Exhibit 10.1

 

EXECUTION VERSION

 

Published CUSIP Number: 75689PAKO

Revolving CUSIP Number: 75689PAL8

Term Loan CUSIP Number: 75689PAM6

 

 

$300,000,000

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of January 10, 2020

 

among

 

RED ROBIN INTERNATIONAL, INC.,
as Borrower,

 

RED ROBIN GOURMET BURGERS, INC.
as Parent,

 

THE DOMESTIC SUBSIDIARIES OF THE PARENT
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,

 

THE LENDERS PARTIES HERETO,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

 

JPMORGAN CHASE BANK, N.A.,
as Syndication Agent,

 

BANK OF AMERICA, N.A.,

 

BBVA USA,

 

and

 

U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent

 

WELLS FARGO SECURITIES, LLC
and
JPMORGAN CHASE BANK, N.A.,
as Joint Lead Arrangers and Joint Bookrunners

 

 

 

TABLE OF CONTENTS

 

 

i

 

 

ii

 

 

iii

 

 

iv

 

Schedules

 

Schedule 1.1(a)	Commitments and Pro Rata Share
Schedule 1.1(b)	Existing Letters of Credit
Schedule 1.1(c)	Permitted Liens
Schedule 3.6	Litigation
Schedule 3.9	ERISA
Schedule 3.12	Subsidiaries
Schedule 3.16	Intellectual Property
Schedule 3.19(a)	Location of Real Property
Schedule 3.19(b)	Location of Collateral
Schedule 3.19(c)	Chief Executive Offices
Schedule 3.19(d)	Warehousemen; Bailees; Consignments
Schedule 3.21	Brokers Fees
Schedule 3.22	Labor Matters
Schedule 3.25	Material Contracts
Schedule 5.5(b)	Insurance
Schedule 6.1(b)	Indebtedness
Schedule 6.6	Investments
Exhibits
Exhibit 1.1(a)	Form of Account Designation Notice
Exhibit 1.1(b)	Form of Assignment and Assumption
Exhibit 1.1(c)	Form of Joinder Agreement
Exhibit 1.1(d)	Form of Notice of Borrowing
Exhibit 1.1(e)	Form of Notice of Conversion/Extension
Exhibit 2.1(e)	Form of Revolving Loan Note
Exhibit 2.2(d)	Form of Term Loan Note
Exhibit 2.4(d)	Form of Swingline Loan Note
Exhibit 2.18	Form of Tax Exempt Certificate
Exhibit 4.1(b)	Form of Secretary’s Certificate
Exhibit 4.1(h)	Form of Solvency Certificate
Exhibit 5.1(c)	Form of Officer’s Compliance Certificate

 

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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of January 10, 2020, among RED ROBIN INTERNATIONAL, INC., a Nevada corporation, (the “Borrower”), RED ROBIN GOURMET BURGERS, INC., a Delaware corporation (the “Parent”) and those Domestic Subsidiaries of the Parent identified as a “Guarantor” on the signature pages hereto and such other Domestic Subsidiaries of the Parent as may from time to time become a party hereto, as Guarantors, the several banks and other financial institutions as may from time to time become parties to this Agreement (individually a “Lender” and collectively the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Parent, the Guarantors party thereto, the financial institutions party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of June 30, 2016 (as amended prior to the date hereof, the “Existing Credit Agreement”);

 

WHEREAS, the parties to this Agreement desire to amend and restate the Existing Credit Agreement in its entirety to read as set forth herein; and

 

WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the Borrower on the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                   Defined Terms.

 

As used in this Agreement, terms defined in the preamble to this Agreement have the meanings therein indicated, and the following terms have the following meanings:

 

“Accessible Borrowing Availability” shall mean, as of any date of determination, the amount that the Borrower is able to borrow on such date under the Revolving Committed Amount without a Default or Event of Default occurring or existing after giving pro forma effect to such borrowing.

 

“Account Designation Notice” shall mean the Account Designation Notice dated the Closing Date from the Borrower to the Administrative Agent substantially in the form attached hereto as Exhibit 1.1(a).

 

“Additional Commitment Lender” shall have the meaning set forth in Section 2.20(d).

 

“Additional Credit Party” shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

 

“Administrative Agent” or “Agent” shall have the meaning set forth in the first paragraph of this Agreement and shall include any successors in such capacity.

 

 

“Administrative Agent’s Office” shall mean the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 9.2.

 

“Administrative Questionnaire” shall mean, with respect to any Lender, a document containing such Lender’s contact information for purposes of notices provided under this Credit Agreement and account details for purposes of payments made to such Lender under this Credit Agreement.

 

“Affiliate” shall mean as to any Person, any other Person (excluding any Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall be deemed an Affiliate of the Borrower solely by reason of the relationship created by the Credit Documents.

 

“Agreement” or “Credit Agreement” shall mean this Amended and Restated Credit Agreement, as amended, restated, amended and restated, extended, replaced, modified or supplemented from time to time in accordance with its terms.

 

“All-In Yield” shall mean, as to any Indebtedness, the effective all-in yield applicable thereto as reasonably determined by the Administrative Agent in consultation with the Borrower in a manner consistent with generally accepted financial practices, taking into account: (a) interest rate margins, (b) original issue discount (“OID”) and upfront or similar fees (which shall be deemed to constitute like amounts of OID) payable by the Borrower or any of its Subsidiaries or Affiliates to the lenders under, or holders of, such Indebtedness in the initial primary syndication thereof (with OID and upfront fees being equated to interest based on assumed four-year life to maturity (or, if less, the stated weighted average life to maturity at the time of its incurrence of the applicable Indebtedness)), and (c) any interest rate floor, but excluding (i) any arrangement, commitment, structuring, agency or underwriting fees that are not paid to or shared with all relevant lenders generally in connection with the commitment or syndication of such Indebtedness, (ii) any ticking, unused line or similar fees or (iii) any other fee that is not paid directly by the Borrower generally to all relevant lenders ratably in the primary syndication of such Indebtedness; provided that (A) to the extent that any interest rate specified for such Indebtedness that is subject to a floor (in each case, without giving effect to any such floor on the date on which the All-In Yield is being calculated) is less than such floor, the amount of such difference will be deemed added to the interest rate margin applicable to such Indebtedness for purposes of calculating the All-In Yield and (B) to the extent that any interest rate specified for such Indebtedness that is subject to a floor (in each case, without giving effect to any such floor on the date on which the All-In Yield is being calculated) is equal to or greater than such floor, the floor will be disregarded in calculating the All-In Yield.

 

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Parent or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977 and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.

 

“Anti-Money Laundering Laws” shall mean any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rules applicable to the Parent or any of its Subsidiaries related to terrorism financing, money laundering, any predicate crime to money laundering or any financial record keeping, including any applicable provision of the Patriot Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

 

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“Applicable Law” shall mean all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

“Applicable Percentage” shall mean, for any day, the rate per annum set forth below opposite the applicable Level then in effect, it being understood that the Applicable Percentage for (i) Base Rate Loans shall be the percentage set forth under the column “Base Rate Margin,” (ii) LIBOR Rate Loans and the Letter of Credit Fee shall be the percentage set forth under the column “LIBOR Rate Margin/Letter of Credit Fee” and (iii) the Commitment Fee shall be the percentage set forth under the column “Commitment Fee”:

 

Level		Lease Adjusted Leverage Ratio		Base Rate Margin		LIBOR Rate Margin/Letter of Credit Fee		Commitment Fee
I		<3.75 to 1.00		0.50	%	1.50	%	0.25	%
II		> 3.75 to 1.00 but <4.00 to 1.00		0.75	%	1.75	%	0.30	%
III		> 4.00 to 1.00 but <4.25 to 1.00		1.00	%	2.00	%	0.35	%
IV		> 4.25 to 1.00 but < 4.75 to 1.00		1.25	%	2.25	%	0.40	%
V		> 4.75 to 1.00		1.50	%	2.50	%	0.45	%

 

The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which the Administrative Agent has received from the Borrower the quarterly financial information and certifications required to be delivered to the Administrative Agent and the Lenders in accordance with the provisions of Sections 5.1(a), (b) and (c) (each an “Interest Determination Date”).  Such Applicable Percentage shall be effective from such Interest Determination Date until the next Interest Determination Date.  If the Borrower shall fail to provide the financial information and certifications in accordance with the provisions of Sections 5.1(a), (b) and (c), the Applicable Percentage shall, on the date five (5) Business Days after the date by which the Borrower was so required to provide such financial information and certifications to the Administrative Agent and the Lenders, be based on Level V until such time as such information and certifications are provided, whereupon the Level shall be determined by the then current Lease Adjusted Leverage Ratio.  In the event that any financial statement or certification delivered pursuant to Section 5.1 is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Percentage for any period (an “Applicable Period”) than the Applicable Percentage applied for such Applicable Period, then the Borrower shall immediately (i) deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period, (ii) determine the Applicable Percentage for such Applicable Period based upon the corrected compliance certificate, and (iii) immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Percentage for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.12.  It is acknowledged and agreed that nothing contained herein shall limit the rights of the Administrative Agent and the Lenders under the Credit Documents, including their

 

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rights under Sections 2.9 and 7.1 and other of their respective rights under this Agreement.  Notwithstanding the foregoing, the Applicable Percentage from the Closing Date through the first Interest Determination Date occurring after the last day of the fiscal quarter of the Borrower ending on or about April 19, 2020 shall be as set forth above opposite Level IV.

 

“Approved Bank” shall have the meaning set forth in the definition of “Cash Equivalents.”

 

“Approved Fund” shall mean, with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Arrangers” shall mean Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A., in their capacities as Joint Lead Arrangers and Joint Bookrunners.

 

“Asset Disposition” shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of any Credit Party or any Subsidiary whether by sale, lease, transfer or otherwise, in a single transaction or in a series of transactions.

 

“Assignment Agreement” shall mean an Assignment and Assumption Agreement, substantially in the form of Exhibit 1.1(b).

 

“Autoborrow Feature” shall mean that certain automated borrowing and repayment mechanism attached to a concentration account (the “Concentration Account”) maintained by the Borrower with the Swingline Lender which grants the Borrower the ability to automatically borrow and repay Swingline Loans through such Concentration Account.

 

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

 

“Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“Base Rate” shall mean:

 

(a)                                 in the case of Loans denominated in Dollars, at any time, the highest of (i) the Prime Rate, (ii) the Federal Funds Rate plus 0.50% and (iii) except during any period of time during which a notice delivered to the Borrower under Section 2.14 shall remain in effect, LIBOR for an Interest Period of one month plus 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR; and

 

(b)                                 in the case of Loans that are denominated in Canadian Dollars, the highest of (i) the Canadian Prime Rate and (ii) except during any period of time during which a notice delivered to the Borrower under Section 2.14 with respect to the CDOR Rate shall remain in effect, the CDOR Rate for an Interest Period of one month plus 1%; each change in the Base Rate

 

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shall take effect simultaneously with the corresponding change or changes in the Canadian Prime Rate or the CDOR Rate, as applicable.

 

Notwithstanding the foregoing, if the Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Base Rate Loan” shall mean any Loan bearing interest at a rate based upon the Base Rate.

 

“Base Rent Expense” shall mean, for any period, all rental expense of the Parent and its Subsidiaries during such period, determined on a consolidated basis in accordance with GAAP, incurred under any rental agreements or leases of real or personal property, including space leases and ground leases and including performance-based payments, if any, actually paid by the Parent and its Subsidiaries under any rental agreements or leases but excluding obligations in respect of Capital Leases, including performance-based payments, if any, actually paid by the Parent or any of its Subsidiaries under any rental agreements or leases and net of rental income derived from subleases of such property.

 

“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term 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 or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR 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.

 

“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.

 

“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides 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 determines in consultation with the Borrower).

 

“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to LIBOR:

 

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(a)                                 in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; and

 

(b)                                 in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

 

“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to LIBOR:

 

(a)                                 a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;

 

(b)                                 a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or

 

(c)                                  a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative.

 

“Benchmark Transition Start Date” shall mean (a) 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 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 (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.

 

“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (a) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with Section 2.14(c) and (b) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 2.14(c).

 

“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” shall mean 31 CFR § 1010.230.

 

“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose

 

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assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“Borrower” shall have the meaning set forth in the first paragraph of this Agreement.

 

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

 

“Borrower Materials” has the meaning assigned thereto in Section 5.2.

 

“Business” shall have the meaning set forth in Section 3.10(b).

 

“Business Day” shall mean (a) for all purposes other than as set forth in clauses (b) and (c) below, any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina and New York, New York, are open for the conduct of their commercial banking business, (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan denominated in Dollars or any Base Rate Loan as to which the interest rate is determined by reference to LIBOR, any day that is a Business Day described in clause (a) and that is also a London Banking Day and (c) with respect to all notices and determinations in connection with, and payments of principal and interest on, any Loan denominated in Canadian Dollars, (i) any day that is a Business Day described in clause (a) and (ii) with respect to any LIBOR Rate Loan that is denominated in Canadian Dollars, any day that is (x) a Business Day described in clauses (a) and (c)(i), (y) a day for trading by and between banks in Canadian Dollar deposits in the applicable offshore interbank market for Canadian Dollars, and (z) a day on which banks in Toronto, Ontario are open for the conduct of their commercial banking business.

 

“Canadian Dollar Equivalent” shall mean, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in Canadian Dollars as determined by the Administrative Agent or the Issuing Lender, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Canadian Dollars with Dollars.

 

“Canadian Dollar Sublimit” shall mean an amount equal to the Dollar Equivalent of $20,000,000.  The Canadian Dollar Sublimit is part of, and not in addition to, the aggregate Revolving Commitments of the Lenders.

 

“Canadian Prime Rate” shall mean, for any day a fluctuating rate of interest per annum equal to the greater of (a) the per annum rate of interest quoted or established as the “prime rate” of the Administrative Agent which it quotes or establishes for such day as its reference rate of interest in order to determine interest rates for commercial loans made by the Administrative Agent in Canadian Dollars; and (b) the average CDOR Rate for a 30-day term plus ½ of 1% per annum, adjusted automatically with each quoted or established change in such rate, all without the necessity of any notice to the Borrower or any other Person.  Such prime rate is based on various factors including cost and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in the prime rate shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Capital Lease” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

 

“Capital Lease Obligations” shall mean the capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP.

 

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“Capital Stock” shall mean (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests, (v) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, and (vi) any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Collateralize” shall mean, to pledge and deposit with, or deliver to, the Administrative Agent, for the benefit of one or more of the Issuing Lender, the Swingline Lender or the Lenders, as collateral for LOC Obligations or obligations of the Lenders to fund participations in respect of LOC Obligations or Swingline Loans, cash or deposit account balances, a backstop letter of credit, or, if the Administrative Agent, the Issuing Lender and the Swingline Lender shall agree, in their sole discretion, other credit support, in each case in an amount equal to the Minimum Collateral Amount and pursuant to documentation in form and substance satisfactory to the Administrative Agent, the Issuing Lender and the Swingline Lender, as applicable.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” shall mean, collectively, (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing not more than 365 days from the date of acquisition thereof, (b) commercial paper maturing no more than six months from the date of creation thereof and currently having the highest short term rating obtainable from either S&P or Moody’s, (c) certificates of deposit maturing no more than 365 days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of at least “A-1” from S&P and at least “P-1” from Moody’s (or, if at any time neither S&P or Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service); provided that the aggregate amount invested in such certificates of deposit shall not at any time exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for any one such bank, (d) time deposits maturing no more than 364 days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder, (e) repurchase agreements with a term of not more than 30 days for underlying securities of the type described in clauses (a) and (c) above entered into with any bank meeting the qualifications specified in clause (c) above or securities dealers of recognized national standing, (f) marketable short-term money market and similar funds (x) either having assets in excess of $500,000,000 or (y) having a rating of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service), (g) shares of money market or similar funds that are registered under the Investment Company Act of 1940 and substantially all the investments of which are one or more of the  types of securities described in clauses (a) through (f) above, and (h) with respect to Foreign Subsidiaries, instruments equivalent to those referred to in clauses (a) through (g) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States.

 

“Cash Management Agreement” shall mean any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, credit card processing, electronic funds transfer and other cash management arrangements.

 

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“Cash Management Bank” shall mean any Person that, at the time it enters into a Cash Management Agreement, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent, in its capacity as a party to such Cash Management Agreement.

 

“CDOR Rate” shall mean:

 

(a)                                 for any interest rate calculation with respect to a Base Rate Loan denominated in Canadian Dollars, the rate of interest per annum determined on the basis of an average thirty (30) day rate applicable to Canadian Dollar bankers’ acceptances appearing on the “Reuters Screen CDOR Page” (as defined in the International Swap Dealer Association, Inc.’s definitions, as amended, restated, supplemented or otherwise modified from time to time), or any successor page, as of 10:00 a.m. on such date (or if such day is not a Business Day, then on the immediately preceding Business Day); or

 

(b)                                 for any interest rate calculation with respect to a LIBOR Rate Loan denominated in Canadian Dollars, the rate of interest per annum determined on the basis of the average rate applicable to Canadian Dollar bankers’ acceptances having a maturity comparable to the applicable Interest Period appearing on the “Reuters Screen CDOR Page” (as defined in the International Swap Dealer Association, Inc.’s definitions, as amended, restated, supplemented or otherwise modified from time to time), or any successor page, as of 10:00 a.m. on the first day of the applicable Interest Period (or if such day is not a Business Day, then on the immediately preceding Business Day).

