CREDIT AGREEMENT by and among EVOLENT HEALTH LLC, as Administrative Borrower, ENDZONE MERGER SUB, INC., as Initial Borrower which upon consummation of the TPG Acquisition will be merged with and into TPG GROWTH ICEMAN PARENT, INC., as TPG and, upon...
Exhibit 10.1
EXECUTION VERSION
by and among
EVOLENT HEALTH LLC,
as Administrative Borrower,
as Administrative Borrower,
ENDZONE MERGER SUB, INC.,
as Initial Borrower
which upon consummation of the TPG Acquisition will be merged with and into
TPG GROWTH ICEMAN PARENT, INC.,
as TPG and, upon consummation of the TPG Acquisition, as the survivor thereof, as a Borrower,
IMPLANTABLE PROVIDER GROUP, INC.,
as a Borrower
as Parent
Certain Subsidiaries thereof, as Guarantors,
The Lenders
from Time to Time Party Hereto,
from Time to Time Party Hereto,
and
ARES CAPITAL CORPORATION,
as Administrative Agent,
as Administrative Agent,
ACF XXXXX I LP,
as Collateral Agent,
ACF XXXXX I LP,
as Revolving Agent,
Dated as of August 1, 2022
___________________________________
___________________________________
TABLE OF CONTENTS
Page
Article I Definitions 2
Section 1.01 Defined Terms 2
Section 1.02 Other Interpretive Provisions 48
Section 1.03 Accounting Terms and Determination 48
Section 1.04 Rounding 48
Section 1.05 References to Agreements, Laws, etc 48
Section 1.06 Times of Day 49
Section 1.07 Timing of Payment of Performance 50
Section 1.08 Corporate Terminology 50
Section 1.09 UCC Definitions 50
Section 1.10 Divisions; Series 50
Section 1.11 Rates 50
Article II Amount and Terms of Credit Facilities 51
Section 2.01 Loans 51
Section 2.02 Borrowing Procedures and Settlements 52
Section 2.03 Notice of Borrowing 57
Section 2.04 Disbursement of Term Loans 57
Section 2.05 Payment of Loans; Evidence of Debt 58
Section 2.06 Conversions and Continuations 59
Section 2.07 Pro Rata Borrowings 59
Section 2.08 Interest 59
Section 2.09 [Reserved] 61
Section 2.10 Increased Costs, Illegality, etc 61
(a) If any Change in Law shall: 61
Section 2.11 Compensation 62
Section 2.12 Change of Lending Office 63
Section 2.13 Notice of Certain Costs 63
Section 2.14 Bank Accounts and Collections 63
Section 2.15 Defaulting Lenders 65
Section 2.16 Benchmark Replacement Setting 66
Article III [RESERVED] 66
Article IV Fees and Commitment Terminations and Reductions 67
Section 4.01 Fees 67
Section 4.02 Mandatory Termination of Commitments 68
Section 4.03 Reduction of Commitments 68
Section 4.04 Prepayment Premium 68
Article V Payments 69
Section 5.01 Voluntary Prepayments 69
Section 5.02 Mandatory Prepayments 70
Section 5.03 Payment of Obligations; Method and Place of Payment 73
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TABLE OF CONTENTS
(continued)
Page
Section 5.04 Net Payments 74
Section 5.05 Computations of Interest and Fees 77
Article VI 77
Conditions Precedent 77
Section 6.01 Conditions Precedent to Initial Credit Extension 77
Section 6.02 Conditions Precedent to all Credit Extensions after the Closing Date 80
Article VII Representations, Warranties and Agreements 81
Section 7.01 Corporate Status 81
Section 7.02 Corporate Power and Authority 81
Section 7.03 No Violation 82
Section 7.04 Litigation, Labor Controversies, etc 82
Section 7.05 Use of Proceeds; Regulations U and X 82
Section 7.06 Approvals, Consents, etc 82
Section 7.07 Investment Company Act 83
Section 7.08 Full Disclosure 83
Section 7.09 Financial Condition; No Material Adverse Effect 83
Section 7.10 Tax Returns and Payments 84
Section 7.11 Compliance with ERISA 84
Section 7.12 Capitalization and Subsidiaries 85
Section 7.13 Intellectual Property 85
Section 7.14 Environmental 85
Section 7.15 Ownership of Properties 85
Section 7.16 No Default 86
Section 7.17 Solvency 86
Section 7.18 Licensed Insurance Entities 87
Section 7.19 Compliance with Laws; Authorizations 87
Section 7.20 Contractual or Other Restrictions 87
Section 7.21 Transaction Documents 87
Section 7.22 Collective Bargaining Agreements 87
Section 7.23 Insurance 88
Section 7.24 Evidence of Other Indebtedness 88
Section 7.25 [Reserved] 88
Section 7.26 Foreign Assets Control Regulations; Anti-Money Laundering and Anti-Corruption Practices 88
Section 7.27 Patriot Act 89
Section 7.28 Holding Company 89
Section 7.29 Flood Insurance 89
Section 7.30 Location of Collateral; Equipment List 89
Section 7.31 Health Care Matters 89
Section 7.32 Eligible Accounts 92
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TABLE OF CONTENTS
(continued)
Page
Article VIII Affirmative Covenants 92
Section 8.01 Financial Information, Reports, Notices and Information 92
Section 8.02 Books, Records and Inspections; Field Exams 96
Section 8.03 Maintenance of Insurance 97
Section 8.04 Payment of Taxes 98
Section 8.05 Maintenance of Existence; Compliance with Laws, etc 98
Section 8.06 Environmental Compliance 98
Section 8.07 ERISA 100
Section 8.08 Maintenance of Property and Assets 100
Section 8.09 End of Fiscal Years; Fiscal Quarters 101
Section 8.10 Use of Proceeds 101
Section 8.11 Further Assurances; Additional Guarantors and Grantors 101
Section 8.12 [Reserved] 103
Section 8.13 Compliance with Health Care Laws 103
Section 8.14 Intellectual Property 104
Section 8.15 Distributable Cash 104
Section 8.16 Post-Closing 104
Article IX Negative Covenants 106
Section 9.01 Limitation on Indebtedness 106
Section 9.02 Limitation on Liens 108
Section 9.03 Consolidation, Merger, etc 110
Section 9.04 Permitted Dispositions 111
Section 9.05 Investments 112
Section 9.06 Restricted Payments, etc 115
Section 9.07 Modification of Certain Agreements 117
Section 9.08 Sale and Leaseback 118
Section 9.09 Transactions with Affiliates 118
Section 9.10 Restrictive Agreements, etc 118
Section 9.11 Hedging Transactions 119
Section 9.12 Changes in Business 119
Section 9.13 Financial Performance Covenant 119
Section 9.14 Disqualified Capital Stock 120
Section 9.15 [Reserved] 120
Section 9.16 Holdings Covenant 120
Article X Events of Default 122
Section 10.01 Listing of Events of Default 122
Section 10.02 Remedies Upon Event of Default 125
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TABLE OF CONTENTS
(continued)
Page
Article XI The Administrative Agent 126
Section 11.01 Appointment 126
Section 11.02 Delegation of Duties 126
Section 11.03 Exculpatory Provisions 126
Section 11.04 Reliance by Administrative Agent 127
Section 11.05 Notice of Default 127
Section 11.06 Nonreliance on Administrative Agent and Other Lenders 127
Section 11.07 Indemnification 128
Section 11.08 Agent in Its Individual Capacity 128
Section 11.09 Successor Agents 129
Section 11.10 Agents Generally 129
Section 11.11 Restrictions on Actions by Lenders; Sharing of Payments 129
Section 11.12 Agency for Perfection 130
Section 11.13 Authorization to File Proof of Claim 130
Section 11.14 Credit Bids 131
Section 11.15 Binding Effect 131
Article XII Miscellaneous 131
Section 12.01 Amendments and Waivers 131
Section 12.02 Notices and Other Communications; Facsimile Copies 134
Section 12.03 No Waiver; Cumulative Remedies 135
Section 12.04 Survival of Representations and Warranties 136
Section 12.05 Payment of Expenses; Indemnification 136
Section 12.06 Successors and Assigns; Participations and Assignments 137
Section 12.07 Replacements of Lenders Under Certain Circumstances 142
Section 12.08 Securitization 143
Section 12.09 Adjustments; Set-off 143
Section 12.10 Counterparts 144
Section 12.11 Severability 144
Section 12.12 Integration 144
Section 12.13 GOVERNING LAW 145
Section 12.14 Submission to Jurisdiction; Waivers 145
Section 12.15 Acknowledgments 146
Section 12.16 WAIVERS OF JURY TRIAL 146
Section 12.17 Confidentiality 146
Section 12.18 Press Releases, etc 148
Section 12.19 Releases of Guarantees and Liens 148
Section 12.20 USA Patriot Act 149
Section 12.21 No Fiduciary Duty 149
Section 12.22 Authorized Officers 149
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TABLE OF CONTENTS
(continued)
Page
Section 12.23 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 149
Section 12.24 Purchase Option 150
Section 12.25 All Obligations to Constitute Joint and Several Obligations 152
Section 12.26 Administrative Borrower 153
Section 12.27 Erroneous Payments 153
EXHIBITS
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
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THIS CREDIT AGREEMENT, dated as of August 1, 2022, is among EVOLENT HEALTH, INC., a Delaware corporation (“Parent”), EVOLENT HEALTH LLC, a Delaware limited liability company (“Evolent”), ENDZONE MERGER SUB, INC., a Delaware corporation (“Endzone” or “Initial Borrower”), which upon consummation of the TPG Acquisition (as defined herein) will be merged with and into TPG GROWTH ICEMAN PARENT, INC., a Delaware corporation “TPG”), PROVIDER GROUP, INC., a Delaware corporation (“Implantable”, collectively with Evolent, Endzone and TPG, the “Borrowers” and each a “Borrower”), the Subsidiaries signatory hereto as guarantors or hereafter designated as Guarantors pursuant to Section 8.11, the lenders from time to time party hereto (each, a “Lender” and, collectively, the “Lenders”), ARES CAPITAL CORPORATION, a Maryland corporation (“Ares”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”) and ACF XXXXX I LP, a Delaware limited partnership (“ACF”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as revolver agent for the Revolving Lenders (in such capacity, together with its successors and assigns in such capacity, the “Revolver Agent”).
RECITALS
WHEREAS, the Borrowers have requested that the Lenders extend credit to the Borrowers in the form of (a) an initial term loan in the aggregate principal amount of $175,000,000 on the Closing Date to Initial Borrower (as defined herein)(the “Initial Term Loan Facility”), and (b) a revolving credit facility in the aggregate principal amount of up to $50,000,000 (the “Revolving Facility”), which shall be fully funded to Initial Borrower on the Closing Date (the “Closing Date Revolver Draw”); and
WHEREAS, (a) the proceeds of the Initial Term Loan Facility will be used (i) to finance the TPG Acquisition, (ii) to pay fees and expenses incurred in connection with the transactions contemplated hereby (including the TPG Acquisition), and (iii) to fund acquisitions, ongoing working capital needs and other growth capital expenditure investments (to the extent permitted hereunder) and (b) the proceeds of the Revolving Facility will be used (i) on the Closing Date, to finance the TPG Acquisition and to pay fees and expenses incurred in connection with the transactions contemplated hereby (including the TPG Acquisition) and (ii) thereafter to fund acquisitions, ongoing working capital needs, and other growth capital investments and to pay fees and expenses in connection with the foregoing.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
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ARTICLE I
Definitions
Definitions
SECTION 1.01 Defined Terms. As used herein, the following terms shall have the meanings specified in this Section 1.01, unless the context otherwise requires:
“2024 Convertible Notes” shall mean Parent’s 3.50% Convertible Senior Notes due December 1, 2024 in favor of U.S. Bank National Association, as trustee (the “Trustee”) and any refinancing and extension thereof to the extent such refinancing or extension complies with clause (y) of the definition of Additional Notes.
“2024 Convertible Notes Repurchase” shall mean Parent’s repurchase or redemption of all or any portion of the 2024 Convertible Notes, whether by tender offer, open-market purchases or otherwise.
“2025 Convertible Notes” shall mean Parent’s 1.50% Convertible Senior Notes due October 15, 2025, in favor of Trustee and any refinancing and extension thereof to the extent such refinancing or extension complies with clause (y) of the definition of Additional Notes.
“2025 Convertible Notes Repurchase” shall mean Parent’s repurchase or redemption of all or any portion of the 2025 Convertible Notes, whether by tender offer, open-market purchases or otherwise.
“ABR” shall mean, for any day, a fluctuating rate of interest per annum (rounded upward, if necessary, to the next highest 1/16 of 1%) equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus ½ of one percentage point and (c) the Adjusted Term SOFR Rate with a tenor of one month (or any comparable Benchmark Replacement implemented pursuant to Section 2.08(e)) (for the avoidance of doubt, in each case, not less than the Floor) plus two percentage points. Changes in the rate of interest on that portion of any Loans maintained as ABR Loans will take effect simultaneously with each change in the ABR.
“ABR Interest Payment Date” shall have the meaning set forth in Section 2.08(d).
“ABR Loan” shall mean each Loan bearing interest at ABR, as provided in Section 2.08(a).
“ACF” shall have the meaning set forth in the recitals to this Agreement.
“Acquisition Agreement Representations” means those representations and warranties made with respect to the Parent and its Subsidiaries in the Acquisition Agreement as are material to the interests of the Agents and the Lenders, but only to the extent that TPG Growth Iceman Parent, Inc. or TPG Growth Iceman Parent, Inc.’s Affiliates have the right (taking into account any applicable cure provisions) to terminate TPG Growth Iceman Parent, Inc.’s or TPG Growth Iceman Parent, Inc.’s Affiliates’ obligations under the TPG Acquisition Agreement or the right not to consummate the TPG Acquisition (in each case, pursuant to the TPG Acquisition Agreement) as a result of a failure of such representations and warranties to be true and correct.
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“Additional Notes” shall mean unsecured convertible senior notes issued by Parent after the Closing Date; provided, that, (x) such Indebtedness shall not mature, amortize or be mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or asset sale event so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments) earlier than the date that is ninety-one (91) days after the Maturity Date (as determined under clause (a) of the definition thereof), (y) the cash interest rate payable thereon does not exceed 4% per annum (it being agreed there shall be no maximum rate with respect to paid-in-kind interest payments or on the conversion price of such Additional Notes) and (z) no Credit Party (other than Parent) shall be an obligor under such unsecured convertible senior notes.
“Administrative Agent” shall have the meaning set forth in the preamble to this Agreement.
“Administrative Borrower” shall have the meaning set forth in Section 12.26.
“Administrative Questionnaire” shall mean a questionnaire completed by each Lender, in a form approved by the Administrative Agent, in which such Lender, among other things, (a) designates one or more credit contacts to whom all syndicate-level information (which may contain material nonpublic information about the Credit Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with such Lender’s compliance procedures and Applicable Laws, including federal and state securities laws and (b) designates an address, facsimile number, electronic mail address and/or telephone number for notices and communications with such Lender.
“Adjusted Term SOFR Rate” shall mean, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR Rate as so determined shall ever be less than the Floor, then Adjusted Term SOFR Rate shall be deemed to be the Floor.
“Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, that, no Secured Party shall be an Affiliate of any Credit Party solely by reason of the provisions of the Credit Documents. The term “Control” means either (a) the power to vote, or the beneficial ownership of, ten (10%) or more of the Voting Stock of such Person or (b) 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. The terms “Controlling” and “Controlled” have meanings correlative thereto.
“Agents” shall mean, collectively, the Administrative Agent, the Collateral Agent and the Revolving Agent.
“Agreement” shall mean this Credit Agreement, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time.
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“Anti-Corruption Laws” shall mean any and all laws, rules or regulations relating to corruption or bribery, including, but not limited to, the FCPA and the U.K. Xxxxxxx Xxx 0000.
“Anti-Money Laundering Laws” shall mean any and all laws, rules or regulations relating to money laundering or terrorism financing, including (a) 18 U.S.C. §§ 1956 and 1957; and (b) the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., as amended by the PATRIOT Act, and its implementing regulations.
“Anti-Terrorism Laws” shall mean any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, all as amended, supplemented or replaced from time to time.
“Applicable Laws” shall mean, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or Products or to which such Person or any of its property or Products is subject. For the avoidance of doubt, the term “Applicable Laws” shall include FATCA and any intergovernmental agreements with respect thereto between the United States and another jurisdiction.
“Applicable Margin” shall mean (a) in the case of (i) an ABR Loan that is a Revolving Loan, 2.50% and (ii) a Term SOFR Loan that is a Revolving Loan, 3.50% and (b) in the case of a (i) an ABR Loan that is a Term Loan, 4.50% and (ii) a Term SOFR Loan that is a Term Loan, 5.50%.
“Approved Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.
“Ares” shall have the meaning set forth in the recitals to this Agreement.
“Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit A-1 or such other form approved by the Administrative Agent.
“Attributable Indebtedness” shall mean, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP.
“Authorized Officer” shall mean, with respect to any Credit Party, the Chief Executive Officer, the Chief Financial Officer, secretary or any other senior financial officer (to the extent that such senior financial officer is designated as such in writing to the Administrative Agent by such Credit Party) of such Credit Party.
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“Available Amount” means, at any date of determination (the “Available Amount Reference Date”), an amount equal to the sum of (i) $20,000,000; plus (ii) 50% of cumulative Excess Cash Flow plus (iii) the cumulative amount of net cash proceeds of issuances of Qualified Capital Stock received by Evolent after the Closing Date and prior to the Available Amount Reference Date, which net cash proceeds are not otherwise used for any other purpose, plus (iv) Indebtedness and Disqualified Capital Stock of any Borrower or any Guarantor which have been exchanged or converted into Qualified Capital Stock of Evolent (or any direct or indirect parent thereof) after the Closing Date, plus (v) the aggregate amount of Net Proceeds received by any Borrower in cash after the Closing Date from the sale, transfer or other disposition of any Investment to the extent not required to be used to prepay the Obligations; plus (vi) the aggregate amount of Declined Proceeds retained by the Borrowers (and not applied to repay or prepay any other Indebtedness) during the period from the Business Day immediately following the Closing Date through and including the Available Amount Reference Date, in each case of the amounts set forth in clause (i) through (vi) above, solely to the extent such amounts are not otherwise applied.
“Availability” means, as of any date of determination, the aggregate amount that the Borrowers are entitled to borrow as Revolving Loans, in each case, under Section 2.01 (after giving effect to the then outstanding Revolver Usage).
“Average Revolver Usage” means, with respect to any period, the sum of the aggregate amount of Revolver Usage for each calendar day in such period (calculated as of the end of each respective day) divided by the number of calendar days in such period.
“Bail-In Action” shall mean 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” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
“Bankruptcy Code” shall mean the Federal Bankruptcy Reform Act of 1978.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.16(a).
“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Administrative Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined
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would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Credit Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Administrative Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Date” shall mean a date and time determined by the Administrative Agent, which date shall be no later than:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current available tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof);
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(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) is not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” shall mean, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” shall mean, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Credit Document in accordance with Section 2.16 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Credit Document in accordance with Section 2.16.
“Benefited Lender” shall have the meaning set forth in Section 12.09.
“Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Board of Directors” shall mean, as to any Person, the board of directors (or comparable managers) of such Person, or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).
“Borrowers” shall mean, the Initial Borrower and, immediately following the consummation of the TPG Acquisition, any of TPG, Evolent or Implantable.
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“Borrowing” shall mean any Loans of the same Type and Class made, converted or continued on the same date.
“Borrowing Base” means, as of any date of determination (without duplication of any part thereof), the result of:
(a) the sum of:
(i) (A) 80% of the amount of Eligible Billed Accounts attributable to the Evolent Health Services Business Segment, less (B) the amount, if any, of the Dilution Reserve, plus
(ii) (A) 80% of the amount of Eligible Billed Accounts attributable to the TPG Business Segment, less (B) the amount, if any, of the Dilution Reserve, plus
(iii) (A) 80% of the amount of Eligible Billed Accounts attributable to the Vital Business Segment, less (B) the amount, if any, of the Dilution Reserve, plus
(iv) 50% of the amount of Eligible Billed Accounts attributable to the Clinical Solutions Business Segment, less (B) the amount, if any, of the Dilution Reserve, plus
(v) (A) The lesser of (1) $15,000,000 and (2) 50% of the amount of Eligible Unbilled Accounts, less (B) the amount, if any, of the Dilution Reserve, minus
(b) without duplication, the aggregate amount of all Reserves in effect at such time.
“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.
“Budget” shall have the meaning set forth in Section 8.01(f).
“Business Day” shall mean any day excluding Saturday, Sunday, and any day which is a legal holiday under the laws of the State of New York or which is a day on which any Agent is, or is authorized to be, otherwise closed for transacting business with the public.
“Capital Stock” shall mean any and all shares, interests, participations, units or other equivalents (however designated) of capital stock of a corporation, membership interests in a limited liability company, partnership interests of a limited partnership, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing.
“Capitalized Lease Obligations” shall mean, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP.
“Capitalized Leases” shall mean, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases on the balance sheet of such Person or any of its Subsidiaries, on a consolidated basis; provided, that for all
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purposes hereunder the amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP; provided, that, any lease classified as an operating lease on December 31, 2018 (assuming for purposes hereof that such lease was in existence on December 31, 2018) shall continue to be treated as an operating lease regardless of its treatment under GAAP. For the avoidance of doubt, “Capitalized Leases” shall not include obligations or liabilities of any Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations would be required to be classified and accounted for as an operating lease under GAAP as existing on December 31, 2018; provided, that financial reporting obligations shall not be affected by this sentence.
“Cash Dominion Event” means the occurrence of an Event of Default; provided that, if such Event of Default is cured, waived or otherwise no longer exists, the Cash Dominion Event shall no longer be deemed to exist until such time as another Event of Default occurs; provided, further that, (A) a Cash Dominion Event may not be deemed to have ended under this definition on more than three (3) occasions in any period of three hundred sixty-five (365) consecutive days and (B) the expiration of any Cash Dominion Event in accordance with this definition shall not impair the commencement of any subsequent Cash Dominion Event.
“Cash Equivalents” shall mean:
(a) any direct obligation of (or unconditional guarantee by) the United States (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States) maturing not more than one (1) year after the date of acquisition thereof;
(b) commercial paper maturing not more than one hundred eighty (180) days from the date of issue and issued by (i) a corporation (other than an Affiliate of any Credit Party) organized under the laws of any state of the United States or of the District of Columbia and, at the time of acquisition thereof, rated A-1 or higher by S&P or P-1 or higher by Xxxxx’x, or (ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers’ acceptance, maturing not more than one hundred eighty (180) days after its date of issuance, which is issued by either: (i) a bank organized under the laws of the United States (or any state thereof) which has, at the time of acquisition thereof, (A) a credit rating of P2 or higher from Xxxxx’x or A or higher from S&P and (B) a combined capital and surplus greater than $500,000,000, or (ii) a Lender;
(d) any repurchase agreement having a term of thirty (30) days or less entered into with any Lender or any commercial banking institution satisfying, at the time of acquisition thereof, the criteria set forth in clause (c)(i) which (i) is secured by a fully perfected security interest in any obligation of the type described in clause (a), and (ii) has a market value at the time such repurchase agreement is entered into of not less than one hundred percent (100%) of the repurchase obligation of such Lender or commercial banking institution thereunder;
(e) Cash Equivalents set forth on Schedule 9.05(g); and
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(f) money market and mutual funds investing primarily in assets described in clauses (a) through (d) of this definition.
“Cash Management Bank” has the meaning specified therefor in Section 2.14(a).
“Casualty Event” shall mean the damage, destruction or condemnation, as the case may be, of property of any Credit Party.
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“Change of Control” shall mean an event or series of events by which: (a) (1) any Person or group within the meaning of the Exchange Act and the rules of the SEC thereunder (other than each Borrower and its respective wholly-owned Subsidiaries and its affiliates and the employee benefit plans of each Borrower and its respective wholly-owned Subsidiaries) shall acquire ownership, directly or indirectly, beneficially or of record, of Capital Stock of the Parent representing more than fifty percent (50%) or, in the case of the Permitted Holders collectively, more than sixty percent (60%), of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of Parent; provided, however, that a Person or group shall not be deemed a beneficial owner of, or to own beneficially, (x) any securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or group pursuant to a Schedule TO (or any successor form) until such tendered securities are accepted for purchase or exchange thereunder or (y) any securities to the extent such beneficial ownership (i) arises solely as a result of a revocable proxy delivered to such Person or group by a shareholder that is not, for the avoidance of doubt, a member of such “group” in response to a proxy or consent solicitation made pursuant to, and disclosed in accordance with, the applicable rules and regulations under the Exchange Act and (ii) is not also then reportable on Schedule 13D or Schedule 13G (or any successor schedule) under the Exchange Act; and (2) any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder) files or the Parent files, a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such an event described in the immediately preceding clause (1) has occurred; (b) the consummation of (A) any recapitalization, reclassification or change of the Class A common stock of the Parent (other than changes resulting from a subdivision or combination) as a result of which the Class A common stock of the Parent would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of Parent pursuant to which the Class A common stock of Parent will be converted into cash, securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Parent and its Subsidiaries, taken as a whole, to any Person other than one of Parent’s Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of Parent’s Capital Stock immediately prior to such transaction hold, directly or indirectly, more than 50% of the voting power of all classes of Capital Stock of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such holders held, directly or indirectly, immediately prior to such transaction shall not be a Change of Control pursuant to this clause (b); (c) the Class A common stock (or other common stock) of the
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Parent ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors); (d) Parent ceases to own one hundred percent (100%) of the issued and outstanding voting Capital Stock of Evolent; (e) any Borrower ceases to own directly or indirectly one hundred percent (100%) of the issued and outstanding Capital Stock of each Guarantor (other than Parent), free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, other than Liens in favor of Administrative Agent or non-consensual Permitted Liens arising by operation of applicable law; or (f) a “Fundamental Change” (as defined in the Convertible Senior Notes) shall occur.
