vctr_8_k_70119

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8‑K


CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

June 28, 2019

Date of Report (date of earliest event reported)


Victory Capital Holdings, Inc.

(Exact name of registrant as specified in its charter)


 

 

 

Delaware

001‑38388

32‑0402956

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

 

 

 

 

 

 

4900 Tiedeman Road, 4th Floor; Brooklyn, OH

 

44144

(Address of principal executive offices)

 

(Zip Code)

 

(216) 898‑2400

(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 registrants under any of the following provisions (see General Instruction A.2. below):

☐    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

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, Par Value $0.01

VCTR

NASDAQ

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

Emerging growth company ☒

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

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

Amendment No. 1 to Stock Purchase Agreement

On June 28, 2019, Victory Capital Holdings, Inc., a Delaware corporation (the “Company”), entered into Amendment No. 1 to the Stock Purchase Agreement (the “Amendment”) with USAA Investment Corporation, a Delaware corporation (“Seller”) and USAA Capital Corporation, a Delaware corporation (“Seller Parent”). The Amendment amended the previously reported Stock Purchase Agreement, dated as of November 6, 2018 (the “Original Agreement”, and, as amended by the Amendment, the “USAA Stock Purchase Agreement”), by and among the Company, Seller and, for certain limited purposes, Seller Parent, as was described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2018 and filed as Exhibit 2.1 thereto. The USAA Stock Purchase Agreement has substantially the same material terms and conditions as the Original Agreement, but provides for, among other things, (i) the consummation of the previously announced acquisition of 100% of the outstanding common stock of USAA Asset Management Company (“USAA Adviser”) and USAA Transfer Agency Company d/b/a USAA Shareholder Account Services (together with USAA Adviser, the “USAA Acquired Companies”) by the Company on July 1, 2019 (the “Closing Date,” such acquisition, the “Transaction” and the consummation of the Transaction, the “Closing”) in accordance with the terms and conditions set forth in the USAA Stock Purchase Agreement, (ii) subject to the satisfaction or waiver of the conditions to the Closing set forth in the Original Agreement as of June 28, 2019, the funding of the purchase price for the Transaction into an escrow account with Barclays Bank PLC as escrow agent in connection with the Transaction on June 28, 2019 and the release of such amount from the escrow account to Seller on July 1, 2019 following the Closing, (iii) certain amendments to the Original Agreement with respect to mechanics to implement the Closing, and (iv) certain other amendments to the Original Agreement agreed to by the parties to the Original Agreement.

The foregoing description of the USAA Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Original Agreement, previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 9, 2018, and incorporated by reference thereto, and the full text of the Amendment, a copy of which is attached hereto as Exhibit 2.2, and each is incorporated herein by reference.  

The USAA Stock Purchase Agreement and the above description of the USAA Stock Purchase Agreement have been included to provide investors with information regarding the terms of the USAA Stock Purchase Agreement and are not intended to provide any other factual information about the Company or the USAA Acquired Companies. The representations, warranties and covenants contained in the USAA Stock Purchase Agreement were made only for purposes of the USAA Stock Purchase Agreement and as of specific dates, were solely for the benefit of the parties to the USAA Stock Purchase Agreement and certain express third party beneficiaries thereto and may be subject to limitations agreed upon by the parties in connection with negotiating the terms of the USAA Stock Purchase Agreement, including being qualified by confidential disclosures made by each party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. In addition, certain representations and warranties may be subject to a contractual standard of materiality different from those generally applicable to investors and may have been used for the purpose of allocating risk between the parties rather than establishing matters as facts.  Information concerning the subject matter of the representations, warranties and covenants may change after the date of the USAA Stock Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company.  Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, the USAA Acquired Companies or any of their respective subsidiaries, affiliates or businesses.

2019 Credit Agreement

The Company entered into a credit agreement (the “2019 Credit Agreement”) dated as of the Closing Date among the Company, as borrower, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent, pursuant to which the Company obtained a seven-year term loan in an aggregate principal amount of $1,100,000,000 and established a five-year revolving credit facility (which was unfunded as of the Closing Date) with aggregate commitments of $100,000,000 (with a $10,000,000 sub-limit for the issuance of letters of credit).  Subject to certain terms and conditions set forth in the 2019 Credit Agreement (including obtaining commitments from one or more new or existing lenders), the Company may incur additional loans or commitments under the 2019 Credit Agreement in an aggregate principal amount of up to $415,000,000 (or, if greater, 100% of Consolidated Adjusted EBITDA (as defined in the 2019 Credit Agreement) for the most recently ended period of four fiscal quarters), plus certain additional amounts

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set forth in the 2019 Credit Agreement (including an unlimited amount of additional loans or commitments based on achievement of a specified leverage ratio).

Amounts outstanding under the 2019 Credit Agreement bear interest at an annual rate equal to, at the option of the Company, either LIBOR (adjusted for reserves) plus a margin of 3.25% or an alternate base rate plus a margin of 2.25%. The Company is also required to pay certain fees to the lenders, including, among others, a quarterly commitment fee on the average unused amount of the revolving credit facility.

Term loans under the 2019 Credit Agreement will amortize at a rate of 1.00% per annum. In addition, the 2019 Credit Agreement requires that the term loans be mandatorily prepaid with (a) a percentage (ranging from 0% to 50%, depending on the Company’s first lien leverage ratio) of the Company’s annual excess cash flow on an annual basis (commencing with the fiscal year ending December 31, 2020), (b) all or a portion of the net cash proceeds of certain asset sales, casualty or condemnation events, subject to customary reinvestment rights, and (c) the proceeds of certain incurrences of indebtedness. At any time, subject to timely prior written notice, the Company may terminate the commitments under the revolving credit facility in full or in part or prepay term loans in whole or in part, subject to the payment of LIBOR breakage fees, if any, and, in the case of certain prepayments of term loans occurring within the six-month period following the Closing Date, a 1.00% premium.

The obligations of the Company under the 2019 Credit Agreement are guaranteed by the USAA Acquired Companies and all of the Company’s other domestic subsidiaries (other than Victory Capital Advisers, Inc., its broker-dealer subsidiary) (the “Guarantors”) and secured by substantially all of the assets of the Company and the Guarantors, subject in each case to certain customary exceptions.

The 2019 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2019 Credit Agreement contains a financial performance covenant, requiring a maximum first lien leverage ratio, measured as of the last day of each fiscal quarter on which outstanding borrowings under the revolving credit facility exceed 35.0% of the commitments thereunder (excluding certain letters of credit), of no greater than 3.80 to 1.00.

The repayment obligation under the 2019 Credit Agreement may be accelerated upon the occurrence of an event of default thereunder, including, among other things, failure to pay principal or interest on a timely basis, material inaccuracy of any representation or warranty, failure to comply with covenants, cross-default, change of control, certain insolvency or bankruptcy-related events and material judgments, subject, in each case, to any applicable grace and/or cure periods.

Proceeds from the term loans under the 2019 Credit Agreement, as well as cash on hand, were used (i) to finance the Transaction, (ii) to repay all indebtedness outstanding under the Company’s existing senior credit facility, which was terminated as of the Closing Date, and (iii) for the payment of fees, commissions, premiums, expenses and other transaction costs (including original issue discount or upfront fees) payable in connection with the Transaction, the 2019 Credit Agreement and the transactions related thereto.  The proceeds of revolving loans incurred under the 2019 Credit Agreement may be used for general corporate purposes, including ongoing working capital requirements.

The foregoing description of the 2019 Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the 2019 Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 1.02. Termination of a Material Definitive Agreement.

In connection with the Company’s entry into the 2019 Credit Agreement, the Company repaid all indebtedness outstanding under the credit agreement (the “2018 Credit Agreement”) dated as of February 12, 2018 among the Company, as borrower, the lenders from time to time party thereto and Royal Bank of Canada, as administrative agent and collateral agent. The 2018 Credit Agreement and the credit documents entered in connection therewith were terminated on the Closing Date.

 

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Item 2.01. Completion of Acquisition or Disposition of Assets.

On July 1, 2019, the Company completed its previously announced acquisition of the USAA Acquired Companies, pursuant to the USAA Stock Purchase Agreement.

The Company purchased 100% of the outstanding common stock of the USAA Acquired Companies in the Transaction. The Transaction was financed using a combination of the 2019 Credit Agreement and the Company’s balance sheet resources (as discussed above in Item 1.01). The purchase price paid in cash at Closing (“Closing Purchase Price”) was approximately $850.0 million, subject to transaction related payments and certain post-closing adjustments. Total purchase consideration includes the Closing Purchase Price and contingent payments based on the annual revenue of USAA Adviser attributable to all “non-managed money”-related assets under management in each of the first four years following the Closing.

As previously disclosed, a maximum of $150.0 million ($37.5 million per year) in contingent payments in respect of “non-managed money”-related assets is achievable over the four-year period. To receive any contingent payment in respect of “non-managed money”-related assets for a given year, annual revenue from “non-managed money”-related assets must be at least 80% of the revenue run-rate (as calculated under the USAA Stock Purchase Agreement) of the USAA Adviser’s “non-managed money”-related assets under management as of the Closing, and to achieve the maximum contingent payment for a given year, such annual revenue must total at least 100% of that Closing revenue run-rate. Annual contingent payments in respect of “non-managed money”-related assets are subject to certain “catch-up” provisions set forth in the USAA Stock Purchase Agreement.

The foregoing description of the USAA Stock Purchase Agreement in this Item 2.01 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Original Agreement, a copy of which is incorporated by reference to Exhibit 2.1 (as previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 9, 2018), and the full text of the Amendment, a copy of which is attached hereto as Exhibit 2.2, and each is incorporated herein by reference.

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

The description of the terms of the 2019 Credit Agreement set forth above in Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 8.01. Other Events.

The Company issued a press release on July 1, 2019 announcing the completion of its previously announced acquisition of the USAA Acquired Companies. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

The Company intends to file the financial statements of the business acquired as required by this Item 9.01(a) under cover of Form 8-K/A no later than 71 calendar days after the date this Current Report on Form 8-K was required to be filed.

(b)

Pro Forma Financial Information.

The Company intends to file pro forma information as required by this Item 9.01(b) giving effect to the Transaction under cover of Form 8-K/A no later than 71 calendar days after the date this Current Report on Form 8-K was required to be filed.

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(d)

Exhibits.

 

 

 

Exhibit

    

 

Number

 

Description

2.1

 

Stock Purchase Agreement, dated as of November 6, 2018, by and among the Company, Seller, and, for certain limited purposes, Seller Parent (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on November 9, 2018).

 

2.2

 

Amendment No. 1 to Stock Purchase Agreement, dated as of June 28, 2019, by and among the Company, Seller and Seller Parent.

 

10.1

 

Credit Agreement, dated as of July 1, 2019, by and among the Company, the lenders from time to time party thereto and Barclays Bank PLC, as administrative agent and collateral agent. 

 

99.1

 

Press Release, dated July 1, 2019.

 

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SIGNATURE(S)

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

 

 

 

 

 

    

VICTORY CAPITAL HOLDINGS, INC.

 

 

 

 

 

 

Date: July 1, 2019

 

By:

/s/ Michael D. Policarpo

 

 

 

Name: Michael D. Policarpo

 

 

 

Title: President, Chief Financial Officer and Chief Administrative Officer

 

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Ex_2_2_Amendment

Exhibit 2.2

Execution Version

AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT

This Amendment No. 1 to Stock Purchase Agreement (this “Amendment”), dated as of June 28, 2019, is made by and among Victory Capital Holdings, Inc., a Delaware corporation (“Buyer”), USAA Investment Corporation, a Delaware corporation (“Seller”) and USAA Capital Corporation, a Delaware corporation (“Seller Parent”).  Seller, Buyer and Seller Parent shall be referred to herein collectively as the “Parties”.

RECITALS:

WHEREAS:

A.          Seller, Buyer and, solely for the purposes of Section 6.12,  Section 6.13,  Section 6.15,  Section 6.19,  Section 6.25 and Article 11 thereto, Seller Parent, are party to that certain Stock Purchase Agreement, dated as of November 6, 2018 (the “Purchase Agreement”).

B.          The Parties desire to amend the Purchase Agreement, certain Exhibits to the Purchase Agreement and the Seller Disclosure Schedule pursuant to and in accordance with Section 11.1 of the Purchase Agreement, as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and subject to the terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1.         Definitions.  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Purchase Agreement, as amended hereby.

2.         Amendments.  The Parties hereby agree to amend the Purchase Agreement and the Seller Disclosure Schedule and hereby agree to take the actions and agree with respect to certain matters, in each case, as set forth below.

(a)    The following amendments and additions shall be made to Section 1.1 of the Purchase Agreement:

i.            The term “Ancillary Agreements” is hereby amended and restated in its entirety as follows:

Ancillary Agreements” means (a) the Transition Services Agreement, (b) the Transitional Trademark License Agreements and that certain trademark assignment agreement regarding the assignment of the Trademarks identified on Section 6.15(a) of the Seller Disclosure Schedule to Buyer, to be entered into on the Closing Date by and between IMCO and Victory Capital Management Inc., (c) the New Selected Dealer Agreement for Mutual Funds, (d) duly executed certification from each Acquired Company in accordance with the provisions of Treasury Regulations Sections 1.1445-2(c)(3) and 1.897-2(h), (e) a duly executed copy of the Escrow Agreement dated the Escrow Funding Date, (f) that certain referral agreement regarding the 529 Plan to be entered into on the Closing Date by and between USAA and Buyer, (g)  that certain referral agreement regarding the

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Funds to be entered into following the Closing Date by and between USAA and Buyer, (h)  that certain IRA Custodian Services Agreement to be entered into on the Closing Date by and between Transfer Agent and USAA Federal Savings Bank, a federally chartered savings association,  (i) that certain 403(b) Custody Services Agreement to be entered into on the Closing Date by and between Transfer Agent and IMCO,  (j) the resignation letters of the directors and officers of the Acquired Companies, (k) certificates (or other applicable evidence of ownership in form and substance reasonably acceptable to Buyer) representing the Shares, duly endorsed in blank or accompanied by stock powers duly executed in blank or other duly executed instruments of transfer in form and substance reasonably acceptable to Buyer evidencing the transfer to Buyer of the Shares, (l) the Written Instructions, (m) that certain Books and Records Agreement to be entered into on the Closing Date by and between Seller and Buyer, and  (n) any other certificates, instruments or agreements being executed and/or delivered in connection with this Agreement and the Transactions, including any exhibits or attachments to any of the foregoing or this Agreement.

ii.            The term “Buyer Foundation” is hereby deleted in its entirety from Section 1.1 of the Purchase Agreement.

iii.            The following definition is hereby added immediately following the definition of the term “Closing Date Net Working Capital” in Section 1.1 of the Purchase Agreement:

Closing Documents” means all Ancillary Agreements to which the Parties or their applicable Affiliates are parties and such other certificates, agreements and instruments as are required to be executed and delivered by the Parties or their applicable Affiliates at or prior to the Closing pursuant to this Agreement or as are otherwise reasonably required in connection with this Agreement.

iv.             The following definition is hereby added immediately following the definition of the term “Closing Statement” in Section 1.1 of the Purchase Agreement:

Closing Time” has the meaning set forth in Section 2.2(b).

v.            The following definition is hereby added immediately following the definition of the term “Commitment Period Expiration Date” in Section 1.1 of the Purchase Agreement:

Committee Charter” has the meaning set forth in Section 6.22.

vi.             The following definitions are hereby added immediately following the definition of the term “ERISA Affiliate” in Section 1.1 of the Purchase Agreement:

Escrow Agent” means Barclays Bank PLC, New York Branch, in its capacity as the escrow agent with respect to the Escrow Account.

Escrow Account” has the meaning set forth in Section 2.2(a).

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Escrow Agreement” has the meaning set forth in Section 2.2(a).

Escrow Amount” has the meaning set forth in Section 2.2(a).

Escrow Funding” has the meaning set forth in Section 2.2(a).

Escrow Funding Date” has the meaning set forth in Section 2.2(a).

Escrow Funding Time” has the meaning set forth in Section 2.2(a).

Escrow Release Time” has the meaning set forth in Section 2.2(b).

Notwithstanding any other changes to the Purchase Agreement contained in this Amendment, the term “Closing” in each of the following instances in which it appears in the Purchase Agreement is hereby deleted and replaced with the term “Escrow Funding”:

(I)      solely for purposes of Section 6.3(g) of the Purchase Agreement, the definition of “Interim Period” in Section 1.1 of the Purchase Agreement;

(II)     the definition of “Transition Services Agreement” in Section 1.1 of the Purchase Agreement;

(III)    Section 4.4 of the Purchase Agreement;

(IV)   the first instance of the term “Closing” in Section 6.2(c) of the Purchase Agreement;

(V)     the first instance of the term “Closing” in Section 6.3(g) of the Purchase Agreement;

(VI)   the first instance of the term “Closing” in the first sentence of Section 6.9 of the Purchase Agreement;

(VII)  the first and second sentences of Section 6.10(a) of the Purchase Agreement;

(VIII) the first sentence of Section 6.20(d) of the Purchase Agreement;

(IX)   the first instance of the term “Closing” in Section 6.21(a) of the Purchase Agreement;

(X)     Section 6.26 of the Purchase Agreement; and

(XI)   the fourth and eighth instances of the term “Closing” in Section 11.13(b) of the Purchase Agreement.

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Notwithstanding any other changes to the Purchase Agreement contained in this Amendment, the defined term “Closing Date” in each of the following instances in which it appears in the Purchase Agreement is hereby deleted and replaced with the term “Escrow Funding Date”:

(I)      the definitions of “Company Employees” and “Vendor Employees” in Section 1.1 of the Purchase Agreement;

(II)     the first and second sentences of Section 2.4(b) of the Purchase Agreement;

(III)    the first and second instances of the term “Closing Date” in Section 6.3(g) of the Purchase Agreement;

(IV)   the last sentence of Section 6.8(c) of the Purchase Agreement;

(V)     the first instance of the term “Closing Date” in the last sentence of Section 6.9 of the Purchase Agreement;

(VI)   the first and third instances of the term “Closing Date” in Section 6.16(a) of the Purchase Agreement;

(VII)  Section 6.23 of the Purchase Agreement; and

(VIII) the first instance of the term “Closing Date” in Section 6.24 of the Purchase Agreement.

vii.   The following definition is hereby added immediately following the definition of the term “Fee Letter” in Section 1.1 of the Purchase Agreement:

Financial Literacy Committee has the meaning set forth in Section 6.22.

Financial Literacy Program”  has the meaning set forth in Section 6.22.

viii.          The following definitions are hereby added immediately following the definition of “New Investment Company Advisory Agreement” in Section 1.1 of the Purchase Agreement:

New Selected Dealer Agreement for Mutual Funds” means that certain Selected Dealer Distribution and Shareholder Servicing Agreement to come into effect on the Closing Date by and between IMCO and Victory Capital Advisers, Inc. with substantially similar terms to those included in the Selected Dealer Agreement and the Agency Agreement.

ix.             The term “Pro Rata Bonus Amount” is hereby amended and restated in its entirety as follows:

Pro Rata Bonus Amount” means the sum of (a) for each Continuing Employee who participated in the USAA Corporate Bonus Plan immediately prior to the

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Closing that is not otherwise a Retiree Eligible Employee, an amount equal to the target annual incentive bonus applicable to such Continuing Employee for the calendar year in which Closing occurs multiplied by a fraction, the numerator of which is the number of days during such calendar year preceding the Closing Date and the denominator of which is three hundred sixty-five (365) plus (b) for each Continuing Employee who participated in the USAA Asset Management Company Variable Pay Program immediately prior to the Closing, an amount equal to the target bonus applicable to such Continuing Employee pursuant to the USAA Asset Management Company Variable Pay Program for the calendar year in which the Closing occurs multiplied by a fraction, the numerator of which is the number of days during such calendar year preceding the Closing Date and the denominator of which is three hundred sixty-five (365).

x.            The definition of “Target Net Working Capital” is hereby amended and restated in its entirety as follows:

Target Net Working Capital” means $18,430,000.

xi.             The definition of “Transitional Trademark License Agreement” is hereby amended and restated in its entirety as follows:

Transitional Trademark License Agreements” means, together, (a) the Transitional Trademark License Agreement, substantially in the form of Exhibit D, by and between Buyer and USAA, and (b) the Additional Transitional Trademark License Agreement to be entered into on the Closing Date, by and between Buyer and USAA, regarding rights and obligations under the 529 Plan.