 

If, for any reason, such rate does not appear on the Reuters Screen CDOR Page, then the “CDOR Rate” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Canadian Dollars would be offered by first class banks in Canada to the Administrative Agent.  Each calculation by the Administrative Agent of the CDOR Rate shall be conclusive and binding for all purposes, absent manifest error.  Notwithstanding the foregoing, if the CDOR Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in implementation thereof and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued.

 

“Change of Control” shall mean any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act) becoming the “beneficial owner” (as defined in Rule l3d-3 under the Securities Exchange Act) of more than 35% of then outstanding Voting Stock of the Parent, measured by voting power rather than the number of shares.

 

“Closing Date” shall mean the date of this Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

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“Collateral” shall mean a collective reference to the collateral which is identified in, and at any time will be covered by, the Security Documents and any other personal property or assets of a Credit Party, whether tangible or intangible, that may from time to time secure the Secured Obligations.

 

“Commitment Fee” shall have the meaning set forth in Section 2.6(a).

 

“Commitment Period” shall mean (a) with respect to Revolving Loans and Swingline Loans, the period from and including the Closing Date to but excluding the Revolving Maturity Date and (b) with respect to Letters of Credit, the period from and including the Closing Date to but excluding the date that is thirty (30) days prior to the Revolving Maturity Date.

 

“Commitments” shall mean a Revolving Commitment, a Term Loan Commitment and/or an Incremental Term Loan Commitment, as applicable.

 

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § et seq.).

 

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code.

 

“Concentration Account” shall have the meaning set forth in the definition of “Autoborrow Feature”.

 

“Consolidated” or “consolidated” shall mean, with reference to any term defined herein, such term as applied to the accounts of the Parent and its Subsidiaries, consolidated in accordance with GAAP.

 

“Consolidated Cash Flow” shall mean, for any period, an amount equal to (i) Consolidated EBITDA for such period, minus (ii) Maintenance Capital Expenditures for such period.

 

“Consolidated Cash on Hand” shall mean, as of any date of determination, the sum of the amount of cash and Cash Equivalents of the Credit Parties on a consolidated basis as set forth on (or that would be set forth on) the consolidated balance sheet of Parent and its Subsidiaries as of such date (it being understood that such amount shall exclude in any event any cash and Cash Equivalents identified on such balance sheet as “restricted” as determined in accordance with GAAP (other than cash or Cash Equivalents restricted in favor of the Administrative Agent or the other holders of the Secured Obligations) or otherwise subject to a security interest in favor of any other Person (other than security interests under the Collateral Documents)).

 

“Consolidated Debt Service” shall mean, with respect to the Parent and its Subsidiaries and for any period, the sum, without duplication, of (i) Consolidated Interest Expense for such period, plus (ii) any and all scheduled repayments of principal during such period in respect of Indebtedness that becomes due and payable during such period pursuant to any agreement or instrument to which the Parent or any of its Subsidiaries is a party relating to or in respect of (without duplication) (A) the borrowing of money, including the issuance of notes or bonds, (B) the deferred purchase price of assets (other than trade payables or accrued liabilities arising in the ordinary course of business), (C) any Capital Leases, and (D) Indebtedness of another Person of the type referred to in clauses (A) through (C) above guaranteed by the Parent or any of its Subsidiaries.  Demand obligations shall be deemed to be due and payable during any fiscal period during which such obligations are outstanding.

 

“Consolidated EBITDA” shall mean, with respect to any period, an amount equal to the sum of (i) Consolidated Net Income for such period, plus (ii) in each case to the extent deducted in the

 

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calculation of Consolidated Net Income and without duplication, (A) depreciation and amortization for such period, plus (B) income tax expense for such period, plus (C) Consolidated Interest Expense for such period, plus (D) other non-cash charges for such period that will not result in cash payments in a subsequent period, plus (E) the amount of any prepayment penalties incurred as a result of extraordinary debt extinguishment, all as determined in accordance with GAAP, plus (F) Pre-Opening Costs for such period not to exceed $300,000 per unit, plus (G) unusual or non-recurring cash losses, expense and other charges in an amount not to exceed $5,000,000 in any period of four consecutive fiscal quarters, plus (H) net proceeds received from business interruption insurance, plus (I) pro forma costs savings in connection with an acquisition, divestiture, restructuring or reorganization occurring prior to the time that Consolidated EBITDA is to be determined; provided that (1) such cost savings are calculated on a basis consistent with Regulation S-X or are otherwise factually supportable and measureable and determined in good faith by the Credit Parties, in each case as certified by the Chief Financial Officer of the Parent to the Administrative Agent, (2) such cost savings must be projected to be realized within the four quarter period following the date as of which Consolidated EBITDA is being determined and (3) the aggregate amount added back to Consolidated Net Income pursuant to this clause (I) when calculating Consolidated EBITDA for any applicable period shall not exceed the lesser of  (I) the actual amount of cost savings expected in good faith to be realized by the Parent and its Subsidiaries during the four quarter period following the date as of which Consolidated EBITDA is being determined (as opposed to the annualized impact of such cost savings) and (II) $5,000,000, plus (J) cash charges related to restructuring or cost reduction initiatives in an aggregate amount not to exceed $5,000,000 in any period of four consecutive fiscal quarters, minus (iii) non-cash gains and non-recurring or unusual cash gains for such period (but excluding a one time pre-tax adjustment in such period for gift card breakage recognized by the Borrower), to the extent included in the calculation of Consolidated Net Income.

 

“Consolidated EBITDAR” shall mean, for any period, the sum of (i) Consolidated EBITDA of the Parent and its Subsidiaries for such period plus (ii) Consolidated Rental Expense for such period.

 

“Consolidated Interest Expense” shall mean, for any period, the aggregate amount of interest required to be paid or accrued by the Parent and its Subsidiaries during such period on all Indebtedness (other than synthetic leases and other similar off-balance sheet financing products) of the Parent and its Subsidiaries outstanding during all or any part of such period (excluding amounts paid during such period that were accrued in a prior period), whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capital Lease and commitment fees, agency fees, facility fees and similar fees or expenses in connection with the borrowing of money (but excluding the amortization of transaction fees in connection with the closing of this Agreement).

 

“Consolidated Net Income” shall mean, for any period, the consolidated net income (or deficit) of the Parent and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP, after eliminating therefrom (i) all extraordinary items of income and (ii) all gains attributable to sales of assets outside the ordinary course of business.

 

“Consolidated Rental Expense” shall mean, for any period, an amount equal to the aggregate amount of fixed and contingent property rent under operating (non-capital) leases of real and personal property that is paid or payable by the Parent and its Subsidiaries (excluding any charges for common area maintenance, rental taxes and personal property taxes) for such period and determined on a consolidated basis in accordance with GAAP.

 

“Copyright Licenses” shall mean any agreement (other than any franchise agreement), whether written or oral, providing for the grant by or to a Credit Party or any Subsidiary thereof of any right under any Copyright, including, without limitation, any thereof referred to in Schedule 3.16 to this Agreement.

 

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“Copyrights” shall mean all copyrights (other than copyrights of de minimis value) owned by the Credit Parties and their Subsidiaries in all works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Copyright Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise, including, without limitation, any thereof referred to in Schedule 3.16 and all renewals thereof.

 

“Credit Documents” shall mean this Agreement, each of the Notes, any Joinder Agreement, the Fee Letter, the Letters of Credit and any other LOC Documents, any Assignment Agreement, the Security Documents and all other agreements, documents, certificates and instruments (excluding (i) any such agreements, documents, certificates or instruments which are purely administrative in nature and (ii) any agreements, documents, certificates and instruments related to any Hedging Agreement or Cash Management Agreement) delivered to the Administrative Agent or any Lender by any Credit Party in connection herewith or therewith.

 

“Credit Party” or “Credit Parties” shall mean any of the Borrower or the Guarantors, individually or collectively, as appropriate.

 

“Debt Issuance” shall mean the issuance of any Indebtedness by any Credit Party or any of its Subsidiaries (excluding any Indebtedness of any Credit Party or any Subsidiary permitted to be incurred pursuant to Section 6.1 hereof).

 

“Default” shall mean any of the events specified in Section 7.1, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

“Defaulting Lender” shall mean, subject to Section 2.21(f), any Lender that, as determined by the Administrative Agent (with notice to the Borrower of such determination) (a) has failed to fund any portion of the Loans, participations in LOC Obligations or participations in Swingline Loans required to be funded by it hereunder within two Business Days of the date required to be funded by it hereunder  unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, unless such amount is the subject of a good faith dispute, (c) has notified the Borrower, the Administrative Agent or any other Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement (except to the extent made in a good faith belief that the conditions to funding hereunder have not been satisfied) or has made a public statement to the effect that it does not intend to comply or has failed to comply with its funding obligations under this Agreement or under other agreements in which it commits or is obligated to extend credit, or (d) has, or has a direct or indirect parent company that has, become or is Insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent holding company thereof or the exercise of control over a Lender or a Person controlling such Lender by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or

 

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such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

“Dollar Equivalent” shall mean, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in Canadian Dollars, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with Canadian Dollars.

 

“Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

 

“Domestic Lending Office” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office located in the United States as shown in such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender located in the United States as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which Base Rate Loans of such Lender are to be made.

 

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

 

“Early Opt-in Election” shall mean the occurrence of:

 

(a)                                 (i) a determination by the Administrative Agent or (ii) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 2.14(c) are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace LIBOR, and

 

(b)                                 (i) the election by the Administrative Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent.

 

“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

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

 

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in

 

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any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification cost recovery, compensation or injunctive relief resulting from the release or disposal, or threat of release or disposal, of Hazardous Materials or arising from alleged injury or threat of injury to human health or the environment.

 

“Environmental Laws” shall mean any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirement of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health or the environment, as now or may at any time be in effect during the term of this Agreement.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

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

 

“Eurodollar Reserve Percentage” shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including without limitation any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“Event of Default” shall mean any of the events specified in Section 7.1; provided, however, that any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

“Excluded Asset Disposition” shall mean any Asset Disposition permitted by Section 6.5(a)(i) through (vi).

 

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor, or the grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation; provided that, for the avoidance of doubt, in determining whether any Guarantor is an “eligible contract participant” under the Commodity Exchange Act, the keepwell agreement set forth in Section 10.10 shall be taken into account.  If a Swap Obligation arises under a “master agreement” governing more than one Hedging Agreement, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Hedging Agreements for which such Guaranty or security interest is or becomes illegal.

 

“Existing Credit Agreement” shall have the meaning assigned thereto in the introductory paragraph of this Agreement.

 

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“Existing Letters of Credit” shall mean the letters of credit described by date of issuance, amount, purpose and the date of expiry on Schedule 1.1(b) hereto.

 

“Existing Maturity Date” shall have the meaning set forth in Section 2.20(a).

 

“Expansion Capital Expenditures” shall mean, for any period, all capital expenditures of the Parent and its Subsidiaries on a consolidated basis for such period (as determined in accordance with GAAP) relating to (i) the construction of new stores and/or distribution centers to be operated by the Parent or any of its Subsidiaries, (ii) the Store Rebranding and Outfitting Program and (iii) information technology and software update projects.  The term “Expansion Capital Expenditures” shall not include capital expenditures in respect of the reinvestment of proceeds derived from Recovery Events received by the Parent and its Subsidiaries to the extent that such reinvestment is permitted under the Credit Documents.

 

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such Lender or the issuance, extension or increase of, or participation in, a Letter of Credit by such Lender.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Rate” shall mean, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that if such rate is not so published for any day which is a Business Day, the Federal Funds Rate for such date shall be the average of the quotation for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.  Notwithstanding the foregoing, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Fee Letter” shall mean the letter agreement dated as of the Closing Date among the Borrower, Wells Fargo and Wells Fargo Securities, LLC (as amended, modified or otherwise supplemented).

 

“Fixed Charge Coverage Ratio” shall mean, for any Reference Period, the ratio of (i) Consolidated Cash Flow for such Reference Period plus Base Rent Expense for such Reference Period to (ii) Consolidated Debt Service for such Reference Period plus Base Rent Expense for such Reference Period plus cash payments for all income taxes paid by the Parent and its Subsidiaries during such Reference Period.

 

“Foreign Lender” shall mean each Lender that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Code).

 

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“Fronting Exposure” shall mean, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s Pro Rata Share of the outstanding LOC Obligations other than LOC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata Share of Swingline Loans other than Swingline

 

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Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders, repaid by the Borrower or Cash Collateralized in accordance with the terms hereof.

 

“Funded Debt” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (e) the principal portion of all obligations of such Person under Capital Leases, (f) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (g) all preferred Capital Stock issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (h) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, (i) all net payment obligations of such Person under Hedging Agreements, excluding any portion thereof which would be accounted for as interest expense under GAAP, (j) all Indebtedness of others of the type described in clauses (a) through (i) hereof secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (k) all Guaranty Obligations of such Person with respect to Indebtedness of another Person of the type described in clauses (a) through (j) hereof, and (l) all Indebtedness of the type described in clauses (a) through (j) hereof of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer; provided, however, that Funded Debt shall not include Indebtedness among the Credit Parties to the extent such Indebtedness would be eliminated on a Consolidated basis.

 

“GAAP” shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject, however, in the case of determination of compliance with the financial covenants set out in Section 5.9 to the provisions of Section 1.3.

 

“Government Acts” shall have the meaning set forth in Section 2.19.

 

“Governmental Approvals” shall have the meaning set forth in Section 3.5(a).

 

“Governmental Authority” shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union, the European Central Bank, the Bank for International Settlements and the Basel Committee on Banking Supervisions (or any successor or similar authority)).

 

“Guarantor” shall mean (a) the Parent, (b) each Domestic Subsidiary of the Parent identified as a “Guarantor” on the signature pages hereto, (c) each Additional Credit Party (other than Liquor License Subsidiaries and Immaterial Subsidiaries) which executes a Joinder Agreement, (d) with respect to (i) all existing or future payment and other obligations owing by any Credit Party under any Secured Hedging Agreement and any Secured Cash Management Agreement, and (ii) any Swap Obligation of a Specified

 

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Credit Party (determined before giving effect to Section 10.1 and 10.10) under the Guaranty, the Borrower, and (e) the successors and permitted assigns of the foregoing.

 

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

 

“Guaranty Obligations” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof.  The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the lesser of (a) the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation.

 

“Hazardous Materials” shall mean any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedge Bank” shall mean any Person that enters into a Hedging Agreement with a Credit Party or any of its Subsidiaries that is permitted by Section 6.1 to the extent such Person is a Lender, an Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of a Lender) at the time it entered into the Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the Credit Agreement.

 

“Hedging Agreements” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements.

 

“Immaterial Subsidiary” shall mean, as of any date, any Subsidiary that (a) had (or would have, if newly formed, created or acquired) total assets representing 2.5% or less of the total consolidated assets of the Parent and its Subsidiaries on the last day of the most recent fiscal quarter ended prior to such date

 

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of determination (such quarter end date, the “Test Date”) and (b) generated (or would have generated, if newly formed, created or acquired) 2.5% or less of the Consolidated EBITDA of the Parent and its Subsidiaries for the four fiscal quarter period ended as of the Test Date; provided that (i) the total assets held by all Subsidiaries treated as Immaterial Subsidiaries hereunder shall not exceed 5.0% or more of the total consolidated assets of the Parent and its Subsidiaries as of the Test Date and (ii) the total Consolidated EBITDA generated by all Subsidiaries treated as Immaterial Subsidiaries hereunder shall not exceed 5.0% or more of the Consolidated EBITDA of the Parent and its Subsidiaries for the four fiscal quarters period ended as of the Test Date.

 

“Increase Effective Date” shall mean the effective date of any Incremental Loan as determined by the Administrative Agent and Borrower.

 

“Incremental Lender” shall have the meaning assigned thereto in Section 2.5.

 

“Incremental Loan Commitment” shall have the meaning assigned thereto in Section 2.5.

 

“Incremental Loans” shall have the meaning assigned thereto in Section 2.5.

 

“Incremental Revolving Credit Commitment” shall have the meaning assigned thereto in Section 2.5(a)(ii).

 

“Incremental Revolving Credit Increase” shall have the meaning assigned thereto in Section 2.5(a)(ii).

 

“Incremental Term Loan” shall have the meaning assigned thereto in Section 2.5(a)(i).

 

“Incremental Term Loan Commitment” shall have the meaning assigned thereto in Section 2.5(a)(i).

 

“Incremental Term Note” shall mean a promissory note made by the Borrower in favor of a Lender evidencing the Incremental Term Loans made by such Lender, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Indebtedness” shall mean, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (h) the principal portion of all Capital Lease Obligations of such Person, (i) all net payment obligations of such Person under Hedging Agreements, excluding any portion thereof which would be accounted for as interest expense under GAAP, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to

 

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the extent unreimbursed), (k) all preferred Capital Stock issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (l) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product and (m) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer; provided however that Indebtedness shall not include Indebtedness among the Credit Parties to the extent such Indebtedness would be eliminated on a Consolidated basis.

 

“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

 

“Insolvent” shall mean being in a condition of Insolvency.

 

“Intellectual Property” shall mean, collectively, all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.