“Change in Law” shall mean the occurrence after the Closing Date of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in this Agreement to the contrary, (i) the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Clinical Solutions Business Segment” shall mean the business of the following entities: NCIS Holding, Inc., a Delaware corporation, NCH Management Systems, Inc., a California corporation, Evolent Care Partners Holding Company, Inc., a Delaware corporation, Evolent Care Partners of Texas, a Texas corporation, The Accountable Care Organization Ltd., a Michigan corporation, and Evolent Care Partners of North Carolina, Inc., a North Carolina corporation.
“Closing Date” shall mean August 1, 2022.
“Closing Date Revolver Draw” shall have the meaning set forth in the recitals to this Agreement.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.
“Collateral” shall mean any assets of any Credit Party or other collateral upon which Administrative Agent has been granted a Lien in connection with this Agreement.
“Collateral Agent” shall have the meaning set forth in the preamble to this Agreement.
“Collateral Documents” shall mean the Security Agreement and each other document or agreement that creates or perfects any security interests granted by any of the Credit Parties to the Administrative Agent on behalf of the Secured Parties.
“Collateral Sale” shall have the meaning set forth in Section 11.14.
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“Collections” shall mean all cash, checks, credit card slips or receipts, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds and tax refunds) of the Credit Parties.
“Commitment” shall mean any of the Initial Term Loan Commitment or Revolver Commitment. The aggregate amount of the Commitments as of the Closing Date is $225,000,000, as set forth on Schedule 1.01(a).
“Competitor” means any Person that is an operating company engaged in substantially similar business operations as the Borrowers.
“Compliance Certificate” shall mean a certificate duly completed and executed by an Authorized Officer of the Administrative Borrower substantially in the form of Exhibit C-1.
“Confidential Information” shall have the meaning set forth in Section 12.17.
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Adjusted EBITDA” shall mean, for a specified Test Period, an amount determined for Parent and its Subsidiaries on a consolidated basis equal to:
(a) Consolidated Net Income,
plus
(b) to the extent deducted in calculating Consolidated Net Income for such period (other than with respect to clause (b)(xiii) below), the sum of, without duplication, amounts for:
(i) Consolidated Interest Expense (net of interest income);
(ii) (a) provisions for Taxes based on income and (b) any payments actually made pursuant to the TRA;
(iii) total depreciation expense;
(iv) total amortization expense;
(v) other non-cash charges reducing Consolidated Net Income (excluding any such non-cash item (x) to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of a prepaid cash item that was paid in a prior period or (y) relating to a write-down, write off or reserve with respect to receivables or inventory);
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(vi) losses, costs and expenses on asset sales, disposals or abandonments (other than (i) of current assets and (ii) asset sales, disposals or abandonments in the ordinary course of business);
(vii) fees and expenses incurred in connection with a Permitted Acquisition, other Investments permitted hereunder, Dispositions (other than in the ordinary course of business) permitted hereunder, Restricted Payments permitted hereunder or the refinancing or redemption of Indebtedness permitted hereunder; provided, that, to the extent such transactions have not been consummated, such costs, fees and expenses (any such costs, fees and expenses, “Unconsummated Deal Expenses”) (x) shall not exceed $1,500,000 in any Test Period and (y) shall not exceed the aggregate amount of any adjustments made pursuant to this clause (b)(vii) during such period shall not exceed 25% of Consolidated Adjusted EBITDA (calculated together with clause (b)(xi) and clause (b)(xv)) for such period (calculated before giving effect to any such adjustments); provided that, the foregoing caps shall not include fees and expenses incurred prior to the Closing Date in connection with the transaction previously identified to the Administrative Agent as “Project Holiday”, so long as such amount does not exceed $3,500,000 in the aggregate;
(viii) fees and expenses incurred in connection with the consummation of the Transactions on the Closing Date in an aggregate amount not to exceed $6,000,000, and to the extent disclosed to the Agents;
(ix) non-cash adjustments pursuant to any management equity or equity-based plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or stockholders agreement;
(x) (1) the effects of adjustments in the Parent’s and its Subsidiaries’ consolidated financial statements pursuant to GAAP (including in the property and equipment, software, goodwill, intangible assets, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or the amortization of any amounts thereof, (2) any non-cash losses, charges or adjustments resulting from the application of Accounting Standards Codification 606 and (3) earnout obligations and other similar contingent consideration;
(xi) costs, fees and expenses relating to restructuring, severance, recruiting, retentions and relocations, signing and stay bonuses, payments made to employees or producers who are subject to non-compete agreements, and curtailments or modifications to pension and post-retirement employee benefits plans; provided, that, the aggregate amount included in this clause (xi) during any Test Period shall not exceed 25% of Consolidated Adjusted EBITDA (calculated together with clause (b)(vii) (solely to the extent relating to Unconsummated Deal Expenses) and clause (b)(xv) for such period (calculated before giving effect to any such adjustments);
(xii) charges, losses or expenses to the extent paid for, reimbursed or indemnified by a Person other than Parent and its Subsidiaries or reimbursed through insurance by a Person other than Parent and its Subsidiaries, in each case to the extent such expenses are
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actually paid or refunded to Parent or any of its Subsidiaries (to the extent such payments or refunds are included in Consolidated Net Income);
(xiii) proceeds received from business interruption insurance;
(xiv) to the extent included in Consolidated Net Income, losses attributable to non-controlling interests; and
(xv) extraordinary, unusual and non-recurring costs, expenses and losses in any Test Period; provided, that, the aggregate amount included in this clause (xv) during any Test Period shall not exceed provided, that, the aggregate amount included in this clause (xv) during any Test Period shall not exceed 25% of Consolidated Adjusted EBITDA (calculated together with clause (b)(vii) (solely to the extent relating to Unconsummated Deal Expenses) and clause (b)(xi)) as of the end of the most recently ended Test Period as calculated before giving effect to the add-back in this clause (xv);
minus
(c) to the extent included in calculating Consolidated Net Income for such period (other than with respect to clause (c)(iv)), the sum of, without duplication, amounts for:
(i) other non-cash gains increasing Consolidated Net Income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for a potential cash item in any prior period),
(ii) extraordinary, unusual and non-recurring gains and income;
(iii) gains on asset sales, disposals or abandonments (other than (A) of current assets and (B) asset sales, disposals or abandonments in the ordinary course of business); and
(iv) any software development costs to the extent capitalized during such period.
provided; however, for purposes of determining the Total Secured Leverage Ratio, Consolidated Adjusted EBITDA shall be determined on a Pro Forma Basis.
“Consolidated Interest Expense” shall mean, for any specified Test Period, for the Parent and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, the sum of: (a) all interest in respect of Indebtedness (including, without limitation, the interest component of any payments in respect of Capitalized Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period) plus (b) the net amount payable (or minus the net amount receivable) in respect of Hedging Obligations relating to interest during such period (whether or not actually paid or received during such period).
“Consolidated Net Income” shall mean, for any specified Test Period, the consolidated net income (or loss) of Parent and its Subsidiaries determined in accordance with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than
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consolidated Subsidiaries of Parent) in which any Person (other than Parent or any of its consolidated Subsidiaries) has a joint ownership interest or that is accounted for by the equity method of accounting, except to the extent of the amount of dividends or other distributions actually paid to Parent or any of its consolidated Subsidiaries by such Person during such specified Test Period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a consolidated Subsidiary of Parent or is merged into or consolidated with Parent or any of its consolidated Subsidiaries or such Person’s assets are acquired by Parent or any of its consolidated Subsidiaries, and (iii) the income of any consolidated Subsidiary of Parent (other than a Credit Party) to the extent that the declaration or payment of dividends or similar distributions by that consolidated Subsidiary 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, governmental regulation applicable to that consolidated Subsidiary or would require governmental (including regulatory) consent; provided, that, the income (or loss) of any consolidated Subsidiary of Parent (other than a Credit Party) shall not be excluded from this definition to the extent governmental (including regulatory) consent has been received for the declaration or payment of dividends or similar distributions by that consolidated Subsidiary of its income.
“Consolidated Secured Debt” shall mean, as of any date of determination, the outstanding principal amount of all Funded Debt that is secured, in whole or part, by a Lien on any asset of Parent or any of its Subsidiaries.
“Convertible Senior Notes” shall mean (i) the 2024 Convertible Notes, (ii) the 2025 Convertible Notes and (iii) any Additional Notes.
“Contingent Liability” shall mean, for any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Stock of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.
“Control” shall have the meaning set forth in the definition of “Affiliate.”
“Controlling and Controlled” shall have the meaning set forth in the definition of “Affiliate.”
“Convertible Senior Notes” shall mean the 2024 Convertible Notes and/or 2025 Convertible Notes.
“Credit Documents” shall mean this Agreement, the Springing Control Agreements, the Fee Letter, the Guarantee Agreement, the Security Documents, the Intercompany Subordination Agreement, the Global Intercompany Note, any Notes issued by any Borrower hereunder, any intercreditor or subordination agreements in favor of the Administrative Agent with respect to this Agreement, and any other agreement entered into now, or in the future, by any Credit Party,
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on the one hand, and the Administrative Agent or Lender, on the other hand, in connection with this Agreement.
“Credit Extension” shall mean and include the making (but not the conversion or continuation) of a Loan.
“Credit Facility” shall mean any of the Initial Term Loan Facility or Revolving Facility, as applicable, and, collectively, the Initial Term Loan Facility and Revolving Facility.
“Credit Party” shall mean each Borrower, each of the Guarantors and each other Person that becomes a Credit Party hereafter pursuant to the execution of joinder documents.
“Cure Amount” shall have the meaning set forth in Section 9.13(d).
“Cure Right” shall have the meaning set forth in Section 9.13(d).
“Declined Proceeds” shall have the meaning set forth in Section 5.02(k).
“Default” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.
“Default Rate” shall have the meaning set forth in Section 2.08(c).
“Defaulting Lender” shall mean, subject to Section 2.15, any Lender that, as determined by the Administrative Agent, (a) has failed to (i) fund any portion of the Loans required to be funded by it hereunder for three (3) or more Business Days unless such Lender notifies the Administrative Agent and the Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any other Lender any other amount required to be paid by it hereunder, (b) has notified the Administrative Borrower, or the Administrative Agent in writing that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) or more Business Days after written request by the Administrative Agent or the Administrative Borrower, to confirm in writing in a manner satisfactory to the Agents that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a bankruptcy or insolvency proceeding, (ii) had a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity, (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment or (iv) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that
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Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error.
“Defaulting Lender Rate” means (a) for the first 3 days from and after the date the relevant payment is due, the Prime Rate, and (b) thereafter, the interest rate then applicable to Loans as if the Prime Rate were applicable thereto.
“Designated Account” means the Deposit Account of each Borrower identified on Schedule 1.01(c) as a “Designated Account” (or such other Deposit Account of a Borrower located at Designated Account Bank that has been designated as such, in writing, by such Borrower to Collateral Agent).
“Designated Account Bank” means the depositary institution shown on Schedule 2.14 which maintains the Designated Account of any Borrower (or such other bank that is located within the United States that has been designated as such, in writing, by a Borrower to Collateral Agent).
“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior twelve (12) months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Credit Parties’ Accounts during such period, by (b) the Credit Parties’ xxxxxxxx with respect to Accounts during such period.
“Dilution Reserve” means, as of any date of determination, a reserve that may be established by Revolver Agent in its Permitted Discretion, including, but not limited to, to address the results of any Field Exam performed by (or on behalf of) Revolver Agent, in an amount sufficient to reduce the advance rate against Eligible Billed Accounts and Eligible Unbilled Accounts by the number of full or partial percentage points by which Dilution is in excess of 5%.
“Disposition” shall mean, with respect to any Person, any sale, transfer, lease, contribution, division or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of such Person’s or their respective Subsidiaries’ assets (including receivables and Capital Stock of Subsidiaries) to any other Person in a single transaction or series of transactions.
“Disqualified Capital Stock” shall mean any Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable
17
and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock) (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provides for the scheduled payment of dividends in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Capital Stock that would constitute Disqualified Capital Stock, in each case, prior to the date that is ninety-one (91) days after the Maturity Date (as determined under clause (a) of the definition thereof); provided, that if such Capital Stock is issued pursuant to a plan for the benefit of employees of the Borrowers or their respective Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the Borrowers or their respective Subsidiaries in order to satisfy applicable statutory or regulatory obligations.
“Disqualified Institution” means any Person that is (a) designated by the Administrative Borrower, by written notice delivered to Administrative Agent on or prior to the Closing Date, as a (i) disqualified institution or (ii) Competitor or (b) clearly identifiable, solely on the basis of such Person’s name, as an Affiliate of any Person referred to in clause (a)(i) or (a)(ii) above; provided, however, Disqualified Institutions shall (A) exclude any Person that the Administrative Borrower has designated as no longer being a Disqualified Institution by written notice delivered to the Administrative Agent from time to time, (B) exclude any bona fide debt fund, investment vehicle, regulated bank entity or unregulated lending entity (other than any person separately identified as a Disqualified Institution in accordance with clause (a)(ii) above or any Affiliate of a Person identified under clause (b) above) that is engaged in making, purchasing, holding or otherwise investing in commercial loans or similar extensions of credit in the ordinary course of business and (C) include (I) any Person that is added as a Competitor and (II) any Person that is clearly identifiable, solely on the basis of such Person’s name, as an Affiliate of any Person referred to in clause (C)(I), pursuant to a written supplement to the list of Competitors that are Disqualified Institutions, that is delivered by the Administrative Borrower after the date hereof to the Administrative Agent. Such supplement shall become effective two (2) Business Days after the date that such written supplement is delivered to Administrative Agent, but which shall not apply retroactively to disqualify any Persons that have previously acquired an assignment or participation interest in the Loans and/or Commitments as permitted herein. Notwithstanding the foregoing, each Credit Party and the Lenders acknowledge and agree that the Administrative Agent shall not have any responsibility or obligation to determine whether any Lender or potential Lender is a Disqualified Institution and the Administrative Agent shall have no liability with respect to any assignment or participation made to a Disqualified Institution.
“Distributable Cash” shall have the meaning set forth in Section 10.01(m).
“Dollars” and “$” shall mean dollars in lawful currency of the United States of America.
“Domestic Holding Company” shall mean a Domestic Subsidiary that has no material assets other than Capital Stock (or Capital Stock and indebtedness) of one or more Foreign Subsidiaries.
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“Domestic Subsidiary” shall mean each Subsidiary of any Borrower that is organized under the Applicable Laws of the United States, any state thereof or the District of Columbia.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Billed Accounts” means those Accounts created by a Credit Party in the ordinary course of its business, that arise out of its rendition of services in the United States that have been acknowledged as accepted by the applicable Account Debtor, that comply with each of the representations and warranties respecting Eligible Billed Accounts made in the Credit Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Revolver Agent in Revolver Agent’s Permitted Discretion including to address the results of any Field Exam performed by (or on behalf of) Revolver Agent from time to time after the Closing Date. In determining the amount to be including, Eligible Billed Accounts shall be calculated net of customer deposits, unapplied cash, Taxes, discounts, credits and allowances. Eligible Billed Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed to pay within 180 days of original invoice date and Accounts that are more than 90 days past due,
(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an Affiliate of a Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,
(d) Accounts that are not payable in Dollars,
(e) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States or any state thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Revolver Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Collateral Agent
19
and is directly drawable by Revolver Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Revolver Agent,
(f) Accounts of a Credit Party with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which such Credit Party has complied, to the reasonable satisfaction of Revolver Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States,
(g) Accounts with respect to which the Account Debtor is a creditor of a Credit Party, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account or has repaid only a portion of the Account,
(h) Accounts with respect to which the Account Debtor is an individual and not a corporate entity,
(i) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which a Credit Party has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,
(j) Accounts, the collection of which, Revolver Agent, in its Permitted Discretion following consultation with the Administrative Borrower, believes to be doubtful, including by reason of the Account Debtor’s financial condition,
(k) Accounts that are not subject to a valid and perfected first priority Revolver Agent’s Lien,
(l) Accounts with respect to which the services giving rise to such Account have not been performed and billed to the Account Debtor,
(m) Accounts owned by a target acquired in connection with a Permitted Acquisition or any other Permitted Investment, until the completion of a customary due diligence investigation, which may include a field examination conducted by Revolver Agent, or the receipt of other information reasonably requested by Collateral Agent with respect to such target, in each case, reasonably satisfactory to Revolver Agent (which field examination may be conducted prior to the closing of such Permitted Acquisition or Permitted Investment),
(n) [reserved],
(o) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity,
(p) [reserved],
(q) Accounts that are not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for services rendered and accepted by the applicable Account Debtor,
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(r) Accounts that have been redated, extended, compromised, settled or otherwise modified or discounted, except discounts or modifications that are granted by a Credit Party in the ordinary course of business and that are reflected in the calculation of the Borrowing Base,
(s) the portion, if any, of any Account that includes a billing for interest, fees or late charges, or
(t) Accounts which are otherwise unacceptable to Revolver Agent in its Permitted Discretion after consultation with the Administrative Borrower.
“Eligible Accounts” means Eligible Billed Accounts and Eligible Unbilled Accounts.
“Eligible Assignee” shall have meaning set forth in Section 12.06(b).
“Eligible Unbilled Accounts” means Accounts of a Credit Party (a) arising from the rendition of services in the United States that have been completed by the applicable Credit Party and that are evidenced by supporting documentation in form and substance satisfactory to Revolver Agent and (b) that qualify as Eligible Billed Accounts except that the invoice applicable to such Accounts has not been issued to the applicable Account Debtor; provided that an Account shall cease to be an Eligible Unbilled Account upon the earlier of (i) the date the invoice applicable to such Account is issued to the applicable Account Debtor and (ii) one hundred eighty (180) days after the services giving rise to such Account have been completed by the applicable Credit Party. In determining the amount to be included, Eligible Unbilled Accounts shall be calculated net of customer deposits and unapplied cash.
“Endzone” shall have the meaning set forth in the preamble to this Agreement.
“Environmental Claims” shall mean any and all administrative, regulatory, adjudicatory or judicial actions, suits, demands, demand letters, claims, liens, fines, penalties, requests for information, inquiries, notices of noncompliance or violation, investigations (other than internal reports prepared by the Credit Parties in the ordinary course of such Person’s business) or proceedings relating in any way to any Environmental Law, any Hazardous Material (including any exposure to any Hazardous Material), or any permit issued, or any approval given, under any such Environmental Law, including (i) by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial, investigation, monitoring or other actions or damages pursuant to any Environmental Law and (ii) by any Person seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the presence, Release of, or threat of Release of, Hazardous Materials or arising from alleged injury or threat of injury to human health, public safety or the environment, pursuant to any Environmental Law.
“Environmental Law” shall mean any federal, state, foreign, regional, county or local statute, law, rule, regulation, ordinance and code now or hereafter in effect and, in each case, as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, decree or judgment, relating to the protection of human health, safety or the environment or natural resources, including laws relating to the Release, threat of Release, manufacture, processing, distribution, use, presence, production, treatment, storage, disposal, transport, labeling or handling of, or exposure to, Hazardous Materials, including the
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Federal Water Pollution Control Act, the Resource Conservation and Recovery Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Clean Air Act and CERCLA, and other similar state and local statutes and any regulations promulgated thereto.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) that, together with any Credit Party or a Subsidiary thereof, is, or within the last six (6) years was, treated as a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.
“ERISA Event” shall mean (a) the occurrence of any Reportable Event with respect to a Plan, (b) any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) a determination that any Plan is, or is reasonably expected to be, in “at-risk” status (as defined in Section 303 of ERISA or Section 430 of the Code), (e) the incurrence by any Credit Party or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the non-standard termination of any Pension Plan, (f) the receipt by any Credit Party from the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA, (g) the incurrence by any Credit Party or any ERISA Affiliate of any liability with respect to its withdrawal or partial withdrawal from any Multiemployer Plan or (i) the receipt by any Credit Party or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability on it or a determination that a Multiemployer Plan is, or is reasonably expected to be, insolvent, within the meaning of Title IV of ERISA or in “endangered” or “critical” status, within the meaning of Section 305 of ERISA.
“Erroneous Payment” has the meaning assigned to it in Section 12.27(a).
“Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 12.27(d).
“Erroneous Payment Impacted Class” has the meaning assigned to it in Section 12.27(d).
“Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 12.27(d).
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” shall have the meaning set forth in Article X.
“Evolent” shall have the meaning set forth in the preamble to this Agreement.
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“Evolent Health Services Business Segment” means the business of Evolent and EH Holding Company, Inc., a Delaware corporation.
“Excess Cash Flow” shall mean, with respect to any fiscal period and with respect to Parent and its Subsidiaries determined on a consolidated basis in accordance with GAAP the result of:
(a) Consolidated Adjusted EBITDA determined on a consolidated basis, for the twelve (12) fiscal month period most recently ended, minus
(b) the sum of, without duplication
(i) the cash portion of interest on the Loans paid during such fiscal period,
(ii) the cash portion of income taxes paid during such period, and
(iii) to the extent financed with internally generated cash, voluntary payments made in respect of the Term Loan during such period.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Account” means each deposit or securities accounts constituting (a) a zero balance account that sweeps on a daily basis into a deposit account subject to a Springing Control Agreement, (b) a deposit account used solely to fund payroll obligations, health benefit or employee benefit obligations, Tax obligations, escrow arrangements, trust accounts or holding third-party insurance funds or funds owned by (or held solely for the benefit of) Persons other than the Credit Parties or holding any funds to be used for the purpose of paying claims to satisfy statutory or regulatory requirements, (c) any other deposit or securities account so long as with respect to this clause (c), the aggregate amount on deposit in all such accounts does not exceed $1,000,000 at any one time (each account under this clause (c), a “Monitored Account”), (d) a deposit account into which an Account Debtor makes payment under Medicare, Medicaid, TRICARE or any other health program operated by or financed in whole or in part by any foreign or domestic federal, state or local government so long as funds on deposit in such deposit account are transferred within two (2) Business Days to an account subject to a Springing Control Agreement or (e) a deposit account holding solely funds pledged as cash collateral to the extent permitted under Section 9.02(b) or Section 9.02(m).
“Excluded Subsidiary” shall mean any Subsidiary (1) for which guarantees at any time are prohibited or restricted by Applicable Laws (including financial assistance, fraudulent conveyance, preference, capitalization or any other Applicable Laws or regulations) (or contractually prohibited on the Closing Date (in the case of existing Subsidiaries) or on the date of acquisition or formation thereof (in the case of acquired or formed Subsidiaries), so long as such prohibition is not created in contemplation of such transaction) from guaranteeing the Obligations, or if guaranteeing the Obligations would require governmental (including regulatory) consent, non-disapproval, approval, filing, license or authorization (unless such consent, approval, license or authorization has been received), (2) not-for-profit subsidiaries, captive insurance companies and special purpose entities, (3) any non-wholly owned Subsidiary (x) in existence on the Closing Date or (y) to the extent a guaranty by such Subsidiary is prohibited by the terms of such person’s organizational or joint venture documents (to the extent
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the prohibition is existing on the Closing Date or at the time any subsidiary is acquired, formed or established (and which prohibition is not created in contemplation of such transaction)), (4) any Subsidiary where the cost of providing a guarantee, taken as a whole, outweighs the benefit to the Lenders, as determined in the reasonable discretion of the Administrative Agent and Administrative Borrower, (5) any subsidiary to the extent a guarantee by such entity will result in material adverse tax or regulatory consequences, taken as a whole, to Parent and its Subsidiaries and (6) any Foreign Subsidiary, Domestic Holding Company and Licensed Insurance Entity (solely, in the case of any Licensed Insurance Entity, to the extent guaranteeing the Obligations would require governmental (including regulatory) consent, notification, non-disapproval, approval, filing, license or authorization or would otherwise be prohibited or restricted by Applicable Laws).
“Excluded Taxes” shall mean with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any Obligation of any Borrower hereunder, (a) income, franchise or similar Taxes imposed on (or measured by) its net income (i) by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which a Borrower is located, (c) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender pursuant to an Applicable Law in effect at the time such Non-U.S. Lender becomes a party to this Agreement (or designates a new lending office, unless such designation was at the request of the Administrative Borrower), except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from a Borrower with respect to such withholding tax pursuant to Section 5.04(a), (d) Taxes imposed by reason of the failure of the Administrative Agent or such Lender to comply with its obligations under Section 5.04(b) and Section 5.04(c), or to the extent that such documentation fails to establish a complete exemption from applicable withholding Taxes, other than, in either case, due to a change in Applicable Laws after the Closing Date and (e) U.S. federal withholding Taxes imposed under FATCA.
“Extraordinary Advances” has the meaning specified therefor in Section 2.02(c)(iii).
“Existing Earnouts” shall mean (i) the “Earnout Consideration” as defined under the TPG Acquisition Agreement, in an amount not to exceed $87,000,000, payable in Capital Stock and, absent the occurrence and continuance of any Event of Default, in cash and (ii) the “Earnout Consideration” as defined in that certain Purchase Agreement and Agreement and Plan of Merger, dated as of August 2, 2021 by and among Parent, Evolent, EV Thunder Merger Sub, LLC, Windrose Health Investors III, L.P., and Vital Decisions Acquisition, LLC, in an amount not to exceed $45,000,000, payable in Capital Stock and, absent the occurrence and continuance of any Event of Default, in cash.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code
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and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.
“FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended from time to time, and the rules and regulations thereunder.