The defined term “Transitional Trademark License Agreement” in each instance in which it appears in the Purchase Agreement is hereby deleted and replaced with the defined term “Transitional Trademark License Agreements.

xii.            The following definition is hereby added immediately following the definition of “Vendor Employees” in Section 1.1 of the Purchase Agreement:

Volcker Rule” means §619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. §1851).

xiii.          The following definition is hereby added immediately following the definition of “willful breach” in Section 1.1 of the Purchase Agreement:

Written Instructions” has the meaning set forth in Section 2.2(a).

(b)    Notwithstanding anything to the contrary in the Purchase Agreement, including, without limitation, the definition of “Covered Transaction Costs”, to the extent not reflected in the Closing Date Net Working Capital as current liabilities of the Acquired Companies, the amount of any retention bonuses payable pursuant to Section 6.27 of the Seller Disclosure Schedule to Specified Employees after the Closing (the “Specified Employee Retention Bonus Amounts”), shall be considered “Covered Transaction Costs” for purposes of the Purchase Agreement; provided, that with respect to any Specified Employee Retention Bonus Amounts included in Covered

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Transaction Costs pursuant hereto that are cancelled or forfeited prior to their payment, or are subsequently repaid by any Specified Employee to Buyer or any of its Affiliates pursuant to the terms of the applicable retention bonus agreement, within ten (10) Business Days following the date on which such cancellation, forfeiture or repayment occurs, Buyer shall pay, or shall cause to be paid, to Seller (by wire transfer of immediately available funds to an account(s) designated by Seller) an amount equal to such cancelled, forfeited or repaid portion of such Specified Employee Retention Bonus Amounts.  Buyer shall promptly notify Seller of any event that would result in the cancellation, forfeiture or repayment of any Specified Employee Retention Bonus Amounts.  Amounts payable pursuant to this clause 2(b) of this Amendment will be subject to adjustment in accordance with Section 2.4(d) of the Seller Disclosure Schedule.  For the avoidance of doubt, (i) Buyer and its Affiliates shall use commercially reasonable efforts to enforce any clawback or forfeiture provision applicable to any Specified Employee Retention Bonus Amounts paid or payable by Buyer or any of its Affiliates against any Specified Employee and (ii) neither Buyer nor any of its Affiliates shall have any repayment obligation unless and until it receives repayment from a Specified Employee.  Further, neither Buyer nor any of its Affiliates shall have any repayment obligation in respect of amounts repaid by any Specified Employee directly to Seller.  For purposes hereof, “commercially reasonable efforts” shall mean providing such individual with written notice of his or her repayment obligation upon, or promptly following, the occurrence of the event giving rise to such obligation.

(c)    Notwithstanding anything to the contrary in the Purchase Agreement, to the extent that any portion of any retention bonuses paid pursuant to (x) the retention bonus agreements set forth under Items 13 and 14 under the heading “Parent Plans” in Section 4.14(a) of the Seller Disclosure Schedule or (y) the retention bonus agreements identified as Items 2, 4 and 6 under the heading “Acquired Company Plans” in Section 4.14(a) of the Seller Disclosure Schedule, are subsequently repaid by the applicable individual who is a party to such agreement to Buyer or any of its Affiliates following payment thereof pursuant to the terms of the applicable retention bonus agreement, within ten (10) Business Days following the date on which such repayment occurs, Buyer shall pay, or shall cause to be paid, to Seller (by wire transfer of immediately available funds to an account(s) designated by Seller) an amount equal to such repaid portion of such retention bonus amount.  Buyer shall promptly notify USAA of any event that would result in the repayment of any retention bonuses described in this clause 2(c) of this Amendment.  Amounts payable pursuant to this clause 2(c) of this Amendment will be subject to adjustment in accordance with Section 2.4(d) of the Seller Disclosure Schedule.  For the avoidance of doubt, neither Buyer nor any of its Affiliates shall have any repayment obligation unless and until it receives repayment from an individual.  Further, neither Buyer nor any of its Affiliates shall have any repayment obligation in respect of retention bonus amounts repaid by any individual directly to Seller.

(d)    Section 2.2 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Escrow Funding; Escrow Release; Closing

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(a)  Notwithstanding anything to the contrary in Section 2.3, if all of the conditions set forth in Article 7  (without regard to any reference to “Closing” or “Closing Date” in Article 7 or in any related defined terms, which references shall be deemed to refer to “Escrow Funding” or “Escrow Funding Date”, as applicable, solely for this purpose) have been satisfied or waived by the Parties entitled to the benefits thereto as of the Escrow Funding Time (as defined below), other than the consummation of the Closing at the Closing Time pursuant to this Agreement, but subject to the Closing occurring at the Closing Time pursuant to this Agreement, then (i) commencing at 11:00 a.m. (prevailing Central Time) on June 28, 2019 (such time and date, the “Escrow Funding Time” and such date, the “Escrow Funding Date”), which date the Parties acknowledge and agree is at least three (3) Business Days following the last day of the Marketing Period, (A) Buyer shall deposit, or cause to be deposited (including through any Financing Source), with the Escrow Agent in an escrow account (which escrow account shall be designated by the Escrow Agent to Buyer at least two (2) Business Days prior to the Escrow Funding Date) (the “Escrow Account”), an aggregate cash amount (the “Escrow Amount”) in immediately available funds equal to the amount of the Estimated Closing Purchase Price set forth on the Seller Statement (the “Escrow Funding”), (B) Buyer shall deliver, or cause to be delivered (including through any Financing Source), irrevocable written instructions to the Escrow Agent to release the Escrow Amount from the Escrow Account at the Escrow Release Time (as defined below) in such amounts and to the payees as set forth in such written instructions (the “Written Instructions”), and (C) the Parties shall, or shall cause, all Closing Documents to be (1) duly executed and dated as of the Closing Date, and (2) irrevocably delivered into escrow at the Escrow Funding Time pending automatic release thereof at the Closing Time as further provided in Section 2.2(b) below, and (ii) the Escrow Amount shall be automatically released from the Escrow Account at the Escrow Release Time in accordance with the Written Instructions (including, for the avoidance of doubt, the Estimated Closing Purchase Price which shall be released to Seller at the Escrow Release Time) as further described in Section 2.2(b) below and in full satisfaction of Buyer’s obligations to fund the Estimated Closing Purchase Price at the Closing.  Following delivery of the Written Instructions to the Escrow Agent pursuant to this Section 2.3(a), Buyer shall not, and shall cause its Financing Sources not to, amend, waive, modify or terminate the Written Instructions or the escrow agreement entered into by and between Buyer and the Escrow Agent (the “Escrow Agreement”), in any respect, or transmit any additional instructions to Escrow Agent thereunder, and without limiting the foregoing, Buyer shall deliver duly executed copies of the Written Instructions and the Escrow Agreement to Seller at the Escrow Funding.  Seller is an express third party beneficiary of clause 5, clause 12.1 and clause 20 of the Escrow Agreement solely for the purpose of enforcing the Escrow Agent’s and any successor’s obligations to release funds from the Escrow Account in accordance with the Written Instructions.  Buyer hereby agrees that if Seller has sought to enforce, and as a result of a final, non-appealable determination by a court of competent jurisdiction fails to enforce, the Escrow Agent’s and its successor’s obligations to release funds from the Escrow Account in accordance with the Written Instructions, then Buyer will enforce the Escrow Agent’s obligations under the Escrow Agreement to release the Escrow

7

 

Amount from the Escrow Account at the Escrow Release Time in accordance with the Written Instructions if the Escrow Agent fails to do so, including by commencing a Proceeding against the Escrow Agent to compel the Escrow Agent to release the funds from the Escrow Account in accordance with the Written Instructions.  Notwithstanding anything to the contrary herein, any representations or warranties or certifications to be made by any Party in any Closing Document so deposited into escrow pursuant to this Section 2.2(a) shall be made at and as of the Closing Date (and, where applicable, as of the date of this Agreement) or such other date as may be specified in such Closing Document, and not as of the Escrow Funding Date.

(b)  Notwithstanding anything to the contrary in Section 2.3, subject only to the Escrow Funding occurring at the Escrow Funding Time pursuant to this Agreement, the consummation of the purchase and sale of the Shares (the “Closing”) shall take place and become effective at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, commencing at 12:00:01 a.m. (prevailing Central Time) on July, 1, 2019 (such date, the “Closing Date” and such time and date, the “Closing Time”) and all Closing Documents irrevocably delivered into escrow at the Escrow Funding pursuant to Section 2.2(a) shall be automatically released without further action by the Parties or any other Person; provided, that the payment of the Estimated Closing Purchase Price and any other amounts required to be released from the Escrow Account or otherwise paid by Buyer pursuant to this Agreement at the Closing shall commence at 7:30 a.m. (prevailing Central Time) on the Closing Date (such time and date, the “Escrow Release Time”).  The Parties hereby acknowledge and agree that for all purposes (including Tax, accounting and financial reporting purposes), the Closing shall be deemed to have occurred at the Closing Time on the Closing Date; provided, that the foregoing shall not be deemed to modify any requirement pursuant to this Agreement that any amount be calculated as of the Calculation Time as specified herein and notwithstanding the foregoing, the Covered Transaction Costs shall be calculated under this Agreement as of the Closing Time.

(c)  Immediately following the close of business on the Escrow Funding Date, Buyer and Seller shall, and shall cause their respective Affiliates to, commence, and use their reasonable best efforts to complete on or prior to the Closing, any and all accounts and systems conversions, migrations and transfers and all other actions reasonably necessary to ensure that the Business may be operated by Buyer and its Subsidiaries on their systems and platforms as of the Escrow Release Time.

(e)    Notwithstanding anything to the contrary in this Amendment, (i) nothing set forth in this Amendment shall be deemed to limit or diminish the rights and obligations of the Indemnified Parties or the Indemnifying Parties under the Purchase Agreement, and (ii) if any of the conditions set forth in Article 7 of the Purchase Agreement (without regard to any reference to “Closing” or “Closing Date” in Article 7 of the Purchase Agreement or in any related defined terms, which references shall be deemed to refer to “Escrow Funding” or “Escrow Funding Date”, as applicable, solely for this purpose) are not satisfied or waived by the Parties entitled to the benefits thereto on or prior to the Escrow Funding Time, other than the consummation of the Closing at

8

 

the Closing Time pursuant to the Purchase Agreement, then the amendments to the Purchase Agreement set forth herein relating to the Escrow Funding (including with respect to any defined terms set forth in Section 1.1 of the Purchase Agreement and the amendments to Section 2.2 and Section 2.3 of the Purchase Agreement set forth above) shall be void ab initio and shall be of no force or effect.

(f)     Section 2.6(e) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Seller Access.  From and after the date on which Seller receives a Buyer Earn Out Statement for a particular Earn Out Year until the date on which the Earn Out Payment for such Earn Out Year is finally determined or agreed pursuant to this Section 2.6, upon reasonable advance notice and in a manner so as to not unreasonably interfere with the normal business operations of Buyer and its Affiliates, Buyer shall (and shall cause each of its applicable Affiliates to) provide to Seller and Seller’s Affiliates and their accountants and other advisors (and each of their respective authorized representatives) during normal business hours access to the books and records of Buyer and its Affiliates (and Seller and Seller’s Affiliates and their accountants and other advisors (and each of their respective authorized representatives) shall be permitted to make copies of such books and records) and to Buyer’s and its applicable Affiliates’ respective personnel and accountants for the purposes of reviewing and auditing the Buyer Earn Out Statement and Buyer Calculated Earn Out Payment.

(g)    The following covenant is hereby added as a new Section 2.6(h) of the Purchase Agreement:

Earn Out Data. Buyer shall prepare and deliver to Seller, no later than thirty (30) days after the end of each calendar quarter of each Earn Out Year, a written statement setting forth the total net assets under management of each Fund that is taken into account in the calculation of the Earn Out Payment for such Earn Out Year pursuant to this Section 2.6.

(h)    Section 6.3(d) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Buyer acknowledges and agrees that Seller and its Affiliates shall have the right to retain copies of all books, data, files, information, materials and records in any form or media of the Acquired Companies relating to periods ending on or prior to the Closing Date solely to the extent (i) relating to information (including employment and medical records) regarding the Company Employees, (ii) required by any Governmental Authority, including pursuant to any Applicable Law or regulatory request or for purposes of preparing or filing any Tax Return or participating in an audit or other proceeding with respect to Taxes, (iii) as may be necessary for Seller or its Affiliates to perform their respective obligations pursuant to this Agreement or any of the Ancillary Agreements, or (iv) relating to historical member data of the Acquired Companies for continued internal business use by Seller and its Affiliates, in each case, subject in all respects to compliance with all applicable privacy Laws and Section 6.3(f) and Section 6.13.

9

 

(i)     Section 6.3(f) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

(f)  From and after the Closing, Seller shall, and shall cause its Affiliates and its and their respective representatives to, keep confidential, and not use any information relating to or obtained from, Buyer or the Acquired Companies or their Affiliates, regardless of the form in which such information is communicated or maintained, and all notes, reports, analyses, compilations, studies, files or other documents or material, whether prepared by such party, its Affiliates, or its representatives, that are based on, contain or otherwise reflect such information, in the same manner as and to the same extent that Buyer is required to keep Evaluation Material (as defined in the Confidentiality Agreement) confidential, and not use such Evaluation Material, under the Confidentiality Agreement, such confidentiality and use provisions applied to Seller mutatis mutandis; provided that nothing in this Section 6.3 shall limit Seller’s and Seller Parent’s use of such Evaluation Material in evaluating and enforcing its rights under this Agreement and the Ancillary Agreements and in defending claims from Buyer and Buyer Indemnitees; provided,  further, that Seller and its Affiliates shall have the right to use data retained pursuant to Section 6.3(d)(iv);  provided,  however, that Seller and its Affiliates shall use such data for internal business purposes and only share such data with a third party in connection with such internal business purposes, and shall not otherwise share such data with, or directly or indirectly provide, grant access to, transfer or convey such data to, any third party, including any third-party acquirer of 50% or more of the outstanding equity interests in, or assets of, Seller, IMCO or any Affiliate of the foregoing Persons or any successor-in-interest of the foregoing Persons.

(j)     Section 6.10(c)(i) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

(i) for the period running through the end of the calendar year in which the Closing Date occurs, Buyer shall (or shall cause one of its Affiliates or the Acquired Companies to) make bonus payments, as calculated by Seller in good faith pursuant to the USAA Asset Management Company Variable Pay Program to each Continuing Employee in amounts equal to those that would have been provided pursuant to the USAA Asset Management Company Variable Pay Program, as in effect as of immediately prior to the Closing Date, subject to any and all terms, eligibility requirements and similar conditions set forth in the USAA Asset Management Company Variable Pay Program, which shall continue to apply mutatis mutandis;

(k)    Section 6.10(h) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

With respect to each of the Parent Plans set forth in Section 6.10(h) of the Seller Disclosure Schedule (each, a “Deferred Compensation Plan”), Seller shall take (or cause to be taken) all actions that are necessary or appropriate to cause each Deferred Compensation Plan to be terminated and liquidated with respect to each Company Employee, effective as of the Closing Date, and subject to the Closing occurring, in accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(B).  Seller shall cause the accounts of such participants to be paid no later than twelve (12) months following the Deferred Compensation Plan Termination Date. 

10

 

(l)     Section 6.10(j) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

After the Closing, (i) within ten (10) Business Days prior to the date that bonuses are paid by Buyer or its Affiliates pursuant to Section 6.10(c)(i) and Section 6.10(f)(i) in respect of the Pre-Closing Bonus Period, Seller shall pay, or cause to be paid, to Buyer (by wire transfer of immediately available funds to an account(s) designated by Buyer) an amount equal to the difference, if any, between (x) the bonus amounts that are payable in respect of the Pre-Closing Bonus Period based on (A) with respect to the bonuses paid pursuant to the USAA Corporate Bonus Plan the actual corporate performance score awarded by the USAA Board for the calendar year in which the Closing occurs and (B) with respect to  the bonuses paid pursuant to Section 6.10(c)(i), the actual performance as calculated by Seller pursuant to Section 6.10(c)(i),  minus  (y) all Pro Rata Bonus Amounts that were included as a component of the Closing Purchase Price, as finally determined pursuant to Section 2.4, and (ii) within five (5) Business Days after the date that bonuses are paid pursuant to Section 6.10(c)(i) and Section 6.10(f)(i) in respect of the calendar year in which the Closing occurs, Buyer shall repay, or cause to be repaid, to Seller (by wire transfer of immediately available funds to an account(s) designated by Seller) an amount equal to the difference, if any, between (x) the aggregate amount of all Pro Rata Bonus Amounts that were included as a component of the Closing Purchase Price, as finally determined pursuant to Section 2.4, and any amounts remitted pursuant to clause  (i) hereof, minus  (y) the total amount, if any, of bonuses that are actually paid by Buyer or its Affiliates pursuant to Section 6.10(c)(i) and Section 6.10(f)(i)

(m)   Notwithstanding anything in the Purchase Agreement to the contrary, including, without limitation, Section 6.1(a) or Section 6.10 thereof, and the corresponding sections of the Seller Disclosure Schedule, the Parties hereby acknowledge and agree that, prior to Closing, Seller shall either (i) transfer out of the Adviser the employment of, or (ii) terminate the employment of, the Persons set forth on Annex I attached to this Amendment, and such Persons shall no longer be treated as Company Employees or Vendor Employees, as applicable, for purposes of the Purchase Agreement.  For the avoidance of doubt, Seller shall be solely responsible for the payment of severance to the Persons set forth on Annex I attached to this Amendment; provided,  however, that the amounts paid or payable to such Persons (which shall be determined in accordance with Section 2.4(d) of the Seller Disclosure Schedule) shall be added to the amounts described on Section 1.1-CTC(II) of the Seller Disclosure Schedule; provided, further, that (x) if any such individual retires or accepts another position with Seller or its Affiliates, such that he or she would not be entitled to receive severance pursuant to the terms of Seller Severance Plans, then Buyer will have no economic liability in respect of such individual and (y) with respect to any severance amounts described in this Section 2(m) that are subsequently repaid to Seller or any of its Affiliates pursuant to the terms of the applicable Seller Severance Plan, Seller shall pay, or shall cause to be paid, to Buyer (by wire transfer of immediately available funds to an account(s) designated by Seller) an amount equal to such repaid portion of such severance amounts.  Seller shall promptly notify Buyer of any event that would result in the repayment of any such severance amount.  For the avoidance of doubt, (i) Seller and its Affiliates shall use commercially reasonable efforts to enforce any clawback provision applicable to any severance amounts described in this clause 2(m) of this Amendment paid or payable by Seller or any of its Affiliates against any

11

 

individual and (ii) neither Seller nor any of its Affiliates shall have any repayment obligation unless and until it receives repayment from an individual.  Further, neither Seller nor any of its Affiliates shall have any repayment obligation in respect of severance amounts repaid by any individual directly to Buyer or any of its Affiliates.  In addition, the Parties acknowledge and agree that the Annexes II and III attached to this Amendment shall represent the final and definitive versions of Sections 1.1-CE and 1.1-VE of the Seller Disclosure Schedule, respectively.

