EXHIBIT 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT, dated as of January 19, 2024 (this “Amendment”), is entered into by and among RYAN SPECIALTY, LLC, a Delaware limited liability company (“Borrower”), each Lender party hereto, which Lenders collectively constitute all Initial Term Lenders and the Required Lenders and JPMORGAN CHASE BANK, N.A. (“JPMorgan”), as Administrative Agent, and, solely for purposes of Section IV, the other Loan Parties party hereto. This Amendment shall constitute a “Loan Document” for all purposes of the Amended Credit Agreement (as defined below) and the other Loan Documents.
RECITALS:
WHEREAS, reference is hereby made to the Credit Agreement, dated as of September 1, 2020 (as amended by the First Amendment to Credit Agreement, dated as of March 30, 2021, the Second Amendment to Credit Agreement, dated as of July 26, 2021, the Third Amendment to Credit Agreement, dated as of August 13, 2021, the Fourth Amendment to Credit Agreement, dated as of April 29, 2022 and as further amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among the Borrower, the Lenders party thereto from time to time, and JPMorgan, as Administrative Agent;
WHEREAS, pursuant to and in accordance with Section 11.1 of the Credit Agreement, the Borrower desires to amend the Credit Agreement as set forth in Section I of this Amendment (the Credit Agreement as amended hereby, the “Amended Credit Agreement”).
WHEREAS, the Required Lenders have agreed to the amendments contemplated by this Amendment and submitted a signature page to this Amendment.
WHEREAS, with respect to this Amendment, JPMorgan will act as the lead arranger and bookrunner (in such capacity, the “Fifth Amendment Arranger”).
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:
Section I. Amendments to the Credit Agreement.
(a) The Credit Agreement is, effective upon receipt by the Administrative Agent of executed counterparts to this Amendment from the Borrower and Lenders constituting Required Lenders, hereby amended as follows:
“Notwithstanding the foregoing and solely in connection with the Fifth Amendment, (A) the Administrative Agent and the Borrower shall not be required to execute and deliver to the Administrative Agent a duly completed Assignment and Assumption and/or such other documentation with respect to a Fifth Amendment Non-Consenting Lender to the Fifth Amendment (a “Fifth Amendment Non-Consenting Lender”) and (B) with respect to each consenting Lender, as determined by the Borrower and the Administrative Agent (such
Lender or Lenders, collectively the “Fifth Amendment Reduced Lenders” and, together with, the Fifth Amendment Non-Consenting Lenders, the “Fifth Amendment Replaced Lenders”) with respect to all or a portion of such Fifth Amendment Reduced Lender’s outstanding Initial Term Loans, as determined by the Borrower and the Administrative Agent (such Initial Term Loans, the “Fifth Amendment Reduced Term Loans” and, together with all of the Fifth Amendment Non-Consenting Lender’s Initial Term Loans, collectively, the “Fifth Amendment Replaced Term Loans”), the assignment of any Fifth Amendment Replaced Lender’s Fifth Amendment Replaced Term Loans pursuant to this Section 2.23 and Section 11.16 shall become effective immediately upon receipt by (i) such Fifth Amendment Replaced Lender of a notice that all such Fifth Amendment Replaced Lender’s Fifth Amendment Replaced Term Loans are being required to be assigned to such assignee, which notice shall be signed by the Borrower, the Administrative Agent and the applicable assignee and (ii) the Administrative Agent (for the account of such Fifth Amendment Replaced Lender) of immediately available funds (x) from such assignee in an amount equal to the principal amount of such Fifth Amendment Replaced Lender’s Fifth Amendment Replaced Term Loans and (y) from the Borrower in an amount equal to the amount of accrued and unpaid interest on such Fifth Amendment Replaced Lender’s Fifth Amendment Replaced Lenders Term Loans to, but excluding, the date of such payment and all other amounts required by this Section 2.23.”
(b) The Credit Agreement is, effective as of the Fifth Amendment Effective Date (after giving effect to clause (a) of this Section 1), hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Amended Credit Agreement attached as Exhibit A hereto (which, for the avoidance of doubt, reflects the amendments as set forth in clause (a) of this Section 1).
(c) Exhibit B to the Credit Agreement, the Form of Assignment and Assumption, is hereby amended and restated in its entirety as set forth in Exhibit B hereto.
(d) Schedule 11.2 of the Credit Agreement is hereby amended and restated in its entirety as set forth in Schedule I hereto.
Section II. Conditions Precedent.
Section I(a) of this Amendment shall become effective as provided therein. The effectiveness of this Amendment (other than Section I(a)) is subject to the satisfaction (or waiver by the Administrative Agent) of the following conditions (the date on which such conditions are satisfied or waived, the “Fifth Amendment Effective Date”):
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Section III. Representations and Warranties.
To induce each Lender party hereto and the Administrative Agent to enter into this Amendment, the Borrower represents to each Lender party hereto and the Administrative Agent that, as of the Fifth Amendment Effective Date and giving effect to all of the transactions occurring on the Fifth Amendment Effective Date:
1. Existence, Qualification and Power; Compliance with Laws.
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2. Authorization; No Contravention.
3. Binding Effect. This Amendment and each other Loan Document has been duly executed and delivered on behalf of each applicable Loan Party. This Amendment constitutes, and each other Loan Document executed in connection herewith upon execution will constitute, a legal, valid and binding obligation of each applicable Loan Party, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by any Legal Reservations.
4. Loan Document Representations. By its execution of this Amendment, the Borrower hereby represents and warrants that each of the representations and warranties made by any Loan
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Party in or pursuant to the Loan Documents shall be true and correct in all material respects (except where such representations and warranties are already qualified by materiality, in which case such representation and warranty shall be accurate in all respects) on and as of such date as if made on and as of such date, except to the extent 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 (except where such representations and warranties are already qualified by materiality, in which case such representation and warranty shall be accurate in all respects) as of such earlier date.
Section IV. Confirmation of Guaranties and Security Interests.
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Section V. Miscellaneous.
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[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.
RYAN SPECIALTY, LLC, as Borrower
By: | /s/ Noah Angeletti |
| Name: Noah S. Angeletti |
| Title: Senior Vice President |
[Signature Page to Fifth Amendment]
Solely with respect to Section IV:
RSG Group Program Administrator, LLC
Ryan Services Group, LLC
RSG Specialty, LLC
International Facilities Insurance Services, Inc.
