unforeclosed Collateral shall remain subject to the Financing Documents to secure payment of sums secured by the Financing Documents and not previously recovered.
(f) To the fullest extent permitted by law, each Credit Party, for itself and its successors and assigns, waives in the event of foreclosure of any or all of the Collateral any equitable right otherwise available to any Credit Party which would require the separate sale of any of the Collateral or require Agent or Lenders to exhaust their remedies against any part of the Collateral before proceeding against any other part of the Collateral; and further in the event of such foreclosure each Credit Party does hereby expressly consent to and authorize, at the option of Agent, the foreclosure and sale either separately or together of each part of the Collateral.
Section 10.9****InjunctiveRelief. The parties acknowledge and agree that, in the event of a breach or threatened breach of any Credit Party’s obligations under any Financing Documents, Agent and Lenders may have no adequate remedy in money damages and, accordingly, shall be entitled to an injunction (including, without limitation, a temporary restraining order, preliminary injunction, writ of attachment, or order compelling an audit) against such breach or threatened breach, including, without limitation, maintaining any cash management and collection procedure described herein. However, no specification in this Agreement of a specific legal or equitable remedy shall be construed as a waiver or prohibition against any other legal or equitable remedies in the event of a breach or threatened breach of any provision of this Agreement. Each Credit Party waives, to the fullest extent permitted by law, the requirement of the posting of any bond in connection with such injunctive relief. By joining in the Financing Documents as a Credit Party, each Credit Party specifically joins in this Section as if this Section were a part of each Financing Document executed by such Credit Party.
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Section 10.10****Marshalling;Payments Set Aside. Neither Agent nor any Lender shall be under any obligation to marshal any assets in payment of any or all of the Obligations. To the extent that a Credit Party makes any payment or Agent enforces its Liens or Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such enforcement or set-off is subsequently invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by anyone, then to the extent of such recovery, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred.
Article 11 - AGENT
Section 11.1****Appointmentand Authorization. Each Lender hereby irrevocably appoints and authorizes Agent to enter into each of the Financing Documents to which it is a party (other than this Agreement) on its behalf and to take such actions as Agent on its behalf and to exercise such powers under the Financing Documents as are delegated to Agent by the terms thereof, together with all such powers as are reasonably incidental thereto, including the authority to enter into any intercreditor agreement. Subject to the terms of Section 11.16 and Article 12 and to the terms of the other Financing Documents, Agent is authorized and empowered to enter into (or acknowledge and consent to) or amend, restate, amend and restate, extend, replace, supplement, modify, or waive any provisions of this Agreement or the other Financing Documents on behalf of Lenders and any intercreditor agreement with the collateral agent or other representatives of the holders of Debt that is permitted to be secured by a Lien on the Collateral that is not prohibited (including with respect to priority) under this Agreement and, to the extent applicable, the ABL Intercreditor Agreement, and to subject the Liens on the Collateral securing the Obligations to the provisions thereof. The provisions of this Article 11 and Article 12 are solely for the benefit of Agent and Lenders and neither any Borrower nor any other Credit Party shall have any rights as a third-party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, Agent shall act solely as agent of Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any Borrower or any other Credit Party. Agent may perform any of its duties hereunder, or under the Financing Documents, by or through its agents, servicers, trustees, investment managers or employees. The Lenders irrevocably agree that (x) Agents may rely exclusively on a certificate of a Responsible Officer of the Credit Parties as to whether any such other Liens are permitted and (y) the ABL Intercreditor Agreement and any junior intercreditor agreement entered into by Agent shall be binding on the Lenders, and each Lender hereby agrees that it will take no actions contrary to the provisions of any intercreditor agreement.
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Section 11.2****Agentand Affiliates. Agent shall have the same rights and powers under the Financing Documents as any other Lender and may exercise or refrain from exercising the same as though it were not Agent, and Agent and its Affiliates may lend money to, invest in and generally engage in any kind of business with each Credit Party or Affiliate of any Credit Party as if it were not Agent hereunder.
Section 11.3****Actionby Agent. The duties of Agent shall be mechanical and administrative in nature. Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any of the Financing Documents is intended to or shall be construed to impose upon Agent any obligations in respect of this Agreement or any of the Financing Documents except as expressly set forth herein or therein.
Section 11.4****Consultationwith Experts. Agent may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.
Section 11.5****Liabilityof Agent. Neither Agent nor any of its directors, officers, agents, trustees, investment managers, servicers or employees shall be liable to any Lender for any action taken or not taken by it in connection with the Financing Documents, except that Agent shall be liable with respect to its specific duties set forth hereunder but only to the extent of its own gross negligence or willful misconduct in the discharge thereof as determined by a final non-appealable judgment of a court of competent jurisdiction. Neither Agent nor any of its directors, officers, agents, trustees, investment managers, servicers or employees shall be responsible for or have any duty to ascertain, inquire into or verify (a) any statement, warranty or representation made in connection with any Financing Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements specified in any Financing Document; (c) the satisfaction of any condition specified in any Financing Document; (d) the validity, effectiveness, sufficiency or genuineness of any Financing Document, any Lien purported to be created or perfected thereby or any other instrument or writing furnished in connection therewith; (e) the existence or non-existence of any Default or Event of Default; or (f) the financial condition of any Credit Party. Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, facsimile or electronic transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them).
Section 11.6****Indemnification. Each Lender shall, in accordance with its Pro Rata Share, indemnify Agent (to the extent not reimbursed by Credit Parties) upon demand against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction) that Agent may suffer or incur in connection with the Financing Documents or any action taken or omitted by Agent hereunder or thereunder. If any indemnity furnished to Agent for any purpose shall, in the opinion of Agent, be insufficient or become impaired, Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against even if so directed by Required Lenders until such additional indemnity is furnished.
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Section 11.7****Rightto Request and Act on Instructions. Agent may at any time request instructions from Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Financing Documents Agent is permitted or desires to take or to grant, and if such instructions are promptly requested, Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Financing Documents until it shall have received such instructions from Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting under this Agreement or any of the other Financing Documents in accordance with the instructions of Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and, notwithstanding the instructions of Required Lenders (or such other applicable portion of the Lenders), Agent shall have no obligation to take any action if it believes, in good faith, that such action would violate applicable Law or exposes Agent to any liability for which it has not received satisfactory indemnification in accordance with the provisions of Section 11.6.
Section 11.8****CreditDecision. Each Lender acknowledges that it has, independently and without reliance upon Agent or any other Lender, 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 also acknowledges that it will, independently and without reliance upon Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Financing Documents.
Section 11.9****CollateralMatters. Lenders irrevocably authorize Agent, at its option and in its discretion, to (a) release any Lien granted to or held by Agent under any Security Document (i) upon payment in full of all Obligations, and, to the extent required by Agent in its sole discretion, the expiration, termination or cash collateralization (to the satisfaction of Agent) of all Swap Contracts secured, in whole or in part, by any Collateral; or (ii) constituting property sold or disposed of as part of or in connection with any disposition permitted under any Financing Document (it being understood and agreed that Agent may conclusively rely without further inquiry on a certificate of a Responsible Officer as to the sale or other disposition of property being made in full compliance with the provisions of the Financing Documents); and (b) subordinate any Lien granted to or held by Agent under any Security Document to a Permitted Lien that is allowed to have priority over the Liens granted to or held by Agent pursuant to the definition of “Permitted Liens”. Upon request by Agent at any time, Lenders will confirm Agent’s authority to release and/or subordinate particular types or items of Collateral pursuant to this Section 11.9.
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Section 11.10****Agencyfor Perfection. Agent and each Lender hereby appoint each other Lender as agent for the purpose of perfecting Agent’s security interest in assets which, in accordance with the Uniform Commercial Code in any applicable jurisdiction, can be perfected by possession or control. Should any Lender (other than Agent) obtain possession or control of any such assets, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor, shall deliver such assets to Agent or in accordance with Agent’s instructions or transfer control to Agent in accordance with Agent’s instructions. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Security Document or to realize upon any Collateral for the Loan unless instructed to do so by Agent (or consented to by Agent), it being understood and agreed that such rights and remedies may be exercised only by Agent.
Section 11.11****Noticeof Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to Agent for the account of Lenders, unless Agent shall have received written notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. Agent will notify each Lender of its receipt of any such notice. Agent shall take such action with respect to such Default or Event of Default as may be requested by Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof. Unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interests of Lenders.
Section 11.12****Assignmentby Agent; Resignation of Agent; Successor Agent.