(n)    Section 6.19 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Invested Capital Commitments.  From and after the Closing, except as required by Law (other than the Volcker Rule, in respect of which clause (c) of this Section 6.19 shall apply), with respect to each Fund set forth on Exhibit F that is a USAA Fund, Seller Parent hereby commits to cause its applicable Affiliate(s) not to withdraw any Invested Capital from such Fund below an amount equal to the minimum Invested Capital Amount set forth opposite such Fund’s name on Exhibit F under the column “USAA Capital Commitment” prior to the second (2nd) anniversary of the Closing Date (each such date, a “Commitment Period Expiration Date”); provided,  however, that the foregoing restriction shall not apply to any Tax distributions or other incidental distributions generally applicable to investors in the relevant Funds.  Notwithstanding anything in the foregoing to the contrary, (a)(i) Seller and its Affiliates are permitted to withdraw any amounts from any Fund so long as Seller and its Affiliates substantially concurrently replace such amounts so that after such replacement the Invested Capital in such Fund equals the minimum Invested Capital Amount for such Fund, and (ii) nothing in this Section 6.19 shall bind any foundation sponsored by Seller or its Affiliates so long as, if such foundation withdraws any amounts from a Fund, Seller and its Affiliates substantially concurrently replace such amounts so that after such replacement the Invested Capital in such Funds equals the minimum Invested Capital Amount for such Fund, (b) on and after a Commitment Period Expiration Date with respect to any Fund or from and after the occurrence of a Fund Trigger Event with respect to any Fund, (x) the restrictions described in the immediately preceding sentence shall be of no further force and effect with respect to such Fund and any Invested Capital in such Fund and (y) Seller and its Affiliates shall be permitted to withdraw all or a portion of the aggregate amount of any and all Invested Capital in respect of such Fund in accordance with such Fund’s withdrawal and redemption procedures upon delivering a notice of such withdrawal to Buyer and/or Adviser in respect thereof, and (c) Seller and its Affiliates shall be permitted to withdraw all or a portion of the aggregate amount of any and all Invested Capital with respect to any Fund set forth on Exhibit F in accordance with such Fund’s withdrawal and redemption procedures upon delivering a notice of such withdrawal to Buyer and/or Adviser in respect thereof solely to the extent necessary to satisfy the requirements of the Volcker Rule; provided, that (i) Seller and its Affiliates substantially concurrently reinvest any such withdrawn amount in one or more other Funds that are USAA Funds as of the Closing Date as selected by Buyer, (ii) if Buyer selects two or more such other Funds, then the allocation of such withdrawn amount to be reinvested by Seller and its Affiliates among such other Funds shall be determined by Buyer, (iii) if such other Fund was not listed on Exhibit F prior to such withdrawal, then the amount so reinvested in such other Fund shall be the minimum Invested Capital Amount for such other Fund and such other Fund shall automatically

12

 

be deemed listed on Exhibit F for all purposes under this Agreement (including the other provisions of this Section 6.19) without further action by the Parties, and (iv) if such other Fund was already set forth on Exhibit F prior to such withdrawal, then the minimum Invested Capital Amount for such other Fund set forth on Exhibit F shall be automatically increased by such amount reinvested pursuant to this clause (c) without further action by the Parties.

(o)    Section 6.20(d) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

[Reserved.]

(p)    Section 6.21 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Retail Brokerage.  On the Escrow Funding Date, (a) Seller shall cause (i) IMCO and Adviser to terminate the Selected Dealer Agreement, (ii) IMCO and Transfer Agent to terminate the Agency Agreement and (iii) IMCO to enter into the New Selected Dealer Agreement for Mutual Funds and (b) Buyer shall cause Victory Capital Advisers, Inc. to enter into the New Selected Dealer Agreement for Mutual Funds.  From and after the Closing, Buyer shall cause Victory Capital Advisers, Inc. to perform its obligations (including payment obligations) under the New Selected Dealer Agreement for Mutual Funds.

(q)    Section 6.22 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Financial Literacy Program.  Over the course of the twelve (12)-month period commencing on the Closing Date, Buyer shall contribute (or cause to be contributed) or spend (or cause to be spent) an aggregate amount in cash equal to $1,000,000 either through donations to certain charitable organizations or through developing financial literacy programs managed by or on behalf of Buyer or any of its Affiliates, in each case, in furtherance of developing and improving the financial literacy of the military community both nationally and in their local communities and the other objectives described in Exhibit G and the Committee Charter (defined below) (collectively, the “Financial Literacy Program”).  Over the course of each successive twelve (12)-month period commencing on the first anniversary of the Closing Date, Buyer or its applicable Affiliate(s) shall contribute (or cause to be contributed) to, or spend (or cause to be spent) on, the Financial Literacy Program an aggregate amount in cash equal to 0.25% of Buyer’s aggregate revenues that are derived from the Businesses of the Acquired Companies during such twelve (12)-month period in accordance with the provisions of the Committee Charter.  Following the Closing, so long as the Transitional Trademark License Agreements are each in effect and have not been terminated in accordance with their terms, Buyer or its applicable Affiliate will appoint two (2) individuals designated by Seller to serve as members of the Committee for Financial Literacy for Military Members and their Families that Buyer or any Affiliate of Buyer intends to establish on or following the Closing Date to supervise, manage and develop the Financial Literacy Program (any such committee, the “Financial Literacy Committee”), in each case, subject in all respects to the provisions of the charter of the Financial Literacy Committee (such charter, the

13

 

Committee Charter”).  Buyer’s and its Affiliates’ contributions and expenditures pursuant to this Section 6.22 shall conform in all material respects with the terms and conditions of Exhibit G and the Committee Charter and without limiting the foregoing, (a) the implementation of (and Buyer’s obligations in respect of) the Financial Literacy Program and the activities and composition of the Financial Literacy Committee shall be subject to, and completed in accordance with, the provisions of Exhibit G and the Committee Charter, (b) Buyer and its applicable Affiliate(s) shall be permitted to defer the contribution or spending of any amounts required to be contributed or spent (or caused to be contributed or spent) under this Section 6.22 that are not so contributed or spent (or caused to be contributed or spent) in any given twelve (12)-month period in accordance with the Committee Charter, and (c) in the event of any conflict between this Section 6.22, on the one hand, and the Committee Charter or Exhibit G, on the other hand, the provisions of the Committee Charter or Exhibit G, as applicable, shall control.  Notwithstanding the foregoing, Buyer or any of its Affiliates may, in lieu of Buyer or its Affiliates performing the foregoing obligations of Buyer in this Section 6.22, create or establish a charitable foundation through which Buyer or such Affiliates of Buyer may perform such obligations of Buyer.

(r)     Exhibit F of the Purchase Agreement is hereby amended and restated in its entirety as set forth on Exhibit F to this Amendment.

(s)    The reference to “Exhibit G – Buyer Foundation Program” under the heading “Exhibits” in the Table of Contents shall hereby be amended and restated in its entirety to “Exhibit G – Financial Literacy Program”.

(t)     The following amendments shall be made to Exhibit G of the Purchase Agreement:

i.            The heading of Exhibit G shall hereby be amended and restated in its entirety to “Financial Literacy Program”.

ii.            The last sentence of the first paragraph shall hereby be amended and restated in its entirety as follows:

“The platform will be used exclusively to serve the military community, with a focus on initiatives that directly support USAA members.”

iii.            The last sentence of the paragraph under the subheading “Purpose” shall hereby be amended and restated in its entirety as follows:

“The purpose of Buyer’s financial literacy program will be to lead and support initiatives that educate military members and their families on how to invest to achieve specific long-term financial goals, such as sending a child to college or achieving a financially comfortable retirement.”

(u)    The following covenant is hereby added as a new Section 6.28 of the Purchase Agreement:

Resignations.  Seller shall or shall cause each of the directors and officers of the Acquired Companies set forth on Exhibit J attached to this Agreement to resign as

14

 

directors or officers of the Acquired Companies, as applicable, effective immediately at the Closing Time. At the Escrow Funding, Seller shall deliver, or cause to be delivered, to Buyer a duly executed resignation letter from each such director and officer of the Acquired Companies in form and substance reasonably acceptable to Buyer with respect to the foregoing and each such resignation letter shall be effective as of the Closing Time.

(v)    A reference to “Exhibit J – Resignations” under the heading “Exhibits” in the Table of Contents shall hereby be added to the Table of Contents.

(w)   Section 6.27 of the Seller Disclosure Schedule is hereby amended and restated in its entirety as set forth in Annex IV to this Amendment.

(x)    The form of Transition Services Agreement attached as Exhibit C to the Purchase Agreement is hereby deleted and replaced in its entirety with the form attached as Annex V to this Amendment.

(y)    Notwithstanding anything to the contrary in this Amendment or the Purchase Agreement, the Parties agree that the fees, costs and expenses payable by the Acquired Companies following the Closing pursuant to any Ancillary Agreement (e.g., transition services fees payable by Buyer to an Affiliate of Seller under the Transition Services Agreement), but excluding for the avoidance of doubt any fees, costs and expenses incurred by the Acquired Companies on or prior to the Closing in respect of the preparation and execution of this Amendment, the Purchase Agreement and any Ancillary Agreement, shall not be included in the calculation of the amounts described in clause (c) of the definition of “Covered Transaction Costs” in the Purchase Agreement.

3.         No Other Variation. Except to the extent set forth in this Amendment, none of the terms and provisions of the Purchase Agreement or the obligations and rights of the parties to the Purchase Agreement shall be deemed amended, modified or waived and such terms, provisions, obligations and rights which shall continue unaffected in accordance with the Purchase Agreement.  References to the Purchase Agreement in any other document or agreement (including references to “this Agreement” in the Purchase Agreement) will be deemed references to the Purchase Agreement, as amended by this Amendment, regardless of whether such documents or agreements refer to any amendments to the Purchase Agreement.

4.         MiscellaneousArticle 11 of the Purchase Agreement is incorporated herein by reference mutatis mutandis and, to the extent applicable, will govern the provisions of this Amendment.

[Signature Page Follows.]

 

15

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date first above written.

 

VICTORY CAPITAL HOLDINGS, INC.

 

By:

/s/ David C. Brown

 

Name:

David C. Brown

 

Title:

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

USAA Investment Corporation

 

By:

/s/ Daniel S. McNamara

 

Name:

Daniel S. McNamara

 

Title:

President

 

 

 

 

 

 

 

USAA CAPITAL Corporation

 

By:

/s/ Laura Bishop

 

Name:

Laura Bishop

 

Title:

President

 

 

Ex_10_1_Credit

Exhibit 10.1

Execution Version

 

 

 

 

 

CREDIT AGREEMENT

 

Dated as of July 1, 2019 among

VICTORY CAPITAL HOLDINGS, INC.,

as Borrower,

 

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

 

BARCLAYS BANK PLC,

as Administrative Agent, Swingline Lender and an Issuing Bank,

 

BARCLAYS BANK PLC, RBC CAPITAL MARKETS*

and

BMO CAPITAL MARKETS CORP.,

as Joint Term Lead Arrangers and Joint Term Bookrunners,

 

BARCLAYS BANK PLC, RBC CAPITAL MARKETS,*

BMO CAPITAL MARKETS CORP., KEYBANK NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A., BOFA SECURITIES, INC.

and

MORGAN STANLEY SENIOR FUNDING, INC.,

as Joint Revolving Lead Arrangers and Joint Revolving Bookrunners, and

BARCLAYS BANK PLC,

as Syndication Agent

 

* RBC Capital Markets is a brand name for the capital markets activities of Royal Bank of Canada and its affiliates.

 

Table of Contents

 

 

 

 

 

 

Page

ARTICLE 1

DEFINITIONS

1

Section 1.01.

Defined Terms

1

Section 1.02.

Classification of Loans and Borrowings

65

Section 1.03.

Terms Generally

65

Section 1.04.

Accounting Terms; GAAP

66

Section 1.05.

Effectuation of Transactions

67

Section 1.06.

Timing of Payment or Performance

67

Section 1.07.

Times of Day

67

Section 1.08.

Cashless Rollovers

67

Section 1.09.

Certain Calculations and Tests

68

Section 1.10.

Divisions

69

Section 1.11.

Successor LIBO Rate Index

69

ARTICLE 2

THE CREDITS

70

Section 2.01.

Commitments

70

Section 2.02.

Loans and Borrowings

70

Section 2.03.

Requests for Borrowings

71

Section 2.04.

Swingline Loans

72

Section 2.05.

Letters of Credit

74

Section 2.06.

[Reserved]

79

Section 2.07.

Funding of Borrowings

79

Section 2.08.

Type; Interest Elections

80

Section 2.09.

Termination and Reduction of Commitments

81

Section 2.10.

Repayment of Loans; Evidence of Debt

81

Section 2.11.

Prepayment of Loans

83

Section 2.12.

Fees

89

Section 2.13.

Interest

90

Section 2.14.

Alternate Rate of Interest

91

Section 2.15.

Increased Costs

91

Section 2.16.

Break Funding Payments

93

Section 2.17.

Taxes

93

Section 2.18.

Payments Generally; Allocation of Proceeds; Sharing of Payments

97

Section 2.19.

Mitigation Obligations; Replacement of Lenders

98

Section 2.20.

Illegality

100

Section 2.21.

Defaulting Lenders

100

 

 

 

i

Table of Contents

(Cont.)

 

 

 

Page

 

 

Page

Section 2.22.

Incremental Credit Extensions

103

Section 2.23.

Extensions of Loans and Revolving Credit Commitments

107

Section 2.24.

Inability to Determine Rates

110

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

111

Section 3.01.

Organization; Powers

111

Section 3.02.

Authorization; Enforceability

111

Section 3.03.

Governmental Approvals; No Conflicts

111

Section 3.04.

Financial Condition; No Material Adverse Effect

111

Section 3.05.

Properties

112

Section 3.06.

Litigation and Environmental Matters

112

Section 3.07.

Compliance with Laws

112

Section 3.08.

Investment Company Status

113

Section 3.09.

Taxes

113

Section 3.10.

ERISA

113

Section 3.11.

Disclosure

113

Section 3.12.

Solvency

114

Section 3.13.

Capitalization and Subsidiaries

114

Section 3.14.

Security Interest in Collateral

114

Section 3.15.

Labor Disputes

114

Section 3.16.

Federal Reserve Regulations

114

Section 3.17.

Senior Indebtedness

114

Section 3.18.

Use of Proceeds

114

Section 3.19.

OFAC; PATRIOT ACT and FCPA

114

Section 3.20.

Certain Regulatory Matters.

115

ARTICLE 4

CONDITIONS

116

Section 4.01.

Closing Date

116

Section 4.02.

Each Credit Extension

119

ARTICLE 5

AFFIRMATIVE COVENANTS

120

Section 5.01.

Financial Statements and Other Reports

120

Section 5.02.

Existence

123

Section 5.03.

Payment of Taxes.

124

Section 5.04.

Maintenance of Properties

124

Section 5.05.

Insurance

124

Section 5.06.

Inspections

124

 

 

 

ii

Table of Contents

(Cont.)

 

 

 

 

 

 

Page

Section 5.07.

Maintenance of Book and Records

125

Section 5.08.

Compliance with Laws

125

Section 5.09.

Designation of Subsidiaries

125

Section 5.10.

Use of Proceeds

126

Section 5.11.

Covenant to Guarantee Obligations and Give Security

126

Section 5.12.

Maintenance of Ratings

128

Section 5.13.

Further Assurances

128

ARTICLE 6

NEGATIVE COVENANTS

129

Section 6.01.

Indebtedness

129

Section 6.02.

Liens

134

Section 6.03.

[Reserved]

138

Section 6.04.

Restricted Payments; Restricted Debt Payments

138

Section 6.05.

Burdensome Agreements

142

Section 6.06.

[Reserved]

144

Section 6.07.

Fundamental Changes; Disposition of Assets

144

Section 6.08.

Sale and Lease-Back Transactions

148

Section 6.09.

Transactions with Affiliates

148

Section 6.10.

Lines of Business

150

Section 6.11.

Amendments or Waivers of Organizational Documents

150

Section 6.12.

Amendments of or Waivers with Respect to Restricted Debt

150

Section 6.13.

Fiscal Year

150

Section 6.14.

Financial Covenant

150

ARTICLE 7

EVENTS OF DEFAULT

151

Section 7.01.

Events of Default

151

ARTICLE 8

THE ADMINISTRATIVE AGENT

155

Section 8.01.

General Agency Provisions

155

Section 8.02.

Certain ERISA Matters

162

ARTICLE 9

MISCELLANEOUS

164

Section 9.01.

Notices

164

Section 9.02.

Waivers; Amendments

166

Section 9.03.

Expenses; Indemnity

172

Section 9.04.

Waiver of Claim.

174

Section 9.05.

Successors and Assigns

174

Section 9.06.

Survival

182

 

 

 

iii

Table of Contents (Cont.)

 

 

 

 

 

 

Page

Section 9.07.

Counterparts; Integration; Effectiveness

182

Section 9.08.

Severability

183

Section 9.09.

Right of Setoff

183

Section 9.10.

Governing Law; Jurisdiction; Consent to Service of Process

183

Section 9.11.

Waiver of Jury Trial

184

Section 9.12.

Headings

184

Section 9.13.

Confidentiality

184

Section 9.14.

No Fiduciary Duty

186

Section 9.15.

Several Obligations

186

Section 9.16.

USA PATRIOT Act

186

Section 9.17.

Disclosure of Agent Conflicts

186

Section 9.18.

Appointment for Perfection

186

Section 9.19.

Interest Rate Limitation

187

Section 9.20.

Conflicts

187

Section 9.21.

Release of Loan Guarantors

187

Section 9.22.

Judgment Currency

187

Section 9.23.

Acknowledgement and Consent to Bail-In of EEA Financial Institution

188

Section 9.24.

Acknowledgement Regarding Any Supported QFC

188

 

 

 

iv

 

 

 

 

 

 

 

 

 

SCHEDULES:

 

 

 

 

 

 

 

 

Schedule 1.01(a)

Commitment Schedule

Schedule 1.01(b)

Dutch Auction

Schedule 1.01(c)

Mortgages

Schedule 1.01(d)

Existing Investments

Schedule 1.01(f)

 

Broker-Dealer Subsidiaries

Schedule 1.01(g)

Introducing Broker Subsidiaries

Schedule 3.05(a)

Fee Owned Real Estate Assets

Schedule 3.13

Subsidiaries

Schedule 3.20

Certain Regulatory Matters

Schedule 5.09

Unrestricted Subsidiaries

Schedule 6.01(i)

Existing Indebtedness

Schedule 6.02(l)

Existing Liens

Schedule 6.07(bb)

Certain Dispositions

Schedule 6.09(e)

Existing Transactions with Affiliates

Schedule 9.01

Borrower’s Website Address for Electronic Delivery

 

EXHIBITS:

 

 

Exhibit A-1

Form of Assignment and Assumption

Exhibit A-2

Form of Affiliated Lender Assignment and Assumption

Exhibit B

Form of Borrowing Request

Exhibit C

Form of Compliance Certificate

Exhibit D

Form of Interest Election Request

Exhibit E

Form of Perfection Certificate

Exhibit F

Form of Perfection Certificate Supplement

Exhibit G

Form of Promissory Note

Exhibit H

Form of Pledge and Security Agreement

Exhibit I

Form of Guaranty Agreement

Exhibit J-1

Form of Patent Security Agreement

Exhibit J-2

Form of Trademark Security Agreement

Exhibit J-3

Form of Copyright Security Agreement

Exhibit K

Form of Letter of Credit Request

Exhibit L-1

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

Exhibit L-2

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

Exhibit L-3

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

 

 

 

Exhibit L-4

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

 

 

 

Exhibit M

Form of Solvency Certificate

Exhibit N

Form of Prepayment Notice

 

 

 

CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of July 1, 2019 (this “Agreement”), by and among Victory Capital Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party hereto and Barclays Bank PLC (“Barclays”), as administrative agent and collateral agent for the Secured Parties (in such capacities, together with its successors and assigns in such capacities, the “Administrative Agent”), a Swingline Lender and an Issuing Bank.