“Federal Funds Rate” shall mean, for any day, a fluctuating interest rate per annum equal to: (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published for such day (or, if such day is not a Business Day, for the next succeeding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.
“Fee Letter” shall mean the Fee Letter dated as of June 24, 2022 by and between the Evolent and Ares Capital Management LLC, and acknowledged by each Credit Party as of the Closing Date, as amended, restated, supplemented or otherwise modified from time to time.
“Fees” shall mean all amounts payable pursuant to, or referred to in, Section 4.01 or the Fee Letter.
“Field Exam” shall have the meaning set forth in Section 8.02(b).
“Financial Performance Covenants” shall mean the covenants set forth in Section 9.12.
“Fiscal Quarter” shall mean each quarterly period corresponding to the Fiscal Year.
“Fiscal Year” shall mean any of the annual accounting periods of the Borrowers ending on December 31 of each year.
“Flood Hazard Property” shall have the meaning set forth in the definition of the term “Flood Insurance Requirements.”
“Flood Insurance Laws” shall mean, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 and (v) the Biggert –Waters Flood Insurance Reform Act of 2012, as now or hereafter in effect of any successor statute thereto, in each case, together with all statutory and regulatory provisions consolidating, amending, replacing, supplementing, implementing or interpreting any of the foregoing, as amended or modified from time to time.
“Flood Insurance Requirements” shall mean (i) a completed “life of loan” Federal Emergency Management Standard Flood Hazard Determination as to whether such real property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood Hazard Property”) and (ii) if such real property is a Flood Hazard Property, evidence as to (A) whether the community in which such real property, or as
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applicable, the leasehold interest of such Credit Party in such real property, is located is participating in the National Flood Insurance Program, (B) the applicable Credit Party’s written acknowledgment of receipt of written notification from the Administrative Agent (1) as to the fact that such real property is a Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (C) copies of flood insurance policies under the National Flood Insurance Program (or private insurance endorsed to cause such private insurance to be fully compliant with the federal law as regards private placement insurance applicable to the National Flood Insurance Program, with financially sound and reputable insurance companies not Affiliates of any Borrower) or a declaration page, application accompanied by proof of premium payment for such policies, or such other documentation as is satisfactory to the Agents and each Lender, with confirmation of such satisfaction of such Lender to be made in writing (which, for purposes of such confirmation, shall include email) and such confirmation shall not be unreasonably withheld or delayed, in each case, for the Parent and its Subsidiaries evidencing such flood insurance coverage in such amounts and with such deductibles as required by Flood Insurance Laws or as the Administrative Agent may request (but no less than required by applicable Flood Insurance Laws) and naming the Administrative Agent and its successors and/or assigns as sole loss payee on behalf of the Lenders.
“Floor” shall mean 1.00%.
“Foreign Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established, contributed to (regardless of whether through direct contributions or through employee withholding) or maintained outside the United States by any Credit Party primarily for the benefit of employees of the Credit Parties residing outside the United States, which plan, 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” shall mean each Subsidiary of a Credit Party that is not a Domestic Subsidiary.
“Funded Debt” shall mean, as of any date of determination, all then outstanding Indebtedness of Parent and its Subsidiaries, on a consolidated basis, of the type described in clauses (a), (b) (excluding the amount of any undrawn or cash collateralized letters of credit), (d) and (f) of the defined term “Indebtedness.”
“Funding Date” means the date on which a Borrowing occurs.
“GAAP” shall mean generally accepted accounting principles in the United States of America, as in effect from time to time; provided, that if the Administrative Borrower notifies the Administrative Agent that any Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then the Administrative Agent, the Lenders and the Credit Parties shall negotiate in good faith to effect such amendment and such provision shall
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be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
“Global Intercompany Note” means a Global Intercompany executed by the “Payors” listed on the signature pages thereto for the benefit of the “Payees” listed on the signature pages thereto.
“Governmental Authority” shall mean the government of the United States, any foreign country or any multinational authority, or any state, commonwealth, protectorate or political subdivision thereof, and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the PBGC and other quasi-governmental entities established to perform such functions.
“Guarantee Agreement” shall mean a Guarantee Agreement, executed and delivered by each Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties, in form and substance satisfactory to the Agents.
“Guarantee Obligations” shall mean, as to any Person, any Contingent Liability of such Person or other obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof; provided, that the term “Guarantee Obligations” shall not include endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Closing Date, entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.
“Guarantors” shall mean (a) Parent, (b) each Person that is a Domestic Subsidiary on the Closing Date, and (c) each Person that becomes a party to the Guarantee Agreement after the Closing Date pursuant to Section 8.11, in each case, other than any Excluded Subsidiary.
“Hazardous Materials” shall mean (a) any petroleum or petroleum products (except when used for refueling motor vehicles in commercially reasonable quantities that would not reasonably be expected to result in a Material Adverse Effect), radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; and
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(b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Law; and (c) any other chemical, material or substance, which is classified, prohibited, limited or regulated by, or forming the basis of liability under, any Environmental Law.
“Health Care Laws” means (i) any and all federal, state and local fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7(b)), the Xxxxx Law (42 U.S.C. § 1395nn), the civil False Claims Act (31 U.S.C. § 3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the exclusion laws (42 U.S.C. § 1320a-7), the civil monetary penalty laws (42 U.S.C. § 1320a-7a), the regulations promulgated pursuant to such statutes and any comparable state laws; (ii) the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), and the regulations promulgated thereunder and any comparable state laws, (iii) Medicare (Title XVIII of the Social Security Act) and the regulations promulgated thereunder; (iv) Medicaid (Title XIX of the Social Security Act) and the regulations promulgated thereunder; (v) the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. No. 108-173) and the regulations promulgated thereunder; (vi) quality, safety and accreditation standards and requirements of all applicable state laws or Governmental Authorities; (vii) State and Federal Applicable Laws relating to the licensure, ownership or operation of a health care facility, health maintenance organization (HMO), Medicaid managed care organization (MCO), Medicare Advantage organization, provider service network (PSN) or insurance plan, including any assets used in connection therewith, (viii) Applicable Laws relating to the preparation, processing, evaluation or payment of claims, collection of accounts receivable, underwriting the cost of, or provision of management or administrative services in connection with, any and all of the foregoing, by any of Parent, its Subsidiaries or any Licensed Insurance Entity, including, but not limited to, laws and regulations relating to the administration of health benefit policies, patient or program charges, recordkeeping, referrals, professional fee splitting, certificates of need, certificates of operations and authority, (ix) any and all federal or state laws regulating third-party administrators and pharmacy benefit managers, including those promulgated by state departments of insurance, and (x) any and all other applicable health care laws, rules, codes, statutes, ordinances, regulations, manual provisions, policies and administrative guidance, each of (i) through (x) as may be amended from time to time.
“Hedge Termination Value” shall mean, in respect of any one or more Hedging Obligations, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Obligations, (a) for any date on or after the date such Hedging Obligations have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the xxxx-to-market value(s) for such Hedging Obligations, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Obligations (which may include any Lender or any Affiliate of a Lender).
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“Hedging Obligations” shall mean, with respect to any Person, any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (a) any and all Hedging Transactions (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (c) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions.
“Hedging Transaction” of any Person shall mean (a) any transaction (including an agreement with respect to any such transaction) permitted under Section 9.11 now existing or hereafter entered into by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as the same may be amended, modified or supplemented from time to time, any successor statute thereto, any and all rules or regulations promulgated from time to time thereunder, and any comparable state laws.
“Historical Financial Statements” shall mean (a) audited consolidated financial statements of Parent for the Fiscal Years ended December 31, 2020 and December 31, 2021, (b) unaudited consolidated financial statements of Parent for the Fiscal Year to date period ended March 31, 2022 and (c) unaudited consolidated balance sheets and related statements of operations and cash flows of TPG Growth Iceman Parent, Inc. and its subsidiaries for each Fiscal Quarter ended after March 31, 2022 and at least forty-five (45) days prior to the Closing Date.
“Holding Company Guarantor” shall mean any entity formed after the Closing Date and joined as a Guarantor under this Agreement pursuant to the terms of Section 8.11 for the sole purpose of holding the Capital Stock of any Licensed Insurance Entity or joint venture.
“Implantable” shall have the meaning set forth in the preamble to this Agreement.
“Indebtedness” shall mean, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
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(a) all indebtedness of such Person for borrowed money and all indebtedness of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) available under all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;
(c) the Hedge Termination Value of all Hedging Obligations of such Person;
(d) all obligations of such Person to pay the deferred purchase price of property or services, including earn-out obligations (including, but not limited to the Existing Earnout) (other than (i) trade accounts payable in the ordinary course of business and (ii) any earn-out obligation (including, but not limited to the Existing Earnout) until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(f) all Attributable Indebtedness;
(g) all obligations of such Person in respect of Disqualified Capital Stock; and
(h) all Guarantee Obligations of such Person in respect of any of the foregoing,
provided, that Indebtedness shall not include (i) prepaid or deferred revenue arising in the ordinary course of business, (ii) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warranties or other unperformed obligations of the seller of such asset, (iii) endorsements of checks or drafts arising in the ordinary course of business, (iv) trade accounts payable in the ordinary course of business, and (v) preferred Capital Stock to the extent not constituting Disqualified Capital Stock.
The amount of any net Hedging Obligations on any date shall be deemed to be the Hedge Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (e) above shall be deemed to be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness and (y) the fair market value of the property of such Person encumbered thereby as determined by such Person in good faith.
“Initial Borrower” shall have the meaning set forth in the preamble to this Agreement.
“Initial Term Loan Commitment” shall mean, (a) in the case of each Lender that is a Lender on the date hereof, the amount set forth opposite such Lender’s name on Schedule 1.01(a) as such Lender’s “Initial Term Loan Commitment” and (b) in the case of any Lender that becomes a Lender after the date hereof, the amount specified as such Lender’s “Initial Term Loan Commitment” in the Assignment and Acceptance pursuant to which such Lender assumed all or a portion of the Initial Term Loan Commitment, in each case, as the same (x) shall be permanently reduced on the Closing Date upon the Initial Term Loan draw that such Lender funds and (y) may be changed from time to time pursuant to the terms hereof.
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“Initial Term Loan Facility” shall have the meaning set forth in the recitals to this Agreement.
“Initial Term Loan” shall have the meaning set forth in Section 2.01(a).
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“Intellectual Property” shall have the meaning set forth in the Security Agreement.
“Intercompany Service Agreement” shall mean that certain Intercompany Service Agreement, dated as of January 31, 2018, by and between the Evolent and Evolent Health International Private Limited (formally known as Valence Health Solutions India Private Limited), as amended, restated, supplemented or otherwise modified from time to time.
“Intercompany Subordination Agreement” shall mean the Intercompany Subordination Agreement dated as of the date hereof among the Credit Parties and the Administrative Agent.
“Investment” shall mean, relative to any Person, (a) any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such first Person of any bonds, notes, debentures or other debt securities of any such other Person, (b) Contingent Liabilities in favor of any other Person and (c) any Capital Stock or other investment held by such Person in any other Person. The amount of any Investment at any time shall be the original principal or capital amount thereof less all returns of principal or equity thereon made on or before such time and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property at the time of such Investment.
“Junior Debt” shall mean any outstanding Indebtedness of the Parent or any of its Subsidiaries that is (i) secured by a lien that is junior to the lien securing the Obligations, (ii) unsecured or (iii) subordinated in right of payment to the Obligations.
“Lender” shall have the meaning set forth in the preamble to this Agreement.
“Letter of Direction” shall mean that certain executed letter of direction from Administrative Borrower addressed to Administrative Agent, on behalf of itself and Lenders, directing the disbursement on the Closing Date of the proceeds of the Loans made on such date.
“Leverage Covenant” shall have the meaning set forth in Section 9.13(d).
“Licensed Insurance Entity” shall mean any Subsidiary of any Borrower listed on Schedule 1.01(d) to this Agreement, any other Subsidiary of any Borrower that operates as a licensed insurance company, is otherwise regulated by a Governmental Authority performing insurance regulatory functions or is a healthcare entity subject to regulatory capital requirements.
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“Lien” shall mean any mortgage, pledge, security interest, hypothecation, assignment for collateral purposes, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar charge or encumbrance (including any conditional sale or other title retention agreement or any lease in the nature thereof); provided, that in no event shall an operating lease entered into in the ordinary course of business or any precautionary UCC filings made pursuant thereto by an applicable lessor or lessee, be deemed to be a Lien.
“Liquidity” shall mean, as of any date of determination, Qualified Cash of the Credit Parties, net of any checks written by any Credit Party, plus Availability, in each case as of such date.
“Loan” shall mean, individually, any Loan made by any Lender hereunder, and collectively, the Loans made by the Lenders hereunder. “Loan” shall include the Initial Term Loan and any Revolving Loan, Swingline Advance or Extraordinary Advance made (or to be made) hereunder.
“Master Agreement” shall have the meaning set forth in the definition of the term “Hedging Transaction.”
“Material Adverse Effect” shall mean a material adverse effect caused by a material adverse change in (a) the business, assets, properties, liabilities (actual or contingent), operations, financial condition or results of operations of the Parent and its Subsidiaries, taken as a whole, (b) the validity or enforceability of this Agreement or any of the other Credit Documents, (c) the Secured Parties’ ability to enforce their rights or remedies hereunder or under any of the other Credit Documents, or (d) the ability of the Parent and its Subsidiaries, taken as a whole, to perform their payment and other material obligations under the Credit Documents to which they are parties.
“Material Contract” shall mean, as to any Person, (i) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate annual consideration payable to or by such Person or such Subsidiary of $15,000,000 or more, and (ii) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect. A reasonably detailed description of each Material Contract is set forth on Schedule 1.01(e) as of the Closing Date.
“Material Real Property” shall mean any Real Property that has a fair market value in excess of $4,000,000, as reasonably determined by the Administrative Borrower based on information available to it; provided that, in no event shall the real property located at Broadway and 00xx Xxxxxx xx Xxxx Xxxxxxxxxx, Xxxxxxxx constitute Material Real Property.
“Maturity Date” shall mean the date that is the earliest of (a) Xxxxxx 0, 0000, (x) the date on which the Commitments are voluntarily terminated pursuant to the terms hereof, (c) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise) in accordance with the terms hereof, (d) the date that is ninety-one (91) days prior to the maturity date of any Junior Debt; provided, that, clause (d) of this definition shall not apply if (x) Liquidity (A) at all
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times within the four (4) months prior to the maturity date of such Junior Debt and (B) immediately after giving effect to any such Junior Debt payment at maturity, exceeds the sum of (i) the principal amount of such maturing Junior Debt plus (ii) $67,200,000; provided further that, clause (d) of this definition shall not apply in the event that the 2024 Convertible Notes and/or 2025 Convertible Notes are converted to equity interests in accordance with the terms set forth in the applicable instrument prior to the date that is ninety-one (91) days prior to the maturity date of such Convertible Senior Note. If such date is not a Business Day, the immediately succeeding Business Day.
“Maturity Test Date” shall have the meaning set forth in Section 8.01(a).
“Maximum Revolver Amount” means $50,000,000, decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 4.03.
“Minimum Revolver Borrowing Amount” shall mean $200,000.
“Minimum Revolver Interest Amount” shall have the meaning set forth in Section 2.08(a).
“Monitored Account” shall have the meaning set forth in the definition of “Excluded Account”.
“Moody’s” shall mean Xxxxx’x Investors Service, Inc. or any successor by merger or consolidation to its business.
“Mortgage” shall mean a mortgage or a deed of trust, deed to secure debt, trust deed or other security document entered into by any applicable Credit Party and the Administrative Agent for the benefit of the Secured Parties in respect of any Real Property owned by such Credit Party, in such form as agreed between such Credit Party and the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.
“Mortgaged Property” shall mean each parcel of Real Property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 8.11(d).
“Multiemployer Plan” shall mean a “multiemployer plan” within the meaning of Section 3(37) of ERISA to which any Credit Party or any ERISA Affiliate makes, is making, is obligated, or within the last six (6) years has been obligated, to make contributions, or with respect to which any Credit Party has any liability, actual or contingent.
“Net Proceeds” shall mean (a) in respect of a Disposition or Casualty Event, cash proceeds as and when received by the Person making a Disposition, as well as insurance proceeds and condemnation and similar awards received on account of a Casualty Event, net of: (i) in the event of a Disposition (w) the direct costs and expenses relating to such Disposition, (x) sales, use or other transaction Taxes actually paid, assessed or estimated by such Person (in good faith) to be payable in cash within the next twelve (12) months in connection with such proceeds provided, that if, after the expiration of the twelve (12) month period, the amount of estimated or assessed Taxes, if any, exceeded the Taxes actually paid in cash in respect of proceeds from such Disposition, the aggregate amount of such excess shall constitute Net Proceeds under Section 5.02 and, subject to Section 5.02(k), be immediately applied to the prepayment of the Obligations in accordance with Section 5.02(j), (y) amounts required to be applied to pay principal, interest and prepayment premiums and penalties on Indebtedness (other than the
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Obligations) secured by a Lien on the asset which is the subject of such Disposition and (z) with respect to a Disposition, any escrow or reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of the applicable Disposition undertaken by any Credit Party or other liabilities in connection with such Disposition (provided that upon release of any such escrow or reserve, the amount released shall be considered Net Proceeds) and (ii) in the event of a Casualty Event, (x) all money actually applied to repair or reconstruct the damaged property affected thereby or otherwise reinvested in replacement property in accordance with this Agreement, (y) all of the costs and expenses reasonably incurred in connection with the collection of such proceeds, award or other payments, and (z) any amounts retained by or paid to parties having superior rights to such proceeds, awards or other payments and (b) in respect of any incurrence of Indebtedness, cash proceeds, net of underwriting discounts and out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of a Borrower in respect of any incurrence of Indebtedness, cash proceeds, net of underwriting discounts and reasonable out-of-pocket costs and expenses paid or incurred in connection therewith in favor of any Person not an Affiliate of a Borrower.
“Non-Consenting Lender” shall have the meaning set forth in Section 12.07(b).
“Non-Excluded Taxes” shall have the meaning set forth in Section 5.04(a).
“Non-U.S. Lender” shall have the meaning set forth in Section 5.04(b).
“Note” shall mean, as the context may require, a Revolver Note or a Term Loan Note.
“Notice of Borrowing” shall have the meaning set forth in Section 2.02(a).
“Notice of Conversion or Continuation” shall have the meaning set forth in Section 2.06.
“Obligations” shall mean all Loans, advances, debts, liabilities, obligations, covenants and duties owing by any Credit Party to any Lender, Agent, or any other Person required to be indemnified hereunder, in each case, that arise under any Credit Document, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired, including all fees, expenses and other amounts accruing during the pendency of any proceeding of the type described in Section 10.01(h), whether or not allowed in such proceeding.
“OFAC” shall have the meaning set forth in Section 7.26.
“Organization Documents” shall mean: (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and, if applicable, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction
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of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Connection Taxes” shall mean, with respect to any recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan, or sold or assigned an interest in any Loan).
“Other Taxes” shall mean any and all present or future stamp, court, documentary, intangible recording, filing or similar Taxes or any other excise or property Taxes, charges or similar levies (but excluding any Tax, charge or levy that constitutes an Excluded Tax) arising from any payment made hereunder or from the execution, delivery or enforcement of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 12.07).
“Overadvance” means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in Section 2.01 or Section 2.02.
“Parent” shall have the meaning set forth in the recitals to this Agreement.
“Participant” shall have the meaning set forth in Section 12.06(c)(i).
“Participant Register” shall have the meaning set forth in Section 12.06(c)(iii).
“Patriot Act” shall have the meaning set forth in Section 12.20.
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.
“Pension Plan” shall mean any single-employer plan, as defined in Section 4001(a)(15) of ERISA, and subject to Title IV of ERISA, Section 412 of the Code or Sections 302 or 303 of ERISA, that is or was within any of the preceding six plan years sponsored, maintained or contributed to (or to which there is or was an obligation to contribute) by any Credit Party or any ERISA Affiliate thereof, or respect of which any Credit Party or any ERISA Affiliate thereof otherwise has any obligation or liability, contingent or otherwise.
“Perfection Certificate” means a certificate in the form of Exhibit P-1.
“Permits” shall mean, with respect to any Person, any permit, approval, clearance, authorization, enrollment, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other contractual obligations with, any Governmental Authority, in each case, whether or not having the force of law and applicable to or binding upon such Person or any of its property or Products or to which such Person or any of its property or Products is subject.
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“Permitted Acquisition” shall mean any acquisition by a Credit Party or a Subsidiary of (i) all or substantially all of the assets of a target, which assets are located in the United States or (ii) one hundred percent (100%) of the Capital Stock of a target organized under the laws of any State in the United States or the District of Columbia, in each case, to the extent that each of the following conditions shall have been satisfied:
(a) the Parent and its Subsidiaries (including any new Subsidiary) shall execute and deliver the agreements, instruments and other documents required by Section 8.11; provided, that, the Parent and its Subsidiaries may acquire Persons that do not become Credit Parties and assets that do not become Collateral after the Closing Date in an amount not to exceed a total consideration of $35,000,000;
(b) such acquisition shall not be hostile and shall have been approved by the board of directors (or other similar body) and/or the stockholders or other equityholders of the target;
(c) no Event of Default shall then exist or would exist after giving effect thereto;
(d) Parent and its Subsidiaries shall be in pro forma compliance with the covenants set forth in Section 9.12 and 9.13;
(e) the total consideration paid or payable for Permitted Acquisitions shall be funded solely with (x) net proceeds from an issuance of Qualified Capital Stock or cash on hand and from operations, (y) proceeds from the Revolving Facility and (z) net proceeds from the issuance of Additional Notes;
(f) the total consideration for the Acquisition set forth on Schedule 1.01(f) shall not exceed $150,000,000 in the aggregate; and
(g) the total consideration paid with respect to target Persons with pro forma Target Consolidated Adjusted EBITDA that is less than $0 shall not exceed $20,000,000 in the aggregate after the Closing Date; provided, that, this clause (g) shall not apply to the Acquisition set forth on Schedule 1.01(f).
Notwithstanding the foregoing and the definition of Borrowing Base, no Accounts acquired in an Acquisition permitted hereunder shall be included in the Borrowing Base unless Revolver Agent, in its Permitted Discretion, determines that such Accounts conform to standards of eligibility established in accordance with this Agreement through completion of such audits, evaluations and appraisals thereof as Revolver Agent shall require (which appraisals, evaluations and audits shall be conducted at the expense of the Borrowers, jointly and severally, and in form, scope and substance acceptable to Revolver Agent in its Permitted Discretion).
“Permitted Discretion” means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.
“Permitted Holders” shall mean TPG Growth II Advisors, Inc., TPG Growth II BDH, L.P. and TPG Eagle Holdings L.P. and each of their Affiliates and any funds or partnerships
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managed by any of them (but not including any portfolio companies or operating companies of any of the foregoing, notwithstanding the form of ownership of any such portfolio or operating companies), The Advisory Board Company and University of Pittsburgh Medical Center.
“Permitted Liens” shall have the meaning set forth in Section 9.02.
“Permitted Refinancing Indebtedness” shall mean Indebtedness issued or incurred (including by means of the extension or renewal of existing Indebtedness) to refinance, refund, extend, renew or replace existing Indebtedness of any Credit Party or any of its Subsidiaries permitted hereunder (the “Refinanced Indebtedness”); provided, that the original principal amount of such refinancing, refunding, extending, renewing or replacing Indebtedness does not exceed the principal amount of such Refinanced Indebtedness plus the amount of any interest, premiums or penalties required to be paid thereon plus fees and expenses associated therewith.
“Person” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority.
“Plan” shall mean a Pension Plan or a Multiemployer Plan.
“Prepayment Premium” shall mean the following amounts (expressed as a percentage of the principal amount of the Term Loans being prepaid or repaid or Revolver Commitments being reduced or terminated):
Time Period | Prepayment Premium | ||||
After the Closing Date, but on or prior to the first anniversary of the Closing Date | 3.0% | ||||
After the first anniversary, but on or prior to the second anniversary of the Closing Date | 2.0% | ||||
After the second anniversary, but prior to the third anniversary of the Closing Date | 1.0% | ||||
On or after the third anniversary of the Closing Date | 0.0% |
“Prepayment Premium Event” shall have the meaning set forth in Section 4.04.
“Primary Obligor” shall have the meaning set forth in the definition of “Guarantee Obligations.”
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“Prime Rate” shall mean a variable per annum rate, as of any date of determination, equal to the rate as of such date published in The Wall Street Journal as being the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then the highest of such rates). The Prime Rate will change as of the date of publication in The Wall Street Journal of a Prime Rate that is different from that published on the preceding Business Day. In the event that The Wall Street Journal shall, for any reason, fail or cease to publish the Prime Rate, the Administrative Agent shall choose a reasonably comparable index or source to use as the basis for the Prime Rate.
“Privacy and Security Rules” shall have the meaning set forth in Section 7.31(i).
“Products” shall mean any item or any service that is researched or developed, created, tested, packaged, labeled, distributed, manufactured, managed, performed, or otherwise used, offered, marketed, sold, or handled by or on behalf of the Credit Parties or any of their Subsidiaries, whether marketed or in development.