RSG Underwriting Managers, LLC
Global Special Risks, LLC
Smooth Waters, LLC
JEM Underwriting Managers, LLC
Concord Specialty Risk of Canada, LLC
Capital Bay Underwriting, LLC
Trident Marine Managers, LLC
Independent Claim Services, LLC
All Risks, LLC
All Risks SPECIALTY, llc
By: | /s/ Noah Angeletti |
| Name: Noah S. Angeletti |
| Title: Senior Vice President |
RSG Platform, LLC
Stetson Insurance Funding, LLC
By: | /s/ Noah Angeletti |
| Name: Noah S. Angeletti |
| Title: Treasurer |
Windward Specialty, a series of RSG Underwriting Managers, LLC
By: | /s/ Patrick G. Ryan |
| Name: Patrick G. Ryan |
| Title: Managing Director |
[Signature Page to Fifth Amendment]
RYAN TRANSACTIONAL RISK, a series of RSG Underwriting Managers, LLC
EmergIn Risk, a series of RSG Underwriting Managers, LLC
Technical Risk Underwriters, a series of RSG Underwriting Managers, LLC
Life Science Risk, a series of RSG Underwriting Managers, LLC
Sapphire Blue, a series of RSG Underwriting Managers, LLC
Power Energy Risk, a series of RSG Underwriting Managers, LLC
WKFC Underwriting Managers, a series of RSG Underwriting Managers, LLC
CorPro Underwriting Managers, a series of RSG Underwriting Managers, LLC
CorRisk Solutions, a series of RSG Underwriting Managers, LLC
Interstate Insurance Management, a series of RSG Underwriting Managers, LLC
Irwin Siegel Agency, a series of RSG Underwriting Managers, LLC
SafeWaters Underwriting Managers, a series of RSG Underwriting Managers, LLC
SuiteLife Underwriting Managers, a Series of RSG Underwriting Managers, LLC
Trident Marine Managers, a Series of RSG Underwriting Managers, LLC
International Specialty Insurance, a Series of RSG Underwriting Managers, LLC
StartPoint Executive Risks US, a Series of RSG Underwriting Managers, LLC
RYAN SPECIALTY Transactional Risks US, a Series of RSG Underwriting Managers, LLC
By: | /s/ Noah Angeletti |
| Name: Noah S. Angeletti |
| Title: Senior Vice President |
[Signature Page to Fifth Amendment]
RYAN RE UNDERWRITING MANAGERS, LLC
RYAN ALTERNATIVE RISK, A SERIES OF RSG SPECIALTY, LLC
TRIDENT MARINE MANAGERS, A SERIES OF RSG SPECIALTY, LLC
IRWIN SIEGEL AGENCY, A SERIES OF RSG SPECIALTY, LLC
EMERALD UNDERWRITING MANAGERS, A SERIES OF RSG UNDERWRITING MANAGERS, LLC
GLOBAL SPECIAL RISKS, A SERIES OF RSG SPECIALTY, LLC
By: | /s/ Noah Angeletti |
| Name: Noah S. Angeletti |
| Title: Senior Vice President and Treasurer |
KRP MANAGERS, LLC
By: | /s/ Andrew Lewis |
| Name: Andrew Lewis |
| Title: President |
[Signature Page to Fifth Amendment]
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and a Term Lender
By: | /s/ Milena Kolev |
| Name: Milena Kolev |
| Title: Vice President |
[Signature Page to Fifth Amendment]
[LENDER SIGNATURE PAGES ON FILE WITH ADMINISTRATIVE AGENT]
[Signature Page to Fifth Amendment]
Exhibit A to
FourthFifth Amendment to Credit Agreement
CREDIT AGREEMENT
among
RYAN SPECIALTY GROUP, LLC,
as Borrower,
the Guarantors from time to time party hereto,
the several Lenders from time to time party hereto,
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
Dated as of September 1, 2020,
as amended by the First Amendment, dated as of March 30, 2021,
as amended by the Second Amendment, dated as of July 26, 2021,
as amended by the Third Amendment, dated as of August 13, 2021,
and as further amended by the Fourth Amendment, dated as of April 29, 2022,
and as further amended by the Fifth Amendment, dated as of January 19, 2024
JPMORGAN CHASE BANK, N.A.,
BARCLAYS BANK PLC,
WELLS FARGO SECURITIES, LLC,
GOLDMAN SACHS BANK USA,
and
BANK OF MONTREAL,
as Joint Lead Arrangers and Joint Bookrunners
ROYAL BANK OF CANADA
CAPITAL ONE, N.A.
and
UBS SECURITIES LLC,
as Co-Syndication Agents
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS | 1 | |
1.1 | Defined Terms | 1 |
1.2 | Other Interpretive Provisions | 8586 |
1.3 | Accounting | 8687 |
1.4 | Limited Condition Transactions | 87 |
1.5 | Financial Ratio Calculations | 88 |
1.6 | Currency Equivalents Generally | 88 |
1.7 | Treatment of Subsidiaries Prior to Joinder | 89 |
1.8 | Interest Rates; Eurocurrency Notification | 89 |
1.9 | Divisions | 90 |
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS | 90 | |
2.1 | Term Commitments | 90 |
2.2 | Procedure for Borrowing Term Loans | 90 |
2.3 | Repayment of Term Loans | 91 |
2.4 | Revolving Commitments | 91 |
2.5 | Procedure for Borrowing of Revolving Loans | 91 |
2.6 | [Reserved] | 92 |
2.7 | [Reserved] | 92 |
2.8 | Commitment Fees, etc | 92 |
2.9 | Termination or Reduction of Revolving Commitments | 9392 |
2.10 | Optional Prepayments | 93 |
2.11 | Mandatory Prepayments and Commitment Reductions | 9493 |
2.12 | Conversion and Continuation Options | 97 |
2.13 | Limitations on Eurocurrency Tranches | 9897 |
2.14 | Interest Rates and Payment Dates | 98 |
2.15 | Computation of Interest and Fees | 98 |
2.16 | Inability to Determine Interest Rate; Illegality | 99 |
2.17 | Pro Rata Treatment and Payments | 101100 |
2.18 | Requirements of Law | 102 |
2.19 | Taxes | 103 |
2.20 | [Reserved] | 106 |
2.21 | Indemnity | 107106 |
2.22 | Change of Lending Office | 107 |
2.23 | Replacement of Lenders | 107 |
2.24 | Notes | 108 |
2.25 | Incremental Credit Extensions | 108 |
2.26 | Refinancing Amendments | 113112 |
2.27 | Defaulting Lenders | 115114 |
2.28 | Loan Modification Offers | 116 |
SECTION 3. LETTERS OF CREDIT | 118 | |
3.1 | L/C Commitment | 118 |
3.2 | Procedure for Issuance of Letter of Credit | 119 |
3.3 | Fees and Other Charges | 120 |
3.4 | L/C Participations | 121120 |
3.5 | Reimbursement Obligation of the Borrower | 121 |
3.6 | Obligations Absolute | 122 |
3.7 | Letter of Credit Payments | 123 |
3.8 | Applications | 123 |
3.9 | Letter of Credit Amounts | 123 |
3.10 | Existing Letters of Credit | 123 |
SECTION 4. REPRESENTATIONS AND WARRANTIES | 123 | |
4.1 | Financial Condition | 124123 |
4.2 | No Change | 124 |
4.3 | Existence; Compliance with Law | 125124 |
4.4 | Power; Authorization; Enforceable Obligations | 125 |
4.5 | No Legal Bar | 125 |
4.6 | Litigation | 125 |
4.7 | Ownership of Property; Liens | 126125 |
4.8 | Intellectual Property | 126125 |
4.9 | Taxes | 126 |
4.10 | Federal Regulations | 126 |
4.11 | Employee Benefit Plans | 126 |
4.12 | Affected Financial Institution. No Loan Party is an Affected Financial Institution | 127 |
4.13 | Investment Company Act | 127 |
4.14 | Environmental Matters | 127 |
4.15 | Accuracy of Information, etc | 128127 |
4.16 | Security Documents | 128 |
4.17 | Solvency | 128 |
4.18 | Patriot Act; FCPA; OFAC; Sanctions Laws | 128 |
4.19 | Status as Senior Indebtedness | 129 |
SECTION 5. CONDITIONS PRECEDENT | 129 | |
5.1 | Conditions to Closing Date | 129 |
5.2 | Conditions to Each Borrowing Date | 132 |
SECTION 6. AFFIRMATIVE COVENANTS | 133132 | |
6.1 | Financial Statements | 133 |
6.2 | Certificates; Other Information | 134 |
6.3 | Payment of Taxes | 136135 |
6.4 | Maintenance of Existence; Compliance with Law | 136135 |
6.5 | Maintenance of Property; Insurance | 136 |
6.6 | Inspection of Property; Books and Records; Discussions | 137136 |
6.7 | Notices | 137 |
6.8 | Environmental Laws | 137 |
6.9 | Additional Collateral, etc | 138137 |
6.10 | Credit Ratings | 140139 |
6.11 | Further Assurances | 140139 |
6.12 | Designation of Unrestricted Subsidiaries | 140 |
6.13 | Employee Benefit Plans | 140 |
6.14 | Use of Proceeds | 141140 |
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6.15 | Post-Closing Matters | 141 |
6.16 | FCPA; OFAC | 141 |
6.17 | Lender Calls | 141 |
SECTION 7. NEGATIVE COVENANTS | 141 | |
7.1 | Total First Lien Net Leverage Ratio | 141 |
7.2 | Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock |
142141 |
7.3 | Limitation on Restricted Payments; Restricted Debt Payments; Investments | 148 |
7.4 | Dividend and Other Payment Restrictions Affecting Subsidiaries | 155154 |
7.5 | Asset Sales | 157 |
7.6 | Transactions with Affiliates | 158 |
7.7 | Liens | 161 |
7.8 | Fundamental Changes | 161 |
7.9 | [Reserved] | 163 |