(a) Agent may at any time assign its rights, powers, privileges and duties hereunder to (i) another Lender, or (ii) any Person to whom Agent, in its capacity as a Lender, has assigned (or will assign, in conjunction with such assignment of agency rights hereunder) 50% or more of its Loan, in each case without the consent of the Lenders or Borrowers. Following any such assignment, Agent shall give notice to the Lenders and Borrowers. An assignment by Agent pursuant to this subsection (a) shall not be deemed a resignation by Agent for purposes of subsection (b) below.
(b) Without limiting the rights of Agent to designate an assignee pursuant to subsection (a) above, Agent may at any time give notice of its resignation to the Lenders and Borrowers. Upon receipt of any such notice of resignation, Required Lenders shall have the right to appoint a successor Agent. If no such successor shall have been so appointed by Required Lenders and shall have accepted such appointment within ten (10) Business Days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders, appoint a successor Agent; provided, however, that if Agent shall notify Borrowers and the Lenders that no Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice from Agent that no Person has accepted such appointment and, from and following delivery of such notice, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Financing Documents, and (ii) all payments, communications and determinations provided to be made by, to or through Agent shall instead be made by or to each Lender directly, until such time as Required Lenders appoint a successor Agent as provided for above in this paragraph.
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(c) Upon (i) an assignment permitted by subsection (a) above, or (ii) the acceptance of a successor’s appointment as Agent pursuant to subsection (b) above, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder and under the other Financing Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by Credit Parties to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Agent’s resignation hereunder and under the other Financing Documents, the provisions of this Article and Section 11.12 shall continue in effect for the benefit of such retiring Agent and its sub-agents in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting or was continuing to act as Agent.
Section 11.13****Paymentand Sharing of Payment.
(a) [Reserved].
(b) [Reserved].
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Agent from a Borrower and such related payment is not received by Agent, then Agent will be entitled to recover such amount from such Lender on demand without setoff, counterclaim or deduction of any kind, together with interest accruing on a daily basis at the Federal Funds Rate.
(ii) If Agent determines at any time that any amount received by Agent under this Agreement must be returned to any Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or any other Financing Document, Agent will not be required to distribute any portion thereof to any Lender. In addition, each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to such Lender, together with interest at such rate, if any, as Agent is required to pay to any Borrower or such other Person, without setoff, counterclaim or deduction of any kind.
(d) Defaulted Lenders. The failure of any Defaulted Lender to make any payment required by it hereunder shall not relieve any other Lender of its obligations to make payment, but neither any other Lender nor Agent shall be responsible for the failure of any Defaulted Lender to make any payment required hereunder. Notwithstanding anything set forth herein to the contrary, a Defaulted Lender shall not have any voting or consent rights under or with respect to any Financing Document or constitute a “Lender” (or be included in the calculation of “Required Lenders” hereunder) for any voting or consent rights under or with respect to any Financing Document.
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(e) Sharing of Payments. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan (other than pursuant to the terms of Section 2.8(d)) in excess of its Pro Rata Share of payments entitled pursuant to the other provisions of this Section 11.13, such Lender shall purchase from the other Lenders such participations in extensions of credit made by such other Lenders (without recourse, representation or warranty) as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter required to be returned or otherwise recovered from such purchasing Lender, such portion of such purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such return or recovery, without interest. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this clause (e) may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 10.6) with respect to such participation as fully as if such Lender were the direct creditor of Borrowers in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this clause (e) applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this clause (e) to share in the benefits of any recovery on such secured claim.
Section 11.14****Rightto Perform, Preserve and Protect. If any Credit Party fails to perform any obligation hereunder or under any other Financing Document, Agent itself may, but shall not be obligated to, cause such obligation to be performed at Credit Parties’ expense. Agent is further authorized by Credit Parties and the Lenders to make expenditures from time to time which Agent, in its reasonable business judgment, deems necessary or desirable to (a) preserve or protect the business conducted by Credit Parties, the Collateral, or any portion thereof, and/or (b) enhance the likelihood of, or maximize the amount of, repayment of the Loan and other Obligations. Each Borrower hereby agrees to reimburse Agent on demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.14. Each Lender hereby agrees to indemnify Agent upon demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.14, in accordance with the provisions of Section 11.6.
Section 11.15****AdditionalTitled Agents. Except for rights and powers, if any, expressly reserved under this Agreement to any bookrunner, arranger or to any titled agent named on the cover page of this Agreement, other than Agent (collectively, the “Additional Titled Agents”), and except for obligations, liabilities, duties and responsibilities, if any, expressly assumed under this Agreement by any Additional Titled Agent, no Additional Titled Agent, in such capacity, has any rights, powers, liabilities, duties or responsibilities hereunder or under any of the other Financing Documents. Without limiting the foregoing, no Additional Titled Agent shall have nor be deemed to have a fiduciary relationship with any Lender. At any time that any Lender serving as an Additional Titled Agent shall have transferred to any other Person (other than any Affiliates) all of its interests in the Loan, such Lender shall be deemed to have concurrently resigned as such Additional Titled Agent.
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Section 11.16****Amendmentsand Waivers.
(a) No provision of this Agreement or any other Financing Document may be materially amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise approved by Borrowers, the Required Lenders and any other Lender to the extent required under Section 11.16(b); provided, however, that Agent shall be entitled, in its sole and absolute discretion, to provide its written consent to a proposed Swap Contract, in each case without the consent of any other Lender.
(b) In addition to the required signatures under Section 11.16(a), no provision of this Agreement or any other Financing Document may be amended, waived or otherwise modified unless such amendment, waiver or other modification is in writing and is signed or otherwise approved by the following Persons:
(i) if any amendment, waiver or other modification would increase a Lender’s funding obligations in respect of any Loan, by such Lender; and/or
(ii) if the rights or duties of Agent are affected thereby, by Agent;
provided, however, that, in each of (i) and (ii) above, no such amendment, waiver or other modification shall, unless signed or otherwise approved in writing by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Loan; (B) postpone the date fixed for, or waive, any payment (other than any mandatory prepayment pursuant to Section 2.1(b)(ii)) of principal of any Loan, or of interest on any Loan (other than default interest) or any fees provided for hereunder (other than late charges) or postpone the date of termination of any commitment of any Lender hereunder; (C) change the definition of the term Required Lenders or the percentage of Lenders which shall be required for Lenders to take any action hereunder; (D) release all or substantially all of the Collateral, authorize any Borrower to sell or otherwise dispose of all or substantially all of the Collateral or release any Guarantor of all or any portion of the Obligations or its Guarantee obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be provided in this Agreement or the other Financing Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 11.16(b) or the definitions of the terms used in this Section 11.16(b) insofar as the definitions affect the substance of this Section 11.16(b); (F) consent to the assignment, delegation or other transfer by any Credit Party of any of its rights and obligations under any Financing Document or release any Borrower of its payment obligations under any Financing Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; or (G) amend any of the provisions of Section 10.7 or amend any of the definitions Pro Rata Share, Revolving Loan Commitment, Revolving Loan Commitment Amount, Revolving Loan Commitment Percentage, or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder. It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F) and (G) of the preceding sentence.
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Section 11.17****Assignmentsand Participations.
(a) Assignments.
(i) Any Lender may at any time assign to one or more Eligible Assignees all or any portion of such Lender’s Loan together with all related obligations of such Lender hereunder. Except as Agent may otherwise agree, the amount of any such assignment (determined as of the date of the applicable Assignment Agreement or, if a “Trade Date” is specified in such Assignment Agreement, as of such Trade Date) shall be in a minimum aggregate amount equal to the Threshold Amount or, if less, the assignor’s entire interests in the outstanding Loan; provided, however, that, in connection with simultaneous assignments to two or more related Approved Funds, such Approved Funds shall be treated as one assignee for purposes of determining compliance with the minimum assignment size referred to above. Borrowers and Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned to an Eligible Assignee until Agent shall have received and accepted an effective Assignment Agreement executed, delivered and fully completed by the applicable parties thereto and a processing fee of $3,500 to be paid by the assigning Lender; provided,however, that only one processing fee shall be payable in connection with simultaneous assignments to two or more related Approved Funds.
(ii) From and after the date on which the conditions described above have been met, (A) such Eligible Assignee shall be deemed automatically to have become a party hereto and, to the extent of the interests assigned to such Eligible Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder, and (B) the assigning Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights and obligations hereunder (other than those that survive termination pursuant to Section 13.1). Upon the request of the Eligible Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, each Borrower shall execute and deliver to Agent for delivery to the Eligible Assignee (and, as applicable, the assigning Lender) Notes in the aggregate principal amount of the Eligible Assignee’s Loan (and, as applicable, Notes in the principal amount of that portion of the principal amount of the Loan retained by the assigning Lender). Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to Borrower Representative any prior Note held by it.