“Pro Forma Basis” shall mean, for purposes of calculating the Total Secured Leverage Ratio:
(a) Investments, acquisitions, mergers, consolidations and dispositions of any Subsidiary, line of business or division, that have been made by the specified Person or any of its Subsidiaries, or any Person or any of its Subsidiaries acquired by, merged or consolidated with the specified Person or any of its Subsidiaries, and including any related financing transactions and incurrences of Indebtedness, and including increases in ownership of Subsidiaries, during the applicable reference period or subsequent to such reference period and on or prior to the date of determination will be given pro forma effect, as if they had occurred on the first day of the applicable reference period;
(b) any Person that is a Subsidiary on the date of determination will be deemed to have been a Subsidiary at all times during such reference period; and
(c) any Person that is not a Subsidiary on the date of determination will be deemed not to have been a Subsidiary at any time during such reference period;
For purposes of this definition, whenever pro forma effect is given to a transaction, the pro forma calculations shall be made in good faith by an Authorized Officer of the Administrative Borrower and shall be reasonably satisfactory to the Agents. Any such pro forma calculation may include adjustments appropriate, in the good faith determination of the Administrative Borrower as set forth in an officers’ certificate, to reflect operating expense reductions (but not revenue increases) expected to result from the applicable pro forma event if such adjustments are reasonably satisfactory to the Agents.
“Pro Rata Share” shall mean (a) with respect to the Initial Term Loan Commitment of any Lender at any time, a percentage, the numerator of which shall be the sum of such Lender’s unfunded Initial Term Loan Commitment, plus such Lender’s funded Initial Term Loans, and the denominator of which shall be the sum of the unused Initial Term Loan Commitments of all Lenders, plus all funded Initial Term Loans of all Lenders or (b) with respect to the Revolver Commitment of any Lender at any time, a percentage, the numerator of be the sum of such
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Lender’s unfunded Revolver Commitment, plus such Lender’s funded Revolving Loan, and the denominator of which shall be the sum of the Revolver Commitment of all Lenders, plus all funded Revolving Loans of all Lenders.
“Protective Advances” has the meaning specified therefor in Section 2.02(c)(i).
“Purchase Notice” shall have the meaning set forth in Section 12.24.
“Purchase Option Date” shall have the meaning set forth in Section 12.24.
“Purchase Option Trigger Event” shall mean (a) an Event of Default has occurred and is continuing or (b) the Obligations have been accelerated in accordance with Section 10.02.
“Qualified Capital Stock” shall mean any Capital Stock that is not Disqualified Capital Stock.
“Qualified Cash” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents of the Credit Parties that are in deposit accounts or in securities accounts, or any combination thereof, which deposit accounts and securities accounts are the subject of Springing Control Agreements and are maintained by a branch office of the applicable bank or securities intermediary located within the United States of America; provided, that, for the first sixty (60) days (or such longer period as reasonably agreed to by the Administrative Agent) following the Closing Date there shall be no requirement that cash and Cash Equivalents of the Credit Parties be held in accounts subject to Springing Control Agreements in order for such cash and Cash Equivalents to be Qualified Cash.
“Real Property” shall mean, with respect to any Person, all right, title and interest of such Person (including, without limitation, any leasehold estate) in and to a parcel of real property owned, leased or operated by such Person together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof.
“Refinanced Indebtedness” shall have the meaning set forth in the definition of “Permitted Refinancing Indebtedness.”
“Register” shall have the meaning set forth in Section 12.06(b)(iv).
“Regulatory Matters” shall mean, collectively, activities that are subject to Health Care Laws.
“Regulation D” shall mean Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.
“Regulation U” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.
“Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.
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“Rejection Notice” shall have the meaning set forth in Section 5.02(k).
“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.
“Release” shall mean a “release,” as such term has the meaning set forth in CERCLA.
“Reportable Event” shall mean an event described in Section 4043 of ERISA and the regulations thereunder (excluding any such event for which the notice requirement has been waived by the PBGC).
“Required Lenders” shall mean, at any date, Lenders having or holding a majority of the sum of (a) the outstanding principal amount of the Term Loans and (b) (i) the Revolver Commitment or (ii) if the Revolver Commitment has been terminated, the aggregate outstanding principal amount of the Revolving Loans; provided that the Revolver Commitment of, and the portion of the outstanding principal amount of the Revolving Loans and the Term Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Required Revolving Lenders” shall mean, at any date, Lenders having or holding a majority of (a) the Revolver Commitment or (b) if the Revolver Commitment has been terminated, the aggregate outstanding principal amount of the Revolving Loans; provided that the Revolver Commitment of, and the portion of the outstanding principal amount of the Revolving Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.
“Required Term Lenders” shall mean, at any date, the Lenders having or holding a majority of the outstanding principal amount of the Term Loans, any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.
“Restricted Payment” shall mean, with respect to any Person, (a) the declaration or payment of any dividend on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Stock of such Person or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash or property (it being understood, for the avoidance of doubt, that payments in the form of Capital Stock pursuant to an employee benefit plan shall not constitute Restricted Payments), (b) the payment or prepayment of principal of, or premium or interest or any other amount in respect of, any Indebtedness that is contractually subordinate to the Obligations unless such payment is permitted under the terms of the subordination agreement applicable thereto, (c) any payment in respect of earn-out obligations and (d) any payment or prepayment of principal of, or premium or interest in respect of the Convertible Senior Notes.
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“Revolver Commitment” shall mean, with respect to each Revolving Lender, its Revolver Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Revolving Lender’s name under the applicable heading on Schedule 1.01(a) or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to this Agreement and/or assignments made in accordance with the provisions of Section 12.01.
“Revolver Note” shall mean the promissory note substantially in the form of Exhibit R-1.
“Revolver Usage” shall mean, as of any date of determination, the amount of outstanding Revolving Loans (inclusive of Extraordinary Advances and Swingline Advances).
“Revolving Agent” shall mean ACF.
“Revolving Agent’s Account” shall mean the Deposit Account of Revolver Agent identified on Schedule 1.01(b) (or such other Deposit Account of Revolver Agent that has been designated as such, in writing, by Revolver Agent to Administrative Borrower and the Lenders).
“Revolving Credit Obligations” shall have the meaning set forth in Section 12.06(d).
“Revolving Creditors” shall have the meaning set forth in Section 12.06(d).
“Revolving Facility” shall mean, at any time, the aggregate amount of the Revolving Lenders’ Revolver Commitments at such time.
“Revolving Lender” shall mean a Lender that has a Revolver Commitment, has an outstanding Revolving Loan.
“Revolving Loan Exposure” shall mean, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lender’s Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate outstanding principal amount of the Revolving Loans (inclusive of Extraordinary Advances and Swingline Advances).
“Revolving Loans” has the meaning specified therefor in Section 2.01(a). Revolving Loans shall include Extraordinary Advances and Swingline Advances, unless the context clearly requires otherwise.
“Sanctioned Entity” shall mean (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
“Sanctioned Person” shall mean a person named on the list of Specially Designated Nationals maintained by OFAC.
“Sanctions” shall have the meaning set forth in Section 7.26.
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“SEC” shall mean the Securities and Exchange Commission.
“S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.
“Secured Parties” shall mean, collectively, (a) the Lenders, (b) the Agents, (c) the beneficiaries of each indemnification obligation undertaken by any Credit Party under the Credit Documents and (d) any successors, endorsees, transferees and permitted assigns of each of the foregoing.
“Securitization” shall have the meaning set forth in Section 12.08.
“Security Agreement” shall mean a Security Agreement, by and among each Credit Party and the Collateral Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Collateral Agent, as amended, restated, supplemented or otherwise modified from time to time.
“Security Documents” shall mean, collectively, the Security Agreement, any Mortgage and each other security agreement or other instrument or document executed and delivered pursuant to Section 8.11 or pursuant to any of the Security Documents to secure any of the Obligations.
“Settlement” shall have the meaning set forth in Section 2.02(d)(i).
“Settlement Date” shall have the meaning set forth in Section 2.02(d)(i).
“Significant Subsidiary” shall mean a Subsidiary of any Borrower that meets the definition of “significant subsidiary” in Article 1, Rule 1-02 of Regulation S-X under the Exchange Act.
“SOFR” shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Solvency Certificate” shall mean a solvency certificate dated as of the Closing Date, duly executed and delivered by an Authorized Officer of the Administrative Borrower to the Administrative Agent, in form and substance reasonably satisfactory to the Agents.
“Solvent” shall mean, with respect to any Person, at any date, that (a) the sum of such Person’s debt (including Contingent Liabilities) does not exceed the present fair saleable value of such Person’s present assets, (b) such Person’s capital is not unreasonably small in relation to its business as contemplated on such date, (c) such Person has not incurred and does not intend to incur debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise) and (d) such Person is “solvent” within the meaning given that term and similar terms under Applicable Laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any Contingent Liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time,
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represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).
“Specified Representations” shall mean Section 7.01(a), 7.02, 7.03(iii), 7.05, 7.07, 7.17, 7.26, and 7.27.
“Springing Control Account” means a Deposit Account that is subject to a Springing Control Agreement.
“Springing Control Agreement” shall mean an agreement in which a Credit Party, Collateral Agent, and Cash Management Bank maintaining the Deposit Account have agreed that the Cash Management Bank will comply with instructions originated by the Collateral Agent directing disposition of the funds in the Deposit Account without further consent by the Credit Party pursuant to terms reasonably satisfactory to the Collateral Agent and the Administrative Borrower. Terms of the agreement shall provide control (within the meaning of Section 9-104 of the UCC) reasonably satisfactory to Collateral Agent.
“Statutory Reserve Rate” shall mean, for any day as applied to any Term SOFR Loan, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages that are in effect on that day (including any marginal, special, emergency or supplemental reserves), expressed as a decimal, as prescribed by the Board and to which the Administrative Agent is subject, for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D). Such reserve percentages shall include those imposed pursuant to such Regulation D. Term SOFR Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subsidiary” of any Person shall mean and include (a) any corporation more than fifty percent (50%) of whose Voting Stock having by the terms thereof power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person, directly or indirectly, through Subsidiaries and (b) any partnership, association, joint venture or other entity in which such Person, directly or indirectly, through Subsidiaries, has more than a fifty percent (50%) voting equity interest at the time. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of a Credit Party. Notwithstanding the foregoing, solely to the extent the Securities Exchange Commission has permitted the Parent to treat Justify Holdings, Inc. as being an unconsolidated entity, then for the purposes of the definition of “Consolidated Adjusted EBITDA,” “Consolidated Net Income,” “Consolidated Secured Debt,” “Funded Debt” and Section 8.01(a)-(c), Section 8.01(f) and Section 9.13 Justify Holdings, Inc. shall not be considered a “Subsidiary.”
“Swingline Advance” has the meaning specified in Section 2.02(b).
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“Swingline Loan Limit” shall mean, at any time, the smaller of the following amounts: (i) $10,000,000, (ii) the aggregate Revolver Commitment minus the Revolver Usage and (iii) the Borrowing Base, minus the amount of Revolving Loans outstanding.
“Target Consolidated Adjusted EBITDA” shall mean, for any specified trailing 12 month period, an amount determined for any Person equal to (a) the consolidated net income (or deficit) of such Person in accordance with GAAP after eliminating all extraordinary nonrecurring items of income, plus (b) without duplication and to the extent deducted in arriving at the consolidated net income of such Person, the sum of, without duplication, amounts for (i) total interest expense, (ii) provisions for Taxes based on income, (iii) total depreciation expense, (iv) total amortization expense, and (v) any other non-cash charges and expenses deducted in arriving at the consolidated net income of such Person (excluding any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or amortization of an item that was paid in a prior period), minus (c) without duplication and to the extent included in arriving at the consolidated net income of such Person, amounts for non-cash gains (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash items in any prior period).
“Taxes” shall mean all income, stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed, enacted, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties, additions to tax or similar liabilities with respect thereto.
“Term Lender” shall mean each Lender that holds an Initial Term Loan Commitment or a Term Loan.
“Term Loan” shall mean the Initial Term Loan.
“Term Creditor” shall have the meaning set forth in Section 12.06(d).
“Term Loan Note” shall mean a promissory note substantially in the form of Exhibit T-1.
“Term Loan Obligations” shall have the meaning set forth in Section 12.06(d).
“Term SOFR” shall mean.
(a) for any calculation with respect to a Term SOFR Loan, the Term SOFR Reference Rate for a tenor of ninety (90) days on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of the applicable calendar quarter, as such rate is published by the Term SOFR Administrator; provided, however, that (x) if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government
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Securities Business Days prior to such Periodic Term SOFR Determination Day and (y) with respect to any Borrowing of Term SOFR Loans on or before September 30, 2022, the Periodic Term SOFR Determination Day shall be July 28, 2022, and
(b) for any calculation with respect to an ABR Loan on any day, the Term SOFR Reference Rate for a tenor of ninety (90) days on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.
“Term SOFR Adjustment” shall mean a percentage equal to 0.15% per annum.
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Agents in their reasonable discretion).
“Term SOFR Loan” shall mean each Loan bearing interest at Adjusted Term SOFR Rate, as provided in Section 2.08(a)Error! Reference source not found..
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Test Period” shall mean, for any date of determination under this Agreement, the four (4) consecutive Fiscal Quarters of any Borrower most recently ended as of such date of determination.
“Total Secured Leverage Ratio” shall mean, as of the last day of any Test Period, the ratio of (a) Consolidated Secured Debt as of such date to (b) Consolidated Adjusted EBITDA for such Test Period.
“TPG” shall have the meaning set forth in the recitals to this Agreement.
“TPG Acquisition” shall mean the acquisition by Evolent of substantially all the assets of TPG Growth Iceman Parent, Inc. and each of its subsidiaries.
“TPG Acquisition Agreement” shall mean the Agreement and Plan of Merger dated as of June 24, 2022, by and between Parent, Evolent, Endzone, TPG and TPG Growth V Iceman, L.P..
“TPG Business Segment” shall mean the business of the TPG Entities.
“TPG Entities” shall mean TPG, TPG Growth Iceman Intermediate, Inc., a Delaware corporation, Implantable and Surgical Collections Group, Inc., a Delaware corporation.
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“TRA” shall mean that certain Income Tax Receivables Agreement, dated as of June 4, 2015, by and among Parent, Evolent, TPG Eagle Holdings, L.P., Ptolemy Capital, LLC, The Advisory Board Company, UPMC, TPG Growth II BDH, L.P., Premier Health Partners, Oxeon Partners, LLC and Medstar Health, Inc., as amended, restated, supplemented or otherwise modified from time to time.
“Transaction Documents” shall mean each of the documents executed and/or delivered in connection with the Transactions, including, without limitation, the Credit Documents.
“Transactions” shall mean, collectively, the transactions contemplated by the Credit Documents, including the TPG Acquisition and the transactions contemplated by the TPG Acquisition Agreement.
“Transactions Rule” shall have the meaning set forth in Section 7.31(i).
“Treasury Rate” shall mean as of any prepayment date, shall mean the yield to maturity at the time of computation of United States Treasury Securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519), which has become publicly available at least (2) two Business Days prior such prepayment (or, if such Statistical Release is no longer published, any publicly available source or similar market data) most nearly equal to the period from such prepayment date to the second anniversary of the Closing Date; provided, however, that if the period from such prepayment date to the second anniversary of the Closing Date, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one twelfth of a year) from the weekly average yields of United States Treasury Securities for which such yields are given.
“Trustee” shall have the meaning set forth in the definition “2024 Convertible Notes.”
“Type” shall mean, as to any Loan, its nature as an ABR Loan or Term SOFR Loan.
“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.
“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Unasserted Contingent Obligations” shall have the meaning given to such term in the Security Agreement.
“Unfunded Current Liability” of any Pension Plan shall mean the amount, if any, by which the present value of all accumulated benefit obligations under such Pension Plan as of the close of its most recent plan year, determined in accordance with FASB Accounting Standards Codification 715: Compensation - Retirement Benefits, as in effect on the date hereof, exceeds the fair market value of the assets of such Pension Plan allocable to such accrued benefits.
“Unused Line Fee” shall have the meaning specified therefor in Section 4.01(b).
“U.S.” and “United States” shall mean the United States of America.
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“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Vital Business Segment” shall mean the business of MTS III Vital Decisions Blocker Corp., a Delaware corporation, Vital Decisions Acquisition LLC, a Delaware limited liability company, and Vital Decisions, LLC, a New Jersey limited liability company.
“Voting Stock” shall mean, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors (or Persons acting in a comparable capacity) of such Person under ordinary circumstances.
“Waterfall Trigger Event” shall mean (w) an Event of Default under (i) Section 10.01(a) (payment default); (ii) Section 10.01(c) or (d) arising from the failure of any Borrower or any other Credit Party to observe or perform any obligation under any of Section 8.01(a) (liquidity certificate), 8.01(b) (delivery of quarterly financials) or 8.01(c) (annual financials) (solely to the extent such financial statements are not delivered to the Administrative Agent for delivery to each Lender within 30 days following the date such financial statements were required to be delivered pursuant to Section 8.01(a), Section 8.01(b) or Section 8.01(c), as applicable), Section 8.10 (use of proceeds) (solely as it relates to the use of proceeds of the Revolving Facility), Section 8.17 (Borrowing Base and Financial Statement Reporting), Section 9.01 (indebtedness), Section 9.02 (liens), Section 9.04 (dispositions), Section 9.05 (investments), Section 9.06 (restricted payments), or Section 9.12 (conduct of business); (iii) Section 10.01(f) (judgment default); (iv) Section 10.01(h) (insolvency proceedings, dissolution or liquidation); (v) Section 10.01(i) (liens); or (vi) Section 10.01(j) (change of control), (x) solely to the extent Required Lenders exercise rights under any Springing Control Agreement in accordance with Section 2.14(b), a Cash Dominion Event, (y) solely to the extent that such amendment, modification or waiver is prohibited by Section 12.01(vi) without the consent of the Required Revolving Lenders, the amendment, modification or waiver of any of the provisions set forth in the immediately preceding clause (x) without the consent of the Required Revolving Lenders to such amendment, modification or waiver or (z) notice of any prepayment made pursuant to Section 5.02(a) from the Net Proceeds of any Disposition set forth on Schedule 1.01(g) (it being understood that a Waterfall Trigger Event occurring pursuant to this clause (z) shall continue until such time the foregoing payment is completed).
“Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.
SECTION 1.02 Other Interpretive Provisions. With reference to this Agreement and each other Credit Document, unless otherwise specified herein or in such other Credit Document:
(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
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(b) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Credit Document shall refer to such Credit Document as a whole and not to any particular provision thereof.
(c) Article, Section, Exhibit and Schedule references are to the Credit Document in which such reference appears.
(d) The term “including” is by way of example and not limitation.
(e) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.
(f) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including.”
(g) Section headings herein and in the other Credit Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Credit Document.
SECTION 1.03 Accounting Terms and Determination. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a manner consistent with that used in preparing the Historical Financial Statements set forth in clause (a) of such definition, except as otherwise specifically prescribed herein. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to in Article IX shall be made, without giving effect to any election under Accounting Standards Codification 825-10 or 470-20 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value.” A breach of any Financial Performance Covenant shall be deemed to have occurred as of the last day of the relevant specified measurement period, regardless of when the financial statements reflecting such breach are delivered to the Administrative Agent.
SECTION 1.04 Rounding. Any financial ratios required to be maintained or complied with by any Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05 References to Agreements, Laws, etc. Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Credit Documents) and other Material Contracts shall be deemed to include all subsequent amendments,
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restatements, amendment and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements and other modifications are permitted by any Credit Document; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.
SECTION 1.06 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
SECTION 1.07 Timing of Payment of Performance. When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day.
SECTION 1.08 Corporate Terminology. Any reference to officers, shareholders, stock, shares, directors, boards of directors, corporate authority, articles of incorporation, bylaws or any other such references to matters relating to a corporation made herein or in any other Credit Document with respect to a Person that is not a corporation shall mean and be references to the comparable terms used with respect to such Person.
SECTION 1.09 UCC Definitions. When used in this Agreement, the following terms have the same definitions as provided in Article 9 of the UCC, but for convenience in this Agreement the first letter of all such terms shall be capitalized: “Accession,” “Account,” “Account Debtor,” “Authenticate” (and all derivations thereof), “Certificate Of Title”, “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangible,” “Goods,” “Health-Care-Insurance Receivable,” “Instrument,” “Inventory,” “Investment Property,” “Letter-Of-Credit Right,” “Obligor,” “Proceeds” (as specifically defined in Section 9-102(64) of the UCC), “Record,” “Secondary Obligor,” “Secured Party,” “Software” and “Supporting Obligation.”
SECTION 1.10 Divisions; Series. For all purposes under the Credit Documents, if, in connection with any division or plan of division with respect to a limited liability company under Delaware law (or any comparable event under a different jurisdiction’s laws) or an allocation of assets to a series of a limited liability company under Delaware law (or any comparable event under a different jurisdiction’s laws), (a) any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then such transaction shall constitute a “transfer” (as used in the definition of “Disposition” contained herein) from the original Person to the subsequent Person, and (b) any new Person comes into existence, such new Person shall be deemed to have been organized by the holders of its Capital Stock on the first date of its existence.
SECTION 1.11 Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Prime Rate, the Term SOFR Reference Rate, Adjusted Term SOFR Rate or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the
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composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Prime Rate, the Term SOFR Reference Rate, Adjusted Term SOFR Rate, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Prime Rate, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR Rate, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to any Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Prime Rate, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to any Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
ARTICLE II
Amount and Terms of Credit Facilities
Amount and Terms of Credit Facilities
SECTION 2.01 Loans.
(a) Subject to and upon the terms and conditions herein set forth:
(x) Each Term Lender having an Initial Term Loan Commitment agrees (severally, not jointly or jointly and severally) to make a term loan (collectively, the “Initial Term Loan”) to the Initial Borrower on the Closing Date in the amount of the Initial Term Loan Commitment of such Lender.
(y) Each Revolving Lender agrees (severally, not jointly or jointly and severally) to make revolving loans (all such loans, collectively, the “Revolving Loans”) to the Borrowers under a revolving credit facility in an amount at any one time outstanding (on an aggregate basis) not to exceed:
(i) on the Closing Date, an amount equal to the Maximum Revolver Amount,
(ii) any time after the Closing Date, the lesser of:
(A) an amount equal to such Revolving Lender’s Revolver Commitment, and
(B) such Revolving Lender’s Pro Rata Share of an amount equal to the lesser of:
a. the amount equal to the Maximum Revolver Amount, and
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b. the amount equal to the Borrowing Base as of such date (based upon the most recent Borrowing Base Certificate delivered by the Administrative Borrower to the Revolver Agent, as adjusted by the Revolving Agent for Reserves established by the Revolving Agent from time to time).
(b) Each of the Loans made pursuant to Section 2.01(a)(x) may, at the option of a Borrower, (i) be incurred and maintained as, and/or converted into, ABR Loans or Term SOFR Loans; provided, that all such Term Loans made by each of the Lenders pursuant to the same Borrowing shall, unless otherwise specifically provided herein, consist entirely of Term Loans of the same Type and (ii) may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid may not be reborrowed.
(c) Each Lender, may at its option, make any Term SOFR Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Term SOFR Loan; provided, that (i) any exercise of such option shall not affect the obligation of any Borrower to repay such Term SOFR Loan and (ii) in exercising such option, such Lender shall use its reasonable efforts to minimize any increased costs to the Borrowers resulting therefrom.
(d) Each of the Revolving Loans made pursuant to Section 2.01(a)(y) may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.
(e) Notwithstanding anything to the contrary in this Section 2.01, the Revolving Agent may at any time establish one or more reserves (“Reserves”) under the Revolving Facility as the Revolving Agent may deem proper and appropriate in the Revolving Agent’s Permitted Discretion (including, without limitation, Reserves based on the results of any Field Exams, including relating to contingent liabilities of the Credit Parties under any Material Contract of such Credit Party). A Reserve may reduce the Borrowing Base (by reduction of an advance rate set forth in the Borrowing Base or otherwise). For the avoidance of doubt, the Revolving Agent may in its Permitted Discretion (but the Revolving Agent shall have no obligation in any circumstance to) increase, reduce or release any Reserve that was previously established under this clause (e).
SECTION 2.02 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing Revolving Loans. Each Borrowing of a Revolving Loan shall be made by a written request by an Authorized Officer pursuant to prior written notice in the form of Exhibit N-1 or such other form approved by the Administrative Agent (a “Notice of Borrowing”) delivered to Revolving Agent and received by Revolving Agent no later than 11:00 a.m. one Business Day prior to the Funding Date, specifying (i) the amount of such Borrowing (which such amount may not be less than the Minimum Revolver Borrowing Amount), and (ii) the requested Funding Date (which shall be a Business Day); provided, that Revolving Agent may, in its sole discretion, elect to accept as timely requests that are received later than 11:00 a.m. on the applicable Business Day; and, provided, further, that
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Borrower shall promptly after delivery of such written request confirm Revolving Agent’s receipt thereof by phone or written confirmation. With respect to each request for a Borrowing pursuant to this Section 2.02(a), each Revolving Lender agrees that Revolving Agent may in Revolving Agent’s sole discretion, but Revolving Agent shall not be obligated to, make such requested Borrowing to Borrower on behalf of the Revolving Lenders as a Swingline Advance.
(b) Making of Revolving Loans.