 

“Interest Payment Date” shall mean (a) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period and the applicable Maturity Date,, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three months, the day that is three months after the first day of such Interest Period and the last day of such Interest Period and the applicable Maturity Date,.

 

“Interest Period” shall mean, with respect to any LIBOR Rate Loan,

 

(i)                                     initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending (A) with respect to any such LIBOR Rate Loan denominated in Dollars, one, two, three or six months or, if agreed by all of the relevant Lenders, one week, thereafter and (B) with respect to any such LIBOR Rate Loan denominated in Canadian Dollars, one or two months thereafter, in each case, as selected by the Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and

 

(ii)                                  thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending (A) with respect to any such LIBOR Rate Loan denominated in Dollars, one, two, three or six months thereafter, and (B) with respect to any such LIBOR Rate Loan denominated in Canadian Dollars, one or two months thereafter, in each case, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;

 

provided that the foregoing provisions are subject to the following:

 

(A)                               if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(B)                               any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no

 

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numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

 

(C)                               if the Borrower shall fail to give notice as provided above, the Borrower shall be deemed to have selected a Base Rate Loan to replace the affected LIBOR Rate Loan;

 

(D)                               no Interest Period in respect of any Loan shall extend beyond the applicable Maturity Date; and

 

(E)                                no more than seven (7) LIBOR Rate Loans may be in effect at any time.  For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Rate Loan with a single Interest Period.

 

“Investment” shall mean all investments, in cash or by delivery of property made, directly or indirectly in or to any Person, whether by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan advance, capital contribution or otherwise.

 

“Issuing Lender” shall mean Wells Fargo or any successor in such capacity.

 

“Issuing Lender Fees” shall have the meaning set forth in Section 2.6(c).

 

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of Exhibit 1.1(c), executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10.

 

“Lease Adjusted Leverage Ratio” shall mean, for any Reference Period, as of the end of any fiscal quarter of the Parent the ratio of (a) the sum of (i) Funded Debt of the Parent and its Subsidiaries on a consolidated basis outstanding on such date plus (ii) the product of Consolidated Rental Expense for the Reference Period ending on such date multiplied by eight (8) to (b) Consolidated EBITDAR for the Reference Period ending on such date.

 

“Lender” shall have the meaning set forth in the first paragraph of this Agreement and shall include the Revolving Lenders, the Term Loan Lenders, the Issuing Lender, the Swingline Lender and the Incremental Lenders.

 

“Lender Joinder Agreement” shall mean a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent delivered in connection with Section 2.5.

 

“Letter of Credit Fee” shall have the meaning set forth in Section 2.6(b).

 

“Letters of Credit” shall mean (a) any letter of credit issued by the Issuing Lender pursuant to the terms hereof and (b) any Existing Letter of Credit, in each case as such Letter of Credit may be amended, modified, restated, extended, renewed, increased or replaced from time to time in accordance with the terms of this Agreement.  Letters of Credit shall be issued in Dollars.

 

“LIBOR” shall mean, subject to the implementation of a Benchmark Replacement in accordance with Section 2.14(c),

 

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(a)                                 for any interest rate calculation with respect to a LIBOR Rate Loan,

 

(i)                                     in the case of a LIBOR Rate Loan denominated in Dollars, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period.  If, for any reason, such rate is not so published then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period, and

 

(ii)                                  in the case of a LIBOR Rate Loan denominated in Canadian Dollars, the CDOR Rate per annum; and

 

(b)                                 for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for an Interest Period equal to one month (commencing on the date of determination of such interest rate) as published by ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day.  If, for any reason, such rate is not so published then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.

 

Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.  Notwithstanding the foregoing, (x) in no event shall LIBOR (including any Benchmark Replacement with respect thereto) be less than zero and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 2.14(c), in the event that a Benchmark Replacement with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Benchmark Replacement.

 

“LIBOR Lending Office” shall mean, initially, the office(s) of each Lender designated as such Lender’s LIBOR Lending Office shown in such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

 

LIBOR Rate =	LIBOR
	1.00 - Eurodollar Reserve Percentage

 

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Notwithstanding the foregoing, if the LIBOR Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.  LIBOR Rate Loans may be denominated in Dollars or in Canadian Dollars.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment for security purposes, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

 

“Liquor License Subsidiaries” shall mean a collective reference to Red Robin of Anne Arundel, Inc., Red Robin of Baltimore County, Inc., Red Robin of Montgomery County, Inc., Red Robin of Howard County, Inc., Red Robin of Charles County, Inc., Red Robin West Walnut Club, Inc., Red Robin of St. Mary’s County, Inc., Red Robin of Frederick County, LLC, Red Robin of Harford County, Inc., and any other current or future special purpose Subsidiary of a Credit Party whose primary asset is, and sole purpose is holding, liquor licenses and other operations incidental thereto; no Liquor License Subsidiary shall be or become a Credit Party.

 

“Loan” shall mean a Revolving Loan, a Term Loan, an Incremental Term Loan and/or a Swingline Loan as appropriate.

 

“LOC Documents” shall mean, with respect to each Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or (ii) any collateral security for such obligations.

 

“LOC Obligations” shall mean, at any time, the sum of (i) the maximum amount which is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (ii) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

 

“LOC Sublimit” shall have the meaning set forth in Section 2.3(a).

 

“London Banking Day” shall mean any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

 

“Maintenance Capital Expenditures” shall mean all capital expenditures of the Parent and its Subsidiaries on a consolidated basis (as determined in accordance with GAAP) other than Expansion Capital Expenditures.  The term “Maintenance Capital Expenditures” shall not include capital expenditures in respect of the reinvestment of proceeds derived from Recovery Events received by the Parent and its Subsidiaries to the extent that such reinvestment is permitted under the Credit Documents.

 

“Mandatory Borrowing” shall have the meaning set forth in Section 2.4(b)(ii).

 

“Mandatory LOC Borrowing” shall have the meaning set forth in Section 2.3(e).

 

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“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of the Credit Parties and their Subsidiaries, taken as a whole, (b) the ability of the Borrower or any Guarantor to perform its obligations after giving effect to any cure period hereunder, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder or the perfection or priority of any Lien on any material property or material assets in favor of the Administrative Agent.

 

“Material Contract” shall mean any contract or agreement, whether written or oral, to which any Credit Party or any of its Subsidiaries is a party as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect, including the contracts and agreements set forth on Schedule 3.25.

 

“Maturity Date” shall mean the Revolving Maturity Date, the Term Loan Maturity Date and, with respect to the Incremental Term Loans, the earliest to occur of (a) the maturity date agreed to by the Incremental Lenders pursuant to Section 2.5, and (b) the date of acceleration of the Loans pursuant to Section 7.2., as applicable

 

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances or backstop letters of credit, an amount equal to 103% of the sum of (i) the Fronting Exposure of the Issuing Lender with respect to Letters of Credit issued and outstanding at such time and (ii) the Fronting Exposure of the Swingline Lender with respect to all Swingline Loans outstanding at such time and (b) otherwise, an amount determined by the Administrative Agent and the Issuing Lender in their sole discretion.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Multiemployer Plan” shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds” shall mean, as applicable, (a) with respect to any Asset Disposition or Recovery Event, the gross proceeds received by any Credit Party or any of its Subsidiaries therefrom (including any cash, Cash Equivalents, deferred payment pursuant to, or by monetization of, a note receivable or otherwise, as and when received) less the sum of (i) in the case of an Asset Disposition, all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition, the amount of such excess shall constitute Net Cash Proceeds), (ii) all reasonable and customary out-of-pocket fees and expenses incurred in connection with such transaction or event, (iii) the principal amount of, premium, if any, and interest on any Indebtedness secured by a Lien on the asset (or a portion thereof) disposed of, which Indebtedness is required to be repaid in connection with such transaction or event, (iv) the pro rata portion of the Net Cash Proceeds thereof (calculated without regard for this clause (iv)) attributable to minority interests and not available for distribution to or for the account of the Borrower or any of its Subsidiaries as a result thereof, and (v) all amounts that are set aside as a reserve (A) for adjustments in respect of the purchase price of such assets, (B) for any liabilities associated with such sale or casualty, to the extent such reserve is required by GAAP or as otherwise required pursuant to the documentation with respect to such Asset Disposition or Recovery Event, (C) for the payment of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 60 days after, the date of such sale or other disposition and (D) for the payment of indemnification obligations; provided that, to the extent and at the time any such amounts are released from such reserve and received by such Credit Party or any of its

 

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Subsidiaries, such amounts shall constitute Net Cash Proceeds, and (b) with respect to any Debt Issuance, the gross cash proceeds received by any Credit Party or any of its Subsidiaries therefrom less all underwriting discounts and commissions and other all reasonable and customary out-of-pocket legal and other fees and expenses incurred in connection therewith.

 

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Non-Extending Lender” shall have the meaning set forth in Section 2.20(b).

 

“Note” or “Notes” shall mean the Revolving Notes, the Term Loan Notes, the Swingline Note and the Incremental Term Notes, separately or individually, as appropriate.

 

“Notice Date” shall have the meaning set forth in Section 2.20(b).

 

“Notice of Borrowing” shall mean a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i), a request for the borrowing of the Term Loans pursuant to Section 2.2(a), or a request for a Swingline Loan borrowing pursuant to Section 2.4(b)(i), as appropriate.  A Form of Notice of Borrowing is attached as Exhibit 1.1(d).

 

“Notice of Conversion/Extension” shall mean the written notice of conversion of a LIBOR Rate Loan to a Base Rate Loan or a Base Rate Loan to a LIBOR Rate Loan, or extension of a LIBOR Rate Loan, in each case substantially in the form of Exhibit 1.1(e).

 

“Obligations” shall mean, in each case, whether now in existence or hereafter arising:  (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the LOC Obligations and (c) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Credit Parties and each of their respective Subsidiaries to the Lenders or the Administrative Agent, in each case under any Credit Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof of any proceeding under any federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“Operating Lease” shall mean, as applied to any Person, any lease (including, without limitation, leases which may be terminated by the lessee at any time) of any property (whether real, personal or mixed) which is not a Capital Lease other than any such lease in which that Person is the lessor.

 

“Other Connection Tax” shall mean with respect to any Recipient, any tax, levy, impost, duty, fee, assessment or other charge imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such tax, levy, impost, duty, fee, assessment or other charge (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Credit Document, or sold or assigned an interest in any Loan or Credit Document).

 

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“Parent” shall mean Red Robin Gourmet Burgers, Inc., a Delaware corporation.

 

“Participant” shall have the meaning set forth in Section 9.6(d).

 

“Participant Register” shall have the meaning set forth in Section 9.6(d).

 

“Participation Interest” shall mean the purchase by a Lender of a participation interest in Letters of Credit as provided in Section 2.3 and in Swingline Loans as provided in Section 2.4.

 

“Patent Licenses” shall mean all agreements, whether written or oral, providing for the grant by or to a Credit Party or any Subsidiary thereof of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 3.16 to the Agreement.

 

“Patents” shall mean all letters patent of the United States or any other country, now existing or hereafter arising, and all improvement patents, reissues, reexaminations, patents of additions, renewals and extensions thereof, including, without limitation, any thereof referred to in Schedule 3.16 to this Agreement, and (ii) all applications for letters patent of the United States or any other country, now existing or hereafter arising, and all provisionals, divisions, continuations and continuations-in-part and substitutes thereof, including, without limitation, any thereof referred to in Schedule 3.16 to this Agreement, in each case of the Credit Parties and their Subsidiaries.

 

“Patriot Act” shall have the meaning set forth in Section 9.19.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“Permitted Acquisition” shall mean an acquisition or any series of related acquisitions by a Credit Party of all or substantially all of the assets or a majority of Capital Stock of a Person that is incorporated, formed or organized in the United States or Canada or any division, line of business or other business unit of a Person that is incorporated, formed or organized in the United States (such Person or such division, line of business or other business unit of such Person referred to herein as the “Target”), in each case that is a (i) purchase or repurchase of a Red Robin franchise, (ii) a purchase of a Target that is converted into one or more Red Robin restaurants or (iii) a purchase of a Target that operates restaurants with a concept or products similar to that of Red Robin, so long as (a) no Default or Event of Default shall then exist or will exist after giving effect thereto, (b) the Credit Parties shall demonstrate to the reasonable satisfaction of the Administrative Agent that (i) the Credit Parties will be in compliance on a Pro Forma Basis upon the consummation of any such acquisition with all of the terms and provisions of the financial covenants set forth in Section 5.9 and (ii) on a Pro Forma Basis upon the consummation of any such acquisition, the Lease Adjusted Leverage Ratio shall be less than 4.50 to 1.00, (c) there is at least $20,000,000 of Accessible Borrowing Availability after giving effect thereto, (d) the Administrative Agent, on behalf of the Lenders, shall have received (or shall receive in connection with the closing of such acquisition), in each case to the extent required in accordance with the terms of Section 5.12 or otherwise hereunder, a first priority perfected security interest (subject to Permitted Liens) in all personal property (including, without limitation, Capital Stock) acquired with respect to the Target, and if the Capital Stock of the Target is acquired and the Target becomes a Domestic Subsidiary that is not a Liquor License Subsidiary, then such Target shall, in connection with the closing of such acquisition, execute and deliver to the Administrative Agent a Joinder Agreement in accordance with the terms of Section 5.10, (e) the Target in any acquisition involving Total Consideration in excess of $5,000,000 has earnings before interest, taxes, depreciation and amortization for the four fiscal quarter period most recently ended prior to the

 

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acquisition date in an amount greater than $0, and (f) such acquisition is not a “hostile” acquisition and has been approved by the applicable Credit Party and the Target.

 

“Permitted Investments” shall mean:

 

(i)                                     cash and Cash Equivalents;

 

(ii)                                  receivables owing to any Credit Party or any of its Subsidiaries, and advances to suppliers and other extensions of trade credit, in each case if created, acquired or made in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

 

(iii)                               Investments or loans (pursuant to Section 6.1(d)) made by a Credit Party in or to another Credit Party;

 

(iv)                              (A) loans and advances to employees to finance purchases of Capital Stock of the Parent in an aggregate amount not to exceed $500,000 and (B) advances to officers, directors and employees for travel and other ordinary course expenses and other loans and advances to employees, in an aggregate amount not to exceed $500,000 at any time outstanding;

 

(v)                                 Investments (including debt obligations) received in connection with the bankruptcy or reorganization of franchisees, suppliers and customers and in settlement of delinquent obligations of, and other disputes with franchisees, customers and suppliers arising in the ordinary course of business;

 

(vi)                              non-cash consideration received in connection with sales of property or assets permitted under Section 6.5(a);

 

(vii)                           Permitted Acquisitions;

 

(viii)                        Guaranty Obligations permitted by Section 6.3;

 

(ix)                              Investments existing as of the Closing Date as set forth on Schedule 6.6;

 

(x)                                 Investments to the extent permitted under Section 6.11(c) and (d);

 

(xi)                              Investments (A) the consideration for which is paid in the form of Capital Stock of the Parent or (B) made with the proceeds of an issuance of Capital Stock by the Parent;

 

(xii)                           any Investment made by any Credit Party in RRGB Canada existing on the Closing Date; and

 

(xiii)                        in addition to the Investments otherwise expressly permitted by this definition, other Investments by any Credit Party in an aggregate amount not to exceed $40,000,000 during the term of this Agreement; provided that no Default or Event of Default shall have occurred and be continuing at the time of such Investments or result therefrom.

 

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“Permitted Liens” shall mean:

 

(i)                                     (a) Liens created by or otherwise existing, under or in connection with this Agreement or the other Credit Documents in favor of the Administrative Agent, on behalf of the Secured Parties and (b) Liens on cash or deposits granted in favor of the Swingline Lender or the Issuing Lender to Cash Collateralize any Defaulting Lender’s participation in Letters of Credit or Swingline Loans;

 

(ii)                                  purchase money Liens securing purchase money indebtedness (and refinancings thereof) to the extent permitted under Section 6.1(c);

 

(iii)                               Liens for taxes, assessments, charges or other governmental levies not yet due or as to which the period of grace (not to exceed 60 days), if any, related thereto has not expired or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP (or, in the case of Subsidiaries with significant operations outside of the United States of America, generally accepted accounting principles in effect from time to time in their respective jurisdictions of incorporation);

 

(iv)                              carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s inchoate, unperfected or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; provided that a reserve, bond or other appropriate provision shall have been made therefor;

 

(v)                                 pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements, other than any Lien imposed by ERISA;

 

(vi)                              any interest or title of a lessor under any lease entered into by any Credit Party or any Subsidiary in the ordinary course of its business and covering only the assets so leased;

 

(vii)                           any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (i)-(vi); provided that such extension, renewal or replacement Lien shall be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property);

 

(viii)                        Liens existing on any property or asset (A) prior to the acquisition thereof by any Credit Party or any Subsidiary; provided that (1) such Lien is not created in contemplation of such acquisition and (2) such Lien does not apply to any other property or assets of the Credit Party or Subsidiary, or (B) belonging to any Person prior to such Person becoming a Subsidiary pursuant to an acquisition permitted by the terms of this Agreement; provided that (1) such Lien is not created in contemplation of such acquisition and (2) such Lien does not apply to any other property or assets of a Credit Party or Subsidiary;

 

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(ix)                              Liens consisting of conditional sale or other title retention agreements entered into in the ordinary course of business in an aggregate amount not to exceed $1,000,000;

 

(x)                                 deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(xi)                              Liens existing on the Closing Date and set forth on Schedule 1.1(c); provided that (a) no such Lien shall at any time be extended to cover property or assets other than the property or assets subject thereto on the Closing Date and (b) the principal amount of the Indebtedness secured by such Liens shall not be increased, extended, renewed, refunded or refinanced;

 

(xii)                           Liens arising in connection with Indebtedness permitted under Section 6.1(c);

 

(xiii)                        easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such lien is attached;

 

(xiv)                       Liens of Securities Intermediaries (as defined in the UCC), banks and other financial institutions in Deposit Accounts (as defined in the UCC), Securities Accounts (as defined in the UCC) and similar accounts;

 

(xv)                          any Lien with respect to judgments, orders or awards to the extent such judgments, orders or awards secured thereby shall not, either individually or in the aggregate, result in an Event of Default under Section 7.1(f);

 

(xvi)                       Liens in favor of a Hedge Bank and/or Cash Management Bank in connection with any Secured Hedging Agreement or Secured Cash Management Bank, respectively, but only if such Hedge Bank and/or Cash Management Bank, as applicable, and the Administrative Agent, on behalf of the Lenders, shall share pari passu in the collateral subject to such Liens; and

 

(xvii)                    other Liens in addition to those permitted by the foregoing clauses securing Indebtedness in an aggregate amount not to exceed $3,000,000.