 

RECITALS

 

WHEREAS, pursuant to the terms and conditions of the Stock Purchase Agreement, dated as of November 6, 2018 (including the exhibits and schedules thereto, the “Acquisition Agreement”), by and among the Borrower, USAA Investment Corporation, a Delaware corporation, and, solely for the express purposes set therein, USAA Capital Corporation, a Delaware corporation, on the Closing Date the Borrower will acquire (the “Acquisition”) 100% of the outstanding equity interests of each of USAA Asset Management Company, a Delaware corporation (“USAA Adviser”), and USAA Transfer Agency Company, a Delaware corporation (“USAA Transfer Agent” and, together with USAA Adviser, the “Targets”) from the current equity-holders thereof (the “Sellers”);

 

WHEREAS, in connection therewith, the Borrower has requested that the Lenders extend credit to the Borrower in the form of (a) Initial Term Loans made on the Closing Date in an aggregate principal amount of up to $1,100,000,000, the proceeds of which shall be used to finance all or a portion of the Transactions, and (b) Revolving Credit Commitments in an aggregate principal amount of $100,000,000, the proceeds of which shall be used to finance the working capital needs and other general corporate purposes of the Borrower and the Restricted Subsidiaries;

 

WHEREAS, in order to facilitate the Acquisition, the Borrower has requested that the Lenders authorize and ratify the Administrative Agent’s actions to enter into the escrow arrangements contemplated by the Escrow Agreement prior to the Closing Date; and

 

WHEREAS, the Lenders are willing to extend credit to the Borrower as so requested, subject to the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE 1DEFINITIONS

 

Section 1.01. Defined Terms. As used in this Agreement (including the preamble and the recitals above), the following terms have the meanings specified below:

 

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

 

ABR Borrowing” means any Borrowing at the Alternate Base Rate.

 

ABR Loan” means a Loan that bears interest with reference to the Alternate Base Rate.

 

ABR Revolving Borrowing” means any Borrowing of Revolving Loans at the Alternate Base

Rate.

 

 

ABR Revolving Loan” means a Revolving Loan that bears interest with reference to the Alternate Base Rate.

 

Acceptable Compliance Certificate” has the meaning assigned to such term in the definition of Applicable Rate.

 

Acceptable Intercreditor Agreement” means an intercreditor agreement the terms of which are reasonably satisfactory to the Administrative Agent, the Required Lenders and the Borrower.

 

ACH” means automated clearing house transfers.

 

Acquisition” has the meaning assigned to such term in the recitals to this Agreement.

 

Acquisition Agreement” has the meaning assigned to such term in the recitals to this Agreement.

 

Additional Agreement” has the meaning assigned to such term in Article 8.

 

Additional Commitment” means any commitment hereunder added pursuant to Sections 2.22,  2.23 or 9.02(c).

 

Additional Lender” has the meaning assigned to such term in Section 2.22(b).

 

Additional Loans” means any Additional Revolving Loans and any Additional Term Loans.

 

Additional Revolving Credit Commitments” means any revolving credit commitment added pursuant to Sections 2.22,  2.23 or 9.02(c)(ii).

 

Additional Revolving Credit Exposure” means, with respect to any Lender at any time, the aggregate Outstanding Amount at such time of all Additional Revolving Loans of such Lender, plus the aggregate Outstanding Amount at such time of such Lender’s LC Exposure and Swingline Exposure attributable to its Additional Revolving Credit Commitment.

 

Additional Revolving Lender” means any Lender with an Additional Revolving Credit Commitment or any Additional Revolving Credit Exposure.

 

Additional Revolving Loans” means any revolving loan added hereunder pursuant to Section 2.22,  2.23 or 9.02(c)(ii).

 

Additional Term Lender” means any Lender with an Additional Term Loan Commitment or an outstanding Additional Term Loan.

 

Additional Term Loan Commitment” means any  term  commitment  added  pursuant  to Sections 2.22,  2.23 or 9.02(c)(i).

 

Additional Term Loans” means any term loan added pursuant to Section 2.22,  2.23 or 9.02(c)(i).

 

Administrative Agent” has the meaning assigned to such term in the preamble to this Agreement.

 

Administrative Questionnaire” has the meaning assigned to such term in Section 2.22(d).

 

Advisers Act” means the Investment Advisers Act of 1940.

 

2

Affiliate” means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, that Person. No Person shall be an “Affiliate” of the Borrower or any Subsidiary thereof solely because it is an unrelated portfolio company of any Sponsor and none of the Agents, any Lender (other than any Affiliated Lender or any Debt Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of the Borrower or any Subsidiary thereof.

 

Affiliated Lender” means any Non-Debt Fund Affiliate, the Borrower or any Subsidiary.

 

Affiliated Lender Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Affiliated Lender (with the consent of any party whose consent is required by Section 9.05) and accepted by the Administrative Agent in the form of Exhibit A-2 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent and the Borrower.

 

Affiliated Lender Cap” has the meaning assigned to such term in Section 9.05(g)(iv).

 

Agents” means, collectively, the Administrative Agent, the Lead Arrangers and the Syndication

Agent.

 

Agreement” has the meaning assigned to such term in the preamble to this Credit Agreement.

 

Agreement Currency” has the meaning assigned to such term in Section 9.22.

 

Alternate Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of

(a) the Federal Funds Effective Rate, plus ½ of 1.00%, (b) the Prime Rate in effect on such day and (c) LIBO Rate for a one month Interest Period as determined on such day, plus 1.00%; provided that if the Prime Rate, Federal Funds Effective Rate or 1-month LIBO Rate is less than 0.00%, then such rate shall deemed to be 0.00%.

 

Applicable Percentage” means, (a) with respect to any Term Lender of any Class, a percentage equal to a fraction the numerator of which is the aggregate outstanding principal amount of the Term Loans and unused Additional Term Loan Commitments of such Term Lender under the applicable Class and the denominator of which is the aggregate outstanding principal amount of the Term Loans and unused Term Commitments of all Term Lenders under the applicable Class and (b) with respect to any Revolving Lender of any Class, the percentage of the aggregate amount of the Revolving Credit Commitments of such Class represented by such Lender’s Revolving Credit Commitment of such Class; provided that for purposes of Section 2.21 and otherwise herein, when there is a Defaulting Lender, such Defaulting Lender’s Revolving Credit Commitment shall be disregarded for any relevant calculation. In the case of clause (b), in the event that the Revolving Credit Commitments of any Class have expired or been terminated, the Applicable Percentage of any Revolving Lender of such Class shall be determined on the basis of the Revolving Credit Exposure of such Revolving Lender attributable to its Revolving Credit Commitment of such Class, giving effect to any assignment thereof.

 

Applicable Period” has the meaning assigned to such term in the definition of Applicable Rate.

 

Applicable Rate” means, for any day: (a) with respect to any Initial Term Loan (i) that is an ABR Loan, 2.25% per annum or (ii) that is a LIBO Rate Loan, 3.25% per annum; (b) with respect to any Initial Revolving Loan, that is an ABR Loan or a LIBO Rate Loan, the percentage per annum as set forth in the pricing grid below for the appropriate Level; provided,  however, that until the delivery of the financial statements and related Compliance Certificate for the first full Fiscal Quarter ending after the Closing Date pursuant to Section 5.01, the Applicable Rate shall be the rate set forth in “Level 1” of the pricing grid

 

3

below; and (c) with respect to any Extended Term Loan or other Additional Term Loan of any Class or any Extended Revolving Loan or other Additional Revolving Loan of any Class, the rate or rates per annum specified in the applicable Refinancing Amendment, Incremental Facility Amendment or Extension Amendment.

 

 

 

 

 

Level

First Lien Leverage Ratio

Applicable Rate for Initial Revolving Loans (ABR Rate Loans)

Applicable Rate for Initial Revolving Loans (LIBO Rate Loans)

1

Greater than 2.50:1.00

2.25%

3.25%

2

Less than or equal to 2.50:1.00 but greater than 2.00:1.00

2.00%

3.00%

3

Less than or equal to 2.00:1.00

1.75%

2.75%

 

The Applicable Rate shall be re-determined quarterly on the first day immediately following the date of delivery to the Administrative Agent of a Compliance Certificate containing a reasonably detailed calculation of the First Lien Leverage Ratio pursuant to Section 5.01 (an “Acceptable Compliance Certificate”); provided that, if an Acceptable Compliance Certificate is not delivered to the Administrative Agent pursuant to Section 5.01, without constituting a waiver of any Default or Event of Default arising as a result thereof, then (i) the rate set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered but was not delivered and shall continue to so apply through but not including the date on which an Acceptable Compliance Certificate is delivered (and from and after delivery of such Acceptable Compliance Certificate, the pricing level shall be determined based on the First Lien Leverage Ratio set forth therein); provided,  further, that, in the event that any calculation of the First Lien Leverage Ratio previously delivered pursuant to Section 5.01 is at any time restated or otherwise revised or the information set forth therein otherwise proves to be false or incorrect such that the Applicable Rate would have been higher than was otherwise in effect during any period (an “Applicable Period”), then, without constituting a waiver of any Default or Event of Default arising as a result thereof, (i) the rate set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered and shall continue to so apply through but not including the date on which a corrected Acceptable Compliance Certificate is delivered and (ii) the Borrower shall, within five (5) Business Days of written demand thereof by the Administrative Agent, pay to the Administrative Agent (for the benefit of the Lenders in accordance with this Agreement) the accrued additional interest with respect to such Loans owing as a result of such increased Applicable Rate for such Applicable Period.

 

Applicable Revolving Credit Percentage” means, with respect to any Revolving Lender at any time, the percentage of the Total Revolving Credit Commitment at such time represented by such Revolving Lender’s Revolving Credit Commitments at such time; provided that for purposes of Section 2.21 and otherwise herein, when there is a Defaulting Lender, any such Defaulting Lender’s Revolving Credit Commitment shall be disregarded in the relevant calculations. In the event that (x) the Revolving Credit Commitments of any Class have expired or been terminated in accordance with the terms hereof (other than pursuant to Article 7), the Applicable Revolving Credit Percentage shall be recalculated without giving effect to the Revolving Credit Commitments of such Class or (y) the Revolving Credit Commitments of all Classes have terminated (or the Revolving Credit Commitments of any Class have terminated pursuant to Article 7), the Applicable Revolving Credit Percentage shall be determined based upon the Revolving Credit Commitments (or the Revolving Credit Commitments of such Class) most recently in effect, giving effect to any assignments thereof.

 

Approved Fund” means, with respect to any Lender, any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar

 

4

extensions of credit in the ordinary course of its activities and is administered, advised or managed by (a) such Lender, (b) any Affiliate of such Lender or (c) any entity or any Affiliate of any entity that administers, advises or manages such Lender.

 

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.05), and accepted by the Administrative Agent in substantially the form of Exhibit A-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent and the Borrower.

 

Available Amount” means, at any time, an amount equal to, without duplication:

 

(a)

the sum of:

 

(i) the greater of $137,500,000 and 33.0% of Consolidated Adjusted EBITDA for the most recently ended Test Period; plus

 

(ii) 50.0% of Consolidated Net Income, which amount shall not be less than zero, for the period from the first day of the Fiscal Quarter during which the Closing Date occurred to and including the last day of the most recently ended Fiscal Quarter prior to such date for which consolidated financial statements of the Borrower are internally available (this clause (ii), the “Builder Basket”); plus

 

(iii) the amount of any capital contributions or other proceeds of any issuance of Qualified Capital Stock of the Borrower (other than any amount (x) constituting a Cure Amount, capital contributions used to incur Indebtedness pursuant to Section 6.01(r) or proceeds of an issuance of Disqualified Capital Stock, (y) received from the Borrower or any Restricted Subsidiary or (z) consisting of the proceeds of any loan or advance made pursuant to clause (h)(ii) of the definition of Permitted Investment) received as Cash equity by the Borrower or any Restricted Subsidiary, plus the fair market value, as determined by the Borrower in good faith, of Cash Equivalents, marketable securities or other property received by the Borrower or any Restricted Subsidiary as a capital contribution or in return for any issuance of Capital Stock of the Borrower (other than any amount (x) constituting a Cure Amount, capital contributions used to incur Indebtedness pursuant to Section 6.01(r) or proceeds of any issuance of Disqualified Capital Stock or (y) received from the Borrower or any Restricted Subsidiary), in each case, during the period from and including the day immediately following the Closing Date through and including such time; plus

 

(iv) the aggregate principal amount of any Indebtedness or Disqualified Capital Stock, in each case, of the Borrower or any Restricted Subsidiary issued after the Closing Date (other than Indebtedness or such Disqualified Capital Stock issued to the Borrower or any Restricted Subsidiary), which has been converted into or exchanged for Capital Stock of the Borrower, any Restricted Subsidiary or any Parent Company that does not constitute Disqualified Capital Stock, together with the fair market value of any Cash Equivalents and the fair market value (as determined by the Borrower in good faith) of any property or assets received by the Borrower or such Restricted Subsidiary upon such exchange or conversion, in each case, during the period from and including the day immediately following the Closing Date through and including such time; plus

 

(v) the net proceeds received by the Borrower or any Restricted Subsidiary during the period from and including the day immediately following the Closing Date

 

5

through and including such time in connection with the Disposition to any Person (other than the Borrower or any Restricted Subsidiary) of any Investment made pursuant to clause

(r) of the definition of Permitted Investment (in an amount not to exceed the original amount of such Investment made in reliance on the Available Amount); plus

 

(vi) to the extent not already reflected as a return of capital with respect to such Investment for purposes of determining the amount of such Investment, the proceeds received by the Borrower or any Restricted Subsidiary during the period from and including the day immediately following the Closing Date through and including such time in connection with cash returns, cash profits, cash distributions and similar cash amounts, including cash principal repayments of loans, in each case received in respect of any Investment made after the Closing Date pursuant to clause (r) of the definition of Permitted Investment (in an amount not to exceed the original amount of such Investment made in reliance on the Available Amount); plus

 

(vii) to the extent that such Investment was made pursuant to clause (r) of the definition of Permitted Investment and to the extent not already reflected as a return of capital with respect to such Investment for purposes of determining the amount of such Investment, an amount equal to the sum of (A) the amount of any Investment by the Borrower or any Restricted Subsidiary in any third party or any Unrestricted Subsidiary (in an amount not to exceed the original amount of such Investment made pursuant to clause

(r) of the definition of Permitted Investment) that has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or is liquidated, wound up or dissolved into, the Borrower or any Restricted Subsidiary and (B) the fair market value (as determined by the Borrower in good faith) of the assets of any Unrestricted Subsidiary that have been transferred, conveyed or otherwise distributed (in an amount not to exceed the original amount of the Investment in such Unrestricted Subsidiary made pursuant to clause (r) of the definition of Permitted Investment) to the Borrower or any Restricted Subsidiary, in each case, during the period from and including the day immediately following the Closing Date through and including such time; plus

 

(viii) to the extent not otherwise applied to prepay Term Loans of Lenders that have not declined their Applicable Percentage of the applicable prepayment, the amount of any Declined Proceeds; plus

 

(ix) to the extent not otherwise included in clause (a)(ii) above, the aggregate amount of any cash dividend or other cash distribution received by the Borrower or any Restricted Subsidiary from any Unrestricted Subsidiary after the Closing Date (in an amount not to exceed the amount of the initial Investment in such Unrestricted Subsidiary made in reliance on the Available Amount); minus

 

(b)an amount equal to the sum of (i) Restricted Payments made  pursuant  to Section 6.04(a)(iii),  plus (ii) Restricted Debt Payments made pursuant to Section 6.04(b)(vi)plus

(iii) Investments made pursuant to clause (r) of the definition of Permitted Investment, in each case, after the Closing Date and prior to such time or contemporaneously therewith.

 

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

 

Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the

 

6

implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

Banking Services” means each and any of the following bank services: commercial credit cards, stored value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling services, operational foreign exchange management, current account facilities and any arrangements or services similar to any of the foregoing or otherwise in connection with Cash management and Deposit Accounts.

 

Banking Services Obligations” means any and all obligations of any Loan Party, whether absolute or contingent and however and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) (a) under any arrangement that is in effect on the Closing Date between any Loan Party and a counterparty that is (or is an Affiliate of) any Lender or Agent as of the Closing Date or (b) under any arrangement that is entered into after the Closing Date by any Loan Party with any counterparty that is (or is an Affiliate of) any Lender or Agent at the time such arrangement is entered into, in each case in connection with Banking Services that have been designated to the Administrative Agent in writing by the Borrower as being Banking Services Obligations for the purposes of the Loan Documents, it being understood that each counterparty thereto shall be deemed (A) to appoint the Administrative Agent as its agent under the applicable Loan Documents and (B) to agree to be bound by the provisions of Article 8,  Section 9.03 and Section 9.10 and any Acceptable Intercreditor Agreement as if it were a Lender.

 

Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.).

 

Barclays” has the meaning assigned to such term in the preamble to this Agreement.

 

Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association.

 

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

 

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

 

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

 

Borrower” has the meaning assigned to such term in the preamble to this Agreement.

 

Borrower Tax Refund Receivable” means a receivable of the Borrower in respect of a refund of

U.S. federal income taxes for the taxable year ended December 31, 2013.

 

Borrowing” means any Loans of the same Type and Class made, converted or continued on the same date and, in the case of LIBO Rate Loans, as to which a single Interest Period is in effect.

 

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Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03 and substantially in the form attached hereto as Exhibit B or such other form that is reasonably acceptable to the Administrative Agent and the Borrower (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent).

 

Broker-Dealer Licenses and Memberships” means (a) the memberships of each Broker-Dealer Subsidiary with FINRA and (b) the licenses with Governmental Authorities of each Broker-Dealer Subsidiary, in each case, to the extent necessary and material to the normal conduct of the business of the applicable Broker-Dealer Subsidiary as a Registered Broker-Dealer or Introducing Broker, as applicable.

 

Broker-Dealer Registrations” means the registrations of each Broker-Dealer Subsidiary with the SEC and all other Governmental Authorities which require registration and have jurisdiction over such Broker-Dealer Subsidiary, in each case, to the extent necessary and material to the normal conduct of the business of the applicable Broker-Dealer Subsidiary as a Registered Broker-Dealer or Introducing Broker, as applicable.

 

Broker-Dealer Subsidiary” means (a) the Restricted Subsidiaries of the Borrower listed on Schedule 1.01(f) and any other Restricted Subsidiary of the Borrower that becomes a broker-dealer registered under the Exchange Act or associated persons thereof, as defined therein (a “Registered Broker- Dealer”), after the Closing Date and (b) the Restricted Subsidiaries listed on Schedule 1.01(g) and any other Restricted Subsidiary that is an introducing broker (“Introducing Broker”) that is required to register under the Commodity Exchange Act after the Closing Date.

 

Builder Basket” has the meaning assigned to such term in clause (a)(ii) of the definition of “Available Amount.”

 

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and, if the applicable Business Day relates to notices, determinations, fundings or payments in connection with the LIBO Rate or any LIBO Rate Loans, a day on which dealings in Dollar deposits are also carried on in the London interbank market.

 

Capital Expenditures” means, with respect to the Borrower and the Restricted Subsidiaries for any period, the aggregate amount, without duplication, of (x) all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) that would, in accordance with GAAP, be included as additions to property, plant and equipment, (y) other capital expenditures of such Person for such period (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) that are reported in the Borrower’s consolidated statement of cash flows for such period and (z) other capital expenditures of such Person for such period (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases).

 

Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of such Person.

 

Capital Stock” means any and all shares, interests, participations, preferred equity certificates, convertible preferred equity certificates or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests (whether general or limited), and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing, but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.

 

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Captive Insurance Subsidiary” means any Restricted Subsidiary that is subject to regulation as an insurance company (or any Restricted Subsidiary thereof).

 

Cash” means money, currency or a credit balance in any Deposit Account, in each case determined in accordance with GAAP.