(i) After receipt of a request for a Borrowing pursuant to Section 2.02(a), Revolving Agent at its option and in its discretion shall do either of the following:
(A) in Revolving Agent’s sole discretion, advance the amount of the requested Borrowing to a Borrower disproportionately (a “Swingline Advance”) out of Revolving Agent’s own funds on behalf of the Revolving Lenders in an aggregate amount not to exceed the Swingline Loan Limit, which advance shall be (i) on the Funding Date specified in the relevant Notice of Borrowing (which shall have been delivered no later than one (1) Business Day in advance of the requested Funding Date) and (ii) notwithstanding anything in the Notice of Borrowing to the contrary, an ABR Loan. Revolving Agent shall make the proceeds of Swingline Advances available to a Borrower on the applicable Funding Date by transferring immediately available funds equal to such proceeds to the Designated Account. All Swingline Advances made under this Section 2.02(b)(i)(A) shall be subject to Settlement in accordance with Section 2.02(d) below; it being understood that all payments on any such Swingline Advances shall be payable solely to Revolving Agent solely for its own account until Settlement thereof shall have occurred. For the avoidance of doubt, all Swingline Advances constitute Loans hereunder; or
(B) notify the Revolving Lenders by telephone, email, or other electronic form of transmission, of the requested Borrowing; such notification to be sent by 1:00 p.m. on the Business Day that is one (1) Business Day prior to the requested Funding Date. If Revolving Agent has notified the Revolving Lenders of a requested Borrowing on the Business Day that is one (1) Business Day prior to the Funding Date, then each Revolving Lender shall make the amount of such Revolving Lender’s Pro Rata Share of the requested Borrowing available to Revolving Agent in immediately available funds, to Revolving Agent’s Account, not later than 10:00 a.m. on the Business Day that is the requested Funding Date. After Revolving Agent’s receipt of the proceeds of such Revolving Loans from the Revolving Lenders, Revolving Agent shall make the proceeds thereof available to a Borrower on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, that, subject to the provisions of Section 2.02(c)(ii), no Revolving Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Article VI will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.
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(ii) Unless Revolving Agent receives notice from a Revolving Lender prior to 9:30 a.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Revolving Agent has notified the Revolving Lenders of a requested Borrowing that such Revolving Lender will not make available as and when required hereunder to Revolving Agent for the account of a Borrower the amount of that Revolving Lender’s Pro Rata Share of the Borrowing, Revolving Agent may assume that each Revolving Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Revolving Agent may (but shall not be so required), in reliance upon such assumption, make available to such Borrower a corresponding amount. If, on the requested Funding Date, any Revolving Lender shall not have remitted the full amount that it is required to make available to Revolving Agent in immediately available funds and if Revolving Agent has made available to a Borrower such amount on the requested Funding Date, then such Revolving Lender shall make the amount of such Revolving Lender’s Pro Rata Share of the requested Borrowing available to Revolving Agent in immediately available funds, to Revolving Agent’s Account, no later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date (in which case, the interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Revolving Agent’s Account). If any Revolving Lender shall not remit the full amount that it is required to make available to Revolving Agent in immediately available funds as and when required hereby and if Revolving Agent has made available to a Borrower such amount, then that Revolving Lender shall be obligated to immediately remit such amount to Revolving Agent, together with interest at the Defaulting Lender Rate for each day until the date on which such amount is so remitted. A notice submitted by Revolving Agent to any Revolving Lender with respect to amounts owing under this Section 2.02(c)(ii) shall be conclusive, absent manifest error. If the amount that a Revolving Lender is required to remit is made available to Revolving Agent, then such payment to Revolving Agent shall constitute such Revolving Lender’s Loan for all purposes of this Agreement. If such amount is not made available to Revolving Agent on the Business Day following the Funding Date, Agent will notify the applicable Borrower of such failure to fund and, upon demand by Revolving Agent, such Borrower shall pay such amount to Revolving Agent for Revolving Agent’s Account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable ABR Loans at the time to the Revolving Loans composing such Borrowing. If any Borrower and any Revolving Lender shall pay interest to the Revolving Agent for the same (or a portion of the same) period, the Revolving Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period.
(c) Protective Advances and Optional Overadvances.
(i) Any contrary provision of this Agreement or any other Credit Document notwithstanding, but subject to Section 2.02(c)(iv), at any time Revolving Agent hereby is authorized by a Borrower and the Revolving Lenders, from time to time, in Revolving Agent’s sole discretion, to make Revolving Loans to, or for the benefit of, any Borrower, on behalf of the Revolving Lenders, that Revolving Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of repayment of the Obligations or (3) to pay any other amount chargeable to any Credit Party hereunder (the Revolving Loans described in this Section 2.02(c)(i) shall be referred to as “Protective Advances”). Notwithstanding the foregoing, no Protective Advance shall be made which would cause (A) the aggregate amount of all Protective Advances outstanding at any one time to exceed 10% of the Maximum Revolver Amount unless the Required Revolving
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Lenders otherwise agree or (B) the aggregate amount of Revolver Usage outstanding at any one time to exceed the Maximum Revolver Amount.
(ii) Any contrary provision of this Agreement or any other Credit Document notwithstanding, but subject to Section 2.02(c)(iv), the Revolving Lenders hereby authorize Revolving Agent, and Revolving Agent may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans to any Borrower notwithstanding that an Overadvance exists or would be created thereby, so long as (A) after giving effect to such Revolving Loans, the outstanding Revolver Usage does not exceed the Borrowing Base by more than 10% of the Maximum Revolver Amount (unless Required Revolving Lenders agree to a higher amount), and (B) after giving effect to such Revolving Loans, the outstanding Revolver Usage does not exceed the Maximum Revolver Amount. In the event Revolving Agent obtains actual knowledge that an Overadvance exists, regardless of the amount of, or reason for, such excess, Revolving Agent shall notify the Revolving Lenders as soon as practicable and the Revolving Lenders with Revolver Commitments thereupon shall, together with Revolving Agent, jointly determine the terms of arrangements that shall be implemented with the Borrowers intended to eliminate the Overadvance within thirty (30) days. In such circumstances, if any Revolving Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Revolving Lenders. The foregoing provisions are meant for the benefit of the Revolving Lenders and Revolving Agent and are not meant for the benefit of the Borrowers, which shall continue to be bound by the provisions of Section 5.02. Each Revolving Lender with a Revolver Commitment shall be obligated to make Revolving Loans in accordance with Section 2.02(b) in, or settle Overadvances made by Revolving Agent with Revolving Agent as provided in Section 2.02(d) (or Section 2.15), as applicable) for, the amount of such Revolving Lender’s Pro Rata Share of any unintentional Overadvances by Revolving Agent reported to such Revolving Lender, any intentional Overadvances made as permitted under this Section 2.02(c)(ii).
(iii) Each Protective Advance and each Overadvance (each, an “Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder. Prior to Settlement with respect to Extraordinary Advances, all payments on the Extraordinary Advances made by Revolving Agent, including interest thereon, shall be payable to Revolving Agent solely for its own account. The Extraordinary Advances shall be repayable on demand, secured by Revolving Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans. The provisions of this Section 2.02(c) are for the exclusive benefit of Revolving Agent and the Revolving Lenders and are not intended to benefit any Borrower (or any other Credit Party) in any way.
(iv) Notwithstanding anything contained in this Agreement or any other Credit Document to the contrary: (A) no Extraordinary Advance may be made by Revolving Agent if such Extraordinary Advance would cause the aggregate principal amount of Extraordinary Advances outstanding to exceed an amount equal to 10% of the Maximum Revolver Amount; and (B) to the extent that the making of any Extraordinary Advance causes the aggregate Revolver Usage to exceed the Maximum Revolver Amount, such portion of such Extraordinary Advance shall be for Revolving Agent’s sole and separate account and not for the account of any Revolving Lender and shall be entitled to priority in repayment in accordance with Section 5.02(j).
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(d) Settlement. It is agreed that each Revolving Lender’s funded portion of the Revolving Loans is intended by the Revolving Lenders to equal, at all times, such Revolving Lender’s Pro Rata Share of the outstanding Revolving Loans. Such agreement notwithstanding, Revolving Agent and the Revolving Lenders agree (which agreement shall not be for the benefit of the Borrowers) that in order to facilitate the administration of this Agreement and the other Credit Documents, settlement among the Revolving Lenders as to the Revolving Loans (including the Swingline Advances and Extraordinary Advances) shall take place on a periodic basis in accordance with the following provisions:
(i) Revolving Agent shall request settlement (“Settlement”) with the Revolving Lenders on a weekly basis, or on a more frequent basis if so determined by Revolving Agent in its sole discretion (A) for itself, with respect to the outstanding Swingline Advances and Extraordinary Advances, and (B) with respect to Parent’s or their Subsidiaries’ payments or other amounts received, as to each by notifying the Revolving Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Revolving Loans (including Swingline Advances and Extraordinary Advances) for the period since the prior Settlement Date. Subject to the terms and conditions contained herein)(including Section 2.15): (1) if the amount of the Revolving Loans (including Swingline Advances and Extraordinary Advances) made by a Revolving Lender that is not a Defaulting Lender exceeds such Revolving Lender’s Pro Rata Share of the Revolving Loans (including Swingline Advances and Extraordinary Advances) as of a Settlement Date, then Revolving Agent shall, by no later than 2:00 p.m. on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Revolving Lender (as such Revolving Lender may designate), an amount such that each such Revolving Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swingline Advances and Extraordinary Advances), and (2) if the amount of the Revolving Loans (including Swingline Advances and Extraordinary Advances) made by a Revolving Lender is less than such Revolving Lender’s Pro Rata Share of the Revolving Loans (including Swingline Advances and Extraordinary Advances) as of a Settlement Date, such Revolving Lender shall no later than 2:00 p.m. on the Settlement Date transfer in immediately available funds to Revolving Agent’s Account, an amount such that each such Revolving Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swingline Advances and Extraordinary Advances). Such amounts made available to Revolving Agent under clause (2) of the immediately preceding sentence shall be applied against the amounts of the applicable Swingline Advances or Extraordinary Advances and shall constitute Revolving Loans of such Revolving Lenders. If any such amount is not made available to Revolving Agent by any Revolving Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Revolving Agent shall be entitled to recover for its account such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Revolving Lender’s balance of the Revolving Loans (including Swingline Advances and Extraordinary Advances) is less than, equal to, or greater than such Revolving Lender’s Pro Rata Share of the Revolving Loans (including Swingline Advances and Extraordinary Advances) as of a Settlement Date, Revolving Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually
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received in good funds by Revolving Agent with respect to principal, interest, fees payable by the Borrowers and allocable to the Revolving Lenders hereunder, and proceeds of Collateral.
(iii) Between Settlement Dates, Revolving Agent, to the extent Swingline Advances and/or Extraordinary Advances for the account of Revolving Agent are outstanding, may apply any payments or other amounts received by Revolving Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, to the Swingline Advances and/or Extraordinary Advances. During the period between Settlement Dates, Revolving Agent shall be entitled to all interest and fees at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Revolving Agent with respect to all Swingline Advances and Extraordinary Advances.
(iv) Anything in this Section 2.02(c) to the contrary notwithstanding, in the event that a Revolving Lender is a Defaulting Lender, Revolving Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.15.
SECTION 2.03 Notice of Borrowing. The Borrower shall give the Administrative Agent a Notice of Borrowing for Term Loans (i) prior to 1:00 p.m. (New York time) at least three (3) Business Days’ prior to each Borrowing of Term Loans, which are to be initially Term SOFR Loans and (ii) prior to 12:00 noon (New York time) at least one (1) Business Day prior to the date of each Borrowing of Term Loans which are to be ABR Loans. Except as otherwise expressly provided in Section 2.10, each Notice of Borrowing shall be irrevocable and shall specify (A) the aggregate principal amount of the Term Loans to be made, (B) the Funding Date (which shall be, in the case of Term Loans, the Closing Date), (C) whether the Term Loans shall consist of ABR Loans and/or Term SOFR Loans and (D) Borrower’s wire instructions. The Administrative Agent shall promptly give each Term Lender written notice of each proposed Borrowing of Term Loans, of such Term Lender’s Pro Rata Share thereof and of the other matters covered by the related Notice of Borrowing.
SECTION 2.04 Disbursement of Term Loans.
(a) No later than (i) 2:00 p.m. (New York time), in the case of each Borrowing of Term Loans for which a Notice of Borrowing has been timely delivered in accordance with Section 2.03 (other than for Borrowings on the Closing Date), each Term Lender will make available its Pro Rata Share, if any, of the Borrowing requested to be made on such date in the manner provided below, and (ii) 5:00 p.m. (New York time), in the case of the making of the Initial Term Loan, if the conditions set forth in Article VI to the effectiveness of this Agreement are met prior to 4:00 p.m. (New York time) on the Closing Date, each Term Lender will make available its Pro Rata Share of the Initial Term Loan in the manner provided below.
(b) Each Term Lender shall make available all amounts it is to fund to a Borrower, under any Borrowing of Term Loans, in immediately available funds to the Administrative Agent, and the Administrative Agent will make available to such Borrower, the aggregate of the amounts so made available in Dollars. Unless the Administrative Agent shall have been notified in writing by any Term Lender prior to the date of any Borrowing of Term Loans that such Term Lender does not intend to make available to the Administrative Agent its
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portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Term Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to such Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Term Lender and the Administrative Agent has made available the same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Term Lender. If such Term Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Administrative Borrower and the Borrowers, jointly and severally, shall promptly pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Term Lender or the Borrowers, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to any Borrower, to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if paid by such Lender, the Federal Funds Rate or (ii) if paid by any Borrower, the then-applicable rate of interest, calculated in accordance with Section 2.08, applicable to ABR Loans. If such Borrower and such Term Lender shall pay interest to the Administrative Agent for the same (or a portion of the same) period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period.
(c) Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Borrowers may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its commitments hereunder).
SECTION 2.05 Payment of Loans; Evidence of Debt.
(a) Each Borrower, jointly and severally, agrees to pay to the Administrative Agent, for the benefit of the Lenders, on the Maturity Date, the aggregate amount of all outstanding Loans.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to the appropriate lending office of such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement.
(c) Each Borrower agrees that from time to time on and after the Closing Date, upon the request to Administrative Agent by any Lender, at Borrowers’ own expense, each Borrower will execute and deliver to such Lender a Note, evidencing the Loans made by, and payable to such Lender or registered assigns in a maximum principal amount equal to such Lender’s applicable Initial Term Loan Commitment or Revolver Commitment. The Agents shall maintain the Register pursuant to Section 12.06(b)(iv), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan
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made hereunder and the Type of each Loan made, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent from the Borrowers and each Lender’s share thereof.
(d) The entries made in the Register and accounts and subaccounts maintained pursuant to paragraphs (c) and (d) of this Section 2.05 shall, to the extent permitted by Applicable Law, be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded; provided, that the failure of any Lender or Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrowers to repay (with applicable interest) the Loans made to the Borrowers by such Lender in accordance with the terms of this Agreement.
SECTION 2.06 Conversions and Continuations. (a) The Borrowers shall have the option on any Business Day to convert all or a portion of the outstanding principal amount of Loans of one Type into a Borrowing or Borrowings of another Type; provided, that ABR Loans may not be converted into Term SOFR Loans if an Event of Default is in existence on the date of the proposed conversion and the Administrative Agent has, or the Required Lenders in respect of the Credit Facility that is the subject of such conversion have, determined in its or their sole discretion not to permit such conversion. Each such conversion or continuation shall be effected by the Administrative Borrower by giving the Administrative Agent written notice prior to 1:00 p.m. (New York time) at least three Business Days (or one (1) Business Day in the case of a conversion into ABR Loans) (and in either case on not more than five (5) Business Days) prior to such proposed conversion or continuation, in the form of Exhibit N-2 or such other form approved by the Administrative Agent (each, a “Notice of Conversion”) specifying the Loans to be so converted or continued and the Type of Loans to be converted or continued. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed conversion or continuation affecting any of its Loans.
(b) If any Event of Default is in existence at the time of any continuation of any Term SOFR Loans and the Administrative Agent determined in its or their sole discretion not to permit such continuation, such Term SOFR Loans shall be automatically converted into a Borrowing of ABR Loans.
SECTION 2.07 Pro Rata Borrowings. Borrowing of the Initial Term Loan funded on the Closing Date under this Agreement shall be made by each Term Lender with an Initial Term Loan Commitment on the basis of its then-applicable Initial Term Loan Commitment. Each Borrowing of Revolving Loans under this Agreement shall be made by each Revolving Lender with a Revolver Commitment on the basis of its then-applicable Revolver Commitment. It is understood that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.
SECTION 2.08 Interest.
(a) The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof until repayment or prepayment thereof at a rate per annum that shall at all times be the Applicable Margin plus the ABR in effect from time to time.
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(b) The unpaid principal amount of each Term SOFR Loan shall bear interest from the date of the Borrowing thereof until repayment or prepayment thereof at a rate per annum that shall at all times be the Applicable Margin in effect from time to time plus the relevant Adjusted Term SOFR Rate.
(c) From and after the occurrence and during the continuance of any Event of Default, upon notice by the Administrative Agent to the Administrative Borrower (or automatically while any Event of Default under Section 10.01(a) or Section 10.01(h) exists), the Borrowers shall pay interest on the principal amount of all Loans and all other due and unpaid Obligations, to the extent permitted by Applicable Law, at the rate described in Section 2.08(a) or Section 2.08(b), as applicable, plus two (2) percentage points per annum (the “Default Rate”). All such interest at the Default Rate shall be payable on demand of the Administrative Agent or the Required Lenders and in cash.
(d) Interest on each Loan shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each ABR Loan, quarterly in arrears on the first Business Day of each January, April, July and October, beginning with the Fiscal Quarter ending September 30, 2022 (the “ABR Interest Payment Date”), (ii) in respect of each Term SOFR Loan, quarterly in arrears on the first Business Day of each January, April, July and October, commencing on September 30, 2022 (the “SOFR Interest Payment Date”) and (iii) in respect of each Loan, on any prepayment (on the amount prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.
(e) In connection with the use or administration of Term SOFR, the Administrative Agent will have the right to make Conforming Changes from time to time in consultation with the Administrative Borrower and, notwithstanding anything to the contrary herein or in any other Credit Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Credit Document. The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
(f) On each of the ABR Interest Payment Date or SOFR Interest Payment Date, as applicable, the Borrowers, jointly and severally, shall pay all accrued and unpaid interest on the Loans by paying all such accrued interest in cash. All accrued, but unpaid Interest shall be payable in cash on the Maturity Date.
(g) The Administrative Agent, upon determining the interest rate for any Borrowing of Term SOFR Loans, shall promptly notify the Administrative Borrower and the relevant Lenders thereof. The Adjusted Term SOFR Rate for the Term SOFR Loans and ABR for the ABR Loans shall be determined on the first day of each January, April, July and October. Each such determination shall, absent clearly demonstrable error, be final and conclusive and binding on all parties hereto.
(h) Notwithstanding anything in this Agreement or any other Credit Document to the contrary, to the extent that the outstanding aggregate principal amount of the drawn Revolving Loans, is less than $20,000,000 on any date, the amount of interest payable on
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account of the Revolving Loans pursuant to this Section 2.08 shall be equal to the amount of interest that would be payable had the outstanding principal amount of the Revolving Loans equaled $20,000,000 on such date; provided, that, to the extent the Revolver Commitment is reduced to an amount that is less than $20,000,000 (but greater than $0), then, to the extent that the outstanding principal amount of the Revolving Loans is less than $10,000,000 on any date, the amount of interest payable on account of the Revolving Loans pursuant to this Section 2.08 shall be equal to the amount of interest that would be payable had the outstanding principal amount of the Revolving Loans equaled $10,000,000 on such date.
SECTION 2.09 [Reserved].
SECTION 2.10 Increased Costs, Illegality, etc.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in Adjusted Term SOFR Rate); or
(ii) subject any Lender to any Taxes (other than (A) Non-Excluded Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its Loans, Commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii) impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or participation therein,
and the result of any of the foregoing shall be to increase the cost to such Lender or any Lender of making or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or any Lender of participating in, or to reduce the amount of any sum received or receivable by such Lender or any Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Administrative Borrower, within five (5) Business Days of demand therefor, will pay to such Lender, such additional amount or amounts as will compensate such, as the case may be, for such additional costs incurred or reduction suffered.
(b) At any time that any Term SOFR Loan is affected by the circumstances described in Section 2.10(a)(ii), the Administrative Borrower may either (A) if the affected Term SOFR Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the Administrative Agent written notice thereof on the same date that the Administrative Borrower was notified by a Lender pursuant to Section 2.10(a)(ii) or (B) if the affected Term SOFR Loan is then outstanding, upon at least three (3) Business Days’ notice to the Administrative Agent, require the affected Lender to convert each such Term SOFR Loan into an ABR Loan; provided, that if more than one Lender is so affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.10(b); provided, that if more than one Lender is affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.10(b).
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(c) If, after the later of the date hereof, and that date such entity becomes a Lender hereunder, the adoption of any Applicable Law regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by a Lender or its parent with any request or directive made or adopted after such date regarding capital adequacy (whether or not having the force of law) of any such authority, association, central bank or comparable agency, has the effect of reducing the rate of return on such Lender’s or its parent’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy), then within five (5) days after written demand by such Lender (with a copy to the Administrative Agent), the Borrowers, jointly and severally, shall pay to such Lender such additional amount or amounts as will compensate such Lender or its parent for such reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with, or pursuant to any request or directive to comply with, any such Applicable Law as in effect on the date hereof. Each Lender (on its own behalf), upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.10(c), will, as promptly as practicable upon ascertaining knowledge thereof, give written notice thereof to the Administrative Borrower, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts. The failure to give any such notice, with respect to a particular event, within the time frame specified in Section 2.13, shall not release or diminish any of the Borrowers’ obligation to pay additional amounts pursuant to this Section 2.10(c) for amounts accrued or incurred after the date of such notice with respect to such event.
(d) [Reserved].
(e) This Section 2.10 shall not apply to Taxes to the extent duplicative of Section 5.04.
SECTION 2.11 Compensation. If (a) any payment of principal of a Term SOFR Loan is made by any Borrower to or for the account of a Lender other than on the last Business Day of a calendar quarter for such Term SOFR Loan as a result of a payment or conversion pursuant to Section 2.05, 2.06, 2.10 or 4.04, as a result of acceleration of the maturity of the Loans pursuant to Article X or for any other reason, (b) any Borrowing of Term SOFR Loans is not made as a result of a withdrawn Notice of Borrowing (except with respect to a revocation as provided in Section 2.10 or by reason of a Lender being a Defaulting Lender), (c) any ABR Loan is not converted into a Term SOFR Loan as a result of a withdrawn Notice of Conversion, (d) any Term SOFR Loan is not continued as a Term SOFR Loan as a result of a withdrawn Notice of Conversion or (e) any prepayment of principal of a Term SOFR Loan is not made as a result of a withdrawn notice of prepayment pursuant to Section 5.01, the Borrowers shall, after receipt of a written request by such Lender (which request shall set forth in reasonable detail the basis for requesting such amount), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that such Lender may reasonably incur as a result of such payment, failure to convert, failure to continue, failure to prepay, reduction or failure to reduce, including any loss, cost or expense
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(excluding loss of anticipated profits) actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Term SOFR Loan.
SECTION 2.12 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii), 2.10(b) or 5.04 with respect to such Lender, it will, if requested by the Administrative Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event; provided, that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrowers or the rights of any Lender provided in Section 2.10 or 5.04.
SECTION 2.13 Notice of Certain Costs. Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Section 2.10, 2.11 or 5.04 is given by any Lender more than one hundred twenty (120) days after such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to the additional cost, reduction in amounts, loss, tax or other additional amounts described in such Sections, such Lender shall not be entitled to compensation under Section 2.10, 2.11 or 5.04, as the case may be, for any such amounts incurred or accruing prior to the giving of such notice to the Administrative Borrower.
SECTION 2.14 Bank Accounts and Collections.
(a) The Credit Parties shall establish and maintain cash management services of a type and on terms reasonably satisfactory to the Collateral Agent at one or more banks reasonably satisfactory to Agent (“Cash Management Banks”). Within sixty (60) days of the Closing Date (or such later date as Collateral Agent may reasonably agree in its sole discretion), each Credit Party will enter into a Springing Control Agreement with the applicable Cash Management Bank for each Deposit Account of Credit Parties (other than a Monitored Account or other Excluded Account). Schedule 2.14 sets forth a complete listing of Deposit Accounts for each Credit Party as of the Closing Date, including the identification of the Credit Party ownership, the name and address of the applicable Cash Management Bank, the account number, the purpose or usage of the account, and a designation of the account as a Springing Control Account, Excluded Account, or Monitored Account.
(b) Each Springing Control Agreement shall provide, among other things, that the applicable Cash Management Bank will comply with any instructions originated by Collateral Agent directing the disposition of the funds in the applicable Deposit Account subject to such Springing Control Agreement, without further consent by the applicable Credit Party. With respect to each Springing Control Account, unless a Cash Dominion Event has occurred, the Collateral Agent will not elect to provide instructions to the applicable Cash Management Bank regarding the disposition of funds in such account. Upon a Cash Dominion Event, the Required Lenders will maintain the right, in their sole discretion, to exercise rights provided for in each Springing Control Agreement, including requiring the applicable Cash Management Bank to forward funds in the applicable Deposit Account to the Collateral Agent to be applied in accordance with Section 5.2(j); provided, that, prior to the exercise of such rights, at the sole election of Required Lenders, all amounts received in such Springing Control Account shall be
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sent on each Business Day by wire transfer or ACH payment to Collateral Agent for application at the end of each Business Day to the payment of the Obligations in accordance with Section 5.02(j).
(c) Collateral Agent shall credit to the payment of the Obligations any funds received by Collateral Agent for which Collateral Agent has received notice that such funds are collected and available to Collateral Agent (i) on the same day of Collateral Agent’s receipt of such notice if such notice is received by Collateral Agent on or before 2 p.m. on a Business Day, and (ii) on the Business Day immediately following Agent’s receipt of such notice if such notice is received by Collateral Agent after 2 p.m. on a Business Day, or if such notice is received by Collateral Agent on a day that is not a Business Day. It is understood and agreed that the transfer and crediting of funds from a Springing Control Account may take up to two Business Days.
(d) Each Credit Party will deposit or cause to be deposited, no later than the first Business Day after the date of receipt thereof, all proceeds in respect of any Collateral, all collections (of a nature susceptible to a deposit in a bank account) and all other amounts received by such Credit Party (including payments made by Account Debtors directly to such Credit Party and remittances on credit card sales) into a Deposit Account that is subject to a Springing Control Agreement (or to a lockbox, to the extent funds collected therefrom are deposited directly into a Deposit Account that is subject Springing Control Agreement).