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(iii) Agent, acting solely for this purpose as a non-fiduciary agent of Borrower, shall maintain a copy of each Assignment Agreement delivered to it and a register (the “Register”) for the recordation of the names and addresses of each Lender, and the commitments of, and principal amount and stated interest of the Loan owing to, such Lender pursuant to the terms hereof. The entries in such register shall be conclusive, and Borrower, Agent and Lenders may treat each Person whose name is recorded therein pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. Such register shall be available for inspection by Borrower and any Lender, at any reasonable time upon reasonable prior notice to Agent. Each Lender that sells a participation shall, acting solely for this purpose as an agent of 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 Obligations (each, a “ParticipantRegister”). The entries in the Participant Registers shall be conclusive, absent manifest error. Each Participant Register shall be available for inspection by Borrowers and Agent at any reasonable time upon reasonable prior notice to the applicable Lender; 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 Financing Document) to any Person (including Borrowers) 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) and proposed Section 1.163-5(b) of the United States Treasury Regulations (and any amended or successor versions). For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a participant register. This Section 11.17(a)(iii) shall be construed so that all Obligations are at all times maintained in “registered form” within the meaning of Section 163(f), 871(h)(2) and 881(c)(2) of the Code and any related U.S. Treasury Regulations (or any other relevant or successor provisions of the Code or of such U.S. Treasury Regulations).
(iv) Notwithstanding the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, 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 or any of its financing sources and lenders from time to time, in each case, without the consent of any Credit Party.
(v) Notwithstanding the foregoing provisions of this Section 11.17(a) or any other provision of this Agreement, Agent has the right, but not the obligation, to effectuate assignments of Loan via an electronic settlement system acceptable to Agent as designated in writing from time to time to the Lenders by Agent (the “Settlement Service”). At any time when Agent elects, in its sole discretion, to implement such Settlement Service, each such assignment shall be effected by the assigning Lender and proposed assignee pursuant to the procedures then in effect under the Settlement Service, which procedures shall be consistent with the other provisions of this Section 11.17(a). Each assigning Lender and proposed Eligible Assignee shall comply with the requirements of the Settlement Service in connection with effecting any assignment of Loan pursuant to the Settlement Service. With the prior written approval of Agent, Agent’s approval of such Eligible Assignee shall be deemed to have been automatically granted with respect to any transfer effected through the Settlement Service. Assignments and assumptions of the Loan shall be effected by the provisions otherwise set forth herein until Agent notifies Lenders of the Settlement Service as set forth herein.
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(b) Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or Agent, sell to one or more Persons (other than any Borrower or any Borrower’s Affiliates, except as otherwise contemplated pursuant to the Exar Facility) participating interests in its Loan, commitments or other interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a participating interest to a Participant, (i) such Lender’s obligations hereunder shall remain unchanged for all purposes, (ii) Borrowers and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder, and (iii) all amounts payable by each Borrower shall be determined as if such Lender had not sold such participation and shall be paid directly to such Lender. Each Borrower agrees that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant (other than a Participant that is a Credit Party or any Affiliate of a Credit Party) shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided, however, that such right of set-off shall be subject to the obligation of each Participant to share with Lenders, and Lenders agree to share with each Participant, as provided in Section 11.5. In no event shall a Credit Party or any Affiliate of a Credit Party shall have any rights of set-off under this Agreement.
(c) [reserved]
(d) Credit Party Assignments. No Credit Party may assign, delegate or otherwise transfer any of its rights or other obligations hereunder or under any other Financing Document without the prior written consent of Agent and each Lender.
Section 11.18**[Reserved]**.
Section 11.19**[Reserved]**.
Section 11.20****ErroneousPayments.
(a) Each Lender and any other party hereto hereby severally agrees that if (i) Agent notifies (which such notice shall be conclusive absent manifest error) such Lender (or the Lender which is an Affiliate of a Lender) or any other Person that has received funds from Agent or any of its Affiliates, either for its own account or on behalf of a Lender (each such recipient, but in any event excluding the Credit Parties and their Affiliates, a “Payment Recipient”) that Agent has determined in its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives any payment from 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 Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts specified in clauses (i) or (ii) of this Section 11.20(a), whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise; individually and collectively, an “ErroneousPayment”), then, in each case, such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided that nothing in this Section shall require Agent to provide any of the notices specified in clauses (i) or (ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by Agent for the return of any Erroneous Payments, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
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(b) Without limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall promptly notify Agent in writing of such occurrence.
(c) In the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of Agent, and upon demand from Agent such Payment Recipient shall (or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later than one Business Day thereafter, return to Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds and 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 Agent at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by Agent for any reason, after demand therefor by Agent in accordance with immediately preceding clause (c), from any Lender that is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Lender, an “Erroneous Payment Return Deficiency”), then at the sole discretion of Agent and upon Agent’s written notice to such Lender (i) such Lender shall be deemed to have made a cashless assignment of the full face amount of the portion of its Loans with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Loans”) to Agent or, at the option of Agent, Agent’s applicable lending affiliate (such assignee, the “Agent Assignee”) in an amount that is equal to the Erroneous Payment Return Deficiency (or such lesser amount as Agent may specify) (such assignment of the Loans of the Erroneous Payment Impacted Loans, the “Erroneous Payment Deficiency Assignment”) plus any accrued and unpaid interest on such assigned amount, without further consent or approval of any party hereto and without any payment by Agent Assignee as the assignee of such Erroneous Payment Deficiency Assignment. Without limitation of its rights hereunder, following the effectiveness of the Erroneous Payment Deficiency Assignment, Agent may make a cashless reassignment to the applicable assigning Lender of any Erroneous Payment Deficiency Assignment at any time by written notice to the applicable assigning Lender and upon such reassignment all of the Loans assigned pursuant to such Erroneous Payment Deficiency Assignment shall be reassigned to such Lender without any requirement for payment or other consideration. The parties hereto acknowledge and agree that (1) any assignment contemplated in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms and conditions of Section 11.17 and (3) Agent may reflect such assignments in the Register without further consent or action by any other Person.
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(e) Each party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, Agent (1) shall be subrogated to all the rights of such Payment Recipient and (2) is authorized to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Financing Document, or otherwise payable or distributable by Agent to such Payment Recipient from any source, against any amount due to Agent under this Section 11.20 or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other satisfaction of any Obligations owed by the Borrower or any other Credit 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 Agent from the Borrower or any other Credit Party for the purpose of making for a payment on the Obligations and (z) to the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Obligations, the Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received.
(f) Each party’s obligations under this Section 11.20 shall survive the resignation or replacement of Agent or any transfer of right or obligations by, or the replacement of, a Lender, or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Financing Document.
(g) The provisions of this Section 11.20 to the contrary notwithstanding, (i) nothing in this Section 11.20 will constitute a waiver or release of any claim of any party hereunder arising from any Payment Recipient’s receipt of an Erroneous Payment and (ii) there will only be deemed to be a recovery of the Erroneous Payment to the extent that Agent has received payment from the Payment Recipient in immediately available funds the Erroneous Payment Return Deficiency, whether directly from the Payment Recipient, as a result of the exercise by Agent of its rights of subrogation or set off as set forth above in clause (e) or as a result of the receipt by Agent Assignee of a payment of the outstanding principal balance of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment, but excluding any other amounts in respect thereof (it being agreed that any payments of interest, fees, expenses or other amounts (other than principal) received by Agent Assignee in respect of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment shall be the sole property of Agent Assignee and shall not constitute a recovery of the Erroneous Payment).
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Section 11.21****Definitions. As used in this Article 11, the following terms have the following meanings:
“Approved Fund” means any (a) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the Ordinary Course of Business, or (b) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (a) and that, with respect to each of the preceding clauses (a) and (b), is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.
“Assignment Agreement” means an assignment agreement in form and substance acceptable to Agent substantially in the form of Exhibit A hereto.
“Defaulted Lender” means, so long as such failure shall remain in existence and uncured, any Lender which shall have failed to make any Loan or other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Financing Document.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by Agent and (other than in the case of any assignment by B. Riley and its Affiliates), so long as no Event of Default has occurred and is continuing, the Borrower Representative (such consent not to be unreasonably withheld or delayed); provided, however, that notwithstanding the foregoing and (x) “Eligible Assignee” shall not include any Borrower or any of a Borrower’s Affiliates.