 

Cash Equivalents” means, as at any date of determination, (a) readily marketable securities

(i) issued or directly and unconditionally guaranteed or insured as to interest and principal by the U.S. government or (ii) issued by any agency or instrumentality of the U.S. the obligations of which are backed by the full faith and credit of the U.S., in each case maturing within one year after such date and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (b) readily marketable direct obligations issued by any state of the U.S. or any political subdivision of any such state or any public instrumentality thereof or by any foreign government, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (c) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (d) deposits, money market deposits, time deposit accounts, certificates of deposit or bankers’ acceptances (or similar instruments) maturing within one year after such date and issued or accepted by any Lender or by any bank organized under, or authorized to operate as a bank under, the laws of the U.S., any state thereof or the District of Columbia or any political subdivision thereof or any foreign bank or its branches or agencies and that has capital and surplus of not less than $100,000,000 and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (e) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank having capital and surplus of not less than $100,000,000; (f) shares of any investment fund that has (i) substantially all of its assets invested in the types of investments referred to in clauses (a) through (e) above, (ii) net assets of not less than $250,000,000 and (iii) a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time either S&P or Moody’s are not rating such fund, an equivalent rating from another nationally recognized statistical rating agency); and (g) solely with respect to any Captive Insurance Subsidiary, any investment that such Captive Insurance Subsidiary is not prohibited to make in accordance with applicable law. The term “Cash Equivalents” shall also include (x) Investments of the type and maturity described in clauses (a) through (g) above in foreign obligors, which Investments or obligors (or the parent companies thereof) have the ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (y) other short-term Investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in Investments analogous to the Investments described in clauses

(a)

through (g) above or in the foregoing clause (x).

 

CFC” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

 

CFTC” means the Commodity Futures Trading Commission.

 

Change in Law” means (a) the adoption or taking effect of any law, rule, regulation or treaty after the Closing Date, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority after the Closing Date or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation

 

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thereof and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case described in clauses (a)(b) and (c) above, be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented.

 

Change of Control” means the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), 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, but excluding any employee benefit plan or Person acting as the trustee, agent or other fiduciary or administrator therefor), other than one or more Permitted Holders, of Capital Stock representing more than the greater of (x) 35.0% of the total voting power of all of the outstanding voting Capital Stock of the Borrower and (y) the percentage of the total voting power of all of the outstanding voting Capital Stock of the Borrower owned, directly or indirectly, beneficially by the Permitted Holders, unless, in the case of each of clauses (x) and (y) above, one or more Permitted Holders has, at such time, the right or the ability, by voting power, contract or otherwise, to elect or designate for election at least a majority of the board of directors (or comparable governing body or managers) of the Borrower. Notwithstanding the foregoing, the right to acquire voting Capital Stock (so long as such Person does not have the right to direct the voting of the Capital Stock subject to such right) or any veto power in connection with the acquisition or disposition of voting Capital Stock will not cause a party to be a beneficial owner.

 

Charge” means any charge, loss, expense, cost, accrual or reserve of any kind.

 

Charged Amounts” has the meaning assigned to such term in Section 9.19.

 

Class”, when used with respect to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Initial Term Loans, Additional Term Loans of any series established as a separate “Class” pursuant to Section 2.22,  2.23 or 9.02(c)(i), Initial Revolving Loans or Additional Revolving Loans of any series established as a separate “Class” pursuant to Section 2.222.23 or 9.02(c)(ii),

(b) any Commitment, refers to whether such Commitment is an Initial Term Loan Commitment, an Additional Term Loan Commitment of any series established as a separate “Class” pursuant to Section 2.21 or 9.02(c), an Initial Revolving Credit Commitment, an Additional Revolving Credit Commitment of any series established as a separate “Class” pursuant to Section 2.21 or 9.02(c)(ii), (c) any Lender, refers to whether such Lender has a Loan or Commitment of a particular Class and (d) any Revolving Credit Exposure, refers to whether such Revolving Credit Exposure is attributable to a Revolving Credit Commitment of a particular Class.

 

Closing Date” means the date on which (a) the Escrow Funding Date shall have occurred, and (b) the Escrow Release Conditions shall have been met, which date shall have occurred on July 1, 2019.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

Collateral” means any and all property of any Loan Party subject to a Lien under any Collateral Document and any and all other property of any Loan Party, now existing or hereafter acquired, that is or becomes subject to a Lien pursuant to any Collateral Document to secure the Secured Obligations. For the avoidance of doubt, in no event shall “Collateral” include any Excluded Asset.

 

Collateral and Guarantee Requirement” means, at any time, subject to (x) the applicable limitations set forth in this Agreement or any other Loan Document, (y) the time periods (and extensions thereof) set forth in Section 5.11 and (z) the terms of any Acceptable Intercreditor Agreement, the requirement that:

 

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(a) the Administrative Agent shall have received (A) a joinder to the Loan Guaranty in substantially the form attached as an exhibit thereto, (B) a supplement to the Security Agreement in substantially the form attached as an exhibit thereto, (C) if the respective Restricted Subsidiary required to comply with the requirements set forth in this definition pursuant to Section 5.11 owns

U.S. registrations of or U.S. applications to register Patents, Trademarks (excluding any intent-to- use applications for the registration of any Trademarks or similar applications) or Copyrights that constitute Collateral, an Intellectual Property Security Agreement in substantially the form attached as Exhibit J-1,  Exhibit J-2 or Exhibit J-3, as applicable, (D) a completed Perfection Certificate (or, with respect to information provided after the Closing Date, a completed Perfection Certificate Supplement) and (E) Uniform Commercial Code financing statements in appropriate form for filing in such jurisdictions as the Administrative Agent may reasonably request;

 

(b) the Administrative Agent shall have received with respect to any Material Real Estate Assets, a Mortgage and any necessary UCC fixture filing in respect thereof, in each case together with, to the extent customary and appropriate (as reasonably determined by the Administrative Agent and the Borrower):

 

(i) evidence that (A) counterparts of such Mortgage have been duly executed, acknowledged and delivered and such Mortgage and any corresponding UCC or equivalent fixture filing are in form suitable for filing or recording in all filing or recording offices that the Administrative Agent may deem reasonably necessary in order to create a valid and subsisting Lien on such Material Real Estate Asset in favor of the Administrative Agent for the benefit of the Secured Parties, (B) such Mortgage and any corresponding UCC or equivalent fixture filings have been duly recorded or filed, as applicable, and (C) all filing and recording taxes and fees have been paid or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent;

 

(ii) one or more fully paid policies of title insurance (the Mortgage Policies”) in an amount reasonably acceptable to the Administrative Agent (not to exceed the fair market value of the Material Real Estate Asset covered thereby (as determined by the Borrower in good faith)) issued by a nationally recognized title insurance company in the applicable jurisdiction that is reasonably acceptable to the Administrative Agent, insuring the relevant Mortgage as having created a valid subsisting Lien on the real property described therein with the ranking or the priority which it is expressed to have in such Mortgage, subject only to Permitted Liens, together with such endorsements, coinsurance and reinsurance as the Administrative Agent may reasonably request to the extent the same are available in the applicable jurisdiction;

 

(iii) customary legal opinions of local counsel for the relevant Loan Party in the jurisdiction in which such Material Real Estate Asset is located, and if applicable, in the jurisdiction of formation of the relevant Loan Party, in each case as the Administrative Agent may reasonably request, with respect to the enforceability of the relevant Mortgage; and

 

(iv) surveys and appraisals (if required under the Financial Institutions Reform Recovery and Enforcement Act of 1989, as amended) and “Life-of-Loan” flood certifications under Regulation H (to the extent applicable, together with evidence of federal flood insurance for any such Flood Hazard Property located in a flood hazard area); provided that the Administrative Agent may in its reasonable discretion accept any such existing certificate, appraisal or survey so long as such existing certificate or appraisal satisfies any applicable local law requirements.

 

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Collateral Documents” means, collectively, (i) the Security Agreement, (ii) each Mortgage, (iii) each Intellectual Property Security Agreement, (iv) any supplement to any of the foregoing delivered to the Administrative Agent pursuant to the definition of “Collateral and Guarantee Requirement” and (v) each of the other instruments and documents pursuant to which any Loan Party grants a Lien on any Collateral as security for payment of the Secured Obligations.

 

Commercial Letter of Credit” means any Letter of Credit issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by the Borrower or any of its Subsidiaries in the ordinary course of business of such Person.

 

Commercial Tort Claim” has the meaning set forth in Article 9 of the UCC.

 

Commitment” means, with respect to each Lender, such Lender’s Initial Term Loan Commitment, Initial Revolving Credit Commitment and Additional Commitment, as applicable, in effect as of such time.

 

Commitment Fee Rate” means, for any day: (a) with respect to the Initial Revolving Credit Commitments, the rate per annum as set forth in the pricing grid below for the appropriate Level; provided,  however, that until the delivery of the financial statements and related Compliance Certificate for the first full Fiscal Quarter ending after the Closing Date pursuant to Section 5.01, the Commitment Fee Rate shall be the rate set forth in “Level 1” of the pricing grid below; and (b) with respect to Additional Revolving Credit Commitments of any Class, the rate or rates per annum specified in the applicable Refinancing Amendment, Incremental Facility Amendment or Extension Amendment.

 

Level

First Lien Leverage Ratio

Commitment Fee Rate

1

Greater than 2.50:1.00

0.50%

2

Less than or equal to 2.50:1.00 but greater than 2.00:1.00

0.375%

3

Less than or equal to 2.00:1.00

0.25%

 

The Commitment Fee Rate shall be re-determined quarterly on the first day immediately following the date of delivery to the Administrative Agent of a Compliance Certificate containing a reasonably detailed, certified calculation of the First Lien Leverage Ratio pursuant to Section 5.01;  provided that, if such certification is not provided in accordance with Section 5.01, without constituting a waiver of any Default or Event of Default arising as a result thereof, then (i) the pricing set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply through but not including the date on which such Compliance Certificate is so delivered (and therefrom, the pricing level shall be based off of the reasonably detailed calculations of the First Lien Leverage Ratio certified by the Borrower in such Compliance Certificate); providedfurther, that, in the event that the certified calculation of the First Lien Leverage Ratio previously delivered pursuant to Section 5.01 is at any time restated or otherwise revised or the information set forth in such certification otherwise proves to be false or incorrect such that the Commitment Fee Rate would have been higher than was otherwise in effect during any Applicable Period, then, without constituting a waiver of any Default or Event of Default arising as a result thereof, (i) the pricing level set forth in “Level 1” shall apply as of the first day after which such Compliance Certificate was required to have been delivered pursuant to Section 5.01 and shall continue to so apply through but not including the date on which the correct certified calculation of the First Lien Leverage Ratio for such Applicable Period in a

 

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Compliance Certificate is so delivered and (ii) the Borrower shall, within five (5) Business Days of written demand thereof by the Administrative Agent, pay to the Administrative Agent (for the benefit of the Lenders in accordance with this Agreement) the accrued additional interest with respect to such Loans owing as a result of such increased Commitment Fee Rate for such Applicable Period.

 

Commitment Schedule” means the Schedule attached hereto as Schedule 1.01(a) reflecting the Commitments in effect on the Closing Date.

 

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

Company” has the meaning assigned to such term in the preamble to this Agreement.

 

Company Competitor” means any Person that is a direct competitor of the Borrower or any of its Subsidiaries.

 

Competitor Debt Fund Affiliate” means, with respect to any Company Competitor or any Affiliate thereof, any debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is (i) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business and (ii) managed, sponsored or advised by any person that is Controlling, Controlled by or under common Control with the relevant Company Competitor or Affiliate thereof, but only to the extent that no personnel involved with the investment in the relevant Company Competitor makes (or has the right to make or participate with others in making) investment decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity with respect to decisions involving any investment in debt of the Borrower or any of its Subsidiaries.

 

Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit C.

 

Compliance Date” means the last day of any applicable Fiscal Quarter (commencing with the first full Fiscal Quarter ending after the Closing Date) if as of such date the aggregate Outstanding Amount of the Revolving Credit Exposure (excluding (i) for the first four full Fiscal Quarters ending after the Closing Date, any Revolving Loans funded on the Closing Date to fund any original issue discount or upfront fees implemented pursuant to the “market flex” provisions of the Fee Letter, (ii) any Letters of Credit under the Initial Revolving Facility, any Incremental Revolving Facility and any Replacement Revolving Facility that have been cash collateralized or otherwise backstopped in an amount equal to at least 103.0% of the Stated Amount thereof (minus any amount then on deposit in any cash collateral account established for the benefit of the relevant Issuing Bank) or otherwise cash collateralized in a manner reasonably satisfactory to the relevant Issuing Bank and (iii) non-cash collateralized or backstopped Letters of Credit in an aggregate outstanding amount not exceeding $2,500,000) exceeds an amount equal to 35.0% of the Total Revolving Credit Commitment.

 

Confidential Information” has the meaning assigned to such term in Section 9.13.

 

Connection Income Taxes” 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 Adjusted EBITDA” means, with respect to any Person on a consolidated basis for any period, the sum of:

 

(a)

Consolidated Net Income for such period; plus

 

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(b) to the extent not otherwise included in the determination of Consolidated Net Income for such period, the amount of any proceeds of any business interruption insurance policy in an amount representing the earnings for such period that such proceeds are intended to replace (whether or not then received so long as such Person in good faith expects to receive such proceeds within the next four Fiscal Quarters (it being understood that to the extent such proceeds are not actually received within such period, to the extent previously added back to Consolidated Net Income in determining Consolidated Adjusted EBITDA for a prior Fiscal Quarter such reimbursement amounts so added back but not so received shall be deducted in calculating Consolidated Adjusted EBITDA for the Fiscal Quarter immediately following such four Fiscal Quarter period)); plus

 

(c) without duplication, those amounts which, in the determination of Consolidated Net Income for such period, have been deducted for:

 

(i)

Consolidated Interest Expense;

 

(ii) Taxes paid and any provision for Taxes, including income, capital, U.S. federal, state, local, foreign, franchise and similar Taxes, property Taxes, foreign withholding Taxes and foreign unreimbursed value added Taxes (including penalties and interest related to any such Tax or arising from any Tax examination, and including pursuant to any Tax sharing arrangement) for such period and, without duplication, the amount of any Restricted Payments made by such Person to any direct or indirect parent entity that is a consolidated tax filer with such Person and the Restricted Subsidiaries made for the purpose of funding the payment of any such Taxes of such parent entity to the extent attributable to such Person and the Restricted Subsidiaries paid or declared in respect of such period;

 

(iii) to the extent deducted in the calculation of Consolidated Net Income, any earn-out obligation expense incurred in connection with any Permitted Investment, any Restricted Payment made in compliance with Section 6.04(a) or any Investment consummated prior to the Closing Date, which is paid or accrued during such period;

 

(iv) (A) depreciation, (B) amortization (including amortization of goodwill, software and other intangible assets), (C) impairment Charges (including any bad debt expense) relating to goodwill and other assets and (D) any asset write-off or write-down;

 

(v) any non-cash Charge, including any Charge from Investments recorded using the equity method and, if applicable, the excess of rent expense over actual cash rent paid during such period due to the use of straight line rent for GAAP purposes (provided that to the extent that any such non-cash Charge represents an accrual of or reserve for any potential cash item in any future period, (A) such Person may elect not to add back such non-cash Charge in the current period and (B) to the extent such Person elects to add back such non-cash Charge, the cash payment in respect thereof in such future period shall be subtracted from Consolidated Adjusted EBITDA to such extent);

 

(vi) any non-cash compensation Charge and/or any other non-cash Charge arising from the granting of any stock option or similar arrangement (including any profits interest), the granting of any stock appreciation right and/or similar arrangement (including any repricing, amendment, modification, substitution or change of any such stock option, stock appreciation right, profits interest or similar arrangement);

 

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(vii) (A) Transaction Costs, (B) Charges incurred in connection with the consummation of any issuance or offering of Capital Stock (including any Public Offering), any Investment, any Disposition, any recapitalization, any merger, consolidation or amalgamation, any option buyout or any incurrence, repayment, refinancing, amendment or modification of Indebtedness (including any amortization or write-off of debt issuance or deferred financing costs, premiums and prepayment penalties), any non-compete agreement or any transaction similar to any of the foregoing (in each case, including any transaction proposed and not consummated), whether or not permitted under this Agreement, (C) the amount of any Charge that is reimbursed or reimbursable by third party pursuant to indemnification or expense reimbursement provisions or similar agreements or insurance; provided that in respect of any Charge that is added back in reliance on clause

(C) above, the relevant Person in good faith expects to receive reimbursement for such Charge within the next four Fiscal Quarters (it being understood that to the extent any reimbursement amount is not actually received within such Fiscal Quarters, to the extent previously added back to Consolidated Net Income in determining Consolidated Adjusted EBITDA for a prior Fiscal Quarter, such reimbursement amount so added back but not so received shall be deducted in calculating Consolidated Adjusted EBITDA for the Fiscal Quarter immediately following such four Fiscal Quarter period pursuant to clause (i)(i) below) and (D) Public Company Costs;

 

(viii) without duplication of any amount referred to in clause (b) above, the amount of (A) any Charge to the extent that a corresponding amount is received in cash by such Person from a Person other than such Person or any Restricted Subsidiary of such Person under any agreement providing for reimbursement of such Charge or (B) any Charge with respect to any liability or casualty event, business interruption or any product recall, (i) so long as such Person has submitted in good faith, and reasonably expects to receive payment in connection with, a claim for reimbursement of such amounts under its relevant insurance policy (with a deduction pursuant to clause (i)(ii) below in the applicable future period for any amount so added back to the extent not so reimbursed within the next four Fiscal Quarters) or (ii) without duplication of amounts included in a prior period under clause (B)(i) above, to the extent such Charge is covered by insurance proceeds received in cash during such period (it being understood that if the amount received in cash under any such agreement in any period exceeds the amount of Charge paid during such period such excess amounts received may be carried forward and applied against any Charge in any future period);

 

(ix) the amount of any management, monitoring, consulting, transaction and advisory fees and expenses and indemnification payments under any management, monitoring, consulting, transaction, advisory or similar agreement, in each case, to the extent permitted under this Agreement;

 

(x) any Charge attributable to the undertaking or implementation of restructurings (including any Tax restructurings), new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions or synergies or similar initiatives or programs (including in connection with any integration or transition, any curtailment, any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, any facility opening or pre-opening, any facility realignment, any inventory optimization program or any curtailment), any business optimization Charge (including lean and 5S implementation), any Charge relating to the closure or consolidation of any facility (including but not limited to severance, rent termination costs, moving costs and legal

 

15

costs), any systems implementation Charge, any severance Charge, any Charge relating to entry into a new market, any Charge relating to any strategic initiative, any consulting Charge, any signing Charge, any retention or completion bonus, any expansion or relocation Charge, any Charge associated with any modification to any pension and post- retirement employee benefit plan, any software development Charge, any Charge associated with new systems design, any implementation Charge, any project startup Charge, any Charge in connection with new operations, any Charge relating to a new contract, any consulting Charge or any corporate development Charge; and

 

(xi) the amount of any Charge incurred or accrued in connection with any single or one-time event, including (A) in connection with the Transactions or any acquisition consummated after the Closing Date (including legal, accounting and other professional fees and expenses incurred in connection with acquisitions and other similar Investments made prior to the Closing Date), (B) in connection with the closing, consolidation or reconfiguration of any facility during such period and (C) one-time consulting costs; plus

 

(d) the amount of any Charge or deduction associated with the Borrower or any Restricted Subsidiary that is attributable to any non-controlling interest or minority interest of any third party; plus

 

(e) to the extent not included in Consolidated Net Income for such period, cash actually received (or any netting arrangement resulting in reduced cash expenditures) during such period in respect of a previous non-cash gain so long as the non-cash gain relating to the relevant cash receipt or netting arrangement was deducted in the calculation of Consolidated Adjusted EBITDA pursuant to clause (f) below for any previous period and not added back or was realized in a period prior to the Closing Date; plus

 

(f) without duplication of any Charges added back pursuant to clause (c) of this definition, the amount of (i) pro forma “run rate” cost savings, operating expense reductions, operational improvements and synergies (net of actual amounts realized) related to the Transactions that are reasonably identifiable, factually supportable and projected by such Person in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of such Person) and realized within 24 months after the Closing Date and (ii) pro forma “run rate” cost savings, operating expense reductions, operational improvements and synergies (net of actual amounts realized) related to acquisitions and other Investments, Dispositions and other specified transactions (including, for the avoidance of doubt, acquisitions occurring prior to the Closing Date), restructurings, cost savings initiatives and other similar initiatives that are reasonably identifiable, factually supportable and projected by such Person in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of such Person) and realized within 24 months after such acquisition or other Investment, Disposition or other specified transaction, restructuring, cost savings initiative or other initiative; minus

 

(g) any amount of any non-cash income or non-cash gain that has been included in the determination of Consolidated Net Income for such period, all as determined in accordance with GAAP (provided that if any such non-cash income or non-cash gain represents an accrual or deferred income in respect of potential cash items in any future period, such Person may determine not to deduct the relevant non-cash gain or income in the then-current period); minus

 

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(h) the amount of any cash payment made during such period in respect of any non- cash accrual, reserve or other non-cash Charge that is accounted for in a prior period which was added to Consolidated Net Income to determine Consolidated Adjusted EBITDA for such prior period and which does not otherwise reduce Consolidated Net Income for the current period; minus

 

(i)

to the extent such amounts increase Consolidated Net Income:

 

(i) the amount added back to Consolidated Adjusted EBITDA pursuant to clause (c)(vii)(C) above (as described in such clause) to the extent such reimbursement amounts were not received within the time period required by such clause; and

 

(ii) the amount added back to Consolidated Adjusted EBITDA pursuant to clause (c)(viii)(B) above (as described in such clause) to the extent such business interruption insurance proceeds were not received within the time period required by such clause.