(e) No Credit Party shall maintain or permit any of its Subsidiaries to maintain cash, Cash Equivalents, or other amounts in any Deposit Account (other than a Monitored Account or other Excluded Account, in the ordinary course of business), unless the Agent shall have received a Springing Control Agreement in respect of each such account.
(f) Each Credit Party shall cause each Person processing or collecting any credit card payments or proceeds of receivables on behalf of the Credit Parties to deliver such payments or proceeds promptly, but not less frequently than each Business Day, into a Deposit Account that is subject to a Springing Control Agreement.
(g) If at any time, any Credit Party receives or otherwise has dominion and control of any proceeds or collections in contravention of this Section 2.14, such proceeds and collections shall (i) be held in trust by such Credit Party for benefit of the Collateral Agent, (ii) not be commingled with any of such Credit Party’s other funds or deposited in any account of such Credit Party, and (iii) be deposited into the Revolving Agent’s Account or dealt with in such other fashion as such Credit Party may be instructed by the Collateral Agent, no later than the Business Day after receipt thereof.
SECTION 2.15 Defaulting Lenders.
(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:
(i) Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 12.01.
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(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Agents for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 5.02(j) or Article X or otherwise, and including any amounts made available to any Agent by that Defaulting Lender pursuant to Section 12.09), shall be applied at such time or times as may be determined by the Agents as follows: first, to Revolving Agent to the extent of any Swingline Advances and Extraordinary Advances that were made by Revolving Agent and that were required to be, but were not, paid by the Defaulting Lender, second, to the payment of any other amounts owing by that Defaulting Lender to the applicable Agent hereunder; third, as the Administrative Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agents; fourth, if so determined by the Agents and the Administrative Borrower, to be held in a noninterest bearing deposit account and released in order to satisfy such Defaulting Lender’s potential future funding with respect to Loans under this Agreement; fifth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; sixth, so long as no Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and seventh, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans in respect of which that Defaulting Lender has not fully funded its appropriate share. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees. A Revolving Lender that is a Defaulting Lender shall not be entitled to receive any Unused Line Fees, for any period during which that Revolving Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(b) Defaulting Lender Cure. If the Administrative Borrower and each Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Agents may determine to be necessary to cause the Lenders to hold their respective Pro Rata Share of Loans, whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to a Lender that is not a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
SECTION 2.16 Benchmark Replacement Setting.
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(a) Notwithstanding anything to the contrary herein or in any other Credit Document, upon the occurrence of a Benchmark Transition Event, the Administrative Agent and the Administrative Borrower may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all affected Lenders and the Administrative Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.16(a) will occur prior to the applicable Benchmark Transition Start Date. No Hedge Agreement shall be deemed to be a “Credit Document” for purposes of this Section 2.16.
(b) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Credit Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Credit Document.
(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Administrative Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.16(d) and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.16, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Credit Document, except, in each case, as expressly required pursuant to this Section 2.16.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Credit Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the tenor for any Benchmark settings (including, as applicable, the definition of “Term SOFR”) at or after such time to remove and/or replace such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement
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that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the tenor for all Benchmark settings (including, as applicable, the definition of “Term SOFR”) at or after such time to reinstate such previously removed tenor.
(e) Benchmark Unavailability Period. Upon the Administrative Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any pending request for a Borrowing of or conversion of Term SOFR Loans to be made, converted during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted any such request into a request for a Borrowing of or conversion to Prime Rate Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an available, the component of the Prime Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Prime Rate.
ARTICLE III
[RESERVED]
[RESERVED]
ARTICLE IV
Fees and Commitment Terminations and Reductions
Fees and Commitment Terminations and Reductions
SECTION 4.01 Fees.
(a) Each Borrower, jointly and severally, agrees to pay to the Administrative Agent, all the Fees set forth in the Fee Letter.
(b) Each Borrower, jointly and severally, agrees to pay to Revolving Agent, for the ratable account of the Revolving Lenders, an unused line fee (the “Unused Line Fee”) in an amount equal to 0.50% times the result of (i) the aggregate amount of the Revolver Commitments, less (ii) the Average Revolver Usage during the immediately preceding month (or portion thereof), which Unused Line Fee shall be due and payable quarterly in arrears, on the first day of each calendar quarter from and after the Closing Date and on the date on which (X) the Obligations are paid in full in cash and (y) the Revolver Commitments are otherwise terminated in accordance with the terms hereof.
SECTION 4.02 Mandatory Termination of Commitments.
(a) The Initial Term Loan Commitment shall terminate at 5:00 p.m. (New York time) on the Closing Date.
(b) The Revolving Commitment shall terminate at 2:00 p.m. (New York time) on the Maturity Date.
SECTION 4.03 Reduction of Commitments. The Borrowers may reduce the Revolver Commitments, subject to payment of the Prepayment Premium, if applicable, in accordance with
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Section 4.04, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans not yet made as to which a request has been given by a Borrower under Section 2.02(a). Each such reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof (unless the Revolver Commitments are being reduced to zero and the amount of the Revolver Commitments in effect immediately prior to such reduction are less than $5,000,000), shall be made by providing not less than ten (10) Business Days prior written notice to Revolver Agent, and shall be irrevocable. Once reduced, the Revolver Commitments may not be increased. Each such reduction of the Revolver Commitments shall reduce the Revolver Commitments of each Revolving Lender proportionately in accordance with its ratable share thereof.
SECTION 4.04 Prepayment Premium.
(a) Upon (i) each mandatory prepayment of Term Loans made pursuant to Section 5.02(a), (b), (d), or (e), (ii) any voluntary prepayment of Term Loans pursuant to Section 5.01, (iii) any voluntary reduction or termination in Revolving Commitments and/or (iv) any payment of the Loans and/or reduction or termination of commitments resulting from any enforcement of remedies pursuant to Section 10.02, including pursuant to acceleration thereunder (each, a “Prepayment Premium Event”), each Borrower, jointly and severally, shall pay to the Administrative Agent, for the ratable account of the Lenders according to their Pro Rata Share thereof, the Prepayment Premium applicable to the Term Loans so prepaid (or Revolving Commitments so reduced or terminated). Notwithstanding the foregoing, the Prepayment Premium shall not be required to be paid with respect to (x) Revolver Commitment reductions of up to $10,000,000 in the aggregate during the term of this Agreement and (y) optional and mandatory prepayments of the Term Loans in an aggregate principal amount during the term of this Agreement that is less than the lesser of (x) $58,300,000 and (y) the Available Amount calculated as of the date of any such prepayment, with details of such calculation delivered to the Administrative Agent as certified by an Authorized Officer of the Administrative Borrower.
(b) Any Prepayment Premium payable in accordance with this Section 4.04 shall be presumed to be equal to the liquidated damages sustained by Lenders as the result of the occurrence of the Prepayment Premium Event and the Credit Parties agree that it is reasonable under the circumstances currently existing. THE CREDIT PARTIES EXPRESSLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREPAYMENT PREMIUM IN CONNECTION WITH ANY ACCELERATION.
(c) The Credit Parties expressly agree that: (i) the Prepayment Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (ii) the Prepayment Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (iii) there has been a course of conduct between the Lenders and the Credit Parties giving specific consideration in this transaction for such agreement to pay the Prepayment Premium; (iv) the Credit Parties shall be estopped hereafter from claiming differently than as agreed to in this paragraph; (v) their agreement to pay the Prepayment Premium is a material inducement to the Lenders to provide the Commitments and make the Term Loans, and (vi) the Prepayment Premium represents a
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good faith, reasonable estimate and calculation of the lost profits or damages of the Agents and Lenders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Agents and Lenders or profits lost by the Agents and Lenders as a result of such Prepayment Premium Event.
ARTICLE V
Payments
Payments
SECTION 5.01 Voluntary Prepayments
(a) Subject to the terms and conditions set forth in this Section 5.01 and Section 4.03 and 4.04, the Borrowers shall have the right to prepay the Term Loans, in whole or in part, from time to time subject to payment of the Prepayment Premium. The Borrowers shall have the right to repay the Revolving Loans, in whole or in part, from time to time, without premium or penalty. Notwithstanding anything to the contrary herein, during the occurrence and continuance of a Waterfall Trigger Event, the Borrowers shall not make any voluntary prepayment of Term Loans without the consent of the Revolving Agent.
(b) When making a voluntary partial prepayment, the Administrative Borrower shall give the Administrative Agent written notice of (i) its intent to make such prepayment, (ii) the amount of such prepayment and (iii) in the case of Term SOFR Loans, the specific Borrowing(s) pursuant to which such prepayment will be made, no later than (A) in the case of Term SOFR Loans, 1:00 p.m. (New York time) three (3) Business Days prior to, and (B) in the case of ABR Loans, 1:00 p.m. (New York time) ) one (1) Business Day prior to the date of such prepayment, and such prepayment shall promptly be transmitted by the Administrative Agent to each of the relevant Lenders, as the case may be.
(c) Each voluntary partial prepayment of any Loans shall be in a multiple of $500,000 and in aggregate principal amount of at least $100,000; provided, that no partial prepayment of Term SOFR Loans outstanding under a single Borrowing shall reduce the outstanding Term SOFR Loans outstanding under such Borrowing to an amount less than $500,000.
(d) With respect to each prepayment of Term Loans pursuant to this Section 5.01, the Borrowers may designate the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made. In the absence of a designation by the Borrowers as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11. Each such prepayment shall be accompanied by all accrued interest on the Loans so prepaid, through the date of such prepayment.
(e) Each prepayment in respect of any Term Loans pursuant to this Section 5.01 shall be applied ratably to Term Loans.
SECTION 5.02 Mandatory Prepayments. Upon three (3) Business Days prior written notice from Borrower to Administrative Agent and Revolver Agent,
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(a) Within five (5) Business Days of the receipt by any Credit Party of any Net Proceeds from any Disposition (other than a Disposition permitted under Section 9.04 (other than Section 9.04(s)), the Borrowers, jointly and severally, shall prepay the Loans in an amount equal to one hundred percent (100%) of the Net Proceeds from such Disposition in excess of $5,000,000 in any Fiscal Year (when combined with Net Proceeds from other Dispositions and Casualty Events received in such Fiscal Year), to be applied as set forth in Section 5.02(g); provided, that, the Administrative Borrower may, at its option by notice in writing to the Administrative Agent, which such notice shall be received within thirty (30) days of the receipt of the Net Proceeds from such Disposition, within one hundred eighty (180) days after such event (or, if such Credit Party shall have entered into a binding commitment for the use of such Net Proceeds within such one hundred eighty (180) days, three hundred sixty (360) days after such event), instead reinvest such Net Proceeds in assets to be used in the business of the Borrowers so long as no Event of Default shall have occurred and be continuing at such time, in each case as certified by the Administrative Borrower in writing to the Administrative Agent. Nothing in this Section 5.02(a) shall be construed to permit or waive any Default or Event of Default arising from any Disposition not permitted under the terms of this Agreement.
(b) Within five (5) Business Days of the receipt by any Credit Party of any Net Proceeds from any Casualty Event, the Borrowers, jointly and severally, shall prepay the Loans in an amount equal to one hundred percent (100%) of such Net Proceeds in excess of $5,000,000 in any Fiscal Year (when combined with Net Proceeds from other Dispositions and Casualty Events received in such Fiscal Year), to be applied as set forth in Section 5.02(g); provided, that so long as no Event of Default shall have occurred and be continuing, the Administrative Borrower may, at its option by notice in writing to the Administrative Agent, which such notice shall be received within thirty (30) days of the receipt of the Net Proceeds from such Casualty Event, apply such Net Proceeds to the rebuilding or replacement of such damaged, destroyed or condemned assets or property, or otherwise reinvest such Net Proceeds in assets to be used in the business, so long as such Net Proceeds are in fact used to rebuild or replace the damaged, destroyed or condemned assets or property, or otherwise so reinvested, within one hundred eighty (180) days following the receipt of such Net Proceeds (or, if such Credit Party shall have entered into a binding commitment for the use of such Net Proceeds within such one hundred eighty (180) days, three hundred sixty (360) days after such event), with the amount of Net Proceeds unused after such period to be applied as set forth in Section 5.02(g).
(c) If, at any time, the Revolver Usage on such date exceeds the lesser of (i) Revolver Commitment and (ii) the Borrowing Base, then the Borrowers, jointly and severally, shall immediately prepay the Revolving Loans in an aggregate amount equal to the amount of such applicable excess.
(d) Concurrently with the incurrence of any Indebtedness by any Credit Party (other than Indebtedness permitted under Section 9.01), the Borrowers, jointly and severally, shall prepay the Loans in an amount equal to one hundred percent (100%) of such Net Proceeds, to be applied as set forth in Section 5.02(g). Nothing in this Section 5.02(d) shall be construed to permit or waive any Default or Event of Default arising from any incurrence of Indebtedness not permitted under the terms of this Agreement.
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(e) Substantially concurrently with any Change of Control, the Borrowers, jointly and severally, shall prepay the Loans in full, to be applied as set forth in Section 5.02(g).
(f) Immediately upon any acceleration of any Loans and/or termination of commitments pursuant to Section 10.02, the Borrowers, jointly and severally, shall repay all the Loans and other Obligations, unless only a portion of Loans and other Obligations is so accelerated (in which case the portion so accelerated shall be so repaid).
(g) Subject to Section 5.02(j), (A) amounts to be applied in connection with prepayments of the Loans pursuant to Sections 5.02(a), (b), (d) and (e) shall be applied, first, to the prepayment of the Term Loans as set forth in Section 5.02(i) until such Term Loans are repaid in full and, second, to the outstanding principal amount of Protective Advances and Swingline Advances until paid in full, third, to the outstanding principal amount of the Revolving Loans until paid in full, and, fourth, to the prepayment of any other outstanding Obligations; provided that, during the occurrence and continuance of a Waterfall Trigger Event, such amounts shall be applied first, to the outstanding principal amount of Extraordinary Advances and Swingline Advances until paid in full and second, to the outstanding principal amount of the Revolving Loans until paid in full, third, to the prepayment of the Term Loans as set forth in Section 5.02(i) until such Term Loans are repaid in full and, fourth, to the prepayment of any other outstanding Obligation, (B) amounts to be applied in connection with prepayments of the Loans pursuant to Section 5.02(c) shall be applied, first, to the outstanding principal amount of Extraordinary Advances and Swingline Advances until paid in full and second, to the outstanding principal amount of the Revolving Loans until paid in full and (C) amounts to be applied in connection with repayments of the Loans pursuant to Section 5.02(f) shall be applied in accordance with Section 5.02(j).
(h) Each prepayment of the Loans under Section 5.02 shall be accompanied by accrued interest to the date of such prepayment on the principal amount prepaid and the Prepayment Premium, as applicable.
(i) Application to Loans.
(i) With respect to each prepayment of Term Loans elected by the Borrowers pursuant to Section 5.01 or required by (d), the Borrowers may designate the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made. In the absence of a designation by the Borrowers as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11. Subject to clause (g), each prepayment in respect of any Term Loans pursuant to this Section 5.02 shall be applied ratably to the outstanding Term Loans.
(ii) With respect to each prepayment of Revolving Loans elected by the Borrowers pursuant to Section 5.01 or required by (d), the Borrowers may designate (i) the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made and (ii) the Revolving Loans to be prepaid; provided, that, subject to Section 2.15, each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by the Borrowers as described in the preceding sentence, the
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Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11.
(j) Application of Collateral Proceeds and Payments. Notwithstanding anything to the contrary in Section 5.01, Section 5.02 or any other provision of any Credit Document, (x) all payments (including, without limitation, prepayments) in respect of the Obligations after acceleration or a Waterfall Trigger Event and (y) all proceeds of Collateral and other payments received by any Agent pursuant to the exercise of remedies against the Collateral shall be applied as follows:
(i) first, ratably to pay any fees then due to the Agents under the Credit Documents and any costs or expense reimbursements of the Agents and any indemnities then due to the Agents under the Credit Documents, until paid in full,
(ii) second, ratably, to pay any fees, premiums (including any Prepayment Premiums), indemnities or expense reimbursements then due to any Revolving Lenders, until paid in full,
(iii) third, ratably, to pay interest due and payable in respect of any Swingline Advances and any Extraordinary Advances, until paid in full,
(iv) fourth, ratably, to pay principal on any Swingline Advances and any Extraordinary Advances, until paid in full,
(v) fifth, ratably, to pay interest due and payable in respect of any Revolving Loans, until paid in full,
(vi) sixth, to the ratable payment of all principal on the Revolving Loans until paid in full,
(vii) seventh, to the ratable payment of all other Revolving Credit Obligations then due and payable until paid in full
(viii) eighth, to pay any fees, premiums (including any Prepayment Premiums), indemnities or expense reimbursements then due of the Term Lenders until paid in full,
(ix) ninth, ratably to pay interest due in respect of the outstanding Term Loans until paid in full,
(x) tenth, ratably to pay the outstanding principal balance of the Term Loans until paid in full,
(xi) eleventh, to the pay any other Obligations due to any Agent or any Lender until paid in full,
(xii) seventh, to Borrowers or such other Person entitled thereto under Applicable Law.
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(k) Notwithstanding the foregoing, each Lender may reject all or a portion of its Pro Rata Share of any mandatory prepayment (such declined amounts, the “Declined Proceeds”) of any class of Term Loans required to be made pursuant to clauses (a), (b), (c) or (d) of this Section 5.02 by providing written notice (each, a “Rejection Notice”) to the Administrative Agent and the Borrower no later than 1:00 p.m. one (1) Business Day prior to the scheduled date of such prepayment (subject to extension by Administrative Agent in its sole discretion). Each Rejection Notice from a Lender shall specify the principal amount of the mandatory prepayment of Term Loans to be rejected by such Lender. If a Lender fails to deliver a Rejection Notice to Administrative Agent within the time frame specified above or such Rejection Notice fails to specify the principal amount of the Term Loans to be rejected, any such failure will be deemed an acceptance of the total amount of such mandatory prepayment of such Term Loans. Any Declined Proceeds may be retained by the Borrowers.
SECTION 5.03 Payment of Obligations; Method and Place of Payment.
(a) The obligations of the Borrowers hereunder and under each other Credit Document are not subject to counterclaim, set-off, rights of rescission or any other defense. Subject to Section 5.02, and except as otherwise specifically provided herein, all payments under this Agreement shall be made by the Borrowers, without set-off, rights of rescission, counterclaim or deduction of any kind, to the Administrative Agent for the ratable account of the Secured Parties entitled thereto, or, with respect to payments in connection with the Revolving Loans, to the Revolver Agent for the ratable account of the Revolving Lenders, as the case may be, not later than 2:00 p.m. (New York time) on the date when due and shall be made in immediately available funds in Dollars to the applicable Agent at the location and/or in the account specified by such Agent to the Administrative Borrower in writing for such purpose. The applicable Agent will thereafter cause to be distributed on the same day (if payment was actually received by such Agent prior to 2:00 p.m. (New York time), on such day) like funds relating to the payment of principal or interest or Fees ratably to the Secured Parties entitled thereto.
(b) For purposes of computing interest or fees, any payments under this Agreement that are made later than 2:00 p.m. (New York time), shall be deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall continue to accrue during such extension at the applicable rate in effect immediately prior to such extension.
SECTION 5.04 Net Payments.
(a) Subject to the following sentence, all payments made by or on behalf of any Borrower under this Agreement or any other Credit Document shall be made free and clear of, and without deduction or withholding for or on account of, any current or future Taxes (including Other Taxes) other than Excluded Taxes. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are required to be withheld from any amounts payable under this Agreement, the Borrowers shall increase the amounts payable to the Administrative Agent or such Lender to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes, including
any such Non-Excluded Taxes payable in respect of additional amounts paid pursuant to this Section 5.04(a)) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement. Whenever any Non-Excluded Taxes are payable by the Borrowers, as promptly as possible thereafter, the Borrowers shall send to the Administrative Agent for its own account or for the account of such Secured Party, as the case may be, a certified copy of an original official receipt (or other evidence acceptable to such Lender, acting reasonably) received by the Borrowers showing payment thereof. If any Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrowers shall indemnify the Administrative Agent and the Lenders for any incremental Taxes, interest, costs or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. In addition, the Borrowers, jointly and severally, shall pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law. The agreements in this Section 5.04(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not organized under the laws of the United States of America or any state thereof (a “Non-U.S. Lender”) shall:
(i) deliver to the Administrative Borrower and the Administrative Agent (2) two copies of either (A) in the case of Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest,” United States Internal Revenue Service Form W-8BEN or W-8BEN-E (together with a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled foreign corporation related to such Borrower (within the meaning of Section 864(d)(4) of the Code)), (B) Internal Revenue Service Form W-8BEN, W-8BEN-E or Form W-8ECI, or (C) to the extent a Non-U.S. Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-9, the certificate described in (A) above, if applicable, and/or other certification documents from each beneficial owner, as applicable; provided, that if the Non-U.S. Lender is a partnership and one or more direct or indirect partners of such Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S. Lender will provide the documents set forth in (A) above on behalf of each such direct and indirect partner, in each case, properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S. federal withholding tax on payments by the Borrowers under this Agreement;
(ii) deliver to the Administrative Borrower and the Administrative Agent two (2) further copies of any such form or certification (or any applicable successor form) promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender; and
(iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by the Administrative Borrower or the Administrative Agent, unless in any such case any change in treaty, law or regulation has
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occurred prior to the date on which any such delivery would otherwise be required that renders any such form inapplicable or would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrowers and the Administrative Agent, in which case such Lender shall not be required to provide any form under subparagraphs (i) or (ii) above. Each Person that shall become a Participant pursuant to Section 12.06 or a Lender pursuant to Section 12.06 shall, upon the effectiveness of the related transfer, be required to provide all the forms and statements required pursuant to this Section 5.04(b) or Section 5.04(c), as applicable; provided, that in the case of a Participant such Participant shall furnish all such required forms and statements to the Lender from which the related participation shall have been purchased. Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver.
(c) Each Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which any Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Administrative Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Administrative Borrower, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate; provided, that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.
(d) The Borrowers shall indemnify the Administrative Agent and each Lender within ten (10) days after written demand therefor, for the full amount of any Non-Excluded Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrowers hereunder (including Non-Excluded Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest, additions to tax and reasonable expenses arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Administrative Borrower by a Lender or by the Administrative Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error.
(e) If a payment made to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Administrative Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Administrative Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Administrative Borrower or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied
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with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) If any Lender or the Administrative Agent determines, in its sole discretion exercised in good faith, that it has received a refund of a Tax for which an additional payment has been made by the Borrowers pursuant to this Section 5.04 or Section 12.05 of this Agreement, then such Lender or the Administrative Agent, as the case may be, shall reimburse the Borrowers for such amount (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 5.04 and Section 12.05 with respect to the Tax giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes imposed on the receipt of such refund) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.
(g) Any Lender claiming any additional amounts payable pursuant to this Section 5.04 shall use its reasonable efforts (consistent with its internal policies and requirements under Applicable Laws) to change the jurisdiction of its lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the reasonable determination of such Lender, be otherwise disadvantageous to such Lender.
(h) Each party’s obligations under this Section 5.04 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Loans and Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.
SECTION 5.05 Computations of Interest and Fees. All interest and fees shall be computed on the basis of the actual number of days (including the first day and the last day) occurring during the period for which such interest or fee is payable over a year comprised of (a) three hundred and sixty five (365) (or three hundred and sixty six (366) as appropriate) days in the case of ABR Loans and (b) three hundred and sixty (360) days in all other cases. Payments due on a day that is not a Business Day shall (except as otherwise required by Section 2.09(c)) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.
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ARTICLE VI
Conditions Precedent
SECTION 6.01 Conditions Precedent to Initial Credit Extension. The making of the initial Credit Extension is subject to the satisfaction (or waiver) of the following conditions precedent on or before the Closing Date:
(a) Credit Documents. The Administrative Agent shall have received the following documents, duly executed by an Authorized Officer of each Credit Party and each other relevant party:
(i) this Agreement;
(ii) the Fee Letter, as acknowledged by each Credit Party;
(iii) a completed Borrowing Base Certificate dated as of July 29, 2022 (provided that, this clause (a)(iii) shall be a condition precedent only to the Credit Extension of the Closing Date Revolving Loans);
(iv) the Intercompany Subordination Agreement;
(v) the Guarantee Agreement;
(vi) the Security Agreement;
(vii) each Note requested by any Lender;
(viii) the Perfection Certificate;
(ix) the Notice of Borrowing, reasonably satisfactory to the Administrative Agent for the Initial Term Loans and reasonably satisfactory to Revolving Agent for the Closing Date Revolver Draw;
(x) the Letter of Direction and flow of funds, reasonably satisfactory to the Agents; and
(xi) Trademark Security Agreement.
(b) Collateral.
(i) To the extent required under the Security Documents, all Capital Stock of each Subsidiary (other than Excluded Subsidiaries) of each Credit Party shall have been pledged to the Administrative Agent.
(ii) [reserved].
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(iii) The Administrative Agent shall have received the results of a search of the UCC filings (or equivalent filings), in addition to tax Lien, judgment Lien, bankruptcy and litigation searches made with respect to each Credit Party, together with copies of the financing statements and other filings (or similar documents) disclosed by such searches, and accompanied by evidence satisfactory to the Collateral Agent that the Liens indicated in any such financing statement and other filings (or similar document) are Permitted Liens or have been released or will be released substantially simultaneously with the initial Credit Extensions hereunder.
(iv) The Collateral Agent shall have received, in form and substance satisfactory to the Collateral Agent, the appropriate UCC (or equivalent) financing statements for filing in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable, to perfect the Collateral Agent’s Liens in and to the Collateral.