7.10 | Changes in Fiscal Periods | 163 |
7.11 | Negative Pledge Clauses | 163 |
7.12 | Lines of Business | 164163 |
7.13 | Amendments to Organizational Documents | 164163 |
SECTION 8. GUARANTEE | 164 | |
8.1 | The Guarantee | 164 |
8.2 | Obligations Unconditional | 165164 |
8.3 | Reinstatement | 166165 |
8.4 | No Subrogation | 166165 |
8.5 | Remedies | 166 |
8.6 | [Reserved] | 166 |
8.7 | Continuing Guarantee | 166 |
8.8 | General Limitation on Guarantor Obligations | 166 |
8.9 | Release of Guarantors | 167166 |
8.10 | Right of Contribution | 167 |
8.11 | Keepwell | 167 |
SECTION 9. EVENTS OF DEFAULT | 168167 | |
9.1 | Events of Default | 168167 |
9.2 | Action in Event of Default | 170 |
9.3 | Right to Cure | 172171 |
9.4 | Application of Proceeds | 173172 |
SECTION 10. ADMINISTRATIVE AGENT | 174173 | |
10.1 | Appointment and Authority | 174173 |
10.2 | Rights as a Lender | 174 |
10.3 | Exculpatory Provisions | 175174 |
10.4 | Reliance by Administrative Agent | 176175 |
10.5 | Delegation of Duties | 176 |
10.6 | Resignation and Removal of Administrative Agent | 177176 |
10.7 | Certain ERISA Matters | 177 |
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10.8 | No Other Duties, Etc | 178 |
10.9 | Administrative Agent May File Proofs of Claim | 179178 |
10.10 | Collateral and Guaranty Matters | 179 |
10.11 | Intercreditor Agreements | 181180 |
10.12 | Withholding Tax Indemnity | 181 |
10.13 | Indemnification | 182181 |
10.14 | Appointment of Incremental Arrangers, Refinancing Arrangers and Loan Modification Agents |
182 |
10.15 | Credit Bidding | 183182 |
10.16 | Acknowledgements of Lenders and Issuing Banks | 184183 |
SECTION 11. MISCELLANEOUS | 185184 | |
11.1 | Amendments and Waivers | 185184 |
11.2 | Notices | 189 |
11.3 | No Waiver; Cumulative Remedies | 191 |
11.4 | Survival of Representations and Warranties | 191 |
11.5 | Payment of Expenses; Indemnity; Limitation of Liability | 192191 |
11.6 | Successors and Assigns; Participations and Assignments | 193 |
11.7 | [Reserved] | 201200 |
11.8 | Adjustments; Set‑off | 201200 |
11.9 | [Reserved] | 201 |
11.10 | Counterparts; Electronic Execution | 201 |
11.11 | Severability | 202 |
11.12 | Integration | 202 |
11.13 | Governing Law | 203202 |
11.14 | Submission To Jurisdiction; Waivers | 203202 |
11.15 | Acknowledgements | 203 |
11.16 | Acknowledgement and Consent to Bail-In of Affected Financial Institutions | 204203 |
11.17 | Confidentiality | 205204 |
11.18 | Waivers Of Jury Trial | 205204 |
11.19 | USA Patriot Act Notification; Beneficial Ownership | 205204 |
11.20 | Maximum Amount | 206205 |
11.21 | Lender Action | 206205 |
11.22 | No Fiduciary Duty | 206 |
11.23 | Acknowledgments Regarding any Supported QFCs | 207206 |
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SCHEDULES:
1.1A-1 Commitments
1.1A-2 L/C Sublimit
1.1B Existing Letters of Credit
1.1C [Reserved]
1.1E Permitted Investments
1.1F Permitted Liens
1.1G Existing Swap Agreements
1.1H [Reserved]
5.1(f) Local Counsel Opinions
6.15 Post-Closing Undertakings
7.2 Permitted Indebtedness
11.2 Notice Addresses for Administrative Agent and Issuing Lenders
EXHIBITS:
A Form of Security Agreement
B Form of Assignment and Assumption
C Form of Compliance Certificate
D-1 [Reserved]
D-2 Form of Terms of Intercreditor (pari passu)
E Form of Prepayment Notice
F-1 Form of Revolving Loan Note
F-2 Form of Term Loan Note
F-3 [Reserved]
G Form of Guarantor Joinder Agreement
H Form of Borrowing and Conversion/Continuation Request
I Form of Solvency Certificate
J Form of Global Intercompany Note
K [Reserved]
L [Reserved]
M-1 Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders That Are Not Partnerships)
M-2 Form of U.S. Tax Compliance Certificate (Non-U.S. Participants That Are Not Partnerships)
M-3 Form of U.S. Tax Compliance Certificate (Non-U.S. Participants That Are Partnerships)
M-4 Form of U.S. Tax Compliance Certificate (Non-U.S. Lenders That Are Partnerships)
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CREDIT AGREEMENT (this “Agreement”), dated as of September 1, 2020, as amended by the First Amendment, dated as of March 30, 2021, as amended by the Second Amendment, dated as of July 26, 2021, as amended by the Third Amendment, dated as of August 13, 2021 and as further amended by the Fourth Amendment, dated as of April 29, 2022, among Ryan Specialty Group, LLC, a Delaware limited liability company (the “Borrower”), the Guarantors from time to time party hereto (including through delivery of a Guarantor Joinder Agreement in accordance with the terms of this Agreement), the several banks, financial institutions, institutional investors and other entities from time to time party hereto as lenders (the “Lenders”), the Issuing Lenders from time to time party hereto and JPMorgan Chase Bank, N.A. (“JPMCB”), as Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Equity Purchase Agreement, dated as of June 23, 2020 (such agreement, together with all schedules and exhibits thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in a manner that would not result in a failure of the condition precedent set forth in Section 5.1(b)(i), the “Acquisition Agreement”), by and among Ryan Specialty Group, LLC (the “Buyer”), Nick Cortezi (“Principal”), in his individual capacity and in his capacity as the Sellers’ Representative, the persons named on Exhibit A thereto (collectively, “Trust Sellers” and, together with Principal, each, a “Seller” and, collectively, “Sellers ”), All Risks, LTD, a Maryland corporation (“All Risks”), Independent Claims Services, LLC, a Maryland limited liability company (“ICS” and together with All Risks, the “Target”) Skipjack Premium Finance Company, a Maryland corporation, Skipjack Premium Finance Company, a California corporation and Matthew Nichols, the Borrower will acquire (the “Acquisition”) from the Sellers all of the outstanding equity interests of the Target, and each of their direct and indirect subsidiaries (collectively, the “Company”) as set forth in the Acquisition Agreement;
WHEREAS, to finance a portion of the Acquisition and for other purposes described herein, the Lenders agreed to extend certain credit facilities consisting of (i) Term Loans made available to the Borrower in an aggregate principal amount of $1,650,000,000 and (ii) Revolving Commitments (which Revolving Commitments include the subfacilities as set forth herein with respect to L/C Commitments) made available to the Borrower in an aggregate principal amount of $300,000,000;
WHEREAS, the Borrower agreed to secure all of the Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a lien on substantially all of its assets (subject to certain limitations set forth in the Loan Documents); and
WHEREAS, each Guarantor has agreed to guarantee the Obligations of the Borrower and to secure the Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a lien on substantially all of its assets (subject, in each case, to certain limitations set forth in the Loan Documents).
NOW, THEREFORE, the parties hereto hereby agree as follows:
DEFINITIONS
provided that any Indebtedness of such Person that is extinguished, redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transaction pursuant to which such other Person becomes a Subsidiary of the specified Person will not be Acquired Indebtedness.
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“Adjusted Term SOFR Rate” means, for any Interest Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Interest Period, plus (b) (i) for one-month Interest Periods, 0.100.00%, (ii) for three-month Interest Periods, 0.150.00% and (iii) for six-month Interest Periods, 0.250.00%; provided that if the Adjusted Term SOFR Rate as so determined (i) in the case of Initial Term Loans, shall be less than 0.75%, such rate shall be deemed to be 0.75% for the purposes of this Agreement and (ii) in the case of Revolving Loans, shall be less than 0.00%, such rate shall be deemed to be 0.00% for the purposes of this Agreement.