 

Consolidated First Lien Debt” means, as to any Person at any date of determination, the aggregate principal amount of Consolidated Total Debt outstanding on such date that is secured by a first priority Lien on the Collateral.

 

Consolidated Interest Expense” means, with respect to any Person for any period, the sum of

(a)

consolidated total interest expense of such Person and the Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including (and without duplication), amortization of any debt issuance cost or original issue discount, any premium paid to obtain payment, financial assurance or similar bonds, any interest capitalized during construction, any non-cash interest payment, the interest component of any deferred payment obligation, the interest component of any payment under any Capital Lease (regardless of whether accounted for as interest expense under GAAP), any commission, discount or other fee or charge owed with respect to any letter of credit or bankers’ acceptance, any fee or expense paid to the Administrative Agent in connection with its services hereunder, any other bank, administrative agency (or trustee) or financing fee and any cost associated with any surety bond in connection with financing activities (whether amortized or immediately expensed)) plus (b) any cash dividend paid or payable in respect of Disqualified Capital Stock during such period other than to such Person or any Loan Party, plus (or, in the case of gains, minus) (c) any gains, losses or obligations arising from any Hedge Agreement or other derivative financial instrument issued by such Person for the benefit of such Person or its Subsidiaries, in each case determined on a consolidated basis for such period. For purposes of this definition, interest in respect of any Capital Lease shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capital Lease in accordance with GAAP.

 

Consolidated Net Income” means, in respect of any period and as determined for any Person (the “Subject Person”) on a consolidated basis, an amount equal to the net income (loss) of such Subject Person and its Subsidiaries, determined in accordance with GAAP, but excluding, without duplication:

 

(a) (i) the income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of the Restricted Subsidiaries) has a joint interest, except to the extent of the amount of dividends or distributions or other payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into cash) to the Subject Person or any of the Restricted Subsidiaries by such Person during such period, (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of the Restricted Subsidiaries) has a joint interest, other than to the extent that the Subject Person or any

 

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of the Restricted Subsidiaries has contributed cash or Cash Equivalents to such Person in respect of such loss during such period or (iii) the income or loss of any Unrestricted Subsidiary,

 

(b) any gain or Charge as a result of, or in connection with, any asset Disposition or abandonment outside the ordinary course of business (including asset retirement costs),

 

(c) (i) any gain or Charge from (A) any extraordinary item or (B) any non-recurring or unusual items or (ii) any Charge associated with or payment of any actual or prospective legal settlement, fine, judgment or order,

 

(d) any net gain or Charge with respect to (i) any disposed, abandoned, divested and/or discontinued asset, property or operation (other than, at the option of such Subject Person, any asset, property or operation pending the disposal, abandonment, divestiture and/or termination thereof), (ii) any disposal, abandonment, divestiture and/or discontinuation of any asset, property or operation (other than, at the option of such Subject Person, relating to assets or properties held for sale or pending the divestiture or termination thereof) or (iii) any facility that has been closed during such period,

 

(e) any net loss (less all fees and expenses or charges related thereto) attributable to the early extinguishment of Indebtedness (and the termination of any associated Hedge Agreement or other derivative instruments),

 

(f) (i) any Charge incurred as a result of, in connection with or pursuant to any management equity plan, profits interest or stock option plan or any other management or employee benefit plan or agreement, pension plan, any stock subscription or shareholder agreement or any distributor equity plan or agreement (including any Charge resulting from a deferred compensation arrangement or contingent transaction payment), (ii) any Charge for such period relating to payments made to option holders of any direct or indirect parent entity in connection with, or as a result of, any distributions being made to its equityholders or its direct or indirect parent entities, which payments are being made to compensate such option holders as though they were equityholders as of the date of, and entitled to share in, such distribution and (iii) any Charge incurred in connection with the rollover, acceleration or payout of Capital Stock held by management of any direct or indirect parent entity of the Subject Person, the Subject Person or any Restricted Subsidiary of the Subject Person, in the case of clause (ii) or this clause (iii), to the extent that any such cash Charge is funded with net cash proceeds contributed to the Subject Person as a capital contribution or as a result of the sale or issuance of Qualified Capital Stock of the Subject Person that are Not Otherwise Applied,

 

(g) any Charge that is established, adjusted or incurred, as applicable, (i) within 12 months after the Closing Date that is required to be established, adjusted or incurred, as applicable, as a result of the Transactions in accordance with GAAP or (ii) as a result of the adoption or modification of accounting principles or policies in accordance with GAAP, on a cumulative basis,

 

(h) (A) the effects of adjustments (including the effects of such adjustments pushed down to the Borrower or a Restricted Subsidiary) in the consolidated financial statements of the Borrower pursuant to GAAP (including in the inventory, property and equipment, leases, rights, fee arrangements, software, goodwill, intangible assets, in-process research and development, deferred revenue, advanced billings and debt line items thereof), resulting from the application of recapitalization accounting or the acquisition method of accounting, as the case may be, in relation to the Transactions or any consummated acquisition or other Investment or the amortization or write-off of any amounts thereof, net of Taxes, and (B) the cumulative effect of changes in

 

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accounting principles or policies made in such period in accordance with GAAP which affect Consolidated Net Income,

 

(i) any write-off or amortization made in such period of any deferred financing cost or premium paid or other Charge incurred directly in connection with any early extinguishment of Indebtedness,

 

(j) solely for purposes of calculating Excess Cash Flow, the income or loss of (i) any Person accrued prior to the date on which such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Borrower or any Restricted Subsidiary or the date that such other Person’s assets are acquired by the Borrower or any Restricted Subsidiary and (ii) any of such Person’s Restricted Subsidiaries (other than Loan Parties) to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiaries of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary,

 

(k) (i) any realized or unrealized net gain or loss in respect of (x) any obligation under any Hedge Agreement as determined in accordance with GAAP or (y) any other derivative instrument pursuant to, in the case of this clause (y), Financial Accounting Standards Board’s Accounting Standards Codification No. 815-Derivatives and Hedging and (ii) any realized or unrealized net foreign currency translation or transaction gain or loss impacting net income (including any currency re-measurement of Indebtedness and any net gain or loss resulting from Hedge Agreements for currency exchange risk associated with the above or any other currency related risk), and

 

(l)

any income or Charge from Investments recorded using the equity method.

 

There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in the applicable period.

 

Consolidated Secured Debt” means, as to any Person at any date of determination, the aggregate principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral.

 

Consolidated Total Assets” means, at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the applicable Person at such date.

 

Consolidated Total Debt” means, as to any Person at any date of determination, the aggregate principal amount of all third party debt for borrowed money and the outstanding principal balance of all Indebtedness of such Person represented by notes, bonds, debentures and similar instruments, Capital Leases and purchase money Indebtedness (excluding, for the avoidance of doubt, undrawn letters of credit); provided that “Consolidated Total Debt” shall be calculated (i) net of the Unrestricted Cash Amount (to the extent the Unrestricted Cash Amount is greater than zero) and (ii) excluding any obligation, liability or indebtedness of such Person if, upon or prior to the maturity thereof, such Person has irrevocably deposited with the proper Person in trust or escrow the necessary funds (or evidences of indebtedness) for the payment, redemption or satisfaction of such obligation, liability or indebtedness, and thereafter such funds and evidences of such obligation, liability or indebtedness or other security so deposited are not included in the calculation of the Unrestricted Cash Amount.

 

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Consolidated Working Capital” means, as at any date of determination, the excess of Current Assets over Current Liabilities.

 

Contractual Obligation” means, as applied to any Person, any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

 

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

 

Copyright” means the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; and (c) all rights corresponding to any of the foregoing.

 

Credit Extension” means each of (i) the making of a Revolving Loan or (ii) the issuance, amendment, modification, renewal or extension of any Letter of Credit (other than any such amendment, modification, renewal or extension that does not increase the Stated Amount of the relevant Letter of Credit).

 

Credit Facilities” means the Revolving Facility and the Term Facility.

 

Cure Amount” has the meaning assigned to such term in Section 6.14(b).

 

Cure Period” has the meaning assigned to such term in Section 6.14(b).

 

Cure Right” has the meaning assigned to such term in Section 6.14(b).

 

Current Assets” means, at any date, all assets of the Borrower and the Restricted Subsidiaries which under GAAP would be classified as current assets (excluding any (i) Cash or Cash Equivalents (including Cash and Cash Equivalents held on deposit for third parties by the Borrower or any Restricted Subsidiary), (ii) permitted loans to third parties, (iii) deferred bank fees and derivative financial instruments related to Indebtedness, (iv) the current portion of current and deferred Taxes and (v) management fees receivables).

 

Current Liabilities” means, at any date, all liabilities of the Borrower and the Restricted Subsidiaries which under GAAP would be classified as current liabilities, other than (i) current maturities of long term debt, (ii) outstanding revolving loans and letter of credit exposure, (iii) accruals of Consolidated Interest Expense (excluding Consolidated Interest Expense that is due and unpaid),

(iv) obligations in respect of derivative financial instruments related to Indebtedness, (v) the current portion of current and deferred Taxes, (vi) liabilities in respect of unpaid earnouts, (vii) accruals relating to restructuring reserves, (viii) liabilities in respect of funds of third parties on deposit with the Borrower or any Restricted Subsidiary, (ix) management fees payables, (x) the current portion of any Capital Lease obligation, (xi) the current portion of any other long term liability for borrowed money, (xii) any liabilities that are not Indebtedness and will not be settled in cash or Cash Equivalents during the next succeeding 12- month period after such date, (xiii) the effects from applying purchase accounting, (xiv) any accrued professional liability risks, (xv) restricted marketable securities and (xvi) the current portion of deferred revenue.

 

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Debt Fund Affiliate” means any Affiliate of any Sponsor (other than a natural Person) that is a bona fide debt fund or investment vehicle (in each case with one or more bona fide investors to whom its managers owe fiduciary duties independent of their fiduciary duties to such Sponsor) primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course of its activities and for which the personnel making the primary investment decisions are not personnel primarily engaged in making investment decisions in respect of any equity fund which has a direct or indirect equity investment in the Borrower or the Restricted Subsidiaries (“Equity Personnel”) or personnel controlled by such Equity Personnel.

 

Debtor Relief Laws” means the Bankruptcy Code of the U.S., and all other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the U.S. or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

Declined Proceeds” has the meaning assigned to such term in Section 2.11(b)(vi).

 

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

 

Defaulting Lender” means, subject to Section 2.21(f), any Lender that has (a) defaulted in its payment obligations under this Agreement, including to make a Loan within two Business Days of the date required to be made by it hereunder or to fund its participation in a Letter of Credit or Swingline Loan required to be funded by it hereunder within two Business Days of the date such obligation arose or such Loan, Letter of Credit was required to be made or funded unless such Lender, acting in good faith, notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied,

(b) notified the Administrative Agent, the Swingline Lender or any Issuing Bank or the Borrower in writing that it does not intend to satisfy any such obligation or has made a public statement to that effect (unless such writing or public statement (x) is made by such Lender acting in good faith, (y) relates to such Lender’s obligation to fund a Loan hereunder and (z) 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) has not been satisfied), (c) made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under agreements in which it commits to extend credit generally, (d) failed, within two Business Days after the request of the Administrative Agent or the Borrower, to confirm in writing that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (d) upon receipt of such written confirmation by the Administrative Agent, (e) become (or any parent company thereof has become) insolvent or been determined by any Governmental Authority having regulatory authority over such Person or its assets, to be insolvent, or the assets or management of which has been taken over by any Governmental Authority or (f) (i) become (or any parent company thereof has become) the subject of (A) a bankruptcy or insolvency proceeding or (B) a Bail-In Action, (ii) has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian, appointed for it, or (iii) has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in, any such proceeding or appointment, unless in the case of any Lender subject to this clause (f), the Borrower and the Administrative Agent have each determined that such Lender intends, and has all approvals required to enable it (in form and substance satisfactory to each of the Borrower and the Administrative Agent), to continue to perform its obligations as a Lender

 

21

hereunder; provided that no Lender shall be deemed to be a Defaulting Lender solely by virtue of (I) the ownership or acquisition of any Capital Stock in such Lender or its parent by any Governmental Authority or (II) in the case of any Lender or parent company which is a solvent Person, the precautionary appointment of an administrator, guardian, custodian or other similar official by a Governmental Authority under or based on the law of the country where such Person is subject to home jurisdiction supervision if applicable Requirements of Law require that such appointment not be made public; provided that such ownership interest or action does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contract or agreement to which such Lender is a party. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (f) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.21(f)) upon delivery of written notice of such determination to the Borrower, the Swingline Lender, each Issuing Bank and each Lender.

 

Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, excluding, for the avoidance of doubt, any investment property (within the meaning of the UCC) or any account evidenced by an instrument (within the meaning of the UCC).

 

Derivative Transaction” means (a) any interest-rate transaction, including any interest-rate swap, basis swap, forward rate agreement, interest rate option (including a cap, collar or floor), and any other instrument linked to interest rates that gives rise to similar credit risks (including when-issued securities and forward deposits accepted), (b) any exchange-rate transaction, including any cross-currency interest- rate swap, any forward foreign-exchange contract, any currency option, and any other instrument linked to exchange rates that gives rise to similar credit risks, (c) any equity derivative transaction, including any equity-linked swap, any equity-linked option, any forward equity-linked contract, and any other instrument linked to equities that gives rise to similar credit risk and (d) any commodity (including precious metal) derivative transaction, including any commodity-linked swap, any commodity-linked option, any forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit risks; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees, members of management, managers or consultants of the Borrower or its Subsidiaries shall constitute a Derivative Transaction.

 

Designated Non-Cash Consideration” means the fair market value (as determined by the Borrower in good faith) of non-Cash consideration received by the Borrower or any Restricted Subsidiary in connection with any Disposition pursuant to Section 6.07(h) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation (which amount will be reduced by the amount of Cash or Cash Equivalents received in connection with a subsequent sale or conversion of such Designated Non-Cash Consideration to Cash or Cash Equivalents). A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise Disposed of in compliance with Section 6.07.

 

Disposition” or “Dispose” means the sale, lease, sublease, or other disposition of any property of any Person.

 

Disqualified Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event,

(a)

matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to a sinking fund obligation or

 

22

otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part, on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued (it being understood that if any such redemption is in part, only such part coming into effect prior to 91 days following the Latest Maturity Date shall constitute Disqualified Capital Stock), (b) is or becomes convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Capital Stock that would constitute Disqualified Capital Stock, in each case at any time on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued, (c) contains any mandatory repurchase obligation, in whole or in part, which may come into effect prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued (it being understood that if any such repurchase obligation is in part, only such part coming into effect prior to 91 days following the Latest Maturity Date shall constitute Disqualified Capital Stock) or (d) provides for the scheduled payments of dividends in Cash on or prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued; provided that any Capital Stock that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Capital Stock is convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem such Capital Stock upon the occurrence of any change of control, Public Offering or any Disposition occurring prior to 91 days following the Latest Maturity Date at the time such Capital Stock is issued shall not constitute Disqualified Capital Stock if such Capital Stock provides that the issuer thereof will not redeem any such Capital Stock pursuant to such provisions prior to the Termination Date.

 

Notwithstanding the preceding sentence, (A) if such Capital Stock is issued pursuant to any plan for the benefit of directors, officers, employees, members of management, managers or consultants or by any such plan to such directors, officers, employees, members of management, managers or consultants, in each case in the ordinary course of business of the Borrower or any Restricted Subsidiary, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the issuer thereof in order to satisfy applicable statutory or regulatory obligations, and (B) no Capital Stock held by any future, present or former employee, director, officer, manager, member of management or consultant (or their respective Affiliates or Immediate Family Members) of the Borrower (or any Parent Company or any Subsidiary) shall be considered Disqualified Capital Stock because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.

 

Disqualified Institution” means (a) any bank, financial institution or other institutional lender that is identified by name on or prior to November 6, 2018 in a written notice to the Lead Arrangers and (b) any Company Competitor or any Affiliate thereof that is identified by name prior to November 6, 2019 in a written notice to the Lead Arrangers and (c) any Affiliate of any Person described in clauses (a) or (b) that is clearly identifiable as an Affiliate solely on the basis of its name (it being understood and agreed that no Debt Fund Affiliate or Competitor Debt Fund Affiliate may be designated as a Disqualified Institution); provided that no written notice delivered pursuant to clauses (b) or (c) shall apply retroactively to disqualify any Person that has previously acquired an assignment or participation or allocation in any Credit Facility, subject to the provisions of Section 9.05(f). Notwithstanding the foregoing, each Loan Party and the Lenders acknowledge and agree that the Administrative Agent shall not have any responsibility or obligation to determine, inquire into or monitor whether any Lender, Participant or potential Lender or Participant is a Disqualified Institution or to inquire into, monitor or enforce the compliance with the provisions hereof related to Disqualified Institutions, and the Administrative Agent shall have no liability with respect to any assignment or participation made to a Disqualified Institution (provided that any such assignment or participation shall be subject to the terms of Section 9.05(c) or (f), as applicable) or disclosure of Confidential Information to any Disqualified Institution.

 

Disqualified Person” has the meaning assigned to such term in Section 9.05(f)(ii).

 

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Disregarded Domestic Person” means any Domestic Subsidiary (i) substantially all the assets of which consist of the equity or debt of one or more Foreign Subsidiaries that is a CFC or (ii) that is treated as a disregarded entity or partnership for U.S. federal income tax purposes and that holds no material assets other than equity of one or more CFCs.

 

Dollars” or “$” refers to lawful money of the U.S.

 

Domestic Subsidiary” means any Restricted Subsidiary that is incorporated or organized under the laws of the U.S., any state thereof or the District of Columbia.

 

Dutch Auction” has the meaning assigned to such term on Schedule 1.01(b).

 

ECF Prepayment Amount” has the meaning assigned to such term in Section 2.11(b)(i).