“Federal Funds Rate” means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided,however, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day, and (b) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Agent on such day on such transactions as determined by Agent.
Article 12****- GUARANTEE
Section 12.1**[Reserved]**.
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Section 12.2****Guarantee;Limitation of Liability.
(a) Each Guarantor, jointly and severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other Credit Party now or hereafter existing under or in respect of the Financing Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether for principal, interest, premiums, fees, indemnities, or reasonable and documented out-of-pocket expenses (such Obligations being the “Guaranteed Obligations”), including, without limitation, reasonable and documented out- of-pocket fees and expenses of counsel incurred by Agent in enforcing any rights under the Guarantee under this Section 12 or under any other Financing Document. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Credit Party to Agent or any Lender under or in respect of the Financing Documents but for the fact that they are unenforceable or not allowed due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Credit Party.
Section 12.3****GuaranteeAbsolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Financing Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Agent or any Lender with respect thereto. The liability of each Guarantor under the Guarantee under this Section 12 shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses (other than payment of the Obligations to the extent of such payment) it may now have or hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Financing Documents or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Obligations of any other Credit Party under or in respect of the Financing Documents, or any other amendment or waiver of or any consent to departure from any Financing Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Credit Party;
(c) any taking, exchange, release or non-perfection of any Collateral or any other collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guarantee, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Credit Party under the Financing Documents or any other assets of any Credit Party;
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(e) any change, restructuring or termination of the corporate structure or existence of any Credit Party;
(f) any failure of Agent or any Lender to disclose to any Credit Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Credit Party now or hereafter known to Agent or such Lender (each Guarantor waiving any duty on the part of Agent or Lenders to disclose such information) provided that each Guarantor shall have any contractual defenses that the applicable Credit Party has under any Financing Document including payment in full of the Obligations;
(g) the failure of any other Person to execute or deliver any Guarantee Supplement or any other guarantee or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by Agent or any Lender that might otherwise constitute a defense available to, or a discharge of, any Credit Party or any other guarantor or surety other than payment in full of the Guaranteed Obligations; provided that each Guarantor shall have any contractual defenses that the applicable Credit Party has under any Financing Document.
The Guarantee under this Section 12 shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of Borrowers or any other Credit Party or otherwise, all as though such payment had not been made.
Section 12.4****Waiversand Acknowledgments.
(a) To the extent allowed under applicable Law, each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and the Guarantee under this Section 12 and any requirement that Agent or any Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against any Credit Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke the Guarantee under this Section 12 and acknowledges that the Guarantee under this Section 12 is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by Agent or any Lender that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Credit Parties, any other guarantor or any other Person or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder.
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(d) Each Guarantor acknowledges that Agent may, without notice to or demand upon such Guarantor and without affecting the liability of such Guarantor under the Guarantee under this Section 12, foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to the recovery by Agent and the other Lenders against such Guarantor of any deficiency after such nonjudicial sale and any defense or benefits that may be afforded by applicable Law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of Agent or any Lender to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Credit Party now or hereafter known by Agent or such Lender.
(f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Financing Documents and that the waivers set forth in Section 12.3 and this Section 12.4 are knowingly made in contemplation of such benefits.
Section 12.5****Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Borrowers, any other Credit Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of the Guarantee under this Section 12 or any other Financing Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of Agent or any Lender against the Borrowers, any other Credit Party or any other insider guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Borrowers, any other Credit Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 shall have been paid in full in cash. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Guaranteed Obligations (other than unasserted contingent indemnification obligations) and all other amounts payable under the Guarantee under this Section 12, such amount shall be received and held in trust for the benefit of Agent and the Lenders, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12, whether matured or unmatured, in accordance with the terms of the Financing Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under the Guarantee under this Section 12 thereafter arising. If (a) any Guarantor shall make payment to Agent or any Lender of all or any part of the Guaranteed Obligations, (b) all of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 shall have been paid in full in cash and (c) the Termination Date shall have occurred, Agent or the Lenders will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to the Guarantee under this Section 12.
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Section 12.6**[Reserved]**.
Section 12.7****Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and other Obligations owed to such Guarantor by each other Credit Party, except for any Obligations otherwise set forth hereunder (the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 12.7:
(a) ProhibitedPayments, Etc. Unless Agent otherwise agrees, upon a Default or the occurrence and during the continuance of an Event of Default, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.
(b) PriorPayment of Guaranteed Obligations. In any proceeding under Debtor Relief Laws relating to any other Credit Party, each Guarantor agrees that Agent and the Lenders shall be entitled to receive payment in full in cash of all Guaranteed Obligations before such Guarantor receives payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of any Event of Default, each Guarantor shall, if Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for Agent and the Lenders and deliver such payments to Agent on account of the Guaranteed Obligations, together with any necessary endorsements or other instruments of transfer.
(d) AgentAuthorization. After the occurrence and during the continuance of any Event of Default, Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations, and (ii) to require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the Subordinated Obligations, and (B) to pay any amounts received on such obligations to Agent for application to the Guaranteed Obligations.
Section 12.8****ContinuingGuarantee; Assignments. The Guarantee under this Section 12 is a continuing guarantee and shall (a) remain in full force and effect until the payment in full in cash of the Guaranteed Obligations and all other amounts payable under the Guarantee under this Section 12 and termination of all other Obligations hereunder, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by Agent, the Lenders and their respective successors, transferees and assigns. No Guarantor shall have the right to assign its rights hereunder or any interest herein without the prior written consent of Agent.
Article 13****- MISCELLANEOUS
Section 13.1****Survival. All agreements, representations and warranties made herein and in every other Financing Document shall survive the execution and delivery of this Agreement and the other Financing Documents and the other Operative Documents. The provisions of Section 2.9 and Articles 11 and 12 shall survive the payment of the Obligations (both with respect to any Lender and all Lenders collectively) and any termination of this Agreement and any judgment with respect to any Obligations, including any final foreclosure judgment with respect to any Security Document, and no unpaid or unperformed, current or future, Obligations will merge into any such judgment.
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Section 13.2****NoWaivers. No failure or delay by Agent or any Lender in exercising any right, power or privilege under any Financing Document shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein and therein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Any reference in any Financing Document to the “continuing” nature of any Event of Default shall not be construed as establishing or otherwise indicating that any Borrower or any other Credit Party has the independent right to cure any such Event of Default, but is rather presented merely for convenience should such Event of Default be waived in accordance with the terms of the applicable Financing Documents.
Section 13.3****Notices.
(a) All notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier, e-mail or similar writing) and shall be given to such party at its address or e-mail address set forth on the signature pages hereof (or, in the case of any such Lender who becomes a Lender after the date hereof, in an assignment agreement or in a notice delivered to Borrower Representative and Agent by the assignee Lender forthwith upon such assignment) or at such other address or e-mail address as such party may hereafter specify for the purpose by notice to Agent and Borrower Representative; provided, however, that notices, requests or other communications shall be permitted by electronic means only in accordance with the provisions of Section 13.3(b) and (c). Each such notice, request or other communication shall be effective (i) if given by electronic means, in accordance with the provisions of Section 13.3(b) and (c), or (ii) if given by mail, prepaid overnight courier or any other means, when received or when receipt is refused at the applicable address specified by this Section 13.3(a).
(b) Notices and other communications to the parties hereto may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved from time to time by Agent, provided, however, that the foregoing shall not apply to notices sent directly to any Lender if such Lender has notified Agent that it is incapable of receiving notices by electronic communication. Agent or Borrower Representative may, in their discretion, agree to accept notices and other communications to them hereunder by electronic communications pursuant to procedures approved by it, provided, however, that approval of such procedures may be limited to particular notices or communications.
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(c) Unless 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 acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), 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, however, that if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day.
Section 13.4****Severability. In case any provision of or obligation under this Agreement or any other Financing Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 13.5****Headings. Headings and captions used in the Financing Documents (including the Exhibits, Schedules and Annexes hereto and thereto) are included for convenience of reference only and shall not be given any substantive effect.
Section 13.6****Confidentiality.
(a) Each Credit Party agrees (i) not to transmit or disclose provisions of any Financing Document to any Person (other than to Borrowers’ advisors and officers on a need-to-know basis or as otherwise may be required by Law) without Agent’s prior written consent, (ii) to inform all Persons of the confidential nature of the Financing Documents and to direct them not to disclose the same to any other Person and to require each of them to be bound by these provisions.