 

“Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan” shall mean, at any particular time, any employee benefit plan which is covered by Title IV of ERISA and in respect of which any Credit Party or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Platform” shall mean Debt Domain, Intralinks, SyndTrak or a substantially similar electronic transmission system.

 

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“Pledge Agreements” shall mean (i) the Amended and Restated Pledge Agreement dated as of the Closing Date to be executed in favor of the Administrative Agent by the Borrower and each of the other Credit Parties and (ii) any other Pledge Agreement executed by a Credit Party to secure the Secured Obligations, in each case as amended, modified, extended, restated, replaced or supplemented from time to time in accordance with the terms hereof and thereof.

 

“Pre-Opening Costs” shall mean “start-up costs” (such term used herein as defined in SOP 98-5 published by the American Institute of Certified Public Accountants) related to the acquisition, opening and organizing of new restaurants, including, without limitation, the cost of feasibility studies, staff-training, and recruiting, travel costs for employees engaged in such start-up activities advertising and rent accrued prior to opening.

 

“Prime Rate” shall mean, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate.  Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs.  The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

 

“Pro Forma Basis” shall mean, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the twelve-month period ending as of the most recent quarter end preceding the date of such transaction.

 

“Pro Rata Share” shall mean, as to each Lender at any time, (a) with respect to such Lender’s Revolving Commitment at any time, a fraction (expressed as a percentage) the numerator of which is the amount of the Revolving Commitment of such Lender at such time (or, if the Revolving Commitments have been terminated, the amount of the outstanding Revolving Loans and participations in LOC Obligations and Swingline Loans of such Lender at such time) and the denominator of which is the amount of the Revolving Commitments of all Lenders at such time (or, if the Revolving Commitments have been terminated, the amount of the outstanding Revolving Loans and participations in LOC Obligations and Swingline Loans of all Lenders at such time) and (b) with respect to such Lender’s outstanding Term Loans and Incremental Term Loans (if any) at any time, a fraction (expressed as a percentage), the numerator of which is the principal amount of the Term Loans and Incremental Term Loans (if any) held by such Lender at such time and the denominator of which is the aggregate principal amount of the Term Loans and Incremental Term Loans (if any) held by all Lenders at such time.  The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 1.1(a) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Properties” shall have the meaning set forth in Section 3.10(a).

 

“PTE” shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Purchasing Lenders” shall have the meaning set forth in Section 9.6(c).

 

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Credit Party as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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“Rate Determination Date” shall mean two (2) Business Days prior to the commencement of such Interest Period (or such other day as is generally treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, then “Rate Determination Date” means such other day as otherwise reasonably determined by the Administrative Agent).

 

“Recipient” shall mean the Administrative Agent and any Lender.

 

“Recovery Event” shall mean theft, loss, physical destruction or damage, taking or similar event with respect to any property or assets owned by any Credit Party or any of its Subsidiaries which results in the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds (excluding proceeds of business interruption insurance) or condemnation award payable by reason thereof.

 

“Reference Period” shall mean, as of any date of determination, the period of four consecutive fiscal quarters of the Parent and its Subsidiaries ending on such date.

 

“Register” shall have the meaning set forth in Section 9.6(c).

 

“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. §4043.

 

“Required Lenders” shall mean Lenders holding in the aggregate greater than 50% of (i) the outstanding Revolving Loans, Participation Interests, Term Loans, Incremental Term Loans and unfunded Revolving Commitments (and Participation Interests therein) or (ii) if the Revolving Commitments have been terminated, the outstanding Loans and Participation Interests (including the Participation Interests of the Issuing Lender (in its capacity as a Lender) in any Letters of Credit and of the Swingline Lender (in its capacity as a Lender) in Swingline Loans); provided that the Revolving Commitment of, and the portion of the Extensions of Credit and Loans, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided further, so long as there are fewer than three Lenders, “Required Lenders” shall mean all Lenders.

 

“Requirement of Law” shall mean, as to any Person, the Certificate of Incorporation and By-laws or other organizational or governing documents of such Person, and each law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” shall mean, as to any Person, the chief executive officer, president, vice president, chief financial officer, controller, treasurer or assistant treasurer of such Person or any other officer of such Person reasonably acceptable to the Administrative Agent.

 

“Restricted Payment” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Parent or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other

 

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acquisition for value, direct or indirect, of any shares of any class of Capital Stock of the Parent or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Parent or any of its Subsidiaries, now or hereafter outstanding, (d) any payment or prepayment of principal or premium, if any, or interest on redemption purchase, retirement, defeasance, sinking fund or similar payment with respect to any Subordinated Debt, or (e) the payment by the Parent or any of its Subsidiaries of any management or consulting fee to any Person or of any salary, bonus or other form of compensation to any Person who is directly or indirectly a significant partner, shareholder, owner or executive officer of any such Person, to the extent such salary, bonus or other form of compensation is not included in the corporate overhead of the Parent, the Borrower or such Subsidiary.

 

“Revaluation Date” shall mean with respect to any Loan, each of the following:  (i) each date of a borrowing of a LIBOR Rate Loan denominated in Canadian Dollars, (ii) each date of a continuation of a LIBOR Rate Loan denominated in Canadian Dollars pursuant to Section 2.10, and (iii) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require.

 

“Revolving Commitment” shall mean, as to any Lender, the obligation of such Lender (a) to make Revolving Loans to the account of the Borrower hereunder, (b) purchase Participation Interests in the Letters of Credit pursuant to Section 2.3(c) and (c) purchase Participation Interests in Swingline Loans as provided in Section 2.4(b)(ii), in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name under the heading “Revolving Commitment” on Schedule 1.1(a) hereto or in the Assignment and Assumption pursuant to which such Lender becomes party hereto, as applicable, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including, without limitation, Section 2.5).  The aggregate Revolving Commitments of all the Lenders on the Closing Date is $161,538,462.

 

“Revolving Committed Amount” shall have the meaning set forth in Section 2.1.

 

“Revolving Credit Facility” shall mean the revolving credit facility established pursuant to Section 2.1 (including any increase in such revolving credit facility established pursuant to Section 2.5).

 

“Revolving Lender” shall mean, as of any date of determination, a Lender holding a Revolving Commitment, a portion of a Revolving Loan or a Participation Interest on such date.

 

“Revolving Loans” shall have the meaning set forth in Section 2.1 (including with respect to any Incremental Revolving Credit Commitment).

 

“Revolving Maturity Date” shall mean the earliest to occur of (a) January 10, 2025 (or, if the Maturity Date is extended pursuant to Section 2.20, such extended Maturity Date as determined pursuant to such Section 2.20), (b) the date of termination of the entire Revolving Committed Amount by the Borrower pursuant to Section 2.7, and (c) the date of termination of the Revolving Commitments pursuant to Section 7.2

 

“Revolving Notes” shall mean the promissory notes of the Borrower in favor of each of the Revolving Lenders evidencing the Revolving Loans provided pursuant to Section 2.1(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time.

 

“RRGB Canada” shall mean RRGB Restaurants Canada Inc., a corporation organized under the laws of Canada.

 

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“S&P” shall mean Standard & Poor’s Rating Service, a division of S&P Global, Inc. and any successor thereto.

 

“Sale Leaseback Property” shall have the meaning set forth in Section 6.12.

 

“Sale Leaseback Transaction” shall have the meaning set forth in Section 6.12.

 

“Same Day Funds” shall mean (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in Canadian Dollars, same day or other funds as may be determined by the Administrative Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in Canadian Dollars.

 

“Sanctioned Country” shall mean at any time, a country, region or territory which is itself (or whose  government is) the subject or target of any Sanctions (including, as of the Closing Date, Cuba, Iran, North Korea, Syria and Crimea).

 

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including, without limitation, OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the United Nations Security Council, the European Union, any European member state, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any such Person or Persons described in clauses (a) and (b), including a Person that is deemed by OFAC to be a Sanctions target based on the ownership of such legal entity by Sanctioned Person(s) or (d) any Person otherwise a target of Sanctions, including vessels and aircraft, that are designated under any Sanctions program.

 

“Sanctions” shall mean any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and restrictions and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European Member State, Her Majesty’s Treasury, or other relevant sanctions authority in any jurisdiction in which (a) the Parent or any of its Subsidiaries or Affiliates is located or conducts business, (b) in which any of the proceeds of the Extensions of Credit will be used, or (c) from which repayment of the Extensions of Credit will be derived.

 

“Secured Cash Management Agreement” shall mean any Cash Management Agreement that is entered into by and between any Credit Party and any Cash Management Bank.

 

“Secured Hedging Agreement” shall mean any Hedging Agreement between a Credit Party and a Hedge Bank to the extent permitted pursuant to Section 6.1, as amended, modified, supplemented, extended or restated from time to time.

 

“Secured Obligations” shall mean, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Credit Party under (i) any Secured Hedging Agreement and (ii) any Secured Cash Management Agreement; provided, that “Secured Obligations” of a Guarantor shall exclude any Excluded Swap Obligations of such Guarantor..

 

“Secured Parties” shall mean, collectively, the Administrative Agent, the Lenders, the Issuing Lender, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the

 

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Administrative Agent from time to time pursuant to Section 8.2, any other holder from time to time of any of any Secured Obligations and, in each case, their respective successors and permitted assigns.

 

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934, together with any amendment thereto or replacement thereof and any rules or regulations promulgated thereunder.

 

“Security Agreements” shall mean (i) the Amended and Restated Security Agreement dated as of the Closing Date given by the Borrower and the other Credit Parties to the Administrative Agent and (ii) any other Security Agreement executed by a Credit Party to secure the Secured Obligations, in each case as amended, modified or supplemented from time to time in accordance with its terms.

 

“Security Documents” shall mean the Security Agreements, the Pledge Agreements and all other agreements, documents and instruments relating to, arising out of, or in any way connected with any of the foregoing documents or granting to the Administrative Agent, for the benefit of the Secured Parties, Liens or security interests to secure, inter alia, the Secured Obligations whether now or hereafter executed and/or filed, each as may be amended from time to time in accordance with the terms hereof, executed and delivered in connection with the granting, attachment and perfection of the Administrative Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements and patent, trademark and copyright filings.

 

“Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

 

“SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.

 

“Specified Credit Party” shall mean each Credit Party that is, at the time on which the relevant guarantee or grant of the relevant security interest under the Credit Documents by such Credit Party becomes effective with respect to a Swap Obligation, a corporation, partnership, proprietorship, organization, trust or other entity that would not be an “eligible contract participant” under the Commodity Exchange Act at such time but for the effect of Section 10.10.

 

“Specified Sales” shall mean (a) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business and (b) the conversion of cash into Cash Equivalents and Cash Equivalents into cash.

 

“Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two (2) Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the Issuing Lender may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in Canadian Dollars.

 

“Store Rebranding and Outfitting Program” shall mean the Borrower’s initiative to transform and upgrade its restaurants through capital investment to be used for material remodeling and renovation of the interior and exterior of buildings (it being understood and agreed that this shall not include regular and customary maintenance of such facilities).

 

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“Subordinated Debt” shall mean any unsecured Indebtedness incurred by any Credit Party that (a) has a maturity date no earlier than the date that is 91 days after the Term Loan Maturity Date and (b) by its terms is specifically subordinated in right of payment to the prior payment of the Secured Obligations on terms reasonably acceptable to, and otherwise subject to terms and conditions reasonably acceptable to, the Administrative Agent.

 

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, limited liability company, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Parent.

 

“Swap Obligation” shall mean with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Swingline Lender” shall mean Wells Fargo and any successor swingline lender.

 

“Swingline Loan” or “Swingline Loans” shall have the meaning set forth in Section 2.4(a).

 

“Swingline Note” shall mean the promissory note of the Borrower in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.4(d), as such promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time.

 

“Swingline Sublimit” shall have the meaning set forth in Section 2.4(a).

 

“Target” shall have the meaning set forth in the definition of “Permitted Acquisitions.”

 

“Tax Exempt Certificate” shall have the meaning set forth in Section 2.18.

 

“Taxes” shall have the meaning set forth in Section 2.18.

 

“Term Loan Commitment” shall mean as to any Term Loan Lender, the obligation of such Term Loan Lender to make a Term Loan to the account of the Borrower hereunder on the Closing Date in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1, or in the Assignment and Assumption pursuant to which such Lender becomes party hereto, as applicable, as such amount may be reduced or otherwise modified at any time or from time to time pursuant to the terms hereof.  The aggregate Term Loan Commitments with respect to the Term Loans of all Term Loan Lenders on the Closing Date shall be $138,461,538.

 

“Term Loan Lender” shall mean any Lender that holds Term Loan Commitments and/or outstanding Term Loans.

 

“Term Loan Maturity Date” shall mean the first to occur of (a) January 10, 2025, or (b) the date of acceleration of the Term Loans pursuant to Section 7.2.

 

“Term Loan Note” shall mean a promissory note made by the Borrower in favor of a Term Loan Lender evidencing the Term Loans made by such Term Loan Lender, substantially in the form attached as

 

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Exhibit 2.2(d), and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Term Loans” shall mean the term loans made, or to be made, to the Borrower by the Term Loan Lenders pursuant to Section 2.2.

 

“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

“Total Consideration” shall mean the total consideration paid or payable in connection with any Permitted Acquisition including, without limitation, payments made in cash, Capital Stock, assumed debt and earnout obligations.

 

“Trademark License” shall mean any agreement (other than any franchise agreement), whether written or oral, providing for the grant by or to a Person of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 3.16 to this Agreement.

 

“Trademarks” shall mean (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, service marks, elements of package or trade dress of goods or services, logos and other source or business identifiers (other than such items that are of de minimis value) owned by a Credit Party or any Subsidiary, together with the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, including, without limitation, any thereof referred to in Schedule 3.16 to this Agreement, and (ii) all renewals thereof including, without limitation, any thereof referred to in Schedule 3.16.

 

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York, as amended or modified from time to time.

 

“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

 

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency.

 

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness, in each case of clauses (a) and (b), without giving effect to the application of any prior prepayment to such installment, sinking fund, serial maturity or other required payment of principal.

 

“Wells Fargo” shall mean Wells Fargo Bank, National Association, together with its successors and/or assigns.

 

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“Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

Section 1.2                                   Other Definitional Provisions; Time References.

 

(a)                                 Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes or other Credit Documents or any certificate or other document made or delivered pursuant hereto.

 

(b)                                 The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(c)                                  The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(d)                                 Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

(e)                                  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, amended and restated or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii)  all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (iv) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (vi) all terms defined in this Agreement shall have the defined meanings when used in any other Credit Document or any certificate or other document made or delivered pursuant hereto and (vii) the term of this Agreement shall commence on the Closing Date.

 

(f)                                   Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions.  Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

 

(g)                                  Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the Dollar Equivalent of the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the application therefor (at the time specified therefor in such applicable Letter of Credit or application therefore and as such amount may be reduced by (a) any permanent reduction of

 

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such Letter of Credit or (b) any amount which is drawn, reimbursed and no longer available under such Letter of Credit).

 

Section 1.3                                   Accounting Terms.

 

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Parent delivered to the Lenders; provided that if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in Section 5.9, and the Borrower shall notify the Administrative Agent that it wishes to amend any covenant in Section 5.9 (or the definitions used therein) to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Section 5.9 or any definition used therein for such purpose), then the Borrower and the Lenders shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

 

The Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1, (a) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (b) a reasonable estimate of the effect on the financial statements on account of such changes in application.

 

For purposes of computing the financial covenants set forth in Section 5.9 for any applicable test period, any Permitted Acquisition or permitted sale of assets (including a stock sale) shall have been deemed to have taken place as of the first day of such applicable test period.