Notwithstanding anything to the contrary herein, to the extent a perfected security interest in any Collateral (the security interest in respect of which cannot be perfected by means of the filing of a UCC financing statement, the making of a federal intellectual property filing or delivery of possession of capital stock or other certificated security of any applicable Credit Party) is not able to be provided on the Closing Date after the Borrowers’ use of commercially reasonable efforts to do so, the perfection of such security interest in such Collateral will not constitute a condition precedent to the availability of the Initial Term Loans and Closing Date Revolving Loans on the Closing Date, but a security interest in such Collateral will be required to be perfected after the Closing Date pursuant to arrangements to be mutually agreed between the Borrowers and the Collateral Agent.
(c) Legal Opinions. The Agents shall have received executed legal opinions of (i) King & Spalding LLP, counsel to the Borrowers and the other Credit Parties, which opinion shall be addressed to the Agents and the Lenders and shall be in form and substance reasonably satisfactory to the Agents.
(d) [Reserved].
(e) [Reserved].
(f) Officer’s Certificates. The Administrative Agent shall have received a certificate for each Credit Party, dated the Closing Date, duly executed and delivered by such Credit Party’s general counsel, secretary, other duly authorized officer, sole shareholder, managing member or general partner, as applicable, as to:
(i) resolutions of each such Person’s board of managers/directors (or other managing body, in the case of a Person that is not a corporation) or shareholder(s) then in full force and effect expressly and specifically authorizing, to the extent relevant, all aspects of the Credit Documents and the other Transaction Documents applicable to such Person and the execution, delivery and performance of each Credit Document and each other Transaction Document, in each case, to be executed by such Person;
(ii) the incumbency and signatures of its certain of its Authorized Officers and any other of its officers, managing member or general partner, as applicable, authorized to act with respect to each Credit Document to be executed by such Person;
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(iii) each such Person’s Organization Documents, as amended, modified or supplemented as of Closing Date, with the certificate or articles of incorporation or formation certified by the appropriate officer or official body of the jurisdiction of organization of such Person;
(iv) certificates of good standing with respect to each Credit Party from its relevant jurisdiction of incorporation or formation, each dated within a recent date prior to the Closing Date, such certificates to be issued by the appropriate officer or official body of the jurisdiction of organization of such Credit Party, which certificate shall indicate that such Credit Party is in good standing in such jurisdiction.
(g) Solvency Certificate. The Administrative Agent shall have received a Solvency Certificate of the chief financial officer of the Administrative Borrower, on behalf of the Credit Parties, confirming the Solvency of the Credit Parties and their Subsidiaries after giving effect to the Transactions.
(h) Financial Information. The Agents shall have received (or in the case of clause (i) below, made available to the Administrative Agent through the materials filed with the SEC) the following documents and reports (each in form and substance reasonably satisfactory to the Agents):
(i) the Historical Financial Statements; and
(ii) a pro forma consolidated balance sheet of Parent, dated as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to be filed with the SEC, prepared after giving effect to the Transactions as if the Transactions have occurred as of such date, which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting.
(i) Insurance. The Agents shall have received a certificate of insurance, in each case, as to the insurance required by Section 8.03, in form and substance reasonably satisfactory to the Agents.
(j) Payment of Outstanding Indebtedness. (A) On the Closing Date, the Credit Parties and each of their respective Subsidiaries shall have no outstanding Indebtedness for borrowed money other than the Loans hereunder and the Indebtedness (if any) listed on Schedule 7.24, and the Administrative Agent shall have received copies of all documentation and instruments evidencing the discharge of all such Indebtedness paid off in connection with the Transactions on the Closing Date, and (B) all Liens (other than Permitted Liens) securing payment of any such Indebtedness shall have been released and the Administrative Agent shall have received pay-off letters and all form UCC-3 termination statements and other instruments as may be reasonably requested by Administrative Agent in connection therewith. The terms, maturity and subordination of any indebtedness listed on Schedule 7.24 shall be satisfactory to the Agents.
(k) Material Adverse Effect. Since June 24, 2022, there has not occurred any facts, events, changes, developments or effects which, individually or in the aggregate has constituted or would reasonably be expected to constitute a Material Adverse Effect (as defined in the TPG Acquisition Agreement).
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(l) Fees and Expenses. Each of the Administrative Agent and each Lender shall have received, for its own respective account, (i) all fees and expenses due and payable to such Person under the Fee Letter and (ii) the reasonable fees, costs and expenses due and payable to such Person pursuant Sections 4.01 and 12.05 (including the reasonable and documented fees, disbursements and other charges of counsel) for which invoices have been presented at least two (2) Business Days prior to the Closing Date.
(m) Patriot Act Compliance. The Administrative Agent shall have received, at least three (3) Business Days prior to the Closing Date, all documentation and other information required by banking regulatory authorities under applicable “know your customer” and Anti-Money Laundering Laws, rules and regulations, and any required Patriot Act compliance, the results of which are satisfactory to each Agent in its sole discretion, in each case, to the extent such information is requested at least five (5) Business Days prior to the Closing Date.
(n) Specified Representations and Acquisition Agreement Representations. The Acquisition Agreement Representations and the Specified Representations shall be true and correct in all material respects, in each case, with the same effect as though such representations and warranties had been made on and as of the date of such Credit Extension (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); provided, that any representation or warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates.
(o) TPG Acquisition. The TPG Acquisition shall have been consummated or shall be consummated substantially concurrently with the initial Credit Extension hereunder in all material respects in accordance with the terms of the TPG Acquisition Agreement.
SECTION 6.02 Conditions Precedent to all Credit Extensions after the Closing Date.
(a) No Default; Representations and Warranties. The agreement of each Lender to make any Loan requested to be made by it on any date after the Closing Date is subject to the satisfaction of the condition precedent that at the time of each such Credit Extension and also after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing, (ii) all representations and warranties made by each Credit Party contained herein or in the other Credit Documents shall be true and correct in all material respects, in each case, with the same effect as though such representations and warranties had been made on and as of the date of such Credit Extension (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); provided, that any representation or warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates, and (iii) no injunction, writ, restraining order, or other order of any nature restricting or prohibiting, directly or indirectly, such Credit Extension shall have been issued and remain in force by any Governmental Authority against any Borrower, the Administrative Agent, any Lender. The acceptance of the benefits of each Credit Extension shall constitute a representation and warranty by each Credit Party to each of the Lenders that all the applicable conditions specified above are satisfied as of that time.
(b) Notice of Borrowing. Prior to the making of each Loan, the Administrative Agent shall have received a Notice of Borrowing (in writing) meeting the requirements of Section 2.02(a) or Section 2.03, as applicable.
(c) Borrowing Base Certificate. Prior to the making of each Revolving Loan, the Revolving Agent shall have received a Borrowing Base Certificate no later than 11:00 a.m. on the date of such request.
ARTICLE VII
Representations, Warranties and Agreements
Representations, Warranties and Agreements
In order to induce the Lenders to enter into this Agreement, make the Loans as provided for herein, the Credit Parties make the following representations and warranties as of the Closing Date and as of the date of making of each Loan thereafter, all of which shall survive the execution and delivery of this Agreement:
SECTION 7.01 Corporate Status. Each Credit Party and each of their Subsidiaries (a) is a duly organized or formed and validly existing corporation, limited liability company or other registered entity in good standing under the laws of the jurisdiction of its organization and has the corporate or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it does business or owns assets, except where the failure to be so qualified, authorized or in good standing could not reasonably be expected to result in a Material Adverse Effect.
SECTION 7.02 Corporate Power and Authority. Each Credit Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. Each Credit Party has duly executed and delivered the Credit Documents to which it is a party and such Credit Documents constitute the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law).
SECTION 7.03 No Violation. None of (a) the execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party and compliance with the terms and provisions thereof, (b) the consummation of the Transactions, or (c) the consummation of the other transactions contemplated hereby or thereby on the relevant dates therefor will (i) contravene in any material respect any applicable provision of any material Applicable Law of any Governmental Authority, (ii) result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of any Credit Party (other than Permitted Liens and Liens created under the Credit Documents) pursuant to, (A) the terms of any material indenture, loan agreement, lease agreement, mortgage or deed of trust or
(B) any other Material Contracts, in the case, of either clause (A) and (B) to which any Credit Party is a party or by which it or any of its property or assets is bound or (iii) violate any provision of the Organization Documents any Credit Party, except with respect to any conflict, breach or contravention or default (but not the creation of Liens other than Permitted Liens) referred to in clauses (ii)(A) or (ii)(B), to the extent that such conflict, breach, contravention or default could not reasonably be expected to have a Material Adverse Effect.
SECTION 7.04 Litigation, Labor Controversies, etc. There is no litigation, action, proceeding or labor controversy (including, without limitation, strikes, lockouts or slowdowns) against the Credit Parties or any of their respective Subsidiaries that is pending or, to the knowledge of any Credit Party, threatened in writing except as disclosed in Schedule 7.04 and other matters that could not reasonably be expected to (x) have a Material Adverse Effect, or (y) result in monetary judgments or relief, individually or in the aggregate, in excess of $15,000,000 or (b) which purports to affect the legality, validity or enforceability of any Credit Document, any Transaction Document or the Transactions.
SECTION 7.05 Use of Proceeds; Regulations U and X. The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by Section 8.10. No Credit Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Credit Extension will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with Regulation U or Regulation X. No Credit Party and no Subsidiary of any Credit Party owns any margin stock.
SECTION 7.06 Approvals, Consents, etc. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person, and no consent or approval under any contract or instrument (other than (a) those that have been duly obtained or made and which are in full force and effect, or if not obtained or made, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (b) the filing of UCC financing statements and other equivalent filings for foreign jurisdictions and (c) to the extent the Capital Stock of any Licensed Insurance Entity is subject to any Applicable Laws affecting any future rights or remedies of a Secured Party with respect to such Capital Stock) is required for the consummation of the Transactions or the due execution, delivery or performance by any Credit Party of any Credit Document to which it is a party, or for the due execution, delivery or performance of the other Credit Documents, in each case by any of the parties thereto. There does not exist any judgment, order, injunction or other restraint issued or filed with respect to the transactions contemplated by the Credit Documents, the consummation of the Transactions, the making of any Credit Extension or the performance by the Credit Parties or any of their respective Subsidiaries of their Obligations under the Credit Documents.
SECTION 7.07 Investment Company Act. No Credit Party is required to be registered, or will be required to be registered after giving effect to the Transactions and the transactions contemplated under the Credit Documents, as an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940.
SECTION 7.08 Full Disclosure.
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(a) In connection with the execution of this Agreement and the Transactions, Credit Parties have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which any Credit Party or any of its Subsidiaries is subject, and all other matters known to them, that, individually or in the aggregate, could reasonably be expected to have Material Adverse Effect. None of the factual written information and data (taken as a whole) at any time furnished by any Credit Party, any of their respective Subsidiaries or any of their respective authorized representatives in writing to the Administrative Agent or any Lender (including all information contained in the representations and warranties, reports, exhibits or otherwise in the Credit Documents but excluding the Budget, any pro forma financial information or projections, which are subject to the requirements of clause (b) below) for purposes of or in connection with this Agreement contains any untrue statement of a material fact or omits to state any material fact necessary to make such information and data (taken as a whole) not materially misleading, in each case, at the time such information was provided in light of the circumstances under which such information or data was furnished.
(b) The Budget, pro forma financial information, Liquidity calculations and projections provided pursuant to this Agreement were prepared in good faith based upon assumptions believed by the Credit Parties to be reasonable at the time made in light of then current market conditions, it being recognized by the Administrative Agent and the Lenders that such projections as to future events are not to be viewed as facts, are subject to uncertainties and contingencies, and that actual results during the period or periods covered by any such projections are not guaranties of financial performance and may differ from the projected results and such differences may be material.
SECTION 7.09 Financial Condition; No Material Adverse Effect.
(a) The Historical Financial Statements present fairly in all material respects the financial position and results of operations of the Credit Parties at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year end audit adjustments and to the absence of footnotes. The Historical Financial Statements and all of the balance sheets, all statements of income and of cash flow and all other financial information furnished pursuant to Section 8.01 have been and will for all periods following the Closing Date be prepared in accordance with GAAP consistently applied. All of the financial information furnished pursuant to Section 8.01 presents fairly in all material respects the financial position and results of operations of the Credit Parties at the respective dates of such information and for the respective periods covered thereby, subject in the case of unaudited financial information, to changes resulting from normal year end audit adjustments and to the absence of footnotes.
(b) To the knowledge of any Credit Party, there are no material liabilities of any Credit Party of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in any such liabilities, other than those liabilities provided for or disclosed in the most recently delivered financial statements pursuant to Section 8.01 or otherwise disclosed hereunder.
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(c) Since December 31, 2021, there has been no circumstance, event or occurrence, and no fact is known to the Credit Parties that has resulted in or could reasonably be expected to result in a Material Adverse Effect.
SECTION 7.10 Tax Returns and Payments. Each Credit Party has filed all applicable federal and state income Tax returns and all other material Tax returns, domestic and foreign, required to be filed by them and has paid all material Taxes and assessments payable by them that have become due, other than those not yet delinquent or being diligently contested in good faith by appropriate proceedings and by proper proceedings which stay the enforcement of any Lien as to which such Credit Party has maintained adequate reserves in accordance with GAAP.
SECTION 7.11 Compliance with ERISA. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (a) each Pension Plan is in compliance with ERISA, the Code and any Applicable Law; (b) no ERISA Event has occurred (or is reasonably likely to occur); (c) each Pension Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue Service, and nothing has occurred subsequent to the issuance of such determination letter which would reasonably be expected to prevent, or cause the loss of, such qualification; (d) no failure by any Credit Party or any ERISA Affiliate to make any required contribution to a Multiemployer Plan when due has occurred; (e) none of the Credit Parties or any ERISA Affiliate has incurred (or is reasonably expected to incur) any liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code; and (f) no Lien imposed under the Code or ERISA on the assets of any of the Credit Parties or any ERISA Affiliate exists (or is reasonably likely to exist). Except as could not reasonably be expected to have a Material Adverse Effect, no employee welfare benefit plan within the meaning of § 3(1) or § 3(2)(B) of ERISA of any Credit Party provides benefit coverage subsequent to termination of employment except as required by Title I, Subtitle B, Part 6 of ERISA or applicable state insurance laws. With respect to any Foreign Plan, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (a) all employer and employee contributions required by applicable law or by the terms of such Foreign Plan have been made or, if applicable, accrued in accordance with normal accounting practices; (b) the accrued benefit obligations of each Foreign Plan (based on those assumptions used to fund such Foreign Plan) with respect to all current and former participants do not exceed the assets of such Foreign Plan; (c) each Foreign Plan that is required to be registered has been registered and has been maintained in good standing and applicable regulatory authorities; and (d) each Foreign Plan is in compliance in all material respects with applicable law and regulations and with the terms of such Foreign Plan.
SECTION 7.12 Capitalization and Subsidiaries. Except as set forth on Schedule 7.12 as of the Closing Date, no Credit Party and no Subsidiary of any Credit Party (a) has any Subsidiaries or (b) is engaged in any joint venture or partnership with any other Person. All of the issued and outstanding Capital Stock of each of the Credit Parties and their Subsidiaries is validly issued, fully paid and nonassessable, free and clear of all Liens, except those created under the Credit Documents. All such securities were issued in compliance with all Applicable Laws concerning the issuance of securities. Except as set forth in Schedule 7.12, on the Closing Date there are no pre-emptive or other outstanding rights to purchase, options, warrants or similar rights or agreements (other than stock options granted to employees) pursuant to which
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any Credit Party may be required to issue, sell, repurchase or redeem any of its Capital Stock or any Capital Stock of its Subsidiaries.
SECTION 7.13 Intellectual Property. Each Credit Party and each of its Subsidiaries owns, or possesses the right to use, all of the material trademarks, service marks, trade names, copyrights, patents, patent rights, licenses and other intellectual property rights that are reasonably necessary for the operation of their respective businesses. To the knowledge of each Credit Party, the use of such material intellectual property does not infringe upon any intellectual property rights held by any other Person, except as could not reasonably be expected to have a Material Adverse Effect. Except as specifically set forth on Schedule 7.04 and as could not reasonably be expected to have a Material Adverse Effect, no claim or litigation regarding any of the foregoing is pending or, to the knowledge of such Credit Party threatened in writing.
SECTION 7.14 Environmental.
(a) Except as would not reasonably be expected to result in a Material Adverse Effect: (i) the Credit Parties and each of their respective Subsidiaries are in compliance with all material Environmental Laws in all jurisdictions in which the Credit Parties or such Subsidiary, as the case may be, are currently doing business (including obtaining, maintaining in full force and effect, and complying with all Permits required under Environmental Laws to operate the business of the Credit Parties and their respective Subsidiaries as currently conducted); (ii) none of the Credit Parties or any of their respective Subsidiaries is subject to any material Environmental Claim or any other material liability under any Environmental Law that is pending or, to the knowledge of such Credit Party, threatened in writing; (iii) to the knowledge of the Credit Parties, there are no conditions relating to the formerly owned Real Property that could reasonably be expected to give rise to any material Environmental Claim against any of the Credit Parties or any of their Subsidiaries and (iv) no Lien in favor of any Governmental Authority securing, in whole or in part, material Environmental Claims has attached to any Real Property of any of the Credit Parties or any of their Subsidiaries.
(b) None of the Credit Parties or any of their respective Subsidiaries has treated, stored, transported, Released or disposed of Hazardous Materials at, from, on or under any currently or formerly owned Real Property, facility relating to its business, or, to the knowledge of any Credit Party, any other location, in each case, in a manner that could reasonably be expected to give rise to an Environmental Claim that could result in a Material Adverse Effect.
(c) Each Credit Party has made available to the Administrative Agent copies of all existing material environmental assessment reports, assessments, reviews, audits, correspondence and other documents and data that have a material bearing on actual or potential Environmental Claims or compliance with Environmental Laws, in each case to the extent such reports, assessments, reviews, audits and documents and data are in their possession or reasonable control.
(d) This Section 7.14 contains the sole and exclusive representations and warranties of the Credit Parties with respect to matters arising under or relating to Environmental Laws, Environmental Claims, Hazardous Materials, Releases, or any other environmental, health or safety matters.
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SECTION 7.15 Ownership of Properties. Set forth on Schedule 7.15 is a list of all of the Real Property owned or leased by any of the Credit Parties or their respective Subsidiaries as of the Closing Date, indicating, in each case, whether the respective property is owned or leased, the identity of the owner or lessor and the location of the respective property. Each Credit Party owns (a) in the case of owned Real Property, good, indefeasible and marketable fee simple title to such Real Property, (b) in the case of owned personal property, good and valid title to such personal property and (c) in the case of leased Real Property or personal property, valid, subsisting, marketable, insurable and enforceable (except as may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity) leasehold interests (as the case may be) in such leased property, in each case, free and clear in each case of all Liens, except for Permitted Liens.
SECTION 7.16 No Default. None of the Credit Parties or any of their respective Subsidiaries is in default under or with respect to, or a party to, any Material Contract (copies of which have been received by the Administrative Agent) (other than any such Material Contract in respect of Indebtedness) that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Upon the effectiveness of this Agreement and the other Credit Documents, none of the Credit Parties or any of their respective Subsidiaries is in default under or with respect to any Material Contract in respect of Indebtedness the breach of which could reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continue or would result from the consummation of the transactions contemplated by this Agreement or any other Credit Document.
SECTION 7.17 Solvency. On the Closing Date after giving effect to the Transactions, Parent and its Subsidiaries, on a consolidated basis, are Solvent.
SECTION 7.18 Licensed Insurance Entities. Except as set forth on Schedule 7.18 or as otherwise permitted under this Agreement, no Licensed Insurance Entity is (i) party to any credit agreement, loan agreement, indenture, guarantee, letter of credit, note, bond or other arrangement providing for or otherwise relating to any Indebtedness owed to any third party for borrowed money or any extension of credit (or commitment for any extension of credit), or (ii) subject to any Lien upon any property or assets of any kind (real or personal, tangible or intangible) of any such Licensed Insurance Entities (including its Capital Stock). Notwithstanding anything in this Agreement to the contrary, the existence of restrictions or requirements under Applicable Laws with respect to Licensed Insurance Entities shall not be deemed to constitute a Lien or contravene any provision hereof, including this Section 7.18.
SECTION 7.19 Compliance with Laws; Authorizations. Each Credit Party and each of its Subsidiaries (a) has complied and is complying with all Applicable Laws, (b) is in possession of and has all requisite Permits, governmental licenses, authorizations, consents and approvals required under Applicable Laws and (c) to the extent due and owing has fully paid all applicable user fees, to operate its business and relating to the Credit Party’s Products as currently conducted except, in each case, to the extent that failure to do so could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
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SECTION 7.20 Contractual or Other Restrictions. Other than the Credit Documents and to the extent permitted by Section 9.10, no Credit Party or any of its Subsidiaries, other than the Licensed Insurance Entities, is a party to any agreement or arrangement or subject to any Applicable Law that limits its ability to pay dividends to, or otherwise make Investments in or other payments to any Credit Party, that limits its ability to grant Liens in favor of the Administrative Agent or that otherwise limits its ability to perform the terms of the Credit Documents.
SECTION 7.21 Transaction Documents. All representations and warranties of (a) the Credit Parties (other than the TPG Entities) set forth in the Transaction Documents and (b) to the best knowledge of the Credit Parties, of each other Person, including, but not limited to, the TPG Parties (other than Lenders) party to the Transaction Documents, were true and correct in all material respects as of the time as of which such representations and warranties were made and shall be true and correct in all material respects as of the Closing Date as if such representations and warranties were made on and as of such date (unless such representation or warranty is given as of a specific date). No default or event of default has occurred and is continuing under any Credit Document. Each Credit Document is in full force and effect, enforceable against each of the Credit Parties thereto (except as may be limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws applicable to creditors’ rights generally and by generally applicable equitable principles, whether considered in an action at law or in equity), the TPG Acquisition Agreement has not been amended or modified except as disclosed to the Administrative Agent on or prior to the Closing Date or otherwise in accordance with Section 9.07, and no waiver or consent has been granted under such document, except in accordance with Section 9.07.
SECTION 7.22 Collective Bargaining Agreements. Set forth on Schedule 7.22 is a list (including dates of expiration) of all collective bargaining or similar agreements between any Credit Party or any of its Subsidiaries and any labor union, labor organization or other bargaining agent, in respect of the employees of any Credit Party or any of its Subsidiaries as of the date hereof.
SECTION 7.23 Insurance. The properties of each Credit Party are insured with financially sound and reputable insurance companies which are not Affiliates of any Credit Party against loss and damage in such amounts, with such deductibles and covering such risks as are customarily carried by Persons of comparable size and of established reputation engaged in the same or similar businesses and owning similar properties in the general locations where such Credit Party operates, in each case as described on Schedule 7.23 as in effect on the Closing Date.
SECTION 7.24 Evidence of Other Indebtedness. Schedule 7.24 is a complete and correct list of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, any Credit Party outstanding on the Closing Date which will remain outstanding after the Closing Date (other than this Agreement and the other Credit Documents), and the aggregate principal or face amount outstanding in excess of $250,000, so long as the aggregate amount of all such Indebtedness does not exceed $1,000,000 under each such arrangement as of the Closing Date is correctly described in Schedule 7.24.
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SECTION 7.25 [Reserved].
SECTION 7.26 Foreign Assets Control Regulations; Anti-Money Laundering and Anti-Corruption Practices. Each Credit Party and each Subsidiary of each Credit Party is (x) in compliance in all material respects with all U.S. economic sanctions laws, executive orders and implementing regulations (“Sanctions”) as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and (y) in compliance in all material respects with all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it. No Credit Party and no Subsidiary or Affiliate of a Credit Party (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation, by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Credit Document would be prohibited under U.S. law. Each Credit Party and each Subsidiary of each Credit Party is in compliance in all material respects with all applicable Anti-Corruption Laws. None of the Credit Parties or any Subsidiary thereof, nor to the knowledge of the Borrower, any director, officer, agent, employee, or other person acting on behalf of a Credit Party or any Subsidiary, has taken any action, directly or indirectly, that would result in a violation in any material respect of applicable Anti-Corruption Laws. Each Credit Party and each Subsidiary of a Credit Party has instituted and will continue to maintain policies and procedures reasonably designed to promote compliance with Applicable Anti-Corruption laws.
SECTION 7.27 Patriot Act. The Credit Parties, each of their Subsidiaries and each of their controlled Affiliates are in compliance in all material respects with (a) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and Anti-Money Laundering Laws, rules and regulations. No part of the proceeds of any Loan will be used directly or indirectly for any payments to any government official or employee, political party, official of a political party, candidate for political office or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.
SECTION 7.28 Holding Company. Each of Parent and EH Holding Company, Inc. is a holding company and does not have any material liabilities (other than liabilities arising under the Credit Documents and Convertible Senior Notes), own any material assets (other than the Equity Interests of Borrower) or engage in any operations or business except as permitted under Section 9.16.
SECTION 7.29 Flood Insurance. Parent and its Subsidiaries maintain, if available, fully paid flood hazard insurance on all Real Property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by Flood Insurance Laws or as otherwise reasonably required by the Administrative Agent.
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SECTION 7.30 Location of Collateral; Equipment List. Schedule 7.30 lists:
(a) all places at which Records relating to the Collateral, including, but not limited to, all Documents and Instruments relating to receivables and Inventory, are maintained by Borrower or by any other Person; and
(b) subject to Section 9.15, all places where the Credit Parties’ Collateral is located and whether the premises are owned or leased by Credit Parties or whether the premises are the premises of a warehouseman, bailee or other third party, and if owned by a third party, the name and address of such third party.