(b) Agent and each Lender shall hold all non-public information regarding the Credit Parties and their respective businesses identified as such by Borrowers and obtained by Agent or any Lender pursuant to the requirements hereof in accordance with such Person’s customary procedures for handling information of such nature, except that disclosure of such information may be made (i) to their respective agents, employees, Subsidiaries, Affiliates, attorneys, auditors, professional consultants, rating agencies, insurance industry associations and portfolio management services, (ii) to prospective transferees or purchasers of any interest in the Loans, Agent or a Lender, and to prospective contractual counterparties (or the professional advisors thereto) in Swap Contracts permitted hereby, provided, however, that any such Persons are bound by obligations of confidentiality, (iii) as required by Law, subpoena, judicial order or similar order and in connection with any litigation, (iv) as may be required in connection with the examination, audit or similar investigation of such Person, (v) as Agent or any Lender considers appropriate in exercising remedies under the Financing Documents or at any time an Event of Default exists hereunder, and (vi) to a Person that is a trustee, investment advisor or investment manager, collateral manager, servicer, noteholder or secured party in a Securitization (as hereinafter defined) in connection with the administration, servicing and reporting on the assets serving as collateral for such Securitization. For the purposes of this Section, “Securitization” shall mean (A) the pledge of the Loans as collateral security for loans to a Lender, or (B) a public or private offering by a Lender or any of its Affiliates or their respective successors and assigns, of securities which represent an interest in, or which are collateralized, in whole or in part, by the Loans. Confidential information shall include only such information identified as such at the time provided to Agent and shall not include information that either: (y) is in the public domain, or becomes part of the public domain after disclosure to such Person through no fault of such Person, or (z) is disclosed to such Person by a Person other than a Credit Party, provided, however, Agent does not have actual knowledge that such Person is prohibited from disclosing such information. The obligations of Agent and Lenders under this Section 13.6 shall supersede and replace the obligations of Agent and Lenders under any confidentiality agreement in respect of this financing executed and delivered by Agent or any Lender prior to the date hereof.
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Section 13.7****Waiverof Consequential and Other Damages. To the fullest extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee (as defined below), 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 Financing Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee 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 Financing Documents or the transactions contemplated hereby or thereby, except for any such damages resulting from the gross negligence or willful misconduct of such Indemnitee or any of such Indemnitee’s related parties, as determined by a final non-appealable court of competent jurisdiction.
Section 13.8****GOVERNINGLAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL DISPUTES AND OTHER MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), OR THE PERFORMANCE BY AGENT OR ANY OF ITS AFFILIATE’S OF THE SERVICES CONTEMPLATED THEREBY, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(b) EACH CREDIT PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT LOCATED WITHIN THE COUNTY OF MONTGOMERY, NEW YORK OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH CREDIT PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
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(c) Each Borrower, Agent and each Lender agree that each Loan (including those made on the Closing Date) shall be deemed to be made in, and the transactions contemplated hereunder and in any other Financing Document shall be deemed to have been performed in, the State of New York.
Section 13.9****WAIVEROF JURY TRIAL. EACH CREDIT PARTY, AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH CREDIT PARTY, AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH CREDIT PARTY, AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
Section 13.10****Publicationand Advertisement.
(a) Publication. No Credit Party will directly or indirectly publish, disclose or otherwise use in any public disclosure, advertising material, promotional material, press release or interview, any reference to the name, logo or any trademark of B. Riley or any of its Affiliates or any reference to this Agreement or the financing evidenced hereby, in any case except (i) as required by Law, subpoena or judicial or similar order, in which case the applicable Credit Party shall give Agent prior written notice of such publication or other disclosure, or (ii) with B. Riley’s prior written consent.
(b) Advertisement. Each Lender and each Credit Party hereby authorizes B. Riley to publish the name of such Lender and Credit Party, the existence of the financing arrangements referenced under this Agreement, the primary purpose and/or structure of those arrangements, the amount of credit extended under each facility, the title and role of each party to this Agreement, and the total amount of the financing evidenced hereby in any “tombstone”, comparable advertisement or press release which B. Riley elects to submit for publication. In addition, each Lender and each Credit Party agrees that B. Riley may provide lending industry trade organizations with information necessary and customary for inclusion in league table measurements after the Closing Date. With respect to any of the foregoing, B. Riley shall provide Credit Parties with an opportunity to review and confer with B. Riley regarding the contents of any such tombstone, advertisement or information, as applicable, prior to its submission for publication and, following such review period, B. Riley may, from time to time, publish such information in any media form desired by B. Riley, until such time that Credit Parties shall have requested B. Riley cease any such further publication.
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Section 13.11****Counterparts;Integration. This Agreement and the other Financing Documents may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures by facsimile or by electronic mail delivery of an electronic version of any executed signature page shall bind the parties hereto. In furtherance of the foregoing, the words “execution”, “signed”, “signature”, “delivery” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries 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, physical delivery thereof 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. As used herein, “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or other record. This Agreement and the other Financing Documents constitute the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.
Section 13.12****NoStrict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.
Section 13.13 LenderApprovals. Unless expressly provided herein to the contrary, any approval, consent, waiver or satisfaction of Agent or Lenders with respect to any matter that is the subject of this Agreement, the other Financing Documents may be granted or withheld by Agent and Lenders in their sole and absolute discretion and credit judgment.
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Section 13.14 Expenses;Indemnity.
(a) Credit Parties hereby agree to promptly pay (i) all costs and expenses of Agent (including, without limitation, the fees, costs and expenses of counsel to, and independent appraisers and consultants retained by Agent) in connection with the examination, review, due diligence investigation, documentation, negotiation, closing and syndication of the transactions contemplated by the Financing Documents, in connection with the performance by Agent of its rights and remedies under the Financing Documents and in connection with the continued administration of the Financing Documents including (A) any amendments, modifications, consents and waivers to and/or under any and all Financing Documents, and (B) any periodic public record searches conducted by or at the request of Agent (including, without limitation, title investigations, UCC searches, fixture filing searches, judgment, pending litigation and tax lien searches and searches of applicable corporate, limited liability, partnership and related records concerning the continued existence, organization and good standing of certain Persons); (ii) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with the creation, perfection and maintenance of Liens pursuant to the Financing Documents; (iii) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with (A) protecting, storing, insuring, handling, maintaining or selling any Collateral, (B) any litigation, dispute, suit or proceeding relating to any Financing Document, and (C) any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all of the Financing Documents; (iv) without limitation of the preceding clause (i), all costs and expenses of Agent in connection with Agent’s reservation of funds in anticipation of the funding of the initial Loans to be made hereunder; and (v) all costs and expenses incurred by Lenders in connection with any litigation, dispute, suit or proceeding relating to any Financing Document and in connection with any workout, collection, bankruptcy, insolvency and other enforcement proceedings under any and all Financing Documents, whether or not Agent or Lenders are a party thereto. If Agent or any Lender uses in-house counsel for any of these purposes, Credit Parties further agree that the Obligations include reasonable charges for such work commensurate with the fees that would otherwise be charged by outside legal counsel selected by Agent or such Lender for the work performed.
(b) Each Credit Party hereby agrees to indemnify, pay and hold harmless Agent and Lenders and the officers, directors, employees, trustees, agents, investment advisors and investment managers, collateral managers, servicers, and counsel of Agent and Lenders (collectively called the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnitee) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnitee shall be designated a party thereto and including any such proceeding initiated by or on behalf of a Credit Party, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Agent or Lenders) asserting any right to payment for the transactions contemplated hereby, which may be imposed on, incurred by or asserted against such Indemnitee as a result of or in connection with the transactions contemplated hereby or by the other Operative Documents (including (i)(A) as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or release from, any property now or previously owned, leased or operated by each Credit Party, any Subsidiary or any other Person of any Hazardous Materials, (B) arising out of or relating to the offsite disposal of any materials generated or present on any such property, or (C) arising out of or resulting from the environmental condition of any such property or the applicability of any governmental requirements relating to Hazardous Materials, whether or not occasioned wholly or in part by any condition, accident or event caused by any act or omission of Credit Party or any Subsidiary, and (ii) proposed and actual extensions of credit under this Agreement) and the use or intended use of the proceeds of the Loans, except that Credit Party shall have no obligation hereunder to an Indemnitee with respect to any liability resulting from the gross negligence or willful misconduct of such Indemnitee or any of such Indemnitee’s related parties, as determined by a final non-appealable judgment of a court of competent jurisdiction. To the extent that the undertaking set forth in the immediately preceding sentence may be unenforceable, Credit Parties shall contribute the maximum portion which it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all such indemnified liabilities incurred by the Indemnitees or any of them. This Section 13.14 shall not apply with respect to Taxes other than any Taxes that represent losses, damages, liabilities, actions, suits, judgments, obligations, penalties, fees, claims or reasonable costs and expenses arising from any non-Tax claim.