 

All leases of any Person that were or would have been characterized as Operating Leases in accordance with GAAP immediately prior to the date on which such Person adopted Accounting Standards Update No. 2016-02 by the Financial Accounting Standards Board (“ASU 2016-02”) (whether or not such leases were in effect on such date) shall be accounted for as Operating Leases (and not as Capital Leases) for purposes of this Agreement and any determination of whether a lease is a Capital Lease or an Operating Lease shall exclude the effect of the adoption of ASU 2016-02 or any related promulgation or accounting standards such that “Capital Leases” shall specifically exclude liabilities that were considered operating lease liabilities under GAAP prior to the adoption of ASU 2016-02 or any related promulgation or accounting standard, and all calculations and deliverables (other than financial statements) under this Agreement or any other Credit Document shall be made or delivered, as applicable, without giving effect thereto; provided that all compliance certificates delivered to the Administrative Agent pursuant to Section 5.1(c) of this Agreement shall contain a schedule showing the modifications necessary to reconcile the adjustments made pursuant to this paragraph with the related financial statements.

 

Section 1.4                                   Exchange Rates; Currency Equivalents.

 

(a)                                 The Administrative Agent shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Extensions of Credit and outstanding Loans

 

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denominated in Canadian Dollars.  Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements delivered by Credit Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Credit Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent.

 

(b)                                 Wherever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of a LIBOR Rate Loan, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such borrowing, is a LIBOR Rate Loan denominated in Canadian Dollars, such amount shall be the Canadian Dollar Equivalent of such Dollar amount (rounded to the nearest Canadian Dollar, with 0.50 of a Canadian Dollar being rounded upward), as determined by the Administrative Agent.

 

(c)                                  The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR” or with respect to any rate that is an alternative or replacement for or successor to any such rate (including, without limitation, any Benchmark Replacement) or the effect of any of the foregoing, or of any Benchmark Replacement Conforming Changes.

 

Section 1.5                                   Change of Currency.

 

Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

 

Section 1.6                                   Divisions.

 

For all purposes under the Credit 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, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Capital Stock at such time.

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1                                   Revolving Loans.

 

(a)                                 Revolving Commitments.  During the Commitment Period, subject to the terms and conditions hereof, the Revolving Lenders severally agree to make revolving credit loans (“Revolving Loans”) to the Borrower in Dollars or Canadian Dollars from time to time in an aggregate principal amount of up to ONE HUNDRED SIXTY-ONE MILLION FIVE HUNDRED THIRTY-EIGHT THOUSAND FOUR HUNDRED SIXTY-TWO DOLLARS ($161,538,462) (as such aggregate maximum amount may be increased from time to time as provided in Section 2.5 or reduced from time to time as provided in Section 2.7, the “Revolving Committed Amount”) for the purposes hereinafter set forth; provided, however, that (i) with

 

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regard to each Revolving Lender individually, the sum of such Revolving Lender’s  Pro Rata Share of outstanding Revolving Loans plus such Revolving Lender’s Pro Rata Share of outstanding Swingline Loans plus such Revolving Lender’s Pro Rata Share of LOC Obligations shall not exceed such Revolving Lender’s Revolving Commitment, and (ii) with regard to the Revolving Lenders collectively, (A) the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount and (B) aggregate outstanding amount of all Loans denominated in Canadian Dollars shall not exceed the Canadian Dollar Sublimit.  Revolving Loans may consist of Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof.  LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Base Rate Loans at its Domestic Lending Office.

 

(b)                                 Revolving Loan Borrowings.

 

(i)                                    Notice of Borrowing.  The Borrower shall request a Revolving Loan borrowing by delivering a written Notice of Borrowing (or telephone notice promptly confirmed in writing by delivery of a written Notice of Borrowing, which delivery may be by facsimile) to the Administrative Agent not later than 11:00 a.m. (w) on the date of the requested borrowing in the case of Base Rate Loans denominated in Dollars, (x) on the third Business Day prior to the date of the requested borrowing in the case of Base Rate Loans denominated in Canadian Dollars, (y) on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans denominated in Dollars and (z) on the fourth Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans denominated in Canadian Dollars.  Each such request for borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall be comprised of Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor and (E) the currency of the Loans to be borrowed.  If the Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving Loan requested, then such notice shall be deemed to be a request for a Base Rate Loan hereunder.  The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Revolving Lender’s share thereof.  All Revolving Loans made on the Closing Date and on any of the three Business Days following the Closing Date shall bear interest at the Base Rate unless the Borrower delivers to the Administrative Agent a funding indemnity letter acceptable to the Administrative Agent.

 

(ii)                                Minimum Amounts.  Each Revolving Loan which is a Base Rate Loan shall be in a minimum aggregate amount of the Dollar Equivalent of $500,000 and in integral multiples of the Dollar Equivalent of $100,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).  Each Revolving Loan which is a LIBOR Rate Loan shall be in a minimum aggregate amount of the Dollar Equivalent of $1,000,000 and in integral multiples of the Dollar Equivalent of $500,000 in excess thereof.

 

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(iii)                            Advances.  Each Revolving Lender will make its Pro Rata Share of each Revolving Loan borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, by 1:00 p.m. on the date specified in the applicable Notice of Borrowing in Same Day Funds immediately available to the Administrative Agent.  Such borrowing will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(c)                                  Repayment.  The principal amount of all Revolving Loans shall be due and payable in full on the Revolving Maturity Date.  The Borrower covenants and agrees to pay the Revolving Loans in accordance with the terms of this Agreement and the Revolving Notes.

 

(d)                                 Interest.  Subject to the provisions of Section 2.9, Revolving Loans shall bear interest as follows:

 

(i)                                    Base Rate Loans.  During such periods as Revolving Loans shall be comprised of Base Rate Loans, each such Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Base Rate plus the Applicable Percentage; and

 

(ii)                                LIBOR Rate Loans.  During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

 

(e)                                  Revolving Notes.  At the request of any Revolving Lender, such Revolving Lender’s Revolving Commitment shall be evidenced by a duly executed promissory note of the Borrower to such Revolving Lender in substantially the form of Exhibit 2.1(e).

 

Section 2.2                                   Term Loans.

 

(a)                                 Term Loans.  Subject to the terms and conditions of this Agreement, each Term Loan Lender severally agrees to make a Term Loan to the Borrower on the Closing Date in a principal amount equal to such Lender’s Term Loan Commitment as of the Closing Date in Dollars.  The Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing prior to 11:00 a.m. on the Closing Date requesting that the Term Loan Lenders make the Term Loans as Base Rate Loans on such date (provided that the Borrower may request, no later than three (3) Business Days prior to the Closing Date, that the Lenders make the Term Loans as a LIBOR Rate Loan if the Borrower has delivered to the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 2.17 of this Agreement).  Upon receipt of such Notice of Borrowing from the Borrower, the Administrative Agent shall promptly notify each Term Loan Lender thereof.  Not later than 1:00 p.m. on the Closing Date, each Term Loan Lender will make available to the Administrative Agent for the account of the Borrower, at the Administrative Agent’s Office in immediately available funds, the amount of the Term Loan to be made by such Term Loan Lender on the Closing Date.  The Borrower hereby irrevocably authorizes the

 

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Administrative Agent to disburse the proceeds of the Term Loans in immediately available funds by wire transfer to such Person or Persons as may be designated by the Borrower in writing.

 

(b)                                 Repayment of Term Loans.  The principal amount of the Term Loans shall be repaid in consecutive quarterly installments in an amount equal to $2,423,076.92 on the last day of each fiscal quarter of the Borrower (provided, however, that if such payment date is not a Business Day, such payment shall be due on the preceding Business Day), unless accelerated sooner pursuant to Section 7.2.  Notwithstanding the foregoing, any outstanding amount of the Term Loans shall be fully due and payable on the Term Loan Maturity Date.

 

(c)                                  Interest on the Term Loans.  Subject to the provisions of Section 2.8, the Term Loans shall bear interest as follows:

 

(i)                                     Base Rate Loans.  During such periods as the Term Loans shall be comprised of Base Rate Loans, each such Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Base Rate plus the Applicable Percentage; and

 

(ii)                                  LIBOR Rate Loans.  During such periods as the Term Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on the Term Loans shall be payable in arrears on each Interest Payment Date.

 

(d)                                 Term Loan Notes.  The Borrower’s obligation to pay each Term Loan Lender’s Term Loan shall be evidenced by this Agreement and, upon such Term Loan Lender’s request, by a Term Loan Note made payable to such Term Loan Lender in substantially the form of Exhibit 2.2(d).  The Borrower covenants and agrees to pay the Term Loans in accordance with the terms of this Agreement.  Amounts repaid or prepaid on the Term Loans may not be reborrowed.

 

(e)                                  Incremental Term Loans.  Any Incremental Term Loans shall be borrowed pursuant to, and in accordance with Section 2.5.  The Borrower shall repay the aggregate outstanding principal amount of each Incremental Term Loan (if any) as determined pursuant to, and in accordance with, Section 2.5.

 

Section 2.3                                   Letter of Credit Subfacility.

 

(a)                                 Issuance.  Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require, during the Commitment Period the Issuing Lender shall issue, and the Revolving Lenders shall participate in, Letters of Credit for the account of the Borrower in Dollars from time to time upon request in a form acceptable to the Issuing Lender; provided, however, that (i) the aggregate amount of LOC Obligations shall not at any time exceed TWENTY FIVE MILLION DOLLARS ($25,000,000) (the “LOC Sublimit”), (ii) the sum of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not at any time exceed the Revolving Committed Amount, (iii) all Letters of Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit shall be issued for lawful corporate purposes and may be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs.  Except as otherwise expressly agreed upon by all the Revolving Lenders, no Letter of Credit shall have an original expiry date more than one year from the date of issuance; provided,

 

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however, so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than one year from the date of extension; provided, further, that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date that is thirty (30) days prior to the Revolving Maturity Date.  Each Letter of Credit shall comply with the related LOC Documents.  The issuance and expiry date of each Letter of Credit shall be a Business Day.  Any Letters of Credit issued hereunder shall be in a minimum original face amount of $100,000.  Wells Fargo shall be the Issuing Lender on all Letters of Credit issued on or after the Closing Date.  The Borrower’s reimbursement obligations in respect of each Existing Letter of Credit, and each Revolving Lender’s participation obligations in connection therewith, shall be governed by the terms of this Credit Agreement.

 

Notwithstanding anything to the contrary contained in this Section 2.3, the Issuing Lender shall not be obligated to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any Applicable Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to letters of credit generally or such Letter of Credit in particular any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense that was not applicable, in effect or known to the Issuing Lender as of the Closing Date and that the Issuing Lender in good faith deems material to it, (ii) at a time when any other Lender is a Defaulting Lender, unless the Issuing Lender has entered into arrangements (which may include the delivery of cash collateral) with the Borrower or such Defaulting Lender which are satisfactory to the Issuing Lender to eliminate the Issuing Lender’s Fronting Exposure (after giving effect to Section 2.21(c)) with respect to any such Defaulting Lender, (iii) such Letter of Credit is to be denominated in a currency other than Dollars, (iv) the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender applicable to letters of credit generally or (v) the proceeds of which would be made available to any Person (x) to fund any activity or business of or with any Sanctioned Person, or in any Sanctioned Country or (y) in any manner that would result in a violation of any Sanctions by any party to this Agreement.

 

(b)                                 Notice and Reports.  The request for the issuance of a Letter of Credit shall be submitted to the Issuing Lender at least five (5) Business Days prior to the requested date of issuance.  The Issuing Lender will promptly upon request provide to the Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred.  The Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit.  The Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.

 

(c)                                  Participations.  Each Revolving Lender (i) on the Closing Date with respect to each Existing Letter of Credit and (ii) upon issuance of any other Letter of Credit (or upon such

 

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Revolving Lender becoming a Lender hereunder pursuant to Section 9.6(c)), shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount equal to its Pro Rata Share of the obligations under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its Pro Rata Share of the obligations arising under such Letter of Credit.  Without limiting the scope and nature of each Revolving Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Revolving Lender shall pay to the Issuing Lender its Pro Rata Share of such unreimbursed drawing in Same Day Funds pursuant to and in accordance with the provisions of subsection (d) hereof.  The obligation of each Revolving Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event.  Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

 

(d)                                 Reimbursement.  In the event of any drawing under any Letter of Credit, the Issuing Lender will promptly notify the Borrower and the Administrative Agent.  The Borrower shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (with the proceeds of a Revolving Loan obtained hereunder or otherwise) in Same Day Funds as provided herein or in the LOC Documents.  If the Borrower shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then overdue from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full.  Unless the Borrower shall immediately notify the Issuing Lender and the Administrative Agent of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have requested a Mandatory LOC Borrowing in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the reimbursement obligations.  The Borrower’s reimbursement obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Borrower may claim or have against the Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including without limitation any defense based on any failure of the Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit.  The Issuing Lender will promptly notify the other Revolving Lenders of the amount of any unreimbursed drawing and each Revolving Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender in Dollars and in immediately available funds, the amount of such Revolving Lender’s Pro Rata Share of such unreimbursed drawing.  Such payment shall be made on the day such notice is received by such Revolving Lender from the Issuing Lender if such notice is received at or before 2:00 p.m., otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received.  If such Revolving Lender does not pay such amount to the Issuing Lender in full upon such request, such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Revolving Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Rate and thereafter at a rate equal to the Base Rate.  Each Revolving Lender’s obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Agreement or the Revolving Commitments hereunder,

 

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the existence of a Default or Event of Default or the acceleration of the Secured Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)                                  Repayment with Revolving Loans.  On any day on which the Borrower shall have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Revolving Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Base Rate Loans (each such borrowing, a “Mandatory LOC Borrowing”) shall be immediately made (without giving effect to any termination of the Revolving Commitments pursuant to Section 7.2) pro rata based on each Revolving Lender’s respective Pro Rata Share (determined before giving effect to any termination of the Revolving Commitments pursuant to Section 7.2).  The proceeds of such Mandatory LOC Borrowing shall be paid directly to the Issuing Lender for application to the respective LOC Obligations.  Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans immediately upon any such request or deemed request on account of each Mandatory LOC Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount (or integral amount in excess thereof) for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure for any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v) the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount after any such Letter of Credit may have been drawn upon; provided, however, that in the event any such Mandatory LOC Borrowing should be less than the minimum amount for borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall pay to the Administrative Agent for its own account an administrative fee of $500.  In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code), then each such Revolving Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory LOC Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Participation Interests in the outstanding LOC Obligations; provided, further, that in the event any Revolving Lender shall fail to fund its Participation Interest on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of such Revolving Lender’s unfunded Participation Interest therein shall bear interest payable by such Revolving Lender to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the Base Rate.

 

(f)                                   Modification, Extension.  The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(g)                                  Uniform Customs and Practices/ISP 98. Unless otherwise expressly agreed by the Issuing Lender and the Borrower, when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each trade Letter of Credit.

 

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(h)                                 Conflict with LOC Documents.  In the event of any conflict between this Credit Agreement and any LOC Document, this Credit Agreement shall control.

 

(j)                                    Cash Collateral.  At any point in time in which there is a Defaulting Lender, the Issuing Lender, to the extent permitted under the terms of Section 2.22, may require the Borrower to Cash Collateralize the LOC Obligations in accordance with Section 2.22.

 

Section 2.4                                   Swingline Loan Subfacility.

 

(a)                                 Swingline Sublimit.  During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, may, in its discretion and in reliance upon the agreements of the other Revolving Lenders set forth in Section 2.4, to make certain revolving credit loans to the Borrower in Dollars (each a “Swingline Loan” and, collectively, the “Swingline Loans”) for the purposes hereinafter set forth; provided, however, (i) the aggregate amount of Swingline Loans outstanding at any time shall not exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the “Swingline Sublimit”), and (ii) the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount.  Swingline Loans hereunder may be repaid and reborrowed in accordance with the provisions hereof.

 

(b)                                 Swingline Loan Borrowings.

 

(i)                                     Swingline Loan Borrowings and Disbursements.  The Swingline Lender will make Swingline Loans available to the Borrower on any Business Day (A) upon request made by the Borrower not later than 12:00 Noon on such Business Day by delivery to the Swingline Lender of a notice of request for Swingline Loan borrowing in the form of Exhibit 1.1(d) with appropriate modifications or (B) in accordance with the lending mechanics and other terms of the Autoborrow Feature, upon the event that expenses charged to the Borrower’s Concentration Account shall exceed the available cash deposits in such Concentration Account in an amount equal to such excess.  Swingline Loans issued pursuant to subclause (A) above shall be made in minimum amounts of $100,000 and in integral amounts of $50,000 in excess thereof.

 

(ii)                                  Repayment of Swingline Loans.  Each Swingline Loan borrowing shall be due and payable on the earlier of (A) the seventh day after the date of such Swingline Loan borrowing and (B) the Revolving Maturity Date.  The Swingline Lender may, at any time, in its sole discretion, by written notice to the Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Borrower shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Base Rate Loans in the amount of such Swingline Loans; provided, however, that, in the following circumstances, any such demand shall also be deemed to have been given one Business Day prior to each of (w) the Revolving Maturity Date, (x) the occurrence of any Event of Default described in Section 7.1(e), (y) upon acceleration of the Secured Obligations hereunder, whether on account of an Event of Default described in Section 7.1(e) or any other Event of Default, and (z) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as “Mandatory Borrowing”).  Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly upon any such request or deemed request on account of each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date

 

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notwithstanding (I) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (II) whether any conditions specified in Section 4.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any reduction in the Revolving Commitment or termination of the Revolving Commitments immediately prior to such Mandatory Borrowing or contemporaneously therewith.  In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code), then each Revolving Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Lender to share in such Swingline Loans ratably based upon its respective Pro Rata Share (determined before giving effect to any termination of the Revolving Commitments pursuant to Section 7.2) provided that (A) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective participation is purchased, and (B) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the principal amount of such participation purchased for each day from and including the day upon which the purchase occurs hereunder to but excluding the date of payment for such participation, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Borrowing, the Federal Funds Rate, and thereafter at a rate equal to the Base Rate.