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Any increase or decrease in the Applicable Margin resulting from a change in the Total First Lien Net Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.2(c); provided that the pricing level as set forth above in clause (a)(ii)(A) shall apply as of the first Business Day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the pricing level otherwise determined in accordance with this definition shall apply).
In the event that any financial statements delivered pursuant to Section 6.1 or a Compliance Certificate delivered pursuant to Section 6.2(c) are shown to be inaccurate at any time that this Agreement is in effect and any Loans or Commitments are outstanding hereunder when such inaccuracy is discovered and such inaccuracy, if corrected, would have led to a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) the Borrower shall promptly (and in no event later than five (5) Business Days thereafter) deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) from and after the date such corrected Compliance Certificate is delivered, the Applicable Margin shall be determined by reference to the corrected Compliance Certificate (but in no event shall the Lenders owe any amounts to the Borrower) and (iii) the Borrower shall pay to the Administrative Agent promptly (and in no event later than ten Business Days after knowledge by the chief financial officer or treasurer of the Borrower that such payment is due) any additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof. This paragraph will not limit the rights of the Administrative Agent or the Lenders hereunder. Notwithstanding anything to the contrary in this Agreement, any additional interest hereunder shall not be due and payable until such payment is due pursuant to clause (iii) above and accordingly, any nonpayment of such interest as a result of any such inaccuracy shall not constitute a Default (whether retroactively or otherwise), and no such amounts shall be deemed overdue (and no amounts shall accrue interest at the default rate set forth in Section 2.14(c)), at any time prior to the date that is ten Business Days following such knowledge by the chief financial officer or treasurer of the Borrower.
“Applicable Period” as defined in the definition of “Applicable Margin.”
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6
7
8
9
minus, the sum of:
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“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which may be Daily Simple SOFR) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the Adjusted Term SOFR Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement; provided further that any such Benchmark Replacement shall be administratively feasible as determined by the Administrative Agent in its sole discretion.
“Benchmark Replacement Adjustment” means the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero), if any, that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the Adjusted Term SOFR Rate with the applicable Unadjusted
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Benchmark Replacement by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the Adjusted Term SOFR Rate with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time (for the avoidance of doubt, such Benchmark Replacement Adjustment shall not be in the form of a reduction to the Applicable Margin).
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “ABR,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent and the Borrower decide may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent and the Borrower decide is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the Adjusted Term SOFR Rate:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the SOFR Administrator permanently or indefinitely ceases to provide the SOFR; or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the Adjusted Term SOFR Rate:
(1) a public statement or publication of information by or on behalf of the SOFR Administrator announcing that the SOFR Administrator has ceased or will cease to provide the SOFR, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the SOFR;
(2) a public statement or publication of information by the regulatory supervisor for the SOFR Administrator, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the SOFR, a resolution authority with jurisdiction over the administrator for the SOFR or a court or an entity with similar insolvency or resolution authority over the administrator for the SOFR, in each case which states that the SOFR Administrator has ceased or will cease to provide the SOFR permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the SOFR; and/or
(3) a public statement or publication of information by the regulatory supervisor for the SOFR Administrator announcing that the SOFR is no longer representative.
“Benchmark Transition Start Date” means in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected
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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) and consented to in writing by the Borrower (not to be unreasonably withheld, delayed or conditioned) and by notice to the Administrative Agent and the Lenders.
“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the Adjusted Term SOFR Rate and solely to the extent that the Adjusted Term SOFR Rate has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the Adjusted Term SOFR Rate for all purposes hereunder in accordance with Section 2.16 and (y) ending at the time that a Benchmark Replacement has replaced the Adjusted Term SOFR Rate for all purposes hereunder pursuant to Section 2.16.
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“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
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“Compounded SOFR”: the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate (which may include compounding in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Interest Period) being established by the Administrative Agent in accordance with:
(1) the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining compounded SOFR; provided that:
(2) if, and to the extent that, the Administrative Agent determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that the Administrative Agent determines in its reasonable discretion, with the consent of the Borrower (which consent shall not be unreasonably withheld, delayed or conditioned), are substantially consistent with any evolving or then-prevailing market convention for determining compounded SOFR for U.S. dollar-denominated syndicated credit facilities at such time;
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provided that, for purposes of calculating Consolidated Interest Expense, no effect shall be given to the discount and/or premium resulting from the bifurcation of derivatives under FASB ASC 815 and related interpretations as a result of the terms of the Indebtedness to which such Consolidated Interest Expense relates.
For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
Notwithstanding the foregoing, any additional charges arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred Stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges.
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Solely for purposes of calculating Consolidated EBITDA, the Net Income of the Borrower and the Restricted Subsidiaries shall be calculated without deducting the income attributable to the minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties.
In addition, to the extent not already accounted for in the Consolidated Net Income of the Borrower and the Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include (i) the amount of proceeds received during such period from business interruption insurance in respect of insured claims for such period, (ii) the amount of proceeds as to which the Borrower has determined that there is a reasonable basis that it will be reimbursed by the insurer in respect of such period from business interruption insurance (with a deduction for any amount so added back to the extent denied by the applicable carrier in writing within 180 days or not so reimbursed within 365 days) and (iii) reimbursements of any expenses and charges that are covered by indemnification, reimbursement, guaranty, purchase price adjustment or other similar provisions in connection with any Permitted Investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder.
Notwithstanding the foregoing, (x) for the purpose of Section 7.3 only (other than clauses (E) and (F) of the definition of Available Amount), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition not constituting a Permitted Investment made by the Borrower and the Restricted Subsidiaries, any repurchases and redemptions of Investments that are not Permitted Investments from the Borrower and the Restricted Subsidiaries, any repayments of loans and advances which do not constitute Permitted Investments by the Borrower or any of the Restricted Subsidiaries, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary , in each case only to the extent such amounts increase the amount of Restricted Payments, Investments and/or Restricted Debt Payments permitted under such covenant pursuant to clauses (E) and (F) of the definition of Available Amount and (y) for the purpose of the definition of “Excess Cash Flow” only, there shall be excluded the income (or deficit) of any Person accrued prior to the date it becomes
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a Restricted Subsidiary or is merged into or consolidated with the Borrower or any Restricted Subsidiary thereof.
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“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Day prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
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in each case prior to the then Latest Maturity Date in respect of the Term Facility (other than as a result of a change of control or asset sale to the extent permitted under clause (1) above); provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or any Restricted Subsidiary in order to satisfy applicable statutory or regulatory obligations; provided, further, however, that any Capital Stock held by any future, current or former employee, director, manager or consultant (or their respective trusts, estates, investment funds, investment vehicles or immediate family members), of the Borrower, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which the Borrower or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors of the Borrower (or the compensation committee thereof), in each case pursuant to any stockholders’ agreement, management equity plan, stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Borrower or any Restricted Subsidiary; provided, further, however, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
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“ECF Percentage”: 50%; provided that the ECF Percentage shall be reduced to (i) 25% if the Total First Lien Net Leverage Ratio determined on a Pro Forma Basis as of the last day of such fiscal year is less than or equal to 4.50 to 1.00 and greater than 4.00 to 1.00 and (ii) 0% if the Total First Lien Net Leverage Ratio determined on a Pro Forma Basis as of the last day of such fiscal year is less than or equal to 4.00 to 1.00, in each case, based on the most recent financial statements delivered under Section 6.1(a).