 

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

 

Effective Yield” means, as to any Indebtedness, the effective yield applicable thereto calculated by the Administrative Agent in consultation with the Borrower in a manner consistent with generally accepted financial practices, taking into account (a) interest rate margins, (b) interest rate floors (subject to the proviso set forth below), (c) any amendment to the relevant interest rate margins and interest rate floors prior to the applicable date of determination and (d) original issue discount and upfront or similar fees (based on an assumed four-year average life to maturity or lesser remaining average life to maturity), but excluding (i) any arrangement, commitment, structuring, underwriting, ticking, unused line fees or amendment fees (regardless of whether any such fees are paid to or shared in whole or in part with any lender) and (ii) any other fee that is not payable to all relevant lenders ratably; provided,  however, that (A) to the extent that the LIBO Rate (with an Interest Period of three months) or Alternate Base Rate (without giving effect to any floor specified in the definition thereof) is less than any floor applicable to loans in respect to which the Effective Yield is being calculated on the date on which the Effective Yield is determined, the amount of the resulting difference will be deemed added to the interest rate margin applicable to the relevant Indebtedness for purposes of calculating the Effective Yield and (B) to the extent that the LIBO Rate (for a period of three months) or Alternate Base Rate (without giving effect to any floor specified in the definition thereof) is greater than any applicable floor on the date on which the Effective Yield is determined, the floor will be disregarded in calculating the Effective Yield.

 

Eligible Assignee” means (a) any Lender, (b) any commercial bank, insurance company, finance company, financial institution, any fund that invests in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act), (c) any Affiliate of any Lender, (d) any Approved Fund of any Lender and (e) to the extent permitted under Section 9.05(g), any Affiliated Lender or any Debt Fund Affiliate; provided that in any event, “Eligible Assignee” shall not include (i) any natural person or any

 

24

entity owned and operated for the primary benefit of a natural person, (ii) any Disqualified Institution or

(iii) except as permitted under Section 9.05(g), the Borrower or any of its Affiliates.

 

Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law or actual or alleged Environmental Liability; (b) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or harm to natural resources, the environment or human health and safety as a result of exposure to Hazardous Materials.

 

Environmental Laws” means any and all applicable Requirements of Law and Governmental Authorizations relating to (a) environmental matters, including those relating to any Hazardous Materials Activity or (b) the generation, use, storage, transportation or disposal of or exposure to Hazardous Materials.

 

Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) any Hazardous Material Activities, (c) exposure to any Hazardous Materials, or (d) any contract pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

Equity Personnel” has the meaning assigned to such term in the definition of “Debt Fund Affiliate”.

 

ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate” means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of which that Person is a member,

(b)

any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Code of which that Person is a member, and (c) solely for purpose of ERISA Section 302 and Code Section 412, any affiliated service group within the meaning of Code Section 414(m), of which that Person is a member.

 

ERISA Event” means (a) a “reportable event” (as defined in Section 4043 of ERISA) with respect to a Pension Plan (unless notice has been waived under applicable regulations); (b) a withdrawal by any Loan Party or any ERISA Affiliate of a Loan Party from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations at any facility of any Loan Party or any ERISA Affiliate of a Loan Party as described in Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate of a Loan Party from a Multiemployer Plan resulting in the imposition of Withdrawal Liability on any Loan Party or any ERISA Affiliate of a Loan Party or notification that a Multiemployer Plan is “insolvent” within the meaning of Section 4245 of ERISA or in “endangered” or “critical” status within the meaning of Section 432 of the Code or Section 305 of ERISA; (d) the filing of a notice of intent to terminate a Pension Plan under Section 4041(c) of ERISA, the treatment of a Pension Plan amendment as a termination under Section 4041(c) of ERISA, the commencement of proceedings by the PBGC to terminate a Pension Plan or the receipt by any Loan Party or any ERISA Affiliate of a Loan Party of notice of the treatment of a Multiemployer Plan amendment as a termination under Section 4041A of ERISA or of notice of the commencement of proceedings by the PBGC to terminate a Multiemployer Plan; (e) the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums payable but not delinquent under ERISA Section 4007, upon any Loan Party or ERISA Affiliate of any Loan Party, in connection with the

 

25

termination of any Pension Plan; (g) with respect to a Pension Plan, the failure to satisfy the minimum funding standard of Section 412 or 430 of the Code or Section 302 or 303 of ERISA, whether or not waived;

(h)

a failure by Loan Party or any ERISA Affiliate of a Loan Party to make a required contribution to a Multiemployer Plan; or (i) the imposition of a Lien with respect to a Pension Plan pursuant to Section 303(k) of ERISA.

 

Escrow Account” means a segregated account, under the control of the Escrow Agent that includes only the Escrow Amount, free from all Liens.

 

Escrow Agent” means Barclays, solely in its capacity as escrow agent under the Escrow Agreement.

 

Escrow Agreement” means that certain Escrow Account Terms and Conditions, dated as of June 28, 2019, among the Borrower, the Administrative Agent and the Escrow Agent, as amended, supplemented or modified from time to time.

 

Escrow Amount” has the meaning assigned to such term in the Escrow Agreement.

 

Escrow Funding Conditions” means the conditions set forth in Section 4.01 (other than Sections 4.01(j), (k) and (l)), which, in each case, shall be determined as if the provisions of this Agreement were in full force and in effect on the Escrow Funding Date.

 

Escrow Funding Date” shall mean the date of funding of the Escrow Amount into the Escrow Account upon the satisfaction (or waiver in accordance with Section 9.02) of the Escrow Funding Conditions, which date shall have occurred on June 28, 2019.

 

Escrow Release Conditions” means the delivery by the Administrative Agent of the Payment Instruction (as defined in the Escrow Agreement) to the Escrow Agent on the Escrow Funding Date directing the Escrow Agent to release the funds from the Escrow Account.

 

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

 

Event of Default” has the meaning assigned to such term in Article 7.

 

Excess Cash Flow” means, for any Excess Cash Flow Period, any amount (if positive) equal to:

 

(a)

Consolidated Net Income for such Excess Cash Flow Period; plus

 

(b) (i) an amount equal to the amount of all non-cash Charges to the extent deducted in calculating Consolidated Net Income for such period, including any Charge from Investments recorded using the equity method 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 and (ii) an amount equal to the amount of all cash gains for such period to the extent excluded from Consolidated Net Income pursuant to clauses (b),  (c) or (k) of the definition thereof; plus

 

(c) cash receipts in respect of Hedge Agreements to the extent not included in such Consolidated Net Income; plus

 

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(d) the decrease, if any, in Consolidated Working Capital from the first day to the last day of such Excess Cash Flow Period, but excluding any such decrease in Consolidated Working Capital arising from (i) the acquisition or Disposition of any Person by the Borrower or any Restricted Subsidiary, (ii) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (iii) the application of purchase or recapitalization accounting, (iv) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement or (v) changes to Consolidated Working Capital resulting from non-cash charges and credits to Current Assets and Current Liabilities (including derivatives and deferred income tax); minus

 

(e) (i) an amount equal to the amount of all non-cash credits to the extent included in calculating Consolidated Net Income for such period (but excluding any non-cash credits to the extent representing the reversal of an accrual or reserve described in clause (b)(i) above) and (ii) an amount equal to the amount of all cash Charges for such period to the extent excluded from Consolidated Net Income pursuant to the definition thereof; minus

 

(f) the amount, if any, which, in the determination of Consolidated Net Income for such Excess Cash Flow Period, has been included in respect of gains from any Disposition of the Borrower or any Restricted Subsidiary and any casualty or condemnation, taking or similar event to the extent the same is utilized to prepay Loans pursuant to Section 2.11(b)(ii); minus

 

(g)

cash payments actually made in respect of the following (without duplication):

 

(i) any Permitted Investment (other than Permitted Investments in (A) Cash and Cash Equivalents or (B) the Borrower or any Restricted Subsidiary) or any Restricted Payment permitted by Section 6.04 (solely to the extent not paid to the Borrower or a Restricted Subsidiary) and in each case actually made in cash during such Excess Cash Flow Period or, at the option of the Borrower, in the case of any Excess Cash Flow Period, committed to be made prior to the date the Borrower is required to make a payment of Excess Cash Flow in respect of such Excess Cash Flow Period, (A) except to the extent the relevant Permitted Investment or Restricted Payment is financed with long term Indebtedness (other than revolving Indebtedness) and (B) without duplication of any amounts deducted from Excess Cash Flow for a prior Excess Cash Flow Period;

 

(ii) Capital Expenditures and acquisitions of IP Rights made in cash during such Excess Cash Flow Period or, at the option of the Borrower, in the case of any Excess Cash Flow Period, made prior to the date the Borrower is required to make a payment of Excess Cash Flow in respect of such Excess Cash Flow Period, (A) except to the extent financed with long term Indebtedness (other than revolving Indebtedness) and (B) without duplication of any amounts deducted from Excess Cash Flow for a prior Excess Cash Flow Period;

 

(iii) any long-term liability (other than Indebtedness), excluding the current portion of any such liability of the Borrower or any Restricted Subsidiary;

 

(iv) the aggregate amount of expenditures actually made by the Borrower and the Restricted Subsidiaries during such Fiscal Year (including any expenditure for the payment of financing fees) to the extent that such expenditures are not expensed; minus

 

(h) (i) the aggregate principal amount of all optional prepayments of Indebtedness (other than any optional prepayment of (A) Indebtedness that is deducted from the amount of any

 

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Excess Cash Flow payment in accordance with Section 2.11(b)(i) or (B) revolving Indebtedness except to the extent any related commitment is permanently reduced in connection with such repayment), (ii) the aggregate principal amount of all mandatory prepayments or scheduled repayments of Indebtedness during such Excess Cash Flow Period and (iii) the amount of any premium, make-whole or penalty payment actually paid in cash by the Borrower or any Restricted Subsidiary that is required to be made in connection with any prepayment of Indebtedness, in each case, except to the extent the relevant payment is financed with long term Indebtedness (other than revolving Indebtedness); minus

 

(i) the amount of cash Taxes paid or Tax reserves set aside or payable (without duplication) in such period, to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period (other than any such cash Taxes paid or reserves set aside with respect to estimated Tax obligations deducted pursuant to clause (k) in any prior period); minus

 

(j) the increase, if any, in Consolidated Working Capital from the first day to the last day of such Excess Cash Flow Period, but excluding any such increase in Consolidated Working Capital arising from (i) the acquisition or Disposition of any Person by the Borrower or any Restricted Subsidiary, (ii) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (iii) the application of purchase or recapitalization accounting, (iv) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement and (v) changes to Consolidated Working Capital resulting from non-cash charges and credits to Current Assets and Current Liabilities (including derivatives and deferred income tax); minus

 

(k) the amount of any Tax obligation of the Borrower or any Restricted Subsidiary that is estimated in good faith by the Borrower as due and payable (but is not currently due and payable) by the Borrower or any Restricted Subsidiary as a result of the repatriation of any dividend or similar distribution of net income of any Foreign Subsidiary to the Borrower or any Restricted Subsidiary that the Borrower in good faith expects to repatriate within 12 months of the end of such period; minus

 

(l) without duplication of amounts deducted from Excess Cash Flow in respect of a prior period, at the option of the Borrower, the aggregate amount (i) required to be paid in Cash by the Borrower or the Restricted Subsidiaries pursuant to binding contracts entered into prior to or during such period relating to Capital Expenditures and acquisitions of IP Rights, Permitted Investments or Restricted Payments described in clause (g) above or (ii) otherwise committed to be made in connection with Capital Expenditures or acquisitions of IP Rights or Permitted Investments or Restricted Payments (other than Restricted Payments in the form of dividends and other distributions constituting a return on capital (as opposed to such distributions made to fund selling, general and administrative expenses, taxes and similar items) to the Investors) described in clause (g) above (clauses (l)(i) and (l)(ii), the “Scheduled Consideration”) (other than Permitted Investments in (A) Cash and Cash Equivalents or (B) the Borrower or any Restricted Subsidiary) to be consummated or made during the period of four consecutive Fiscal Quarters of the Borrower following the end of such period (except, in each case, to the extent financed with long-term Indebtedness (other than revolving Indebtedness)); provided that to the extent the aggregate amount actually utilized to finance such Capital Expenditures or acquisitions of IP Rights, Permitted Investments or Restricted Payments during such subsequent period of four consecutive Fiscal Quarters is less than the Scheduled Consideration, the amount of the resulting shortfall shall be added to the calculation of Excess Cash Flow at the end of such subsequent period of four consecutive Fiscal Quarters; minus

 

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(m) cash payments made during such Excess Cash Flow Period for any liability the accrual of which in a prior Excess Cash Flow Period did not reduce Consolidated Net Income (and so increased Excess Cash Flow in such prior period) (provided that there was no other deduction to Consolidated Net Income or Excess Cash Flow related to such payment), except to the extent financed with long-term Indebtedness (other than revolving Indebtedness); minus

 

(n) cash expenditures made in respect of any Hedge Agreement during such period to the extent (i) not otherwise deducted in the calculation of Consolidated Net Income and (ii) not financed with long-term Indebtedness (other than revolving Indebtedness); minus

 

(o) amounts paid in Cash (except to the extent financed with long-term Indebtedness (other than revolving Indebtedness)) during such period on account of (i) items that were accounted for as non-Cash reductions of Consolidated Net Income in a prior period and (ii) reserves or amounts established in purchase accounting to the extent such reserves or amounts are added back to, or not deducted from, Consolidated Net Income.

 

Excess Cash Flow Period” means each Fiscal Year, commencing with the Fiscal Year ending on December 31, 2020.

 

Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations of the SEC promulgated thereunder.

 

Excluded Assets” means each of the following:

 

(a) (i) any asset to the extent that the Administrative Agent may not validly possess a security interest therein under applicable Requirements of Law (including rules and regulations of any Governmental Authority), (ii) any asset the grant or perfection of a security interest in which is prohibited or restricted under applicable Requirements of Law (including any requirement to obtain the consent, approval, license or authorization of any Governmental Authority) (unless such consent, approval, license or authorization has been obtained), in each case except to the extent such prohibition or restriction is ineffective under the applicable UCC or other applicable Requirements of Law, (iii) leases, contracts, agreements, licenses, franchises and permits to the extent the grant of a security interest therein is prohibited or restricted by applicable Requirements of Law or by the terms thereof (including any requirement to obtain the consent, approval, license or authorization of any third party (unless such consent, approval, license or authorization has been obtained)), in each case except to the extent such prohibition or restriction is ineffective under the applicable UCC or other applicable Requirements of Law, or (iv) equipment and assets that are subject to a Lien securing a purchase money or Capital Lease obligation permitted under this Agreement (not including assets subject to Liens securing Indebtedness permitted by Section 6.01(q)(iii)), if the underlying contract or other agreement prohibits or restricts the creation of any other Lien on such equipment (including any requirement to obtain the consent of a third party) (unless such consent has been obtained) or the granting of a Lien on such assets would trigger the termination (or a right of termination) of any such purchase money or Capital Lease pursuant to any “change of control” or similar provision in favor of any third party or the ability for any third party to amend any rights, benefits or obligations of the Loan Parties in respect of those assets, except to the extent such prohibition or restriction is ineffective under the applicable UCC or other applicable Requirements of Law; it being understood that any proceeds or receivables arising out of any asset described in this clause (a) shall not constitute Excluded Assets pursuant to this clause

(a)

to the extent the assignment of such proceeds or receivables is expressly deemed effective under the UCC or other applicable Requirements of Law notwithstanding the relevant prohibition, violation or termination right,

 

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(b) the Capital Stock of any (i) Captive Insurance Subsidiary, (ii) Unrestricted Subsidiary, (iii) not-for-profit Subsidiary or (iv) special purpose entity used for any securitization facility,

 

(c) any intent-to-use application for the registration of any Trademark or similar application under applicable federal law, provided that upon the filing and acceptance by the U.S. Patent and Trademark Office of a “Statement of Use”, “Amendment to Allege Use” or similar filing with respect thereto or circumstances otherwise change so that the interests of a Loan Party in such Trademark application(s) is no longer on an “intent-to-use” basis, such Trademark application(s) shall automatically and without further action by the parties be considered Collateral and subject to the security interest granted by such Loan Party hereunder,

 

(d) (i) any leasehold Real Estate Asset and (ii) any owned Real Estate Asset that is not a Material Real Estate Asset,

 

(e)

any interest in any partnership, joint venture or non-Wholly-Owned Subsidiary

(i)

which cannot be pledged without the consent of one or more third parties other than the Borrower or any of its Wholly-Owned Restricted Subsidiaries (after giving effect to Sections 9- 406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Requirement of Law) (except to the extent such consent has been obtained) or (ii) the pledge of which could give rise to a “right of first refusal”, a “right of first offer” or a similar right that may be exercised by any third party other than the Borrower or any of its Wholly-Owned Restricted Subsidiaries,

 

(f)

any Margin Stock,

 

(g) the Capital Stock of (i) any Foreign Subsidiary and (ii) any Disregarded Domestic Person, other than 65.0% of the issued and outstanding voting Capital Stock and 100.0% of the issued and outstanding non-voting Capital Stock of any such Person that is a first-tier Foreign Subsidiary or Disregarded Domestic Person,

 

(h) Commercial Tort Claims with a value (as estimated in good faith by the Borrower) of less than $5,000,000,

 

(i) Instruments (i) under which the only relevant obligors are Loan Parties and (ii) with an outstanding balance of less than $7,500,000,

 

(j) any Cash or Cash Equivalents comprised of (i) funds used or to be used for payroll and payroll Taxes and other employee benefit payments to or for the benefit of the employees of the Borrower or any Restricted Subsidiary, (ii) funds used or to be used to pay any Taxes required to be collected, remitted or withheld (including U.S. federal and state withholding Taxes (including the employer’s share thereof)) and (iii) any other funds which any Loan Party holds as an escrow or fiduciary for the benefit of any third Person,

 

(k) any asset or Collateral to the extent the cost, burden, difficulty or consequence of obtaining or perfecting a security interest therein outweighs the benefit of the security afforded thereby as reasonably determined by the Borrower and the Administrative Agent, and

 

(l) any asset the grant or perfection of a security interest in which would result in a material and adverse tax consequence as reasonably determined by the Borrower and notified in writing to the Administrative Agent.

 

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Excluded Subsidiary” means:

 

(a)

any Unrestricted Subsidiary,

 

(b)

any Subsidiary that is not a Wholly-Owned Subsidiary,

 

(c)

any Immaterial Subsidiary,

 

(d) any Subsidiary (i) that is prohibited or restricted by Requirement of Law or any Contractual Obligation (limited, in the case of a Contractual Obligation, to such Contractual Obligations in place on the Closing Date or on the date such Person becomes a Restricted Subsidiary and that was not incurred in contemplation thereof) from providing a Loan Guaranty,

(ii) that would require a governmental consent, approval, license or authorization (including any regulatory consent, approval, license or authorization) in order to provide a Loan Guaranty (other than any such consent, approval, license or authorization that has been obtained) or (iii) if the provision of a Loan Guaranty by such Subsidiary would result in material adverse tax consequences as reasonably determined by the Borrower,

 

(e)

any not-for-profit Subsidiary,

 

(f)

any Captive Insurance Subsidiary,

 

(g) any special purpose entity used for any permitted securitization or receivables facility or financing,

 

(h)

any Foreign Subsidiary,

 

(i)

any Disregarded Domestic Person,

 

(j) any Domestic Subsidiary that is a direct or indirect Subsidiary of a CFC or a Disregarded Domestic Person,

 

(k) without limiting clause (d) of this definition, any Subsidiary acquired by the Borrower or any Restricted Subsidiary that, at the time of the relevant acquisition, is an obligor in respect of assumed Indebtedness that is permitted pursuant to Section 6.01(q) to the extent (as for so long as) the documentation governing such Indebtedness prohibits such Subsidiary from providing a Loan Guaranty; provided that such prohibition was not incurred or amended in contemplation of such acquisition,

 

(l)

any Broker-Dealer Subsidiary,

 

(m) any Subsidiary that is a trust company organized pursuant to the laws of the United States, any state or any other jurisdiction therein,

 

(n) any Subsidiary that is an investment company under the Investment Company Act of 1940,

 

(o)

any Investment Vehicle,

 

(p) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower, the burden or cost of providing a Loan Guaranty outweighs the benefits afforded thereby, and

 

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(q) for the avoidance of doubt, any Investment Manager Subsidiary shall not be an Excluded Subsidiary.