 

(c)                                  Interest on Swingline Loans.  Subject to the provisions of Section 2.9, Swingline Loans shall bear interest at a per annum rate equal to the Base Rate plus the applicable Percentage for Revolving Loans that are Base Rate Loans.  Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date.

 

(d)                                 Swingline Note.  The obligation of the Borrower to pay the principal of, and interest on, the Swingline Loans made to it by the Swingline Lender shall be evidenced by a duly executed promissory note of the Borrower to the Swingline Lender in the original amount of the Swingline Sublimit and substantially in the form of Exhibit 2.4(d).

 

(e)                                  Defaulting Lenders.  Notwithstanding anything to the contrary contained in this Section 2.4, the Swingline Lender shall not be obligated to make any Swingline Loan at a time when any other Revolving Lender is a Defaulting Lender, unless the Swingline Lender has entered into arrangements (which may include the delivery of Cash Collateral) with the Borrower or such Defaulting Lender which are satisfactory to the Swingline Lender to eliminate the Swingline Lender’s Fronting Exposure (after giving effect to Section 2.21(c)) with respect to any such Defaulting Lender.

 

(e)                                  Cash Collateral.  At any point in time in which there is a Defaulting Lender, the Swingline Lender may, to the extent permitted under the terms of Section 2.22, require the Borrower to Cash Collateralize the outstanding Swingline Loans in accordance with Section 2.22.

 

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Section 2.5            Incremental Facilities.

 

(a)           At any time, the Borrower may by written notice to the Administrative Agent elect to request the establishment of:

 

(i)            one or more incremental term loan commitments (any such incremental term loan commitment, an “Incremental Term Loan Commitment”) to make one or more additional term loans, including a borrowing of an additional term loan the principal amount of which will be added to the outstanding principal amount of the existing Term Loans (any such term loan, an “Incremental Term Loan”); or

 

(ii)           one or more increases in the Revolving Committed Amount (any such increase, an “Incremental Revolving Credit Commitment” and, together with the Incremental Term Loan Commitments, the “Incremental Loan Commitments”) to make revolving credit loans under the Revolving Credit Facility (any such increase, an “Incremental Revolving Credit Increase” and, together with the Incremental Term Loans, the “Incremental Loans “);

 

provided that (1) the total aggregate amount for all such Incremental Loan Commitments shall not exceed $100,000,000, (2) the total aggregate amount for each Incremental Loan Commitment (and the Incremental Loans made thereunder) shall not be less than a minimum principal amount of $10,000,000 (or, if less, the remaining amount permitted pursuant to the foregoing clause (1)) and integral multiples of $1,000,000 in excess thereof and (3) the total aggregate amount for all such Incremental Loan Commitments plus all Commitments and outstanding Loans plus all payments made on the Term Loans pursuant to Section 2.2 prior to such time, shall not exceed $400,000,000 at any time.  Each such notice shall specify the date (each, an “Increased Amount Date”) on which the Borrower proposes that any Incremental Loan Commitment shall be effective, which shall be a date not less than ten (10) Business Days after the date on which such notice is delivered to Administrative Agent (or such earlier date as may be approved by the Administrative Agent).  The Borrower may invite any Lender, any Affiliate of any Lender and/or any Approved Fund, and/or any other Person reasonably satisfactory to the Administrative Agent, to provide an Incremental Loan Commitment (any such Person, an “Incremental Lender”).  Any proposed Incremental Lender offered or approached to provide all or a portion of any Incremental Loan Commitment may elect or decline, in its sole discretion, to provide such Incremental Loan Commitment or any portion thereof.  Any Incremental Loan Commitment shall become effective as of such Increased Amount Date; provided that:

 

(A)          no Default or Event of Default shall have occurred and be continuing on such Increased Amount Date before or after giving effect to (1) any Incremental Loan Commitment and (2) the making of any Incremental Loan  pursuant thereto;

 

(B)          the Administrative Agent and the Lenders shall have received from the Borrower updated financial projections and an Officer’s Compliance Certificate demonstrating, in form and substance reasonably satisfactory to the Administrative Agent,  that (1) the Borrower will be in compliance on a pro forma basis with the financial covenants set forth in Section 5.9 based on the financial statements most recently delivered pursuant to Section 5.1(a) or 5.1(b), as applicable, both before and after giving effect to (1) any Incremental Loan Commitment and (2) the making of any Incremental Loan pursuant thereto;

 

(C)          the representations and warranties made by the Credit Parties herein, in the Security Documents or which are contained in any certificate furnished at any time under or in connection herewith shall be true and correct on and as of the date of such

 

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Increased Amount Date as if made on and as of such date, except for representations and warranties expressly stated to relate to a specific earlier date;

 

(D)          the proceeds of any Incremental Loans shall be used for the purposes set forth in Section 3.11;

 

(E)           each Incremental Loan Commitment (and the Incremental Loans made thereunder) shall constitute Secured Obligations and shall be secured and guaranteed with the other Secured Obligations on a pari passu basis;

 

(F)           (1)           in the case of each Incremental Term Loan (the terms of which shall be set forth in the relevant Lender Joinder Agreement):

 

(w)          the maturity of any such Incremental Term Loan shall not be earlier than the then the latest scheduled maturity date of the Loans and Commitments in effect as of the Increase Effective Date and the Weighted Average Life to Maturity of any such Incremental Term Loan shall not be shorter than the remaining Weighted Average Life to Maturity of such latest maturing Term Loans;

 

(x)           the All-In Yield and pricing grid, if applicable, for such Incremental Term Loan shall be determined by the Administrative Agent, the applicable Incremental Lenders and the Borrower on the applicable Increase Effective Date; provided that if the All-In Yield in respect of any Incremental Term Loan exceeds the All-In Yield for the Term Loans by more than 0.50%, then the Applicable Percentage for the Term Loans shall be increased so that the All-In Yield in respect of such Term Loans is equal to the All-In Yield for the Incremental Term Loan minus 0.50%;

 

(y)           any mandatory prepayment (other than scheduled amortization payments) of each Incremental Term Loan shall be made on a pro rata basis with all then existing Term Loans, except that the Borrower and the Incremental Lenders in respect of such Incremental Term Loan may, in their sole discretion, elect to prepay or receive, as applicable, any prepayments on a less than pro rata basis (but not on a greater than pro rata basis); and

 

(z)           except to the extent otherwise provided in this Section 2.5, all other terms and conditions applicable to any Incremental Term Loan shall be consistent with the terms and conditions applicable to the Term Loans or otherwise reasonably satisfactory to the Administrative Agent and the Borrower (provided that such other terms and conditions, taken as a whole, shall not be more favorable to the Lenders under any Incremental Term Loans than such other terms and conditions, taken as a whole, under the Term Loans);

 

(2)           in the case of each Incremental Revolving Credit Increase (the terms of which shall be set forth the relevant Lender Joinder Agreement):

 

(x)           such Incremental Revolving Credit Increase shall mature on the Revolving Maturity Date, shall bear interest at the rate applicable to the Revolving Loans and shall be subject to the same terms and conditions as the Revolving Loans;

 

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(y)           the outstanding Revolving Loans and Pro Rata Share of Swingline Loans and LOC Obligations will be reallocated by the Administrative Agent on the applicable Increased Amount Date among the Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) in accordance with their revised Pro Rata Share (and the Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) agree to make all payments and adjustments necessary to effect such reallocation and the Borrower shall pay any and all costs required pursuant to Section 2.17 in connection with such reallocation as if such reallocation were a repayment); and

 

(z)           except to the extent otherwise provided in this Section 2.5, all of the other terms and conditions applicable to such Incremental Loan shall, be identical to the terms and conditions applicable to the Revolving Credit Facility (other than upfront fees);

 

(G)          (1)           any Incremental Lender making any Incremental Term Loan shall be entitled to the same voting rights as the existing Lenders; and

 

(2)           any Incremental Lender with an Incremental Revolving Credit Increase shall be entitled to the same voting rights as the existing Lenders under the Revolving Credit Facility and each Incremental Revolving Credit Increase shall receive proceeds of prepayments on the same basis as the other Loans made hereunder;

 

(H)          such Incremental Loan Commitments shall be effected pursuant to one or more Lender Joinder Agreements executed and delivered by the Borrower, the Administrative Agent and the applicable Incremental Lenders (which Lender Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.5); and

 

(I)            the Borrower shall deliver or cause to be delivered any customary legal opinions or other documents (including, without limitation, a resolution duly adopted by the board of directors (or equivalent governing body) of each Credit Party authorizing such Incremental Loan and/or Incremental Loan Commitment), in case as reasonably requested by Administrative Agent in connection with any such transaction.

 

(b)           The Incremental Lenders shall be included in any determination of the Required Lenders and the Incremental Lenders will not constitute a separate voting class for any purposes under this Agreement (subject to customary protections with respect to mandatory prepayments of the Incremental Term Loans, as applicable).

 

(c)           (i)            On any Increased Amount Date on which any Incremental Term Loan Commitment becomes effective, subject to the foregoing terms and conditions, each Incremental Lender with an Incremental Term Loan Commitment shall make, or be obligated to make, an Incremental Term Loan to the Borrower in an amount equal to its Incremental Term Loan Commitment and shall become a Lender hereunder with respect to such Incremental Term Loan Commitment and the Incremental Term Loan made pursuant thereto.

 

(ii)           On any Increased Amount Date on which any Incremental Revolving Credit Increase becomes effective, subject to the foregoing terms and conditions, each Incremental Lender with

 

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an Incremental Revolving Credit Commitment shall become a Lender hereunder with respect to such Incremental Revolving Credit Commitment.

 

Section 2.6            Fees.

 

(a)           Commitment Fee.  In consideration of the Revolving Commitments, the Borrower agrees to pay to the Administrative Agent, for the ratable benefit of the Lenders, a commitment fee (the “Commitment Fee”) in an amount equal to the Applicable Percentage per annum on the actual daily unused portion of the Revolving Committed Amount of the Revolving Lenders (other than the Defaulting Lenders, if any).  For purposes of computing the Commitment Fee, LOC Obligations shall be considered usage of the Revolving Committed Amount but Swingline Loans shall not be considered usage of the Revolving Committed Amount.  The Commitment Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for the prior calendar quarter.

 

(b)           Letter of Credit Fees.  The Borrower agrees to pay to the Issuing Lender, for the benefit of the Lenders, a fee (the “Letter of Credit Fee”) equal to the Applicable Percentage per annum on the average daily maximum amount available to be drawn under each Letter of Credit from the date of issuance to the date of expiration.  In addition to such Letter of Credit Fee, the Issuing Lender may charge, and retain for its own account without sharing by the other Lenders, an additional facing fee of 0.125% per annum on the average daily maximum amount available to be drawn under each such Letter of Credit issued by it.  The Issuing Lender shall promptly pay over to the Administrative Agent for the ratable benefit of the Lenders, for the benefit of all Lenders having a Revolving Commitment (including the Issuing Lender), the Letter of Credit Fee.  The Letter of Credit Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for such calendar quarter.

 

(c)           Issuing Lender Fees.  In addition to the Letter of Credit Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender, for its own account without sharing by the other Lenders, the reasonable and customary charges from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, such Letters of Credit (collectively, the “Issuing Lender Fees”).

 

(d)           Administrative Fee.  The Borrower agrees to pay to the Administrative Agent the annual administrative fee as described in the Fee Letter.

 

Section 2.7            Commitment Reductions.

 

(a)           Voluntary Reductions.  The Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five Business Days’ prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that (i) no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Loans made on the effective date thereof, (A) the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed the Revolving Committed Amount or (B) the outstanding Revolving Loans denominated in Canadian Dollars would exceed the Canadian Dollar Sublimit and (ii) if,

 

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after giving effect to any reduction of the Revolving Committed Amount, the Canadian Dollar Sublimit exceeds the amount of the Revolving Committed Amount, the Canadian Dollar Sublimit shall be automatically reduced by the amount of such excess and (iii) the Canadian Dollar Sublimit shall be reduced in the same proportion as the reduction in the Revolving Committed Amount.

 

(b)           Revolving Maturity Date.  The Revolving Commitments shall automatically terminate on the Revolving Maturity Date.

 

Section 2.8            Prepayments.

 

(a)           Optional Prepayments.  The Borrower shall have the right to prepay the Term Loans and the Incremental Term Loans (if any) and repay the Revolving Loans in whole or in part from time to time; provided, however, that (i) with respect to the Revolving Loans, the Term Loans and Incremental Term Loans, each partial prepayment of a Base Rate Loan shall be in a minimum principal amount of $500,000 and integral multiples of $100,000 in excess thereof or, if less, the unpaid balance thereof, (ii) with respect to the Revolving Loans, the Term Loans and Incremental Term Loans, each partial prepayment of a LIBOR Rate Loan shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof or, if less, the unpaid balance thereof, and (iii) each partial prepayment of a Swingline Loan shall be in a minimum principal amount of $100,000 and integral multiples of $50,000 in excess thereof or the unpaid balance thereof, if less.  The Borrower shall give three Business Days’ irrevocable notice in the case of LIBOR Rate Loans denominated in Dollars, four Business Day’s irrevocable notice in the case of LIBOR Rate Loans denominated in Canadian Dollars and one Business Day’s irrevocable notice in the case of Base Rate Loans to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable); provided that a notice of prepayment of Advances pursuant to paragraph (a) of this Section may state that such notice is conditioned upon the occurrence of one or more events specified therein, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified date of prepayment) if such condition is not satisfied.  To the extent that the Borrower elects to prepay the Term Loans and the Incremental Term Loans, amounts prepaid under this Section 2.8(a) shall be (i) applied to the remaining amortization payments thereof in the inverse order of maturity and (ii) applied to the Term Loans and the Incremental Term Loans held by the Term Loan Lenders in accordance with their respective Pro Rata Share.  Each prepayment of the Revolving Loans and/or Swingline Loans pursuant to this Section 2.8(a) shall be applied to the outstanding Loans as the Borrower may elect; provided, however, each prepayment shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section 2.8(a) shall be subject to Section 2.17, but otherwise without premium or penalty.  Interest on the principal amount prepaid shall be payable on the next occurring Interest Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Administrative Agent, interest on the principal amount prepaid shall be payable on any date that a prepayment is made hereunder through the date of prepayment.

 

(b)           Mandatory Prepayments.

 

(i)            Revolving Committed Amount.  If at any time after the Closing Date, the sum of the outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall exceed the Revolving Committed Amount, the Borrower immediately shall prepay the Revolving Loans in an amount sufficient to eliminate such excess (such prepayment to be applied as set forth in clause (v) below).

 

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(ii)           Asset Dispositions.  The Borrower shall make mandatory principal prepayments of the Loans and/or Cash Collateralize the LOC Obligations in the manner set forth in clause (v) below in amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Asset Disposition by any Credit Party or any of its Subsidiaries (other than an Excluded Asset Disposition).  Such prepayments shall be made within five (5) Business Days after the date of receipt of the Net Cash Proceeds of any such Asset Disposition by such Credit Party or any of its Subsidiaries; provided that, so long as no Default or Event of Default has occurred and is continuing, no prepayment shall be required under this Section 2.8(b)(ii), (1) until the aggregate amount of the Net Cash Proceeds derived from any Asset Dispositions (other than Excluded Asset Dispositions) in any fiscal year of the Borrower and required to be prepaid in accordance with this Section 2.8(b)(ii) is equal to or greater than $2,000,000 or (2) to the extent that such Net Cash Proceeds are reinvested in assets used or useful in the business of the Credit Parties and their Subsidiaries within 180 days after receipt of such Net Cash Proceeds by such Credit Party or such Subsidiary (but, subject to clause (1) above, any portion of such Net Cash Proceeds not actually reinvested within such 180-day period shall be prepaid in accordance with this Section 2.8(b)(ii) on or before the last day of such 180-day period).

 

(iii)          Debt Issuances.  The Borrower shall make mandatory principal prepayments of the Loans and/or Cash Collateralize the LOC Obligations in the manner set forth in clause (v) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Debt Issuance by any Credit Party or any of its Subsidiaries or other Indebtedness not permitted pursuant to this Agreement.  Such prepayment shall be made within five (5) Business Days after the date of receipt of the Net Cash Proceeds of any such Debt Issuance.

 

(iv)          Recovery Events.  The Borrower shall make mandatory principal prepayments of the Loans and/or Cash Collateralize the LOC Obligations in the manner set forth in clause (v) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Recovery Event by any Credit Party or any of its Subsidiaries.  Such prepayments shall be made within five (5) Business Days after the date of receipt of Net Cash Proceeds of any such Recovery Event by such Credit Party or such Subsidiary; provided that, so long as no Default or Event of Default has occurred and is continuing, no prepayment shall be required under this Section 2.8(b)(iii), (1) until the aggregate amount of the Net Cash Proceeds derived from any Recovery Event in any Fiscal Year and required to be prepaid in accordance with this Section 2.8(b)(iii) is equal to or greater than $2,000,000 or (2) to the extent that such Net Cash Proceeds are reinvested in assets used or useful in the business of the Borrower within 180 days after receipt of such Net Cash Proceeds by such Credit Party or such Subsidiary (but, subject to clause (1) above, any portion of the Net Cash Proceeds not actually reinvested within such 180-day period shall be prepaid in accordance with this Section 2.8(b)(iii) on or before the last day of such 180-day period).