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(c) Notwithstanding any contrary provision in this Agreement, the obligations of Credit Parties under this Section 13.14 shall survive the payment in full of the Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE RESPONSIBLE OR LIABLE TO THE CREDIT PARTIES OR TO ANY OTHER PARTY TO ANY FINANCING DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
Section 13.15 Confessionof Judgment. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, EACH CREDIT PARTY AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO APPEAR ON BEHALF OF SUCH CREDIT PARTY IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST CREDIT PARTY IN FAVOR OF AGENT (FOR THE BENEFIT OF ALL LENDERS) IN THE FULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS’ FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT DUE (EXCEPT THAT AGENT SHALL NOT SEEK TO COLLECT AN AMOUNT IN EXCESS OF ITS ACTUAL ATTORNEYS’ FEES), PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF SUCH CREDIT PARTY FOR PRIOR HEARING. EACH CREDIT PARTY AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF MONTGOMERY COUNTY OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW YORK. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST A CREDIT PARTY SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS AGENT SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.
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Section 13.16 Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition or other proceeding be filed by or against any Credit Party for liquidation or reorganization, should any Credit Party become insolvent or make an assignment for the benefit of any creditor or creditors or should an interim receiver, receiver, receiver and manager, monitor or trustee be appointed for all or any significant part of any Credit Party’s assets, and shall continue to be effective or to be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a fraudulent preference reviewable transaction or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
Section 13.17****Successorsand Assigns. This Agreement shall be binding upon and inure to the benefit of Credit Parties and Agent and each Lender and their respective successors and permitted assigns.
Section 13.18****USAPATRIOT Act Notification. Agent (for itself and not on behalf of any Lender) and each Lender hereby notifies Credit Parties that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record certain information and documentation that identifies Credit Parties, which information includes the name and address of Credit Parties and such other information that will allow Agent or such Lender, as applicable, to identify any Credit Party in accordance with the USA PATRIOT Act.
Section 13.19****JudgmentCurrency.
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or under any other Financing Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Credit Party in respect of any such sum due from it to Agent or any Lender hereunder or under the other Financing Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to Agent or any Lender from any Credit Party in the Agreement Currency, such Credit Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to Agent or any Lender in such currency, Agent or such Lender, as the case may be, agrees to return the amount of any excess to such Credit Party (or to any other Person who may be entitled thereto under applicable Law).
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Section 13.20****Acknowledgementand Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Financing 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 Financing 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 Financing 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.
Section 13.21****Parent. The parties hereto acknowledge and agree that the Parent is not a party to this Agreement or any other Financing Document and shall not be deemed a Borrower, Guarantor or other obligor with respect to the Obligations.
Section 13.22****ROFR. Prior to any assignment or sale of a participation interest in the Loans other than pursuant to the Last Out Participation Agreement, dated August 30, 2024, between Exela BR SPV LLC and BRF Finance Co., LLC, as amended, restated, supplemented or otherwise in effect from time to time) each Lender shall offer to Borrowers the option to purchase such interest at a purchase price equal to the unpaid principal amount thereunder, together with all accrued and unpaid fees, interest and other amounts. If any Borrower elects to receive by assignment or purchase a participation interest in the Loans as herein provided, then upon the effectiveness of such assignment or consummation of the purchase of such participation interest, the Loans held by such Borrower shall be terminated or the participation interests owned by such Borrower shall be null and void and the corresponding amount of principal of the Loans outstanding shall be deemed to be repaid.
Article 14****Amendment and Restatement of Existing 2L Note.
Section 14.1****Acknowledgmentof Assignment and Assumption. Effective as of the date hereof, immediately prior to the effectiveness of this Agreement, ER3 Holdco (the “Existing 2L Borrower”) hereby assigned to Exela Technologies BPA LLC (“Exela BPA”) all of its rights and obligations under the Existing 2L Note and Exela BPA accepted the assignment of all such rights and assumed such obligations as if Exela BPA had been an original party thereto in lieu of the Existing 2L Borrower and agreed to undertake and agree to perform all obligations of the Existing 2L Borrower thereunder.
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Section 14.2****Amendmentand Restatement. This Agreement amends and restates in its entirety, with effect as of the date hereof and immediately after giving effect to the assignment described in Section 14.1, the Existing 2L Note. Upon the effectiveness of this Agreement, the terms and provisions of the Existing 2L Note shall, subject to this paragraph, be superseded hereby in their entirety. To the extent that any rights, benefits or provisions in favor of the parties hereto existed in the Existing 2L Note and continue to exist in this Agreement, then such rights, benefits or provisions are reaffirmed and acknowledged to be and to continue to be effective from and after the date of the Existing 2L Note. The parties hereto agree and acknowledge that any and all rights, remedies and servicing obligations under the Existing 2L Note shall continue and survive the execution and delivery of this Agreement. Upon the effectiveness of this Agreement, each reference to the Existing 2L Note in any other document, instrument or agreement shall mean and be a reference to this Agreement. Nothing contained herein, unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect any other instrument, document or agreement executed and/or delivered in connection with the Existing 2L Note.
[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]
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INWITNESS WHEREOF, intending to be legally bound, and intending that this Agreement constitute an agreement executed under seal, each of the parties have caused this Agreement to be executed under seal the day and year first above mentioned.
| BORROWERS: | EXELA TECHNOLOGIES BPA, LLC | |
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| Address: | ||
| --- | ||
| 6641 N. Belt Line Road | ||
| Suite 100 | ||
| Irving, TX 75063 USA | ||
| Attn: | Suresh Yannamani | |
| --- | --- | |
| Facsimile: | 972.821.4320 | |
| --- | --- | |
| E-Mail: | suresh.yannamani@exelatech.com | |
| --- | --- |
[Signature Page to 2L Credit and SecurityAgreement]
| GUARANTORS: | ||
|---|---|---|
| EXELA INTERMEDIATE LLC | ||
| --- | --- | --- |
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA FINANCE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV HOLDINGS, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| CORPSOURCE HOLDINGS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| SOURCECORP, INCORPORATED | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP BPS INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DELIVEREX, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| UNITED INFORMATION SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| ECONOMIC RESEARCH SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP LEGAL INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| RUST CONSULTING, INC. | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCEHOV HEALTHCARE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| KINSELLA MEDIA LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV SERVICES, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV ENTERPRISE SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| MERIDIAN CONSULTING GROUP, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| RUSTIC CANYON III, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOV SERVICES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| CHARTER LASON, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| LASON INTERNATIONAL, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SOURCECORP MANAGEMENT, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| PANGEA ACQUSITIONS INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| BANCTEC GROUP LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BANCTEC (PUERTO RICO), INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DOCUDATA SOLUTIONS, L.C. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| BTC VENTURES, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| RECOGNITION MEXICO HOLDING INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| BANCTEC INTERMEDIATE HOLDING, INC. | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| RC4 CAPITAL, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DFG2 HOLDINGS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| DFG2, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| PLEXUS GLOBAL FINANCE, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| HOVG, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| TRAC HOLDINGS, LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| MANAGED CARE PROFESSIONALS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| FTS PARENT INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| TRANSCENTRA, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| J & B SOFTWARE, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS HOLDING INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| REGULUS GROUP LLC | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS GROUP II LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS AMERICA LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS INTERGRATED SOLUTIONS LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA RE LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| REGULUS WEST LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| NOVITEX HOLDINGS, INC. | ||