SECTION 7.31 Health Care Matters.
(a) Compliance with Health Care Laws; Permits. Parent, each of its Subsidiaries and each Licensed Insurance Entity is and has for the last six (6) years been in compliance in all material respects with all Health Care Laws applicable to it, its products and its properties or other assets or its business or operation. Parent, each of its Subsidiaries and each Licensed Insurance Entity and, any Person acting on their behalf, has in effect all Permits, including, without limitation, all Permits necessary for it to own, lease or operate its properties and other assets and to carry on its business and operations, as presently conducted, except where the failure to have any such Permit would not be material to any of Parent, its Subsidiaries or the Licensed Insurance Entities. All such Permits are in full force and effect and there exists no default under, or material violation of, any such Permit and none of Parent, any of its Subsidiaries or any Licensed Insurance Entity has received notice of any current or proposed limitation, suspension, termination or revocation of any such Permit. Except as set forth on Schedule 7.31, no action, demand, requirement or investigation by any Governmental Authority (excluding, for the avoidance of doubt, routine audits that occur in the ordinary course of business) and no material suit, action or proceeding by any other person, in each case with respect to any of Parent, any Subsidiary or any Licensed Insurance Entity is pending or, to the knowledge of such Person, threatened.
(b) Filings. Except as set forth on Schedule 7.31, all material reports, documents, claims, notices or approvals required to be filed, obtained, maintained or furnished pursuant to any Health Care Law to any Governmental Authority have been so filed, obtained, maintained or furnished, and all such material reports, documents, claims and notices were complete and correct in all material respects on the date filed (or were corrected in or supplemented by a subsequent filing).
(c) Material Statements. None of Parent, its Subsidiaries or any Licensed Insurance Entity has made an untrue statement of a material fact or fraudulent statement to any Governmental Authority, or, to the knowledge of any of Parent, its Subsidiaries or any Licensed Insurance Entity, (i) failed to disclose a material fact required to any Governmental Authority, or (ii) committed an act, or made a statement that, at the time such act occurred or such statement was made, would reasonably be expected to constitute a violation of any Health Care Law. None of Parent, its Subsidiaries or any Licensed Insurance Entity, officer, nor to the knowledge of any of Parent, its Subsidiaries or any Licensed Insurance Entity, any affiliate, employee or agent of
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any of Parent, its Subsidiaries or any Licensed Insurance Entity, has made any untrue statement of a material fact regarding material claims incurred but not reported.
(d) Contracts. Each Licensed Insurance Entity has the requisite contract, license, enrollment, or other Permit to fulfill its obligations as (i) a Medicare Advantage organization in the Medicare program, (ii) a managed care organization in the respective Medicaid program in the state or states in which such Licensed Insurance Entity operates, (iii) a provider service network in the state or states in which such Licensed Insurance Entity operates, or (iv) as a health maintenance organization, managed care organization, or health insurance plan providing commercial health insurance in the state or states in which such Licensed Insurance Entity operates. Except as set forth on Schedule 7.31 there is no investigation, audit, claim, or other action pending, or to the knowledge of any of Parent, its Subsidiaries or any Licensed Insurance Entity, threatened which could reasonably be expected to result in a revocation, suspension, termination, probation, restriction or limitation, or non-renewal of the contract or other Permit necessary for a Licensed Insurance Entity to operate as a managed care organization under the Medicare program, the respective Medicaid program in the state or states in which such entity operates, or as a managed care organization providing commercial health insurance in the state or states in which such Licensed Insurance Entity operates.
(e) Accreditation. Each of Parent, its Subsidiaries and any Licensed Insurance Entity has received and maintains accreditation in good standing and without limitation or impairment by all applicable accrediting organizations, to the extent required by Applicable Laws.
(f) Proceedings. Except as set forth on Schedule 7.31, to the knowledge of any Credit Party, there are no facts, circumstances or conditions that would reasonably be expected to form the basis for any material investigation, suit, claim, audit, action (legal or regulatory) or proceeding (legal or regulatory) by a Governmental Authority against or affecting any of Parent, its Subsidiaries or any Licensed Insurance Entity relating to any of the Health Care Laws. As of the Closing Date, none of Parent, its Subsidiaries or any Licensed Insurance Entity (1) is a party to a corporate integrity agreement, (2) has any reporting obligations pursuant to a settlement agreement, or (3) has any material reporting obligations pursuant to a plan of correction or other remedial measure entered into with any Governmental Authority in connection with any actual or alleged noncompliance with Health Care Laws.
(g) Prohibited Transactions. During the past six (6) years, none of Parent, its Subsidiaries or any Licensed Insurance Entity has, directly or indirectly: (1) given or agreed to give, or is aware that there has been made or that there is any illegal agreement to make, any illegal gift or gratuitous payment of any kind, nature or description (whether in money, property or services) to any past, present or potential patient, supplier, contractor, or any other person in material violation in any material respect of any Health Care Law; (2) made or agreed to make, or is aware that there has been made or that there is any agreement to make, any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee or agent where either the contribution, payment or gift or the purpose of such contribution, payment or gift is or was illegal in any material respect under the laws of any Governmental Authority having jurisdiction over such payment, contribution or gift; (3) established or maintained any unrecorded fund or asset for any purpose or made any misleading, false or artificial entries on any of its books or records for any reason to the extent any such
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action would reasonably be expected to result in a Material Adverse Effect; or (4) made, or agreed to make, or is aware that there has been made or that there is any agreement to make, any payment to any person with the intention or understanding that any part of such payment would be in material violation in any material respect of any Health Care Law.
(h) Exclusion. None of Parent, its Subsidiaries or any Licensed Insurance Entity is or, to the knowledge of any of Parent, its Subsidiaries or any Licensed Insurance Entity, has been threatened to be, (i) excluded from any federal health care program pursuant to 42 U.S.C. § 1320a-7b and related regulations, (ii) “suspended” or “debarred” from selling products to the U. S. government or its agencies pursuant to the Federal Acquisition Regulation, relating to debarment and suspension applicable to federal government agencies generally (42 C.F.R. Subpart 9.4), or other Applicable Laws, or (iii) made a party to any other action by any Governmental Authority that may prohibit it from selling products to any governmental or other purchaser pursuant to any federal, state or local laws or regulations.
(i) HIPAA Compliance. To the extent applicable to any of Parent, its Subsidiaries or any Licensed Insurance Entity and for so long as (1) any of Parent, its Subsidiaries or any Licensed Insurance Entity is a “covered entity” as defined in 45 C.F.R. § 160.103, (2) any of Parent, its Subsidiaries or any Licensed Insurance Entity is a “business associate” as defined in 45 C.F.R. § 160.103, (3) any of Parent, its Subsidiaries or any Licensed Insurance Entity is subject to or covered by the HIPAA Administrative Requirements codified at 45 C.F.R. Parts 160 & 162 (the “Transactions Rule”) and/or the HIPAA Security and Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the “Privacy and Security Rules”), and/or (4) any of Parent, its Subsidiaries or any Licensed Insurance Entity sponsors any “group health plans” as defined in 45 C.F.R. § 160.103, such Person has: (i) developed and implemented appropriate safeguards to comply with HIPAA and (ii) is and has been for the past six (6) years in material compliance with HIPAA.
(j) Corporate Integrity Agreement. None of Parent, its Subsidiaries or any Licensed Insurance entity, nor any officer, director, partner, agent, or managing employee of Parent, its Subsidiaries, or any Licensed Insurance Entity, is party to or bound by any individual integrity agreement, corporate integrity agreement, corporate compliance agreement, deferred prosecution agreement, or other formal or informal agreement with any Governmental Authority arising from actual or alleged noncompliance any Applicable Laws.
SECTION 7.32 Eligible Accounts. As to each Account that is identified by any Credit Party as an Eligible Account in a Borrowing Base Certificate submitted to Revolver Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the rendition of services to such Account Debtor in the ordinary course of a Credit Party’s business, (b) owed to a Credit Party without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Revolver Agent-discretionary criteria) set forth in the definition of Eligible Accounts.
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ARTICLE VIII
Affirmative Covenants
Affirmative Covenants
The Credit Parties hereby covenant and agree that on the Closing Date and thereafter, until the Commitments have been terminated and the Loans and all other Obligations incurred hereunder (other than Unasserted Contingent Obligations) are paid in full in accordance with the terms of this Agreement:
SECTION 8.01 Financial Information, Reports, Notices and Information. The Credit Parties will furnish the Administrative Agent for further distribution to each Lender copies of the following financial statements, reports, notices and information provided, that as to any information contained in materials filed with the SEC, Parent shall not be separately required to furnish such information under Sections 8.01(b) and (c) below):
(a) Liquidity Certificate. Within thirty (30) days after the end of each month, a monthly Liquidity report based upon (and including) Parent’s and its Subsidiaries’ account statements, together with a certification from an Authorized Officer of Parent, that Parent is in compliance with the minimum Liquidity requirement set forth in Section 9.13(b) in a form reasonably acceptable to Administrative Agent. To the extent that any 2024 Convertible Notes or 2025 Convertible Notes are outstanding on the date that is four (4) months prior to the respective maturity date in such Convertible Senior Notes (each such date, a “Maturity Test Date”), Borrower shall provide a Liquidity report on such Maturity Test Date, and thereafter on a weekly basis (or as frequently as may be requested by any Agent), demonstrating that the Maturity Date has not occurred.
(b) Quarterly Financial Statements. Within forty-five (45) days after the end of each Fiscal Quarter of Parent and its Subsidiaries, (i) unaudited consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Quarter and (i) unaudited consolidated statements of income and cash flow of the Parent and its Subsidiaries for such Fiscal Quarter, including, in comparative form (both in Dollar and percentage terms) the figures for the corresponding Fiscal Quarter in, and year-to-date portion of, the immediately preceding Fiscal Year of Parent, certified as complete and correct by an Authorized Officer of the Administrative Borrower.
(c) Annual Financial Statements. Within ninety (90) days after the end of each Fiscal Year of Parent, copies of the consolidated balance sheets of Parent and its Subsidiaries, and the related consolidated statements of income and cash flows of Parent and its Subsidiaries for such Fiscal Year, setting forth in comparative form the figures for the immediately preceding Fiscal Year, such consolidated statements to be audited and certified accompanied by a report and unqualified opinion of Deloitte or another independent firm of certified public accountants of nationally recognized standing (or regionally recognized standing if reasonably acceptable to the Administrative Agent) (which report and opinion shall (x) state that such financial statements present fairly in all material respects the financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years and (y) not be subject to any “going concern” or like qualifications or exceptions or any qualifications or exception as to the scope of the audit (other than as may be required as a result of (A) an actual
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or prospective default or event of default with respect to any financial covenant (including the financial covenant set forth in Section 9.13) or (y) the impending maturity of any Indebtedness)).
(d) Compliance Certificates. Concurrently with the delivery of the financial information pursuant to clauses (b) and (c) above, a Compliance Certificate, executed by an Authorized Officer of the Administrative Borrower, (i) showing compliance with the Financial Performance Covenants and stating that no Default or Event of Default has occurred and is continuing (or, if a Default or an Event of Default has occurred, specifying the details of such Default or Event of Default and the actions taken or to be taken with respect thereto) and (ii) specifying any change in the identity of the Subsidiaries as at the end of such Fiscal Year or period, as the case may be, from the Subsidiaries identified to the Lenders on the Closing Date or the most recent Fiscal Quarter or period, as the case may be.
(e) Other Entity Reporting. To the extent not delivered in accordance with clause (b) above, concurrently with the delivery of the financial information pursuant to clause (b) above, the Credit Parties shall deliver to the Administrative Agent statutory reporting provided in the ordinary course of business and consistent with past practices with respect to Justify Holdings, Inc. and quarterly summaries of operations provided to the respective board of directors (or equivalent governing body) of Justify Holdings, Inc..
(f) Budget. Within sixty (60) days after to the commencement of each Fiscal Year of Parent, commencing with its Fiscal Year 2023, the forecasted financial projections for the then current Fiscal Year (on a month-by-month basis), in each case (including projected consolidated balance sheet of Parent and its Subsidiaries as of the end of the following Fiscal Year, the related consolidated statements of projected cash flow, and projected income and a description or discussion of the underlying assumptions applicable thereto), in each case, as customarily prepared by management of the Credit Parties for their internal use consistent in scope with the financial statements provided pursuant to Section 8.01(b), setting forth (or offering a discussion of) the principal assumptions on which such projections are based (such projections, collectively, the “Budget”).
(g) Defaults. As soon as possible and in any event within five (5) Business Days after an Authorized Officer of the Administrative Borrower or any of its Subsidiaries obtains knowledge thereof, notice from an Authorized Officer of the Administrative Borrower of (i) the occurrence of any event that constitutes a Default or an Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the applicable Credit Parties propose to take with respect thereto or (ii) the occurrence of a breach or nonperformance of, or any default under, any other Material Contracts of any Credit Party or any Subsidiary of a Credit Party, or any violation of, or noncompliance with any Applicable Laws (including Health Care Laws), in each case, which would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.
(h) Other Litigation. As soon as possible and in any event within five (5) Business Days after an Authorized Officer of the Administrative Borrower or any of its Subsidiaries obtains knowledge thereof, notice from an Authorized Officer of the Administrative Borrower of (i) the commencement of, or any material development in, any litigation, action, proceeding or labor controversy or proceeding affecting any Credit Party or any Subsidiary of any Credit Party or its respective property (A) in which the amount of damages claimed is
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$15,000,000 or more, (B) which would reasonably be expected to have a Material Adverse Effect, (C) which purports to affect the legality, validity or enforceability of any Credit Document, any other Transaction Document or (D) in which the relief sought is an injunction or other stay of the performance of this Agreement, any other Credit Document or any other document or instrument referred to in Section 9.07, or (ii) the occurrence of any development with respect to any litigation, action, proceeding or labor controversy described in Schedule 7.04 that would reasonably be expected to result in a Material Adverse Effect, and, in each case, together with a statement of an Authorized Officer of the Administrative Borrower, which notice shall specify the nature thereof, and what actions the applicable Credit Parties propose to take with respect thereto, and, to the extent the Administrative Agent requests, copies of all documentation related thereto.
(i) Transaction Documents. As soon as possible and in any event within five (5) Business Days after any Credit Party obtains knowledge of the occurrence of a breach or default or notice of termination by any party under, or material amendment entered into by any party to, any Transaction Document or any other document or instrument referred to in Section 9.07, a statement of an Authorized Officer of the Administrative Borrower setting forth details of such breach or default or notice of termination and the actions taken or to be taken with respect thereto and, if applicable, a copy of such amendment.
(j) Management Letters. Promptly upon, and in any event within five (5) Business Days after, receipt thereof, copies of all “management letters” submitted to any Credit Party by the independent public accountants referred to in Section 8.01(c) in connection with each audit made by such accountants.
(k) Casualty Event. With reasonable promptness, but in any event within five (5) days after any Credit Party obtains knowledge thereof, notice of any casualty or condemnation event with respect to a material portion of the Collateral.
(l) Other Information. With reasonable promptness, such other information (financial or otherwise) as any Agent on its own behalf or on behalf of any Lender may reasonably request in writing from time to time, including with respect to any wind down process or release of statutory capital or other capital reserves; provided, that, notwithstanding anything herein to the contrary, none of the Parent nor any Subsidiary will be required to disclose or permit the inspection or discussion of, any document, information or other matter (i) in respect of which disclosure to any Agent or any Lender (or their respective contractors) is prohibited by law or any binding agreement (or would otherwise cause a breach or default thereunder) or (ii) that is subject to attorney-client or similar privilege or constitutes attorney work product.
(m) Insurance Report. Within ten (10) Business days (or such longer prior as reasonably agreed to by the Administrative Agent) of the delivery of the financial statements provided for in Section 8.01(c), a report of a reputable insurance broker with respect to insurance policies maintained by the Credit Parties.
(n) Convertible Senior Notes. No event later than five (5) days after delivery thereof, copies of all material statements, reports and notices made available to or from the Trustee with respect to any Convertible Senior Notes.
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(o) Health Care Reporting.
(i) In no event later than five (5) Business Days after delivery thereof, of any notice from any Governmental Authority of any investigation or audit, or pending or threatened proceedings relating to, any violation by Parent, any Subsidiary, or any Licensed Insurance Entity of any Applicable Laws, including or Health Care Laws, in each case, solely to the extent the same would reasonably be expected to result in a Material Adverse Effect.
(ii) No later than five (5) Business Days after delivery thereof, the receipt of notice from any Governmental Authority threatening to limit, revoke, suspend or materially modify any Permit or contract held by any Licensed Insurance Entity that would reasonably be expected to result in a Material Adverse Effect.
(iii) Promptly notify, in the event that Parent, any Subsidiary, or any Licensed Insurance Entity experiences any (I) Breach of Unsecured Protected Health Information as “Breach,” “Unsecured Protected Health Information” and “Protected Health Information” are defined by HIPAA, or (II) a Security Incident as "Security Incident" is defined by HIPAA, in each case which materially impacts the security or integrity of Parent, any Subsidiary, or any Licensed Insurance Entity.
(iv) In no event later than five (5) Business Days after execution thereof, in the event that Parent, any Subsidiary, or any Licensed Insurance Entity becomes a party to or becomes bound by any corporate integrity agreement, corporate compliance agreement, deferred prosecution agreement, or other formal agreement with any Governmental Authority concerning compliance with Health Care Laws.
(p) Promptly, but in any event within three (3) days, notify the Administrative Agent if average daily Liquidity for the trailing seven (7) day period is less than $30,000,000.
(q) Wind Down Process. With respect to Justify Holdings, Inc., promptly upon any material development relating to any wind down process, provide the Administrative Agent with a written notification setting forth the details of such material development, along with copies of any relevant documentation relating to such material development, including any notices or written communications from any Governmental Authority with respect to such material development.
Notwithstanding the foregoing, the obligations in clauses (b) and (c) of this Section 8.01 may be satisfied with respect to financial information of the Parent and the Subsidiaries by filing the Form 10-K, 10-Q or 8-K, as applicable, of the Parent with the Securities Exchange Commission.
Documents required to be delivered pursuant to clauses (b) and (c) of this Section 8.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the earliest date on which (i) any Credit Party posts such documents, or provides a link thereto on Evolent’s website on the Internet and (ii) such financial statements and/or other documents are posted on the Securities Exchange Commission’s website on the internet at xxx.xxx.xxx; provided, that, (A) the Administrative Borrower shall, at the request of the Administrative Agent, continue to deliver copies (which delivery may be by electronic transmission) of such documents to the Administrative Agent and (B) the Administrative Borrower shall notify (which notification
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may be by facsimile or electronic transmission) the Administrative Agent of the posting of any such documents on any website described in this paragraph. Each Lender shall be solely responsible for timely accessing posted documents or requesting delivery of paper copies of such documents from the Administrative Agent and maintaining its copies of such documents.
SECTION 8.02 Books, Records and Inspections; Field Exams.
(a) Parent will, and will cause each of its Subsidiaries to, maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP shall be made of all material financial transactions and matters involving the assets and business of the Credit Parties or such Subsidiary, as the case may be. Parent will, and will cause each of its Subsidiaries to, permit representatives and independent contractors of any Agent to visit and inspect any of its properties (to the extent authorized pursuant to any leases for such properties), to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom (subject to applicable confidentiality agreements or undertakings and copyright laws), and to discuss its affairs, finances and accounts with its directors and officers (provided, that an authorized representative of the Credit Parties shall be allowed to be present and that any such inspection of properties shall not include any invasive or physically intrusive environmental sampling), all at the expense of the Credit Parties and (unless an Event of Default then exists) as often as such Agent may reasonably request, at reasonable times during normal business hours, upon reasonable advance notice to the Credit Parties; provided that during any calendar year, absent the continuation of an Event of Default, reasonable expenses of a reasonable number of people in connection with only one (1) inspection by each Agent shall be at the Borrowers’ expense and reimbursable under this Agreement. Any information obtained by the Agents pursuant to this Section 8.02 may be shared with the Administrative Agent or any Lender upon the request of such Secured Party; provided, further, that, notwithstanding anything herein to the contrary, none of the Parent nor any Subsidiary will be required to disclose or permit the inspection or discussion of, any document, information or other matter (i) in respect of which disclosure to the Administrative Agent or any Lender (or their respective contractors) is prohibited by law or any binding agreement (or would otherwise cause a breach or default thereunder) or (ii) that is subject to attorney-client or similar privilege or constitutes attorney work product.
(b) Each Credit Party will, and will permit each of its Subsidiaries to, permit representatives of Revolving Agent to conduct field examinations, appraisals and audits of Accounts (collectively “Field Exams”) and other personal property of the Credit Parties and their Subsidiaries, which shall, be at such reasonable times during normal business hours and unless an Event of Default is continuing, upon reasonable advance notice to Parent; provided, that for so long as no Event of Default shall have occurred and be continuing, Borrowers shall not be obligated to reimburse Revolving Agent for more than one (1) Field Exam in any twelve month period; provided, that any additional Field Exams required by Revolving Agent in any given twelve month period shall be performed at the expense of Revolving Agent; and, provided, further, that if an Event of Default shall have occurred and be continuing, Revolving Agent may conduct additional Field Exams at Borrowers’ expense. For the avoidance of doubt, the reimbursement limitations set forth in this clause (b) shall not apply to Field Exams conducted in connection with a Permitted Acquisition (provided, that unless agreed otherwise with the Administrative Borrower, there shall not be more than one such exam per Permitted Acquisition).
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SECTION 8.03 Maintenance of Insurance.
(a) Parent will, and will cause each of its Subsidiaries to, at all times maintain in full force and effect, with insurance companies that Parent believes (in its reasonable business judgment) are financially sound and reputable at the time the relevant coverage is placed or renewed, insurance in at least such amounts and against at least such risks (and with such risk retentions) as are usually insured against in the same general area by companies engaged in businesses similar to those engaged in by the Credit Parties; and will furnish to the Collateral Agent for further delivery to the Lenders, upon written request from the Collateral Agent, information presented in reasonable detail as to the insurance so carried, including (i) endorsements to (A) all casualty policies of the Credit Parties naming the Collateral Agent, on behalf of the Secured Parties, as loss payee and (B) all property policies of the Credit Parties naming the Collateral Agent, on behalf of the Secured Parties, as additional insured and (ii) legends providing that no cancellation, material reduction in amount or material change in insurance coverage thereof shall be effective until at least thirty (30) days after receipt by the Collateral Agent of written notice thereof.
(b) Within thirty (30) days after the Closing Date, the Administrative Borrower shall have delivered to the Administrative Agent copies of each insurance policy (or binders in respect thereof).
(c) Without limiting the foregoing, Parent will, and will cause each of its Subsidiaries to, (i) maintain, if available, fully paid flood hazard insurance on all owned or leased Real Property that is located in a special flood hazard area and that constitutes Collateral, on such terms and in such amounts as required by Flood Insurance Laws or as otherwise reasonably required by the Administrative Agent or any Lender, (ii) furnish to the Administrative Agent evidence of the renewal (and payment of renewal premiums therefor) of all such policies prior to the expiration or lapse thereof and (iii) furnish to the Administrative Agent prompt written notice of any redesignation of any such owned or leased improved Real Property into or out of a special flood hazard area.
SECTION 8.04 Payment of Taxes. The Credit Parties will pay and discharge, and will cause each of their respective Subsidiaries to pay and discharge, all material Taxes payable by them that have become due, other than those not yet delinquent or being diligently contested in good faith and by proper proceedings, which stay the enforcement of any Lien as to which such Credit Party has maintained adequate reserves in accordance with GAAP.
SECTION 8.05 Maintenance of Existence; Compliance with Laws, etc.
(a) Each Credit Party will, and will cause its Subsidiaries to, (i) preserve and maintain in full force and effect its organizational existence and good standing under the laws of its jurisdiction of incorporation, organization or formation as applicable, except as permitted by Section 9.03 or Section 9.04 and (ii) preserve and maintain its good standing under the laws of each state or other jurisdiction where such Person is required to be so qualified, to do business as a foreign entity, except in the case of this clause (ii) where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
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(b) Each Credit Party shall, and shall cause each of its Subsidiaries to, comply with all Applicable Laws and Permits (including without limitation, all Registrations) of any Governmental Authority having jurisdiction over it, its business or its Products, except where such failures to comply would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, each Credit Party and its Subsidiaries shall comply in all material respects with all Health Care Laws and their implementation by any applicable Governmental Authority and all lawful requests of any Governmental Authority applicable to its operations.
SECTION 8.06 Environmental Compliance.
(a) Each Credit Party will, and will cause its Subsidiaries to, use and operate all of its and their facilities and Real Property in compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with all Environmental Laws, and keep its and their Real Property free of any Lien imposed by any Environmental Law, in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(b) The Administrative Borrower will promptly give notice to the Administrative Agent upon any Credit Party or Subsidiary thereof becoming aware of: (i) any violation by any Credit Party or any of its Subsidiaries of any Environmental Law that could reasonably be expected to result in a Material Adverse Effect, (ii) any proceeding against or investigation of any Credit Party under any Environmental Law, including a written request for information or a written notice of violation or potential environmental liability from any Governmental Authority or any other Person, which could reasonably be expected to result in a Material Adverse Effect, (iii) the occurrence or discovery of a new Release or new threat of a Release (or discovery of any Release or threat of a Release previously undisclosed by any Credit Party to Administrative Agent) at, on, under or from any of the Real Property of any Credit Party or any facility or assets therein in excess of reportable or allowable standards or levels under any Environmental Law, or under circumstances, or in a manner or amount that could reasonably be expected to result in a Material Adverse Effect or (iv) any Environmental Claim arising or existing on or after the Closing Date which could reasonably be expected to result in a Material Adverse Effect.