 

(v)           Application of Mandatory Prepayments.  All amounts required to be paid pursuant to this Section 2.8(b) shall be applied as follows:

 

(A)          with respect to all amounts prepaid pursuant to Section 2.8(b)(i), (1) first to the outstanding Swingline Loans, (2) second to the outstanding Revolving Loans and (3) third to Cash Collateralize the LOC Obligations; and

 

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(B)          with respect to all amounts prepaid pursuant to Sections 2.8(b)(ii) through (iv), (1) first to the Term Loans and the Incremental Term Loans (if any) in the inverse order of maturity of the remaining amortization payments pursuant to Section 2.2(b)), (2) second to outstanding Swingline Loans, (3) third to the outstanding Revolving Loans (without a corresponding permanent reduction in the Revolving Committed Amount) and (4) fourth to Cash Collateralize the LOC Obligations.  Within the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section 2.8(b) shall be subject to Section 2.17 and be accompanied by interest on the principal amount prepaid through the date of prepayment.

 

(vi)          Canadian Dollar Sublimit.  If the Administrative Agent notifies the Borrower at any time that the outstanding Revolving Loans denominated in Canadian Dollars at such time exceeds the Canadian Dollar Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrower shall prepay Loans in an aggregate amount sufficient to reduce such outstanding amount as of such date of payment to an amount not to exceed 100% of the Canadian Dollar Sublimit then in effect.

 

Notwithstanding the foregoing provisions of this Section 2.8, if at any time any prepayment of the Loans pursuant to Section 2.8 would result in LIBOR Rate Loans being prepaid other than on the last day of an Interest Period with respect thereto, then the Borrower, so long as no Event of Default shall have occurred and be continuing, may deposit the amount that otherwise would have been paid in respect of such LIBOR Rate Loans with the Administrative Agent to be held as security for the obligation of the Borrower to make such prepayment pursuant to a cash collateral agreement to be entered into on terms reasonably satisfactory to the Administrative Agent, with such cash collateral to be directly applied upon the first occurrence thereafter of the last day of any Interest Period with respect to such LIBOR Rate Loans.

 

(c)           Hedging Obligations Unaffected.  Any prepayment made pursuant to this Section 2.8 shall not affect the Borrower’s obligation to continue to make payments under any Hedging Agreement, which shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such Hedging Agreement.

 

(d)           Repatriation of Net Cash Proceeds.  Notwithstanding any other provisions of this Section 2.8, with respect to any of or all the Net Cash Proceeds of any Asset Disposition by a Foreign Subsidiary giving rise to a mandatory prepayment (A) to the extent that any of or all of such Net Cash Proceeds is prohibited or delayed by Applicable Law from being distributed or otherwise transferred to the Borrower, the portion of such Net Cash Proceeds so affected will not be required to prepay the Loans and/or Cash Collateralize the LOC Obligations, but only so long as the Applicable Law will not permit such distribution or transfer (the Borrower hereby agreeing to cause the applicable Foreign Subsidiary to promptly take all actions reasonably required by the Applicable Law to permit such distribution or transfer), and once such distribution or transfer of any of such affected Net Cash Proceeds is permitted under Applicable Law, such distribution or transfer will be promptly effected and (B) to the extent that Borrower has reasonably determined in good faith that distribution or other transfer of any of or all such Net Cash Proceeds (or the obligation to do so) would have adverse tax consequences (taking into account any foreign tax credit or benefit received in connection with such distribution or transfer and, for the avoidance of doubt, utilization of any net operating loss shall be deemed to be an adverse tax consequence), the

 

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portion of such Net Cash Proceeds so affected will not be required to prepay the Loans and/or Cash Collateralize the LOC Obligations.

 

Section 2.9            Default Rate and Payment Dates.

 

(a)           Subject to Section 7.3, (i) immediately upon the occurrence and during the continuance of an Event of Default under Section 7.1(a), (e) or (j), or (ii) at the election of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, (A) the Borrower shall no longer have the option to request LIBOR Rate Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate (including the Applicable Percentage) then applicable to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate (including the Applicable Percentage) then applicable to Base Rate Loans, (C) all outstanding Base Rate Loans and other Obligations arising hereunder or under any other Credit Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate (including the Applicable Percentage) then applicable to Base Rate Loans or such other Obligations arising hereunder or under any other Credit Document and (D) all accrued and unpaid interest shall be due and payable on demand of the Administrative Agent.  Interest shall continue to accrue on the Obligations after the filing by or against the Borrower of any petition seeking any relief in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

 

(b)           Interest on each Loan shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (a) of this Section 2.9 shall be payable from time to time on demand.

 

Section 2.10         Conversion Options.

 

(a)           The Borrower may, in the case of Revolving Loans, the Term Loans and the Incremental Term Loans (if any), elect from time to time to convert Base Rate Loans to LIBOR Rate Loans, by giving the Administrative Agent at least (i) three Business Days’ prior irrevocable written notice of such election for LIBOR Rate Loans denominated in Dollars and (ii) four Business Days’ prior irrevocable written notice of such election for LIBOR Rate Loans denominated in Canadian Dollars.  A form of Notice of Conversion/ Extension is attached as Exhibit 1.1(e).  If the date upon which a Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were a Base Rate Loan.  All or any part of outstanding Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions to LIBOR Rate Loans shall be in an aggregate principal amount of the Dollar Equivalent of $1,000,000 or a whole multiple of the Dollar Equivalent of $500,000 in excess thereof.  If the Borrower fails to specify a currency in a Loan Notice requesting a Borrowing, then the Loans so requested shall be made in Dollars.

 

(b)           Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in Section 2.10(a); provided, that when any Default or Event of Default has occurred and is continuing (i) no LIBOR Rate Loan may be continued as such, in which case such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period with respect thereto and (ii) the Required Lenders may demand that any or all of the then

 

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outstanding LIBOR Rate Loans denominated in an Canadian Dollars be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, at the end of the applicable Interest Period with respect thereto.  If the Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Base Rate Loans at the end of the applicable Interest Period with respect thereto; provided, however that in the case of a failure to timely request a continuation of LIBOR Rate Loans denominated in Canadian Dollars, such Loans shall be continued as LIBOR Rate Loans in Canadian Dollars with an Interest Period of one (1) month.

 

Section 2.11         Computation of Interest and Fees.

 

(a)           Interest payable hereunder with respect to Base Rate Loans based on the Prime Rate and Loans denominated in Canadian Dollars shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed.  All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed.  The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof.  Any change in the interest rate on a Loan resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate shall become effective.  The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change.

 

(b)           Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error.  The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the computations used by the Administrative Agent in determining any interest rate.

 

(c)           It is the intent of the Lenders and the Credit Parties to conform to and contract in strict compliance with applicable usury law from time to time in effect.  All agreements between the Lenders and the Credit Parties are hereby limited by the provisions of this paragraph which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount permissible under Applicable Law.  If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this paragraph and such interest shall be automatically reduced to the maximum nonusurious amount permitted under Applicable Law, without the necessity of execution of any amendment or new document.  If any Lender shall ever receive anything of value which is characterized as interest on the Loans under Applicable Law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans.  The right to demand payment of the Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.

 

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All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of such indebtedness does not exceed the maximum nonusurious amount permitted by Applicable Law.

 

Section 2.12         Pro Rata Treatment and Payments.

 

(a)           Each borrowing of Revolving Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Pro Rata Share of the Lenders.  Each payment (other than prepayments) of principal or interest under this Agreement or any Note shall be applied pro rata, first, to any fees then due and owing by the Borrower pursuant to Section 2.6, second, to interest then due and owing hereunder and under the Notes and, third, to principal then due and owing hereunder and under the Notes.  Each payment on account of any fees pursuant to Section 2.6 shall be made pro rata in accordance with the respective amounts due and owing (except as to the portion of the Letter of Credit retained by the Issuing Lender and the Issuing Lender Fees).

 

Each optional repayment and prepayment by the Borrower on account of principal of and interest (i) on the Revolving Loans shall be applied to such Loans on a pro rata basis and (ii) on Term Loans and the Incremental Term Loans (if any) shall be applied in the inverse order of maturities on the remaining scheduled principal installments thereof, in each case, to the extent applicable, in accordance with the terms of Section 2.8(a) hereof.  Each mandatory prepayment on account of principal of the Loans shall be applied to such Loans, as applicable, in accordance with Section 2.8(b).  Prepayments made pursuant to Section 2.15 shall be applied in accordance with such section.  All payments (including prepayments) to be made by the Borrower on account of principal, interest and fees shall be made without defense, set-off or counterclaim (except as provided in Section 2.18(b)).  All payments by the Borrower hereunder shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified in Section 9.2 in Dollars or Canadian Dollars, as applicable, and in Same Day Funds not later than 12:00 Noon on the date when due.  If, for any reason, the Borrower is prohibited by any Law from making any required payment hereunder in Canadian Dollars, the Borrower shall make such payment in Dollars in the Dollar Equivalent of the Canadian Dollar payment amount.  The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received.  If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.  If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.

 

Notwithstanding the foregoing, if there exists a Defaulting Lender each payment by the Borrower to such Defaulting Lender hereunder shall be applied in accordance with Section 2.21(b).

 

(b)           Allocation of Payments After Event of Default. Notwithstanding any other provisions of this Agreement to the contrary, after the exercise of remedies by the Administrative Agent or the Lenders pursuant to Section 7.2 (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Credit Documents (including without limitation the maximum amount of all contingent liabilities under

 

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Letters of Credit) shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Lender on account of the Secured Obligations or any other amounts outstanding under any of the Credit Documents or in respect of the Collateral shall be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Administrative Agent with respect to the Collateral under or pursuant to the terms of the Security Documents;

 

SECOND, to payment of any fees owed to the Administrative Agent and the Issuing Lender;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation, reasonable attorneys’ and consultants’ fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents or otherwise with respect to the Secured Obligations owing to such Lender;

 

FOURTH, to the payment of all of the Secured Obligations consisting of accrued fees and interest and, with respect to any Secured Hedging Agreement and any Secured Cash Management Agreement, to the payment of any fees, premiums and scheduled periodic payments due under such Secured Hedging Agreement and such Secured Cash Management Agreement and any interest accrued thereon;

 

FIFTH, to the payment of the outstanding principal amount of the Secured Obligations and the payment or Cash Collateralization of the outstanding LOC Obligations and, with respect to any Secured Hedging Agreement and any Secured Cash Management Agreement, to the payment of any breakage, termination or other payments due under such Secured Hedging Agreement and such Secured Cash Management Agreement and any interest accrued thereon;

 

SIXTH, to all other Secured Obligations and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

SEVENTH, to the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Lenders shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans, LOC Obligations and obligations outstanding under the Hedging Agreements (if any) permitted by Section 6.1(e) held by such Lender (and its Affiliates in the case of Hedging Agreement obligations) bears to the aggregate then outstanding Loans, LOC Obligations and obligations outstanding under the Hedging Agreements between any Credit Party and any Lender or any Affiliate of a Lender that are permitted by Section 6.1(e)) of amounts available to be applied pursuant to clauses “FOURTH” and “FIFTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (A) first, to reimburse the Issuing Lender from time to time for any drawings under such Letters of Credit and (B) then, following

 

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the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section 2.12(b).  Notwithstanding the foregoing terms of this Section 2.12, only Collateral proceeds and payments under the Guaranty (as opposed to ordinary course principal, interest and fee payments hereunder) shall be applied to obligations under any Secured Hedging Agreement and any Secured Cash Management Agreement.

 

Section 2.13         Obligations of Lenders.

 

(a)           Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with the terms hereof and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(b)           Unless the Administrative Agent shall have been notified in writing by the Borrower, prior to the date on which any payment is due from it hereunder (which notice shall be effective upon receipt) that the Borrower does not intend to make such payment, the Administrative Agent may assume that the Borrower has made such payment when due, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Lender on such payment date an amount equal to the portion of such assumed payment to which such Lender is entitled hereunder, and if the Borrower has not in fact made such payment to the Administrative Agent, such Lender shall, on demand, repay to the Administrative Agent the amount made available to such Lender.  If such amount is repaid to the Administrative Agent on a date after the date such amount was made available to such Lender, such Lender shall pay to the Administrative Agent on demand interest on such amount in respect of each day from the date such amount was made available by the Administrative Agent to such Lender to the date such amount is recovered by the Administrative Agent at a per annum rate equal to the Federal Funds Rate.

 

(c)           The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several.  The failure of any Lender to make available its Pro Rata Share of any Loan requested by the Borrower shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Pro Rata Share of such Loan available on the borrowing date, but no Lender shall be responsible for the

 

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failure of any other Lender to make its Pro Rata Share of such Loan available on the borrowing date.

 

(d)           A certificate of the Administrative Agent submitted to the Borrower or any Lender with respect to any amount owing under this Section 2.13 shall be conclusive in the absence of manifest error.

 

Section 2.14         Inability to Determine Interest Rate.

 

(a)           Notwithstanding any other provision of this Agreement, if (a) the Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that (i) deposits (whether in Dollars or Canadian Dollars) are not being offered to banks in the applicable offshore interbank market for such currency for the applicable amount and Interest Period of a proposed LIBOR Rate Loan, (ii) by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining the LIBOR Rate for such Interest Period with respect to a proposed LIBOR Rate Loan or any Base Rate Loan as to which the interest rate is determined with reference to LIBOR, or (iii) a fundamental change has occurred in the foreign exchange or interbank markets with respect to Canadian Dollars (including, without limitation, changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls) or (b) the Required Lenders shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested be outstanding as a LIBOR Rate Loan during such Interest Period or a Base Rate Loan as to which the interest rate is determined with reference to LIBOR, the Administrative Agent shall forthwith give telephone notice of such determination, confirmed in writing, to the Borrower, and the Lenders at least two Business Days prior to the first day of such Interest Period.

 

(b)           Unless the Borrower shall have notified the Administrative Agent upon receipt of such telephone notice that they wish to rescind or modify their request regarding such LIBOR Rate Loans or Base Rate Loans as to which the interest rate is determined with reference to LIBOR, any Loans that were requested to be made as LIBOR Rate Loans or Base Rate Loans as to which the interest rate is determined with reference to LIBOR shall be made as Base Rate Loans as to which the interest rate is not determined by reference to LIBOR and any Loans that were requested to be converted into or continued as LIBOR Rate Loans shall remain as or be converted into Base Rate Loans as to which the interest rate is not determined by reference to LIBOR.  Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so affected or Base Rate Loans as to which the interest rate is determined with reference to LIBOR.

 

(c)           Effect of Benchmark Transition Event.

 

(i)            Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Credit Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Required Lenders have delivered to the Administrative Agent written

 

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notice that such Required Lenders accept such amendment. No replacement of LIBOR with a Benchmark Replacement pursuant to this Section 2.14(c) will occur prior to the applicable Benchmark Transition Start Date.

 

(ii)           Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Credit Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

 

(iii)          Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark Replacement Conforming Changes and (D) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or Lenders pursuant to this Section 2.14(c), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.14(c).

 

(iv)          Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a LIBOR Rate Loan of, conversion to or continuation of LIBOR Rate Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During any Benchmark Unavailability Period, the component of the Base Rate based upon LIBOR will not be used in any determination of the Base Rate.

 

Section 2.15         Illegality.

 

Notwithstanding any other provision of this Agreement, if, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to make or maintain LIBOR Rate Loans (whether denominated in Dollars or Canadian Dollars) as contemplated by this Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall promptly notify the Administrative Agent and the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until the Administrative Agent shall give notice that the condition or situation which gave rise to the suspension shall no longer exist, (c) such Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of the Interest Period for such Loans or within such earlier period as required by law as Base Rate Loans (provided that if any Lender may not lawfully continue to maintain a LIBOR Rate Loan to the last day of the then current Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be

 

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converted to a Base Rate Loan) and (d) if any Lender may not otherwise lawfully continue to maintain Loans denominated in Canadian Dollars, any Loan denominated in Canadian Dollars, if any, shall immediately be repaid in full (together with accrued interest thereon).  The Borrower hereby agrees to promptly pay any Lender, upon its demand, any additional amounts necessary to compensate such Lender for actual and direct costs (but not including anticipated profits) reasonably incurred by such Lender in making any repayment in accordance with this Section including, but not limited to, any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.  A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error.  Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens deemed by such Lender in its sole discretion to be material.

 

Section 2.16         Requirements of Law.

 

(a)           If any Change in Law:

 

(i)            shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit or any application relating thereto, any LIBOR Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for tax on the overall net income of such Lender and changes in the rate of such tax);

 

(ii)           shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the LIBOR Rate hereunder; or

 

(iii)         shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining LIBOR Rate Loans, Base Rate Loans as to which the interest rate is determined with reference to LIBOR or the Letters of Credit or to reduce any amount receivable hereunder or under any Note, LIBOR Rate Loan or Letter of Credit, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amount receivable which such Lender reasonably deems to be material as determined by such Lender with respect to its LIBOR Rate Loans, as to which the interest rate is determined with reference to LIBOR or Letters of Credit.  A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error.  Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this paragraph of this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or other disadvantages deemed by such Lender to be material.