 

Excluded Swap Obligation” means, with respect to any Loan Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Loan Guaranty of such Loan Guarantor of, or the grant by such Loan Guarantor of a security interest to secure, such Swap Obligation (or any Loan Guaranty 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 Loan Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Loan Guaranty of such Loan Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Loan Guaranty or security interest is or becomes illegal.

 

Excluded Taxes” means, with respect to the Administrative Agent, any Lender or Issuing Bank, or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder, (a) Taxes (i) imposed on (or measured by) net income (however denominated) or franchise Taxes, in each case, imposed by the jurisdiction under the Requirements of Law under which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed by the U.S. or any similar tax imposed by any other jurisdiction described in clause a(i) or (ii), (c) any U.S. federal withholding Tax that is imposed on amounts payable to the relevant recipient pursuant to a law in effect at the time the relevant recipient becomes a party to this Agreement or acquires an interest in any Commitment (or designates a new lending office), except (i) pursuant to an assignment or designation of a new lending office under Section 2.19(b) and (ii) to the extent that the relevant recipient was entitled, immediately before designation of a new lending office (or, in the case of an assignment, to the extent the assignor was entitled immediately before assignment), to receive additional amounts from any Loan Party with respect to such withholding Tax pursuant to Section 2.17, (d) any Tax imposed as a result of a failure by the relevant recipient to comply with Section 2.17(f) and (e) any U.S. federal withholding Tax imposed pursuant to FATCA.

 

Existing Credit Agreement” means that certain Credit Agreement dated as of February 12, 2018 by and among the Borrower, the lenders from time to time party thereto and Royal Bank of Canada, as administrative agent.

 

Extended Revolving Credit Commitment”  has  the  meaning  assigned  to  such  term  in  Section 2.23(a)(i).

 

Extended Revolving Loans” has the meaning assigned to such term in Section 2.23(a)(i).

 

Extended Term Loans” has the meaning assigned to such term in Section 2.23(a)(ii).

 

Extension” has the meaning assigned to such term in Section 2.23(a).

 

Extension Amendment” means an amendment to this Agreement that is reasonably satisfactory to the Administrative Agent (for purposes of giving effect to Section 2.23) and the Borrower executed by each of (a) the Loan Parties, (b) the Administrative Agent and (c) each Lender that has accepted the applicable Extension Offer pursuant hereto and in accordance with Section 2.23.

 

Extension Offer” has the meaning assigned to such term in Section 2.23(a).

 

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FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations, official guidance or interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements (or related legislation or official administrative rules) implementing any of the foregoing.

 

FCPA” has the meaning assigned to such term in Section 3.19(c).

 

Federal Funds Effective Rate” means, for any day, the rate calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided, that if the Federal Funds Effective Rate for any day is less than zero, the Federal Funds Effective Rate for such day will be deemed to be zero.

 

Fee Letter” means that certain fee letter dated as of November 6, 2018 between the Borrower and the Lead Arrangers (as amended by that certain Joinder Agreement to Project Eagle/Patriot Commitment Letter, dated as of November 30, 2018 between the Borrower and the Lead Arrangers and as further amended by that certain Amended and Restated Joinder Agreement to Project Eagle/Patriot Commitment Letter, dated as of December 3, 2018 between the Borrower and the Lead Arrangers).

 

FINRA” means the Financial Industry Regulatory Authority or any other self-regulatory body which succeeds to the functions of the Financial Industry Regulatory Authority.

 

First Lien Leverage Ratio” means the ratio, as of any date of determination, of (a) Consolidated First Lien Debt as of the last day of the Test Period then most recently ended to (b) Consolidated Adjusted EBITDA for the Test Period then most recently ended, in each case, of the Borrower and the Restricted Subsidiaries on a consolidated basis.

 

First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that, subject to any Acceptable Intercreditor Agreement, such Lien is senior in priority to any other Lien to which such Collateral is subject, other than any Permitted Lien.

 

Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

Fiscal Year” means the fiscal year of the Borrower ending December 31 of each calendar year.

 

Fixed Amounts” has the meaning assigned to such term in Section 1.09(d).

 

Fixed Incremental Amount” means (a) the greater of $415,000,000 and 100.0% of Consolidated Adjusted EBITDA for the most recently ended Test Period minus (b) the aggregate outstanding principal amount of all Incremental Facilities and Incremental Equivalent Debt incurred or issued in reliance on the Fixed Incremental Amount.

 

Flood Hazard Property” means any parcel of any Material Real Estate Asset subject to a Mortgage located in the U.S. in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

 

Foreign Benefit Event” means with respect to any Foreign Pension Plan, (a) the failure of any such Foreign Pension Plan or any trust thereunder intended to qualify for tax exempt status under any Requirements of Law, (b) the existence of unfunded liabilities in excess of the amount permitted under any

 

33

Requirements of Law, (c) the failure to make the required contributions or payments under any Requirements of Law on or before the due date for such contributions or payments, (d) the receipt of a notice by a Governmental Authority relating to its intention to terminate any such Foreign Pension Plan or to appoint a trustee or similar official to administer any such Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension Plan, (e) the incurrence of any liability on account of the complete or partial termination of such Foreign Pension Plan or the complete or partial withdrawal of any participating employer therein, or (f) the occurrence of any transaction that is prohibited under any Requirements of Law and that could reasonably be expected to result in the incurrence of any liability by any Loan Party, or the imposition on any Loan Party of any fine, excise tax or penalty resulting from any noncompliance with any Requirement of Law, in the case of the acts, omissions, and occurrences described in clauses (a) through (f) above, only to the extent that such acts, omissions or occurrences could reasonably be expected to result in a Material Adverse Effect.

 

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

 

Foreign Pension Plan” means any defined benefit pension plan or other similar program established or maintained outside the United States by any Loan Party for employees of any Loan Party residing outside the United States, which fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

 

Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic Subsidiary.

 

GAAP” means generally accepted accounting principles in the U.S. in effect and applicable to the accounting period in respect of which reference to GAAP is made.

 

Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative power or functions of or pertaining to any government or any court, in each case whether associated with a state or locality of the U.S., the U.S., or a foreign government (including any supranational bodies such as the European Union or the European Central Bank).

 

Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

 

Granting Lender” has the meaning assigned to such term in Section 9.05(e).

 

Growth Available Incremental Amount” has the meaning assigned to such term in the definition of “Incremental Cap.”

 

Guarantee” of or by any Person (the “Guarantor”) means any obligation, contingent or otherwise, of the Guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “Primary Obligor”) in any manner and including any obligation of the Guarantor (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor to pay such Indebtedness or other monetary

 

34

obligation, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or monetary obligation, (e) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (f) secured by any Lien on any assets of such Guarantor securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or monetary other obligation is assumed by such Guarantor (or any right, contingent or otherwise, of any holder of such Indebtedness or other monetary obligation to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition, Disposition or other transaction permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, 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 the guaranteeing Person in good faith.

 

Hazardous Materials” means any chemical, material, substance or waste, or any constituent thereof that is defined, listed or regulated as hazardous, toxic, a pollutant or a contaminant under applicable Environmental Law.

 

Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Material, including the storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Material, and any corrective action or response action with respect to any of the foregoing.

 

Hedge Agreement” means any agreement with respect to any Derivative Transaction between any Loan Party or any Restricted Subsidiary and any other Person.

 

Hedging Obligations” means, with respect to any Person, the obligations of such Person under any Hedge Agreement.

 

Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary designated by the Borrower pursuant to written notice provided to the Administrative Agent as an “Immaterial Subsidiary”; provided that no Borrower may be designated as an Immaterial Subsidiary; provided,  further, that (a) the gross assets of any Immaterial Subsidiary (after eliminating any intercompany obligations) shall not exceed 5.0% of Consolidated Total Assets of the Borrower and the Restricted Subsidiaries, and (b) the contribution to Consolidated Adjusted EBITDA of any Immaterial Subsidiary shall not exceed 5.0% of the Consolidated Adjusted EBITDA of the Borrower and the Restricted Subsidiaries, in each case, as of the last day of the most recently ended Test Period; and provided,  further, that, if (i) the combined gross assets (after eliminating any intercompany obligations) of all Immaterial Subsidiaries exceeds 5.0% of Consolidated Total Assets of the Borrower and the Restricted Subsidiaries or (ii) the contribution to Consolidated Adjusted EBITDA of all Immaterial Subsidiaries exceeds 5.0% of Consolidated Adjusted EBITDA of the Borrower and the Restricted Subsidiaries, in each case, as of the last day of the most recently ended Test Period, the Borrower shall designate one or more of such Subsidiaries as non-Immaterial Subsidiaries pursuant to written notice provided to the Administrative Agent, such, after giving effect thereto, (x) the combined gross assets (after eliminating any intercompany obligations) of all Immaterial Subsidiaries does not exceed 5.0% of Consolidated Total Assets of the Borrower and the Restricted Subsidiaries and (y) the contribution to Consolidated Adjusted EBITDA of all Immaterial Subsidiaries does not exceed 5.0% of Consolidated Adjusted EBITDA of the Borrower and the Restricted Subsidiaries, in each case, as of the last day of the most recently ended Test Period.

 

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Immediate Family Member” means, with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, domestic partner, former domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter- in-law (including adoptive relationships), any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals, such individual’s estate (or an executor or administrator acting on its behalf), heirs or legatees or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

 

Incremental Cap” means:

 

(a)

the Fixed Incremental Amount; plus

 

(b) (1) the amount of (A) any optional prepayment of any (x) Term Loan in accordance with Section 2.11(a), (y) Incremental Equivalent Debt (to the extent originally incurred using the Fixed Incremental Amount) or (z) Refinancing Indebtedness or (B) any permanent reduction of any Revolving Credit Commitment and (2) the cash amount paid in respect of any reduction in any Term Loan (other than any Incremental Term Facility incurred pursuant to clause (c) below) resulting from assignments to (and purchases by) the Borrower or any Restricted Subsidiary, in each case so long as such optional prepayment or assignment and purchase, as the case may be, was not funded with the proceeds of any Refinancing Indebtedness or other long-term Indebtedness (other than revolving Indebtedness) or with proceeds constituting a Cure Amount (such amount, the “Growth Available Incremental Amount”); plus

 

(c) an unlimited amount so long as, in the case of this clause (c), after giving effect to the relevant Incremental Facility, (i) if the relevant Incremental Facility is unsecured or secured solely by assets that do not constitute Collateral, the Total Leverage Ratio, calculated on a Pro Forma Basis for the most recently ended Test Period (including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental Facility) and, in the case of any Incremental Commitment, assuming a full drawing of such Incremental Commitment) does not exceed, at the election of the Borrower, (A) 4.50:1.00 or (B) if the relevant Incremental Facility is incurred in connection with any Permitted Acquisition or other permitted Investment, the Total Leverage Ratio immediately prior to such Permitted Acquisition or other permitted Investment, (ii) if the relevant Incremental Facility is secured by Liens on the Collateral that are junior to the Liens on the Collateral securing the Term Facility, the Secured Leverage Ratio, calculated on a Pro Forma Basis for the most recently ended Test Period (including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental Facility) and, in the case of any Incremental Commitment, assuming a full drawing of such Incremental Commitment) does not exceed, at the election of the Borrower, (A) 4.50:1.00 or (B) if the relevant Incremental Facility is incurred in connection with any Permitted Acquisition or other permitted Investment, the Secured Leverage Ratio immediately prior to such Permitted Acquisition or other permitted Investment, and

(iii)

if the relevant Incremental Facility is secured by Liens on the Collateral that are pari passu with the Liens on the Collateral securing the Term Facility, the First Lien Leverage Ratio, calculated on a Pro Forma Basis for the most recently ended Test Period (including the application of the proceeds thereof (without “netting” the cash proceeds of the applicable Incremental Facility) and, in the case of any Incremental Commitment, assuming a full drawing of such Incremental Commitment) does not exceed, at the election of the Borrower, (A) 2.65:1.00 or (B) if the relevant Incremental Facility is incurred in connection with any Permitted Acquisition or other permitted Investment, the First Lien Leverage Ratio immediately prior to such Permitted Acquisition or other permitted Investment;

 

36

provided that (x) (I) the Borrower may elect to use amounts under clause (c) above (to the extent compliant therewith) prior to utilization of amounts under clauses (a) or (b) above; provided that, if the Borrower does not make such election, the Borrower will be deemed to have elected to use clause (c) above first and (II) Incremental Facilities and/or Incremental Equivalent Debt may be incurred simultaneously under clauses

(a) through (c) above, and proceeds from any such incurrence may be utilized in a single transaction by first calculating the incurrence under clause (c) above and then calculating the incurrence under clauses (a) and/or (b) above specifying the amount so requested under each such clause and (y) the Borrower may re- designate any Incremental Facility or Incremental Equivalent Debt originally designated as incurred under clauses (a) and/or (b) above as having been incurred under clause (c) above so long as, at the time of such re-designation, the Borrower would be permitted to incur under clause (c) above the aggregate principal amount of such Incremental Facility or Incremental Equivalent Debt being so re-designated (for purposes of clarity, with any such re-designation having the effect of increasing the Borrower’s ability to incur indebtedness under clauses (a) and/or (b) above as of the date of such re-designation by the amount of the Incremental Facility or Incremental Equivalent Debt so re-designated); provided,  further, that, unless the Borrower elects otherwise, any Incremental Facility or Incremental Equivalent Debt originally designated as incurred under clauses (a) and/or (b) above shall be automatically reclassified as having been incurred under clause (c) above if the Total Leverage Ratio, Secured Leverage Ratio or First Lien Leverage Ratio, as applicable, test under clause (c) above is satisfied at any time after the incurrence of such Incremental Facility or Incremental Equivalent Debt.

 

Incremental Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Facility or Incremental Loan.

 

Incremental Equivalent Debt” means Indebtedness in the form of secured or unsecured notes or loans or junior secured or unsecured notes or loans or commitments in respect of any of the foregoing issued, incurred or implemented in lieu of loans which would otherwise be permitted to be incurred under an Incremental Facility; provided that:

 

(a) the aggregate outstanding principal amount thereof shall not exceed the Incremental Cap;

 

(b) on the date that such notes or loans or commitments are issued, incurred or implemented, the representations and warranties of the Loan Parties set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects on and as of such date with the same effect as though such representations and warranties had been made on and as of such date; provided that to the extent that any representation and warranty specifically refers to an earlier date, it shall be true and correct in all material respects as of such earlier date; provided, further, that representations and warranties that are qualified by “material”, “material adverse effect” or a similar term shall be true and correct in all respects;

 

(c) no Event of Default under Sections 7.01(a), 7.01(f) or 7.01(g) exists or would exist immediately after giving effect to such notes or loans and, except as otherwise agreed by the lenders or holders providing such notes or loans in connection with an acquisition or other Investment permitted under this Agreement, no other Event of Default exists or would exist immediately after giving effect to such notes or loans;

 

(d) the Weighted Average Life to Maturity applicable to any such Indebtedness in the form of notes or term loans is no shorter than the Weighted Average Life to Maturity of the then- existing Term Loans; provided that this requirement shall not apply to Incremental Equivalent Debt in the form of one-year bridge loans that are convertible or exchangeable into other instruments

 

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meeting the requirements set forth in this definition (but for the avoidance of doubt, excluding any loans, securities or other debt which are exchanged for or otherwise replace such bridge loans);

 

(e) the final maturity date with respect to such notes or loans is no earlier than the Latest Term Loan Maturity Date on the date of the issuance or incurrence, as applicable, thereof; provided that this requirement shall not apply to Incremental Equivalent Debt in the form of one- year bridge loans that are convertible or exchangeable into other instruments meeting the requirements set forth in this definition (but for the avoidance of doubt, excluding any loans, securities or other debt which are exchanged for or otherwise replace such bridge loans);

 

(f) in the case of any such Indebtedness incurred in the form of term loans that are pari passu with the Initial Term Loans with respect to security (other than any such Indebtedness that constitutes MFN Adjustment Excluded Indebtedness), the Effective Yield applicable thereto (as determined on the date of initial incurrence thereof) will not be more than 0.50% per annum higher than the Effective Yield in respect of the Initial Term Loans (as determined on such date) unless the Effective Yield with respect to the Initial Term Loans is adjusted to be equal to such Effective Yield applicable to such Indebtedness, minus, 0.50% per annum;

 

(g) (i) any such notes or loans must rank pari passu with or junior to the Term Facility in right of payment and may rank pari passu with or junior to the Term Facility with respect to security or may be unsecured and (ii) to the extent such notes or loans are ranked pari passu with the Term Facility with respect to security or are subordinated to the Term Facility in right of payment or security, they shall be subject to an Acceptable Intercreditor Agreement;

 

(h) no such Indebtedness may be (x) guaranteed by any Person which is not a Loan Party or (y) secured by any assets other than the Collateral; and

 

(i) notwithstanding anything to the contrary in this definition or in any other provision of any Loan Document, if the proceeds of any Incremental Equivalent Debt are intended to be applied to finance an acquisition or other Investment that is permitted under this Agreement, the conditions to entering into and availability of such Incremental Equivalent Debt (including applicability of customary “SunGard” or other “certain funds” conditionality but without in any way limiting the other applicable conditions to Incremental Equivalent Debt specified in this Agreement), and the timing of satisfaction or waiver of any such conditions (as between being satisfied or waived upon execution of an amendment evidencing such Incremental Equivalent Debt or upon the making of any notes or loans thereunder), shall be as agreed to among the Borrower and the lenders in respect of such Incremental Equivalent Debt; provided that no Event of Default under Sections 7.01(a),  7.01(f) or 7.01(g) exists or would exist immediately after giving effect to such Incremental Equivalent Debt.

 

Incremental Facilities” has the meaning assigned to such term in Section 2.22(a).

 

Incremental Facility Amendment” means an amendment to this Agreement that is reasonably satisfactory to the Administrative Agent (solely for purposes of giving effect to Section 2.22) and the Borrower executed by each of (a) the Loan Parties, (b) the Administrative Agent and (c) each Lender that agrees to provide all or any portion of the Incremental Facility being incurred pursuant thereto and in accordance with Section 2.22.

 

Incremental Loans” has the meaning assigned to such term in Section 2.22(a).

 

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Incremental Revolving Commitment” means any commitment made by a lender to provide all or any portion of any Incremental Revolving Facility.

 

Incremental Revolving Facility” has the meaning assigned to such term in Section 2.22(a).

 

Incremental Revolving Facility Lender” means, with respect to any Incremental Revolving Facility, each Revolving Lender providing any portion of such Incremental Revolving Facility.

 

Incremental Revolving Loans” has the meaning assigned to such term in Section 2.22(a).

 

Incremental Term Facility” has the meaning assigned to such term in Section 2.22(a).

 

Incremental Term Loans” has the meaning assigned to such term in Section 2.22(a).

 

Incurrence-Based Amounts” has the meaning assigned to such term in Section 1.09(d).

 

Indebtedness” as applied to any Person means, without duplication:

 

(a)

all indebtedness for borrowed money;

 

(b) that portion of obligations with respect to Capital Leases to the extent recorded (or required to be recorded) as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

 

(c) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments to the extent the same would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

 

(d) any obligation of such Person owed for all or any part of the deferred purchase price of property or services (excluding (i) any earn-out obligation or purchase price adjustment until such obligation (A) becomes a liability on the statement of financial position or balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP and (B) has not been paid within sixty (60) days after becoming