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“Excluded Subsidiary”: any Subsidiary of the Borrower that is, at any time of determination, (i) not a Wholly Owned Subsidiary, provided that such Subsidiary shall cease to be an Excluded Subsidiary at the time such Subsidiary becomes a Wholly Owned Subsidiary, (ii) a special purpose securitization vehicle (or similar entity), including any Receivables Subsidiary created pursuant to a transaction permitted under this Agreement, in each case reasonably satisfactory to the Administrative Agent, (iii) [reserved], (iv) a not-for-profit Subsidiary, (v) a Captive Insurance Subsidiary, (vi) a CFC, (vii) a CFC Holdco, (viii) a Subsidiary of a CFC, (ix) an Unrestricted Subsidiary, (x) any Foreign Subsidiary, (xi) any Immaterial Subsidiary (provided that, in the absence of any other applicable limitation, such Subsidiary shall cease to be an Excluded Subsidiary at the time such Subsidiary is no longer an Immaterial Subsidiary), (xii) for which the granting of a pledge or security interest would be prohibited or restricted by applicable law whether on the Closing Date or thereafter or by contract existing on the Closing Date, or, if such Subsidiary is acquired after the Closing Date, by contract existing when such Subsidiary is acquired (so long as such prohibition is not created in contemplation of such acquisition), including any requirement
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to obtain the consent of any Governmental Authority or third party pursuant to such contract (unless such consent has been obtained), (xiii) [reserved] or (xiv) for which the cost of providing a Guarantee is excessive in relation to the value afforded thereby (as reasonably agreed by the Borrower and the Administrative Agent); provided that, notwithstanding the foregoing, the Borrower may designate any U.S. Subsidiary that is an Excluded Subsidiary as a Guarantor and may designate, with the consent of the Administrative Agent any Foreign Subsidiary that is an Excluded Subsidiary as a Guarantor, by causing such Subsidiary to execute a Guarantor Joinder Agreement, whereupon such Subsidiary shall cease to constitute an Excluded Subsidiary and such Subsidiary and the Loan Party that holds the Equity Interests of such Subsidiary shall in connection therewith comply with the provisions of Section 6.9(c) and may, thereafter, re-designate such Subsidiary as an Excluded Subsidiary (so long as such Subsidiary otherwise then qualified as an Excluded Subsidiary), upon which re-designation such Subsidiary shall automatically be released from its Guarantee in accordance with Section 8.9.
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“FATCA”: Sections 1471 through 1474 of the Code as in existence on the Closing Date (and any amended or successor versions of such provisions to the extent such versions are substantively comparable and not materially more onerous to comply with), any current or future U.S. Treasury regulations thereunder and official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal, tax or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention entered into in connection with the implementation of such Sections of the Code and/or U.S. Treasury regulations thereunder.
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“Financial Compliance Date”: any date on which the aggregate Outstanding Amount of all Revolving Loans and undrawn L/C Obligations (excluding (i) Collateralized Letters of Credit and (ii) non-Collateralized Letters of Credit and undrawn L/C Obligations in an amount up to $15,000,000) exceeds 35% of the Revolving Commitments as of such date.
“First Amendment”: that certain First Amendment to Credit Agreement, dated as of March 30, 2021, by and among the Borrower, the other Loan Parties party thereto, the Administrative Agent and the Lenders party thereto.
“First Amendment Effective Date”: as defined in the First Amendment.
“First Amendment Arranger”: as defined in the First Amendment.
“First Priority Refinancing Revolving Facility”: as defined in the definition of “Permitted First Priority Refinancing Debt.”
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For purposes of making the computation referred to above, Investments (including any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary), acquisitions, dispositions, mergers (including the Transactions), consolidations and disposed or discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and Operational Changes that the Borrower or any of the Restricted Subsidiaries has both determined to make and made after the Closing Date and during the four-quarter reference period or subsequent to such reference period and on or prior to or substantially simultaneously with the Calculation Date (each, for purposes of this definition, a “pro forma event”) shall be calculated on a Pro Forma Basis assuming that all such Investments, acquisitions, dispositions, mergers (including the Transactions), consolidations, Operational Changes and discontinued operations (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If, since the beginning of such period, any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any Restricted Subsidiary since the beginning of such period shall have made or effected any Investment, acquisition, disposition, merger, consolidation or discontinued operation, in each case with respect to an operating unit of a business, or Operational Changes that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, discontinued operation or Operational Changes had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower to the extent identifiable and supportable. Any such pro forma calculation may include, without duplication, adjustments appropriate to reflect cost savings, operating expense reductions, restructuring charges and expenses and synergies reasonably expected to result from the applicable event to the extent set forth in the definition of “Consolidated EBITDA”.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. In connection with any Limited Condition Transaction, the Borrower may determine baskets and ratios in accordance with Section 1.4.
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provided, however, that, notwithstanding the foregoing, any charges arising from (i) the application of Accounting Standards Codification Topic 480-10-25-4 “Distinguishing Liabilities from Equity—Overall—Recognition” to any series of Preferred Stock other than Disqualified Stock or (ii) the application of Accounting Standards Codification Topic 470-20 “Debt—Debt with Conversion Options—Recognition,” in each case, shall be disregarded in the calculation of Fixed Charges; provided further that the Borrower’s ratable portion of Fixed Charges attributable to Ryan Re shall be included as Fixed Charges.
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“Global Intercompany Note”: a note substantially in the form of Exhibit J.
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provided that (a) Contingent Obligations Incurred in the ordinary course of business, (b) obligations under or in respect of Receivables Financings, (c) Obligations associated with other post-employment benefits and pension plans, workers’ compensation claims, deferred compensation or employee or director equity plans, social security or wage taxes, (d) [reserved], (e) in connection with the purchase by the Borrower or any Restricted Subsidiary of any business, post-closing payment adjustments to which the seller may be
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entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing until 30 days after any such obligation becomes contractually due and payable, (f) deferred or prepaid revenues, (g) any Capital Stock (other than Disqualified Stock), (h) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller, (i) premiums payable to, and advance commissions or claims payments from, insurance companies, (j) earn-out or similar obligations, (k) intercompany indebtedness made in the ordinary course of business and having a term not exceeding 364 days, (l) deferred compensation to employees of the Borrower and its Subsidiaries incurred in the ordinary course of business, and (m) obligations, to the extent such obligations would otherwise constitute Indebtedness, under any agreement that have been defeased or satisfied and discharged pursuant to the terms of such agreement shall in each case not constitute Indebtedness.
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For the avoidance of doubt, a guarantee by the Borrower or a Restricted Subsidiary of the obligations of another Person (the “primary obligor”) shall not be deemed to be an Investment by the Borrower or such Restricted Subsidiary in the primary obligor to the extent that such obligations of the primary obligor are in favor of the Borrower or any Restricted Subsidiary, and in no event shall (x) a guarantee of an operating lease or other business contract of the Borrower or any Restricted Subsidiary or (y) intercompany indebtedness among the Borrower and the Restricted Subsidiaries made in the ordinary course of business and having a term not exceeding 364 days be deemed an Investment.
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“Other Applicable Indebtedness”: as defined in Section 2.11(b).
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“Payment”: as defined in Section 10.16.
“Payment Notice”: as defined in Section 10.16.
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provided, that an Officer’s Certificate signed on behalf of the Borrower delivered to the Administrative Agent at least five (5) Business Days (or a shorter period acceptable to the Administrative Agent) prior to the Incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirements of this definition, shall be conclusive evidence that such terms and conditions satisfy the requirements of this definition, unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees);
(i) (x) in the case of Refinancing Term Debt Incurred under any First Priority Refinancing Term Facility or any Junior Priority Refinancing Term Facility, such Indebtedness (A) does not mature prior to the maturity date of the Refinanced Debt and (B) does not have a Weighted
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Average Life to Maturity shorter than the Weighted Average Life to Maturity of the Refinanced Debt and (y) in the case of Refinancing Term Debt incurred under an Unsecured Refinancing Term Facility, such Indebtedness does not mature or have scheduled amortization or payments of principal and is not subject to mandatory redemption or prepayment (except (i) customary asset sale or change of control provisions or (ii) other mandatory redemptions that are also made or offered to holders of outstanding Term Loans that are First Lien Obligations on at least a pari passu basis), in each case prior to the then Latest Maturity Date at the time such Refinancing Term Debt is incurred;
(ii) such Indebtedness shares not greater than ratably in (or, if such Indebtedness constitutes Unsecured Refinancing Term Facility or Junior Priority Refinancing Term Facility, on a junior basis with respect to) any voluntary or mandatory prepayments of any Term Loans then outstanding; and
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For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower to the extent identifiable and supportable. Any such pro forma calculation shall include, without duplication, adjustments appropriate to reflect cost savings, operating expense reductions, restructuring charges and expenses and synergies reasonably expected to result from the applicable event to the extent set forth in the definition of “Consolidated EBITDA”.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the
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applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness).
Interest on (x) a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP and (y) any Indebtedness under a revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate as the Borrower may designate.