|---|---|---|
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| NOVITEX INTERMEDIATE, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| NOVITEX GOVERNMENT SOLUTIONS, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA XBP, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to 2L Credit and Security Agreement]
| AFFILIATED GUARANTORS: | ||
|---|---|---|
| XCV-EMEA, LLC | ||
| By: | /s/ Matt Brown | |
| Name: | Matt Brown | |
| Title: | President of Manager | |
| NEON ACQUISITION, LLC | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| EXELA ENTERPRISE SOLUTIONS, INC. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SERVICES INTEGRATION GROUP, L.P. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer | |
| SIG - GP L.L.C. | ||
| By: | /s/ Suresh Yannamani | |
| Name: | Suresh Yannamani | |
| Title: | Chief Executive Officer |
[Signature Page to2L Credit and Security Agreement]
| AGENT: | BRF FINANCE CO., LLC | |
|---|---|---|
| By: | /s/ Bryant Riley | |
| Name: | Bryant Riley | |
| Title: | Authorized Signatory | |
| Address: | ||
| --- | ||
| 11100 Santa Monica Blvd., Suite 800 | ||
| Los Angeles, CA 90025 | ||
| Telephone Number: (310) 966-1444 | ||
| Email: legal@brileyfin.com | ||
| Attention: General Counsel | ||
| With copy (such copy not to constitute notice<br> hereunder) to: | ||
| Duane Morris LLP | ||
| 22 Vanderbilt | ||
| 335 Madison Avenue, 23rd Floor | ||
| New York, NY 10017-4669 | ||
| Attention: James<br> T. Seery | ||
| Telephone: (973) 424-2020 | ||
| Email: jtseery@duanemorris.com | ||
| Payment Account: [to<br> be provided] |
[Signature Page to 2L Credit and SecurityAgreement]
| LENDER: | BRF FINANCE CO., LLC | |
|---|---|---|
| By: | /s/ Bryant Riley | |
| Name: | Bryant Riley | |
| Title: | Authorized Signatory | |
| Address: | ||
| --- | ||
| 11100 Santa Monica Blvd., Suite 800 | ||
| Los Angeles, CA 90025 | ||
| Telephone Number: (310) 966-1444 | ||
| Email: legal@brileyfin.com | ||
| Attention: General Counsel | ||
| With copy (such copy not to constitute notice<br> hereunder) to: | ||
| Duane Morris LLP | ||
| 22 Vanderbilt | ||
| 335 Madison Avenue, 23rd Floor | ||
| New York, NY 10017-4669 | ||
| Attention: James<br> T. Seery | ||
| Telephone: (973) 424-2020 | ||
| Email: jtseery@duanemorris.com |
[Signature Page to 2L Credit and SecurityAgreement]
ANNEXES,EXHIBITS AND SCHEDULES
EXHIBITS
| Exhibit A | [Reserved] |
|---|---|
| Exhibit B | Form of<br> Compliance Certificate |
| Exhibit C | [Reserved] |
| Exhibit D | [Reserved] |
| Exhibit E | Form of<br> Closing Certificate |
| Exhibit F-1 | Form of<br> U.S. Tax Compliance Certificate |
| Exhibit F-2 | Form of<br> U.S. Tax Compliance Certificate |
| Exhibit F-3 | Form of<br> U.S. Tax Compliance Certificate |
| Exhibit F-4 | Form of<br> U.S. Tax Compliance Certificate |
| Exhibit G | Form of<br> Solvency Certificate |
| Exhibit H | Form of<br> ABL Intercreditor Agreement |
SCHEDULES
| Schedule 3.1 | Existence,<br> Organizational ID Numbers, Foreign Qualification, Prior Names |
|---|---|
| Schedule 3.4 | Capitalization |
| Schedule 3.6 | Litigation |
| Schedule 3.17(a) | Material<br> Contracts |
| Schedule 3.17(b) | Leased<br> Properties |
| Schedule 3.18 | Environmental<br> Compliance |
| Schedule 3.19 | Intellectual<br> Property |
| Schedule 4.4 | Insurance |
| Schedule 4.9 | Litigation,<br> Governmental Proceedings and Other Notice Events |
| Schedule 5.1 | Debt;<br> Contingent Obligations |
| Schedule 5.2 | Liens |
| Schedule 5.7 | Permitted<br> Investments |
| Schedule 5.8 | Affiliate<br> Transactions |
| Schedule 5.11 | Business<br> Description |
| Schedule 5.14 | Deposit<br> Accounts and Securities Accounts |
| Schedule 7.4 | Post-Closing<br> Obligations |
| Schedule 9.1 | Collateral |
| Schedule 9.2(b)<br><br> <br>Schedule 9.2(d) | Location of Collateral<br><br> <br>Chattel Paper, Letters of Credit Rights, Commercial Tort Claims, Instruments,<br> Documents, Investment Property |
Exhibit Ato Credit Agreement
(Reserved)
Exhibit Bto Credit Agreement (Compliance Certificate)
COMPLIANCECERTIFICATE
Date: __________, 20__
This Compliance Certificate is given by _____________________, a Responsible Officer of Exela Technologies BPA, LLC (the “Borrower Representative”), pursuant to that certain Amended and Restated Credit and Security Agreement dated as of July 29, 2025 among the Borrower Representative, ____________________ and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), BRF Finance Co., LLC, individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
The undersigned Responsible Officer hereby certifies to Agent and Lenders that:
(a) the financial statements delivered with this certificate in accordance with Section 4.1(a) of the Credit Agreement fairly present in all material respects the results of operations and financial condition of Borrowers and their Consolidated Subsidiaries as of the dates and the accounting period covered by such financial statements;
(b) the representations and warranties of each Credit Party contained in the Financing Documents are true, correct and complete in all material respects on and as of the date hereof, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty shall be true and correct in all material respects as of such earlier date; provided, however, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
(c) I have reviewed the terms of the Credit Agreement and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and conditions of Borrowers and their Consolidated Subsidiaries during the accounting period covered by such financial statements and such review has not disclosed the existence during or at the end of such accounting period, and I have no knowledge of the existence as of the date hereof, of any condition or event that constitutes a Default or an Event of Default, except as set forth in Schedule 1 hereto, which includes a description of the nature and period of existence of such Default or an Event of Default and what action Borrowers have taken, are undertaking and propose to take with respect thereto;
(d) Borrowers and Guarantors are in compliance with the covenants contained in Article 6 of the Credit Agreement, and in any Guarantee constituting a part of the Financing Documents, as demonstrated by the calculation of such covenants below, except as set forth below; in determining such compliance, the following calculations have been made: [See attached worksheets]. Such calculations and the certifications contained therein are true, correct and complete.
Exhibit B – Page 1
The foregoing certifications and computations are made as of ________________, 20__ (end of month) and as of _____________, 20__.
| Sincerely, |
|---|
| EXELA TECHNOLOGIES BPA, LLC |
| By: |
| Name: |
| Title: |
Exhibit B – Page 2
Fixed Charge Coverage Ratio Worksheet (Attachmentto Compliance Certificate)
| Fixed<br> Charges for the applicable Defined Period is calculated as follows: | |
|---|---|
| · Fixed<br> Charges: | $___________ |
| · Pro<br> Forma Adjustments: | $___________ |
| Adjusted<br> Fixed Charges for the applicable Defined Period: | $___________ |
| EBITDA<br> for the applicable Defined Period is calculated as follows: | |
| · EBITDA: | $___________ |
| · Unfinanced<br> Capital Expenditures: | $___________ |
| · Capitalized<br> Software Expenditures: | $___________ |
| · Pro<br> Forma Adjustments: | $___________ |
| Adjusted<br> EBITDA for the Defined Period: | $___________ |
| FCCR<br>Compliance:<br><br> <br><br><br> <br><br><br> <br>Fixed Charge Coverage Ratio (Adjusted EBITDA/Adjusted Fixed Charges)<br> for the Defined Period | ___<br> to 1.0 |
| Minimum<br> Fixed Charge Coverage for the Defined Period | ___<br> to 1.0 |
| In<br> Compliance | Yes/No |
Exhibit B – Page 3
Exhibit Cto Credit Agreement (RESERVED)
Exhibit Dto Credit Agreement (RESERVED)
Exhibit ETO CREDIT AGREEMENT
FORM OF CLOSING CERTIFICATE
[Date]
Reference is hereby made to that certain Amended and Restated Credit and Security Agreement, dated as of July 29, 2025 (as amended, restated, amended and restated, modified or otherwise supplemented from time to time, the “Credit Agreement”), by and among Exela Technologies BPA, LLC, a Delaware limited liability company, and any additional borrower that may hereafter be added to the Credit Agreement (each individually as a “Borrower”, and collectively as “Borrowers”), BRF Finance Co., LLC, a Delaware limited liability company, as administrative agent (in such capacity, and together with its successors and assigns, the “Agent”), and the financial institutions or other entities from time to time parties hereto, each as a Lender. This Closing Certificate is being delivered pursuant to Section 7.1(d) of the Credit Agreement. Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.