The term “Disposition” in this definition shall not include dispositions of inventory and other ordinary course dispositions of property.
For the avoidance of doubt, any pro forma adjustments to Consolidated EBITDA made pursuant to the definition thereof in connection with the Acquisition for the period of July 1, 2020 through August 31, 2020 are acceptable to the extent that they are of a similar nature to the adjustments reflected in the calculation of Consolidated EBITDA in the last paragraph of the definition thereof.
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“Qualified Hedging Agreement”: any (i) Existing Swap Agreement and (ii) Swap Agreement entered into by any Group Member, on the one hand, and any Qualified Counterparty, on the other hand (including any Swap Agreement entered into prior to the Closing Date between any Group Member).
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“Ratio-Based Incremental Amount”:
(x) with respect to any Indebtedness that constitutes First Lien Obligations, an unlimited amount so long as either (I) the Total First Lien Net Leverage Ratio does not exceed 5.00 to 1.00, or (II) if incurred in connection with a Permitted Acquisition or other Investment, the Total First Lien Net Leverage Ratio does not exceed the Total First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment;
(y) with respect to any such Incremental Term Loans that constitute Junior Lien Obligations, an unlimited amount so long as either (I) the Total Secured Net Leverage Ratio does not exceed 6.25 to 1.00, or (II) if incurred in connection with a Permitted Acquisition or other Investment, the Total Secured Net Leverage Ratio does not exceed the Total Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment; or
(z) with respect to any such Incremental Term Loans that are unsecured, an unlimited amount so long as either (I) the Total Net Leverage Ratio does not exceed 6.75 to 1.00, (II) the Fixed Charge Coverage Ratio is greater than or equal to 2.00 to 1.00, (III) if incurred in connection with a Permitted Acquisition or other Investment, the Total Net Leverage Ratio does not exceed the Total Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment or (IV) if incurred in connection with a Permitted Acquisition or other Investment, the Fixed Charge Coverage Ratio is not less than the Fixed Charge Coverage Ratio immediately prior to such Permitted Acquisition or Investment;
in each case where such Total First Lien Net Leverage Ratio, Total Secured Net Leverage Ratio, Total Net Leverage Ratio and/or Fixed Charge Coverage Ratio, as applicable, is calculated on a Pro Forma Basis (but without giving effect to the cash proceeds received from such Indebtedness that remain on the balance sheet) as of the most recently completed Test Period (calculated assuming that any applicable revolving commitments being Incurred pursuant to this definition are fully drawn throughout such period);
provided that, for the avoidance of doubt, if, as part of the same transaction or series of related transactions, the Borrower Incurs Indebtedness pursuant to the Ratio-Based Incremental Amount and substantially concurrently also Incurs Indebtedness (x) pursuant to the Prepayment-Based Incremental Amount or the Cash-Capped Incremental Amount (whether Incurred under Section 2.25 or Section 7.2(b)(vi) or under any or all such sections) or (y) otherwise constituting a Fixed Amount, then the Total
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First Lien Net Leverage Ratio, Total Secured Net Leverage Ratio, Total Net Leverage Ratio and/or Fixed Charge Coverage Ratio, as applicable, will be calculated with respect to such Incurrence pursuant to the Ratio-Based Incremental Amount without regard to any such substantially concurrent Incurrence of Indebtedness under the Prepayment-Based Incremental Facility, the Cash-Capped Incremental Facility or any other Fixed Amount.
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Any such designation by the Board of Directors of the Borrower shall be evidenced to the Administrative Agent by delivering to the Administrative Agent a certified copy of the resolutions of the Board of Directors of the Borrower giving effect to such designation and an Officer’s Certificate signed on behalf of the Borrower certifying that such designation complied with the foregoing conditions.
“Recipient” means the Administrative Agent or any Lender (including any Issuing Lender), as applicable.
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“Resignation Effective Date”: as defined in Section 10.6(a).
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“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Determination Date” has the meaning specified in the definition of “Daily Simple SOFR”.
“SOFR Rate Day” has the meaning specified in the definition of “Daily Simple SOFR”.
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“Term Loan Purchase Amount”: as defined in the definition of “Dutch Auction.”
“Term SOFR Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.
“Term SOFR Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.
“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in Dollars and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Adjusted Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.
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“U.S. Government Securities Business Day” means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends
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that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
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If at any time any change in GAAP would affect the computation of any financial ratio, standard or term set forth in any Loan Document, and the Borrower or the Required Lenders shall so request, the Administrative Agent and the Borrower shall negotiate in good faith to amend such ratio, standard or term to preserve the original intent thereof in light of such change in GAAP (subject to approval by the
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Borrower); provided that, until so amended, such ratio, standard or term shall continue to be computed in accordance with GAAP immediately prior to such change therein and the Borrower shall provide to the Administrative Agent and the Lenders within five (5) days after delivery of each certificate or financial report required hereunder that is affected thereby a written statement of the Borrower setting forth in reasonable detail the differences (including any differences that would affect any calculations relating to the Financial Covenant as set forth in Section 7.1) that would have resulted if such financial statements had been prepared giving effect to such change; provided, further that, such written statement shall only be required if the Financial Covenant is required to be tested at such time in accordance with Section 7.1; provided, further that, to the extent any such change would have a negative impact on the Borrower with respect to any ratio, financial calculation, financial reporting items or requirement computation, the Borrower may (in its sole discretion) elect to compute or report such ratio, financial calculation, financial reporting item or requirement in accordance with GAAP and/or the Applicable Tax Laws, as the case may be, as changed and accordingly, if such an election is made, the Borrower shall not be required to deliver the written statement described in the immediately preceding proviso with respect thereto.
in each case, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted under the Loan Documents shall be deemed to be the date the definitive agreements for (or in the case of a Limited Condition Transaction that involves some other manner of establishing a binding obligation under local law, such other binding obligations to consummate), or irrevocable notice of, such Limited Condition Transaction are entered into (the “LCT Test Date”), and if, after giving effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any Incurrence of Indebtedness and the use of proceeds thereof) on a Pro Forma Basis as if they had occurred at the beginning of the most recently completed Test Period ending prior to the LCT Test Date, the Borrower or the Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in compliance with such ratio, basket, test, Default or Event of Default “blocker” or making of representations and warranties, such ratio, basket, test, Default or Event of Default “blocker” or making of representations and warranties shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCT Election and any of the ratios, baskets, tests, Default or Event of Default “blocker” or making of representations and warranties for which compliance was determined or tested as of the LCT Test Date are exceeded as a result of fluctuations in any such ratio, basket, test, Default or Event of Default “blocker” or making of representations and warranties, including due to fluctuations in Consolidated EBITDA at or prior to the consummation of the relevant transaction or action, such baskets, ratios, tests, Default or Event of Default “blocker” or making of representations and warranties will not be deemed to have been exceeded as a result of such fluctuations.
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Each Subsidiary of the Borrower that is required to be joined as a Loan Party pursuant to Section 6.9 shall, until the completion of such joinder, be deemed for the purposes of Section 7 of this Agreement to be a Loan Party from and after the Closing Date (or the date of formation or acquisition of such subsidiary).
Upon the occurrence of a Benchmark Transition Event, Section 2.16 provides a mechanism for determining an alternative rate of interest. The Administrative Agent will promptly notify the applicable parties as and when required by Section 2.16, of any change to the reference rate upon which the interest rate on Eurocurrency Loans is based. Except as otherwise provided in this Agreement, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of “Eurocurrency Rate” or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section 2.16, whether upon the occurrence of a Benchmark Transition Event, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 2.16, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the Eurocurrency Rate or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability other than, in each case, to the extent of the Administrative Agent’s gross negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision. Nothing in this Section shall constitute a representation or warranty by the Borrower or any of its Restricted Subsidiaries nor can it constitute the basis of any Default or Event of Default.
For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person,
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and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its equity interests at such time.
AMOUNT AND TERMS OF COMMITMENTS
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in each case of clauses (i) and (ii) above until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.
Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay (solely if requirement by a Requirement of Law) or, if applicable, convert all of such Lender’s Term Benchmark Loans to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted Term SOFR Rate component of the ABR) either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Term Benchmark Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Term Benchmark Loans. In the event any Lender shall exercise its rights under clauses (i) or (ii) of this Section 2.16(b), all payments and prepayments of principal that would otherwise have been applied to repay the Term Benchmark Loans that would have been made by such Lender or the converted Term Benchmark Loans of such Lender shall instead be applied to repay the ABR Loans (if applicable) made by such Lender in lieu of, or resulting from the conversion of, such Term Benchmark Loans. For purposes of this Section 2.16(b), a notice to the Borrower by any Lender shall be effective as to each Term Benchmark Loan made by such Lender, if lawful, on the last day of the Interest Period then applicable to such Term Benchmark Loan; in all other cases, such notice shall be effective on the date of receipt by the Borrower.
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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so. Notwithstanding any other provision of this Section 2.19, a Lender shall not be required to deliver any documentation that such Lender is not legally eligible to deliver.
Each Lender authorizes the Administrative Agent to deliver to the Loan Parties and to any successor Administrative Agent any documentation provided by such Lender to the Administrative Agent pursuant to this Section 2.19.
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Subject to the terms of this Section 2.25:
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All or any portion of Indebtedness originally designated as Incurred under the Cash-Capped Incremental Facility or the Prepayment-Based Incremental Facility will automatically be reclassified as having been Incurred under the Ratio-Based Incremental Facility so long as, at the time of such reclassification (without giving effect to any amounts previously Incurred under the Cash-Capped Incremental Facility or the Prepayment-Based Incremental Facility that are not being reclassified), the Borrower would be permitted to Incur the aggregate principal amount of Indebtedness being so reclassified under the Ratio-Based Incremental Facility (which, for the avoidance of doubt, shall have the effect of increasing availability under the Cash-Capped Incremental Facility or Prepayment-Based Incremental Facility, as applicable, by the amount of such reclassified Indebtedness).
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provided, further, that the terms and conditions applicable to such Permitted Credit Agreement Refinancing Debt may provide for any additional or different financial or other covenants or other provisions that are agreed between the Borrower and the Lenders thereof and applicable only during periods after the Latest Maturity Date that is in effect on the date such Permitted Credit Agreement Refinancing Debt is issued, Incurred or obtained or added to the Loan Documents for the benefit of the applicable Lenders pursuant to a Refinancing Amendment; provided, further that if a certificate of a Responsible Officer shall have been delivered to the Administrative Agent for posting to the Lenders at least five (5) Business Days prior to the incurrence of such Permitted Credit Agreement Refinancing Debt, together with a reasonably detailed description of the material terms and conditions of such Permitted Credit Agreement Refinancing Debt or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirements of this Section 2.26(a), and the Required Lenders shall not have notified the Borrower and the Administrative Agent that they disagree with such determination (including a statement of the basis upon which each such Lender disagrees) within such five (5) Business Day period, then such certificate shall be conclusive evidence that such terms and conditions satisfy the requirements of this Section 2.26(a). The effectiveness of any Refinancing Amendment shall be subject to the satisfaction on the date thereof of (i) to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent of board resolutions, officers’ certificates and/or reaffirmation agreements consistent with those delivered on the Closing Date and (ii) such conditions as the Borrower and providers of said Permitted Credit Agreement Refinancing Debt shall agree. Any Refinancing Amendment may provide for the issuance of Letters of Credit for the account of the Borrower or any
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Restricted Subsidiary, pursuant to any Other Revolving Commitments established thereby, in each case on terms substantially equivalent to the terms applicable to Letters of Credit under the Revolving Commitments subject to the approval of the Issuing Lenders.
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LETTERS OF CREDIT
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REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, each Loan Party (but with respect to the Borrower, solely as set forth herein) hereby jointly and severally represents and warrants to the Administrative Agent and each Lender that:
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Notwithstanding anything herein or in any other Loan Document to the contrary, no officer of any Group Member shall have any personal liability in connection with the representations and warranties and other certifications in this Agreement or any other Loan Document.
CONDITIONS PRECEDENT
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Notwithstanding the foregoing, to the extent any Collateral or any security interest therein (other than Collateral with respect to which a lien or security interest may be perfected by (x) filing a financing statement under the Uniform Commercial Code of any applicable jurisdiction and (y) the delivery of any stock certificates, if any, together with undated stock powers executed in blank, of all material Wholly Owned Restricted Subsidiaries formed in the United States that are directly owned by a Loan Party; provided that stock certificates together with undated stock powers executed in blank of such material
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subsidiaries of the Company will only be delivered on the Closing Date to the extent received from the Seller after the use of commercially reasonable efforts to do so) is not provided or perfected on the Closing Date after the Borrower’s use of commercially reasonable efforts to do so or cannot be provided or perfected without undue burden or expense, the provision and/or perfection of such security interests in such Collateral shall not constitute a condition precedent to the availability of any Facility on the Closing Date, but shall be required to be provided and/or perfected within 90 days after the Closing Date (subject to extensions granted by the Administrative Agent in its reasonable discretion).
Each Borrowing by, and each issuance, renewal, extension, increase or amendment of a Letter of Credit on behalf of, the Borrower hereunder (other than its initial extension of credit on the Closing Date or as otherwise agreed in connection with a Limited Condition Transaction, and except as otherwise provided herein in the case of Incremental Term Loans and Incremental Revolving Loans)) shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied; provided, however, that for the avoidance of doubt the conversion or continuation of an existing Borrowing pursuant to Section 2.12 does not constitute the Borrowing of a Loan under this Section 5.2 and shall not result in a representation and warranty by the Borrower on the date thereof as to the conditions contained in this Section 5.2.
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document and all other Obligations shall have been paid in full (other than (i) contingent indemnification and reimbursement obligations for which no claim has been made, (ii) Cash Management Obligations as to which arrangements reasonably satisfactory to the Cash Management Providers have been made and (iii) obligations under Qualified Hedging Agreements to which arrangements reasonably satisfactory to the Qualified Counterparties have been made) and all Letters of Credit have been canceled, have expired or have been Collateralized or, rolled into another credit facility, the Borrower will, and will cause each of its Restricted Subsidiaries to:
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All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and (except as otherwise provided below) in accordance with GAAP applied consistently (except to the extent any such inconsistent application of GAAP has been approved by such accountants (in the case of clause (a) above) or officer (in the case of clause (b) above), as the case may be, and disclosed in reasonable detail therein) throughout the periods reflected therein and with prior periods (subject, in the case of quarterly financial statements, to normal year-end audit adjustments and the absence of footnotes).
Notwithstanding the foregoing, the obligations of this Section 6.1 may be satisfied with respect to financial information of the Borrower and its consolidated Subsidiaries by furnishing (A) the applicable
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financial statements of any direct or indirect parent of the Borrower (including consolidated for the borrower) or (B) the Form 10-K or Form 10-Q, as applicable, of any direct or indirect parent of the Borrower (including consolidated for the borrower); provided that, in each case, such information is accompanied by supplementary schedules shown in reasonable detail separating the Borrower and its consolidated Subsidiaries from the parent entities.
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Nothing in this Agreement or in any other Loan Document shall require any Loan Party to provide information (i) that constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure is prohibited by applicable Laws, (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product or (iv) the disclosure of which is restricted by binding agreements not entered into primarily for the purpose of qualifying for the exclusion in this clause (iv) (in the case of this clause (iv), so long as such confidentiality agreement does not relate to information regarding the financial affairs of any Group Member or compliance with the terms of any Loan Document).
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Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.
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For the avoidance of doubt, and without limitation, this Section 6.9 shall apply to any division of a Loan Party and to any division of a Group Member required to become a Loan Party pursuant to the terms of the Loan Documents and to any allocation of assets to a series of a limited liability company.
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The Borrower will hold a conference call (at a time mutually agreed upon by the Borrower and the Administrative Agent but, in any event, no earlier than the Business Day following the delivery of applicable financial information pursuant to Sections 6.1(a) and (b) above) with all Lenders who choose to attend such conference call to discuss the results of the previous fiscal quarter. Notwithstanding the foregoing, the obligations of this Section 6.17 may be satisfied by the holding of a public earnings call by Borrower (or any direct or indirect parent thereof) in connection with the release of the applicable financial information required by Sections 6.1(a) and (b).
NEGATIVE COVENANTS
The Borrower hereby agrees that, until all Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document and all other Obligations shall have been paid in full (other than (i) contingent indemnification and reimbursement obligations for which no claim has been made, (ii) Cash Management Obligations as to which arrangements reasonably satisfactory to the Cash Management Providers have been made and (iii) obligations under Qualified Hedging Agreements as to which arrangements reasonably satisfactory to the Qualified Counterparties have been made) and all Letters of Credit have been canceled, have expired or have been Collateralized or, to the reasonable satisfaction of the applicable Issuing Lender, rolled into another credit facility, the Borrower will and will cause the Restricted Subsidiaries to, comply with this Section 7.
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(all such payments and other actions set forth in clauses (i) and (ii) above, other than any of the exceptions thereto, being collectively referred to as “Restricted Payments”).
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provided that the Borrower may elect to apply all or any portion of the aggregate increase contemplated by clauses (1) through (4) above in any calendar year; in addition, cancellation of Indebtedness owing to the Borrower or any of its Restricted Subsidiaries from any current, former or future officer, director or employee (or any permitted transferees thereof) of the Borrower or any of the Restricted Subsidiaries (or any direct or indirect parent company thereof), in connection with a repurchase of Equity Interests of the Borrower from such Persons will not be deemed to constitute a Restricted Payment for purposes of this Section 7.3 or any other provisions of this Agreement;
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(xxiv) Restricted Payments and distributions among the Borrower and its Restricted Subsidiaries in connection with transfer pricing or shared services agreements to the extent advances related thereto are permitted pursuant to clause (31) of the definition of “Permitted Investments”;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (b)(vi) and (b)(x) of this Section 7.3, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.
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provided, however, that at the time of, and after giving effect to, any Restricted Debt Payment permitted under clauses (d)(ii), (d)(iv) and (d)(vi) of this Section 7.3, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.
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except in each case for such encumbrances or restrictions existing under or by reason of:
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For purposes of determining compliance with this Section 7.4, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to the Borrower or a Restricted Subsidiary to other Indebtedness Incurred by the Borrower or such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
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shall each be deemed to be Cash Equivalents for the purposes of this Section 7.5;
After the Borrower’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale pursuant to clauses (a) to (c) above, the Borrower or such Restricted Subsidiary shall apply the Net Cash Proceeds from such Asset Sale if and to the extent required by Section 2.11(c).
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GUARANTEE
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(b) Each of the Guarantors hereby expressly waives diligence, presentment, demand of payment, marshaling, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against the Borrower under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guarantor Obligations. Each of the Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guarantor Obligations and notice of or proof of reliance by any Secured Party upon the guarantee made under this Section 8 (this “Guarantee”) or acceptance of the Guarantee, and the Guarantor Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon the Guarantee, and all dealings between the Borrower and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon the Guarantee. The Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guarantor Obligations at any time or from time to time held by the Secured Parties and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time of any right or remedy against the Borrower or against any other person which may be or become liable in respect of all or any part of the Guarantor Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. The Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the applicable Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guarantor Obligations outstanding.
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EVENTS OF DEFAULT
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ADMINISTRATIVE AGENT
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In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the applicable Issuing Lender, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.8 and 11.5.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any Issuing Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any Issuing Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender or any Issuing Lender or in any such proceeding.
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The parties hereto acknowledge and agree that the Administrative Agent may rely conclusively as to any of the matters described in this 10.10 (including as to its authority hereunder) on a certificate or similar instrument provided to it by the Borrower without further inquiry or investigation, which certificate may be delivered to the Administrative Agent by the Borrower.
The Lenders hereby authorize the Administrative Agent to enter into any intercreditor agreement (including any other Intercreditor Agreement) or arrangement permitted under and expressly contemplated (including with respect to priority) by this Agreement (and any amendments, amendments and restatements, restatements or waivers of, or supplements or other modifications to, any such agreement or arrangement permitted under this Agreement), and any such agreement or arrangement will be binding upon the Lenders.
Except as otherwise expressly set forth herein or in any Security Document, no Qualified Counterparty or Cash Management Provider that obtains the benefits of Section 9.4, any Guarantee or any Collateral by virtue of the provisions hereof or of any Guarantee or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any
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Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Section 10 to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Cash Management Obligations and Obligations arising under Qualified Hedging Agreements unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Provider or Qualified Counterparty, as the case may be.
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(i) Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on “discharge for value” or any
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similar doctrine. A notice of the Administrative Agent to any Lender under this Section 10.16 shall be conclusive, absent manifest error.
(ii) Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(iii) The Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party.
(iv) Each party’s obligations under this Section 10.16 shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.
(v) Each Lender represents and warrants that in participating as a Lender, it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender, in each case in the ordinary course of business, and not for the purpose of investing in the general performance or operations of the Borrower, or for the purpose of purchasing, acquiring or holding any other type of financial instrument such as a security (and each Lender agrees not to assert a claim in contravention of the foregoing, such as a claim under the federal or state securities laws).
MISCELLANEOUS
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To the Borrower or any Guarantor: | Ryan Specialty Group, LLC 180 N. Stetson Ave., Suite 4600 Chicago, IL 60601 Attention: Chief Executive Officer Attention: Chief Financial Officer Attention: General Counsel Telecopy: (312) 381-3030
With a copy to (which shall not constitute notice):
Kirkland & Ellis LLP 300 N LaSalle Street Chicago, IL 60654 Attention: Jon A. Ballis, P.C. and Louis Hernandez, P.C. Telecopy: (312) 862-2200 |
To the Administrative Agent and the Issuing Lenders: |
To the addresses listed in Schedule 11.2
|
; provided that any notice, request or demand to or upon the Administrative Agent or the Lenders shall not be effective until received. In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder. All telephonic notices to the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Administrative Agent and the applicable Lender (“Approved Electronic Communications”). The Administrative Agent or the Borrower may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent to an email address shall be deemed
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received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (b) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (a) of notification that such notice or communication is available and identifying the website address therefor.
Each Loan Party agrees to assume all risk, and hold the Administrative Agent, the Joint Bookrunners and each Lender harmless from any losses, associated with, the electronic transmission of information (including the protection of confidential information), except to the extent caused by the bad faith, gross negligence or willful misconduct of such Person, as determined in a final and non-appealable decision of a court of competent jurisdiction.
THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH PERSON’S BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Each Loan Party, the Lenders, the Issuing Lenders, the Joint Lead Arrangers, the Joint Bookrunners, Co-Syndication Agents and the Administrative Agent agree that the Administrative Agent may, but shall not be obligated to, store any Approved Electronic Communications on the Platform in accordance with Administrative Agent’s customary document retention procedures and policies.
Each of the Borrower, the other Loan Parties, the Administrative Agent and the Issuing Lenders may change its address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile, telephone number or email address for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the Issuing Lenders. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s
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compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to documents or notices that are not made available through the “Public Side Information” portion of the Platform and that may contain Private Lender Information.
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(b) To the extent permitted by applicable law (i) the Borrower and any Loan Party shall not assert, and the Borrower and each Loan Party hereby waives, any claim against any Agent, any Issuing Lender and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a “Lender-Related Person”) for any Liabilities arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages)
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arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this clause (b)(ii) shall relieve the Borrower and each Loan Party of any obligation it may have to indemnify an Indemnitee, as provided in Section 11.5(a), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.
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This paragraph (b) shall not prohibit any Lender from assigning all or any portion of its rights and obligations among separate Facilities on a non-pro rata basis.
For the purposes of this Section 11.6, “Approved Fund” means 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 or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
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Notwithstanding anything to the contrary herein, this Section 11.6(b)(iii) shall supersede any provisions in Section 2.17 to the contrary.
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Notwithstanding anything to the contrary herein, this Section 11.6(b)(iv) shall supersede any provisions in Section 2.17 to the contrary.
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Solely to the extent any Lender or Issuing Lender that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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The respective obligations of the Administrative Agent and the Lenders under this Section 11.17 shall survive, to the extent applicable to such Person, (x) the payment in full of the Obligations and the termination of this Agreement, (y) any assignment of its rights and obligations under this Agreement and (z) the resignation or removal of the Administrative Agent, in each case for a period of one (1) year.
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To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Obligations or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
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