I, [name], [title] of each Borrower, hereby certify, as of the date hereof, as follows:
| 1. | The representations and warranties made<br> by each Borrower in Article III of the Credit Agreement and in each other Financing<br> Document, certificate or other writing delivered to any Lender pursuant thereto on or prior<br> to the Closing Date are true and correct on and as of the Closing Date as though made on<br> and as of such date, except to the extent that any such representation or warranty expressly<br> relates solely to an earlier date (in which case such representation or warranty shall be<br> true and correct on and as of such earlier date). |
|---|---|
| 2. | No Default or Event of Default has occurred<br> nor is continuing on the Closing Date or would result from the Credit Agreement or the other<br> Financing Documents becoming effective in accordance with its or their respective terms. |
| --- | --- |
| 3. | Except<br> for the agreements set forth on Schedule 3.17(a) of the Credit Agreement,<br> as of the Closing Date there are no Material Contracts and the attached copies of<br> all Material Contracts hereto as in effect on the Closing Date are true, complete and correct<br> copies thereof and such agreements remain in full force and effect and none of the Credit<br> Parties have breached or defaulted in any of their obligations under such agreements. |
| --- | --- |
| 4. | Since the Petition Date, there have not<br> been any changes, events, circumstances, effects, developments, occurrences or state of facts<br> that, individually or in the aggregate, have had or would reasonably be expected to have<br> a Material Adverse Effect |
| --- | --- |
| 5. | Other<br> than the Chapter 11 Cases, as of the Closing Date, there are not litigation, action, suit,<br> investigation or other arbitral, administrative or judicial proceeding pending or, to the<br> knowledge of the Credit Parties, threatened against any Credit Party or any of their Subsidiaries<br> or against of any of their properties or revenues that (a) purport to affect or pertain<br> to the Credit Agreement or any other Operative Documents, or (b) that could reasonably<br> be expected to have a Material Adverse Effect on the Credit Parties and their Subsidiaries,<br> taken as a whole; and |
| --- | --- |
| 6. | The Investment Grade Accounts listed on Schedule 1.1 of the<br> Credit Agreement are true and correct as of Closing Date. |
| --- | --- |
This Closing Certificate is being delivered by the undersigned only in his or her capacity as a[n] [_] of each Borrower and not individually, and the undersigned shall have no personal liability to the Agent or the Lenders with respect thereto.
[Remainder of this page intentionallyleft blank]
**IN WITNESS WHEREOF,**the undersigned has duly executed this Closing Certificate as of the date first written above.
| EXELA TECHNOLOGIES BPA, LLC | |
|---|---|
| By: | |
| Name: | |
| Title: |
Exhibit F-1 to Credit Agreement (Form ofU.S. Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Amended and Restated Credit and Security Agreement dated as of July 29, 2025 among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), BRF Finance Co., LLC, individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “CreditAgreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 Agent and the Borrower Representative with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower Representative and Agent, and (2) the undersigned shall have at all times furnished the Borrower Representative and 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.
| [NAME<br> OF LENDER] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-2 to Credit Agreement (Form ofU.S. Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Amended and Restated Credit and Security Agreement dated as of July 29, 2025 among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), BRF Finance Co., LLC, individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “CreditAgreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 or IRS Form W-8BEN-E. 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.
| [NAME<br> OF PARTICIPANT] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-3 to Credit Agreement (Form ofU.S. Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Amended and Restated Credit and Security Agreement dated as of July 29, 2025 among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), BRF Finance Co., LLC, individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “CreditAgreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E 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.
| [NAME<br> OF PARTICIPANT] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit F-4 to Credit Agreement (Form ofU.S. Tax Compliance Certificate)
U.S.TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is made to that certain Amended and Restated Credit and Security Agreement dated as of July 29, 2025 among the Borrower Representative, the other Borrowers listed therein and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), BRF Finance Co., LLC, individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “CreditAgreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.
Pursuant to the provisions of Section 2.8(c) 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 Financing 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 Agent and the Borrower Representative 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 or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E 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 Borrower Representative and Agent, and (2) the undersigned shall have at all times furnished the Borrower Representative and 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.
| [NAME<br> OF LENDER] | |
|---|---|
| By: | |
| Name: | |
| Title: |
Date: ________ __, 20[ ]
Exhibit G to Credit Agreement (Form ofSolvency Certificate)
FORM OF SOLVENCY CERTIFICATE
[Insert Date]
To Agent and each of the Lenders party to the Credit Agreement referred to below:
I, the undersigned interim chief financial officer of Exela Technologies BPA, LLC, a Delaware limited liability company (the “Borrower”), in that capacity only and not in my individual capacity (and without personal liability), do hereby certify as of the date hereof, and based upon facts and circumstances as they exist as of the date hereof (and disclaiming any responsibility for changes in such facts and circumstances after the date hereof), that:
1. This certificate is furnished to Agent and the Lenders pursuant to Section 7.1(d) of the Amended and Restated Credit and Security Agreement, dated as of July 29, 2025, among the Credit Parties, the Lenders and BRF Finance Co., LLC (“B. Riley”), as administrative agent and collateral agent (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used in this certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this certificate, the terms below shall have the following definitions:
(a) “Fair Value”
The amount at which the assets (both tangible and intangible), in their entirety, of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.
(b) “Present Fair Salable Value”
The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.
(c) “Liabilities”
The recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Borrower and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions, determined in accordance with GAAP consistently applied.
(d) “Will be able to pay their Liabilities as they mature”
For the period from the date hereof through the Termination Date, the Borrower and its Subsidiaries taken as a whole and after giving effect to the consummation of the Transactions will have sufficient assets, credit capacity and cash flow to pay their Liabilities as those Liabilities mature or (in the case of contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by the Borrower and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.
(e) “Do not have Unreasonably Small Capital”
The Borrower and its Subsidiaries taken as a whole after consummation of the Transactions is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern for the period from the date hereof through the Termination Date. I understand that “unreasonably small capital” depends upon the nature of the particular business or businesses conducted or to be conducted, and I have reached my conclusion based on the needs and anticipated needs for capital of the business conducted or anticipated to be conducted by the Borrower and its Subsidiaries as reflected in the projected financial statements and in light of the anticipated credit capacity.
3. For purposes of this certificate, I, or officers of the Borrower under my direction and supervision, have performed the following procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements of the Borrower and its Subsidiaries.
(b) I have knowledge of and have reviewed to my satisfaction the Credit Agreement.
(c) As interim chief financial officer of the Borrower, I am familiar with the financial condition of the Borrower and its Subsidiaries.
4. Based on and subject to the foregoing, I hereby certify on behalf of the Borrower that after giving effect to the consummation of the Transactions, it is my opinion that (i) the Fair Value of the assets of the Borrower and its Subsidiaries taken as a whole exceeds their Liabilities, (ii) the Present Fair Salable Value of the assets of the Borrower and its Subsidiaries taken as a whole exceeds their Liabilities; (iii) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; (iv) the Borrower and its Subsidiaries taken as a whole will be able to pay their Liabilities as they mature, and (v) the Borrower and each of its Subsidiaries is (on a consolidated basis) Solvent.
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IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed on its behalf by its chief financial officer as of the date first written above.
| By: | |
|---|---|
| Name: | |
| Title: |
Exhibit H to Credit Agreement (Form ofABL Intercreditor Agreement)
[See attached]
Exhibit 16.1
| EisnerAmper LLP111 Wood Avenue South<br><br>Iselin, NJ 08830-2700<br><br>T 732.243.7000<br><br>F 732.951.7400<br><br>www.eisneramper.com |
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August 4, 2025
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Ladies and Gentlemen:
We have read Item 4.01 of Form 8-K dated August 4, 2025,of XBP Global Holdings, Inc. (f/k/a XBP Europe Holdings, Inc.) and are in agreement with the statements contained therein as it regardsour firm. We have no basis to agree or disagree with other statements of the registrant contained in Item 4.01.
Sincerely,
/s/ EisnerAmper LLP
EisnerAmper LLP
“EisnerAmper” is the brand name under which EisnerAmper LLP and Eisner Advisory Group LLC and its subsidiary entities provide professional services. EisnerAmper LLP and Eisner Advisory Group LLC are independently owned firms that practice in an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. EisnerAmper LLP is a licensed CPA firm that provides attest services, and Eisner Advisory Group LLC and its subsidiary entities provide tax and business consulting services. Eisner Advisory Group LLC and its subsidiary entities are not licensed CPA firms.