 

(b)           If any Lender shall have reasonably determined that any Change in Law regarding capital adequacy or liquidity requirements or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or

 

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directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) from any central bank or Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy or liquidity requirements) by an amount reasonably deemed by such Lender to be material, then from time to time, within fifteen (15) days after demand by such Lender, the Borrower shall pay to such Lender such additional amount as shall be certified by such Lender as being required to compensate it for such reduction.  Such a certificate as to any additional amounts payable under this Section submitted by a Lender (which certificate shall include a description of the basis for the computation), through the Administrative Agent, to the Borrower shall be conclusive absent manifest error.

 

(c)           The agreements in this Section 2.16 shall survive the termination of this Agreement and payment of the Notes and all other amounts payable hereunder.

 

Section 2.17         Indemnity.

 

The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any funding loss or expense which such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or interest on any Loan by such Lender in accordance with the terms hereof, (b) default by the Borrower in accepting a borrowing after the Borrower has given a notice in accordance with the terms hereof, (c) default by the Borrower in making any prepayment after the Borrower has given a notice in accordance with the terms hereof, (d) default by the Borrower in making any payment of any Loan (or interest due thereon) denominated in Canadian Dollars on its scheduled due date or any payment thereof in a different currency; and/or (e) the making by the Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is not the last day of the Interest Period with respect thereto, in each case including, but not limited to, any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its Loans hereunder.  The amount of such loss or expense shall be determined, in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its Pro Rata Share of the LIBOR Rate Loans in the applicable interbank markets and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical.  A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender, through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error.  The agreements in this Section shall survive termination of this Agreement and payment of the Notes and all other amounts payable hereunder.  This Section 2.17 shall not apply with respect to taxes.

 

Section 2.18         Taxes.

 

(a)           All payments made by the Borrower hereunder or under any Note shall be, except as provided in Section 2.18(b), made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any Governmental Authority or by any political subdivision or taxing authority thereof or therein with respect to such payments and all interest, penalties or similar liabilities with respect thereto (but excluding (i) any taxes imposed on or measured by the net income or profits of a Recipient, any franchise taxes, and any branch profits taxes that are (A) imposed pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable Lending Office of such Recipient is located or any subdivision thereof or therein or (B) an Other Connection Tax, (ii) any U.S. federal

 

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withholding taxes imposed under FATCA, (iii) any U.S. federal backup withholding taxes attributable to such Recipient’s failure to comply with Section 2.18(c) and (iv) any interest, penalties or similar liabilities with respect to any tax described in (i) through (iii)) (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note.  The Borrower will furnish to the Administrative Agent as soon as practicable after the date the payment of any Taxes is due pursuant to Applicable Law certified copies (to the extent reasonably available and required by law) of tax receipts evidencing such payment by the Borrower.  The Borrower agrees to indemnify and hold harmless each Recipient, and reimburse such Recipient upon its written request, for the amount of any Taxes so levied or imposed and paid by such Recipient.

 

(b)           Each Foreign Lender agrees to deliver to the Borrower and the Administrative Agent on or prior to the Closing Date, or in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 9.6 (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) if the Lender is a “bank” within the meaning of Section 881(c)(3)(A) of the Code, two accurate and complete signed copies of Internal Revenue Service Form W-8BEN (or W-8BEN-E, as applicable) or W-8ECI (or successor forms) certifying such Lender’s entitlement to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form W-8BEN (or W-8BEN-E, as applicable) or W-8ECI as set forth in clause (i) above, or (x) a certificate substantially in the form of Exhibit 2.18 (any such certificate, a “Tax Exempt Certificate”) and (y) two accurate and complete signed copies of Internal Revenue Service Form W-8 (or successor form) certifying such Lender’s entitlement to an exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note.  In addition, each Lender agrees that it will deliver upon the Borrower’s request updated versions of the foregoing, as applicable, whenever the previous certification has become obsolete or inaccurate in any material respect, together with such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note.  Notwithstanding anything to the contrary contained in Section 2.18(a), but subject to the immediately succeeding sentence, (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold Taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Foreign Lender for U.S. Federal income tax purposes to the extent that such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 2.18(a) hereof to gross-up payments to be made to a Lender in respect of Taxes imposed by the United States if (I) such Lender has not provided to the Borrower the Internal Revenue Service Forms required to be provided to the Borrower pursuant to this Section 2.18(b) or (II) in the case of a payment, other than interest, to a Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such Taxes.  Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 2.18, the Borrower agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 2.18(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any

 

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amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Closing Date in any Applicable Law, or in the interpretation thereof, relating to the deducting or withholding of Taxes.

 

Without limiting the obligations of the Lenders set forth above regarding delivery of certain forms and documents to establish each Lender’s status for U.S. withholding tax purposes, each Lender agrees promptly to deliver to the Administrative Agent or the Borrower, as the Administrative Agent or the Borrower shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such other documents and forms required by any relevant taxing authorities under the Requirements of Law of any other jurisdiction, duly executed and completed by such Lender, as are required under such Requirements of Law and which such Lender is able to lawfully complete and deliver, to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender outside of the U.S. by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such other jurisdiction.  Each Lender shall promptly (i) notify the Administrative Agent of any change in circumstances which would modify or render invalid any such  claimed exemption or reduction, and (ii) take such steps as shall not be materially disadvantageous to it, in the sole judgment of such Lender, and as may be reasonably necessary (including the re-designation of its LIBOR Lending Office) to avoid any requirement of applicable Requirements of Law of any such jurisdiction that the Borrower make any deduction or withholding for taxes from amounts payable to such Lender.  Additionally, the Borrower shall promptly deliver to the Administrative Agent or any Lender, as the Administrative Agent or such Lender shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the Requirements of Law of any jurisdiction, duly executed and completed by the Borrower, as are required to be furnished by such Lender or the Administrative Agent under such Requirements of Law in connection with any payment by the Administrative Agent or any Lender of Taxes or other Taxes, or otherwise in connection with the Credit Documents, with respect to such jurisdiction.

 

(c)           Any Lender that is not a Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower of the Administrative Agent), executed copies of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

(d)           Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this Section; provided, however, that such efforts shall not cause the imposition on such Lender of any additional costs or other disadvantages deemed by such Lender in its sole discretion to be material.

 

(e)           If the Borrower pays any additional amount pursuant to this Section 2.18 with respect to a Lender, such Lender shall use reasonable efforts to obtain a refund of tax on account of such payment; provided that such Lender shall have no obligation to use such reasonable efforts if it believes in good faith, in its sole discretion, that claiming a refund would cause adverse tax consequences to it.  In the event that such Lender receives such a refund, such Lender shall pay to the Borrower an amount that such Lender reasonably determines is equal to the net tax benefit obtained by such Lender as a result of such payment by the Borrower.  In the event that no refund is obtained with respect to the Borrower’s payments to such Lender pursuant to this Section 2.18, then such Lender shall upon request provide a certification that such Lender has

 

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not received a refund for such payments.  Nothing contained in this Section 2.18(e) shall require a Lender to disclose or detail the basis of its calculation of the amount of any tax benefit or any other amount or the basis of its determination referred to in the proviso to the first sentence of this Section 2.18(e) to the Borrower or any other party.

 

(f)            The agreements in this Section 2.18 shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable hereunder.

 

Section 2.19         Indemnification; Nature of Issuing Lender’s Duties.

 

(a)           In addition to its other obligations under Section 2.3, the Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys’ fees) that the Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the Issuing Lender to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions, herein called “Government Acts”).

 

(b)           As between the Borrower and the Issuing Lender, the Borrower shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.  The Issuing Lender shall not be responsible:  (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii) for any consequences arising from causes beyond the control of the Issuing Lender, including, without limitation, any Government Acts.  None of the above shall affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers hereunder.

 

(c)           In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuing Lender, under or in connection with any Letter of Credit or the related certificates, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to the Borrower.  It is the intention of the parties that this Agreement shall be construed and applied to protect and indemnify the Issuing Lender against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Borrower, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any Government Authority.  The Issuing Lender shall not, in any way, be liable for any failure by the Issuing Lender or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of the Issuing Lender.

 

(d)           Nothing in this Section 2.19 is intended to limit the reimbursement obligation of the Borrower contained in Section 2.3(d) hereof.  The obligations of the Borrower under this

 

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Section 2.19 shall survive the termination of this Agreement.  No act or omissions of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the Issuing Lender to enforce any right, power or benefit under this Agreement.

 

(e)           Notwithstanding anything to the contrary contained in this Section 2.19, the Borrower shall have no obligation to indemnify any Issuing Lender in respect of any liability incurred by such Issuing Lender arising out of the gross negligence or willful misconduct of the Issuing Lender (including action not taken by an Issuing Lender), as determined by a court of competent jurisdiction.

 

Section 2.20         Extension of Revolving Maturity Date.

 

(a)           Requests for Extension.  The Borrower may, up to two times prior to the Revolving Maturity Date during the term of this Credit Agreement, by notice to the Administrative Agent (who shall promptly notify the Lenders) not earlier than 60 days and not later than 30 days prior to any anniversary of the Closing Date that occurs prior to the Revolving Maturity Date, request that each Revolving Lender consent to extend the Revolving Maturity Date for an additional one year from the Revolving Maturity Date then in effect hereunder (the “Existing Maturity Date”).

 

(b)           Lender Elections to Extend.  Each Revolving Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later than the date (the “Notice Date”) that is 15 days prior to the applicable anniversary of the Closing Date, advise the Administrative Agent whether or not such Revolving Lender agrees to such extension.  Each Lender that determines not to so extend the Revolving Maturity Date (a “Non-Extending Lender”) shall notify the Administrative Agent of such fact promptly after such determination (but in any event no later than the Notice Date).  Any Revolving Lender that does not advise the Administrative Agent on or before the Notice Date shall be deemed to be a Non-Extending Lender.  The election of any Revolving Lender to agree to such extension shall not obligate any other Revolving Lender to so agree.

 

(c)           Notification by Administrative Agent.  The Administrative Agent shall notify the Borrower of each Revolving Lender’s determination under this Section no later than the date 15 days prior to the applicable anniversary of the Closing Date (or, if such date is not a Business Day, on the next preceding Business Day).

 

(d)           Additional Commitment Lenders.  The Borrower shall have the right on or before the applicable anniversary of the Closing Date to replace each Non-Extending Lender with one or more institutions (each, an “Additional Commitment Lender”) (i) that is an existing Revolving Lender (and, if any such Additional Commitment Lender is already a Revolving Lender, the Revolving Commitment it assumes from such Non-Extending Lender shall be in addition to such Revolving Lender’s Commitment hereunder on such date, provided that each Revolving Lender shall have no obligation to increase its Revolving Commitment or become an Additional Commitment Lender) or (ii) that is not an existing Revolving Lender; provided that any such institution (A) must conform with the requirements contained in Section 9.6(c), (B) must be acceptable to the Administrative Agent (which approval shall not be unreasonably withheld or delayed) and (C) must become a Revolving Lender under this Credit Agreement by execution and delivery of an appropriate joinder agreement or of counterparts to this Credit Agreement in a manner acceptable to the Borrower and the Administrative Agent.

 

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(e)           Minimum Extension Requirement.  If (and only if) the total of the Revolving Commitments of the Revolving Lenders that have agreed so to extend the Revolving Maturity Date plus the additional Revolving Commitments of the Additional Commitment Lenders equals at least 51% of the aggregate amount of the Revolving Committed Amount in effect immediately prior to the applicable anniversary of the Closing Date, then, effective as of the applicable anniversary of the Closing Date, the Revolving Maturity Date shall be extended (subject to clause (f) below) to the date falling one year after the Existing Maturity Date (except that, if such date is not a Business Day, such Revolving Maturity Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a “Revolving Lender” for all purposes of this Agreement.

 

(f)            Conditions to Effectiveness of Extensions.  Notwithstanding the foregoing, the extension of the Revolving Maturity Date pursuant to this Section shall not be effective unless:

 

(i)            no Default or Event of Default shall have occurred and be continuing on the date of such extension and after giving effect thereto;

 

(ii)           the representations and warranties contained in this Agreement are true and correct on and as of the date of such extension and after giving effect thereto, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

 

(iii)         with respect to each Non-Extending Lender, on the Existing Maturity Date (as in effect prior to such extension), the Borrower shall prepay (provided that any such prepayment shall be subject to Section 2.17) all Borrower Obligations owing to such Non-Extending Lender and, if such Non-Extending Lender has not been replaced by an Additional Commitment Lender, the Revolving Committed Amount shall be reduced by an amount equal to such Non-Extending Lender’s Revolving Commitment;

 

(iv)          on the Existing Maturity Date (as in effect prior to such extension), if any Non-Extending Lender has not been replaced by an Additional Commitment Lender, the Borrower shall prepay (provided that any such prepayment shall be subject to Section 2.17) one or more existing Revolving Loans in an amount necessary such that, after giving effect to the extension of the Revolving Maturity Date, each Revolving Lender and each Additional Commitment Lender will hold its Pro Rata Share (based on its share of the revised Revolving Committed Amount) of outstanding Revolving Loans;

 

(v)           on the Existing Maturity Date (as in effect prior to such extension), the Borrower shall prepay (provided that any such prepayment shall be subject to Section 2.17) one or more existing Revolving Loans or Cash Collateralize Letters of Credit in an amount necessary such that, after giving effect to the extension of the Revolving Maturity Date, the aggregate amount of LOC Obligations outstanding plus Revolving Loans outstanding plus Swingline Loans outstanding shall not exceed the Revolving Committed Amount; and

 

(vi)          since the date of the most recent annual audited financial statements delivered pursuant to Section 5.1(a), no event or condition shall have occurred that has had or could be reasonably expected to have a Material Adverse Effect.

 

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Section 2.21         Defaulting Lenders.

 

Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

 

(a)           Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 9.1.

 

(b)           Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise, and including any amounts made available to the Administrative Agent for the account of such Defaulting Lender pursuant to Section 9.7), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lender and/or the Swingline Lender hereunder; third, if so determined by the Administrative Agent or requested by the Issuing Lender and/or the Swingline Lender, to be held as Cash Collateral for future funding obligations of such Defaulting Lender of any participation in any Swingline Loan or Letter of Credit; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans under this Agreement; sixth, to the payment of any amounts owing to the Administrative Agent, the Lenders, the Issuing Lender or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by the Administrative Agent, any Lender, the Issuing Lender or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (i) such payment is a payment of the principal amount of any Revolving Loans or funded participations in Swingline Loans or Letters of Credit in respect of which such Defaulting Lender has not fully funded its appropriate share and (ii) such Revolving Loans or funded participations in Swingline Loans or Letters of Credit were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Revolving Loans of, and funded participations in Swingline Loans or Letters of Credit owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Revolving Loans of, or funded participations in Swingline Loans or Letters of Credit owed to, such Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.21(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(c)           Reallocation of Pro Rata Shares to Reduce Fronting Exposure.  During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each Non-Defaulting Lender to acquire, refinance or fund participations in Letters

 

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of Credit or Swingline Loans pursuant to Section 2.4(b) and Section 2.3(c), the “Pro Rata Share” of each Non-Defaulting Lender shall be computed without giving effect to the Revolving Commitment of such Defaulting Lender; provided that (i) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists and (ii) the aggregate obligation of each Non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit and Swingline Loans shall not exceed the positive difference, if any, of (A) the Revolving Commitment of that Non-Defaulting Lender minus (B) the aggregate outstanding principal amount of the Revolving Loans of that Lender.  Subject to Section 9.21, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(d)           Cash Collateral.  If the reallocation described in clause (c) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, immediately following notice by the Administrative Agent, the Issuing Lender or the Swingline Lender, (x) first, repay Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure and (y) second, Cash Collateralize such Defaulting Lender’s LOC Obligations (after giving effect to any partial reallocation pursuant to clause (c) above) in accordance with the procedures set forth in Section 2.22 for so long as such LOC Obligations are outstanding.

 

(e)           Certain Fees.  For any period during which such Lender is a Defaulting Lender, such Defaulting Lender (i) shall not be entitled to receive any Commitment Fee pursuant to Section 2.6(a) (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender) and (ii) shall not be entitled to receive any letter of credit commissions pursuant to Section 2.6(b) otherwise payable to the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided cash collateral or other credit support arrangements satisfactory to the Issuing Lender pursuant to Section 2.21(d), but instead, the Borrower shall pay to the Non-Defaulting Lenders the amount of such letter of credit commissions in accordance with the upward adjustments in their respective Pro Rata Share allocable to such Letter of Credit pursuant to Section 2.21(c), with the balance of such fee, if any, payable to the Issuing Lender for its own account.

 

(f)            Defaulting Lender Cure.  If the Borrower, the Administrative Agent, the Swingline Lender and the Issuing Lender agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lenders in accordance with their Pro Rata Share (without giving effect to Section 2.21(c)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.

 

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Section 2.22         Cash Collateral.  At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Issuing Lender or the Swingline Lender (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, with respect to such Defaulting Lender (determined after giving effect to Section 2.21(c) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

(a)           Grant of Security Interest.  The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the Swingline Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of LOC Obligations and Swingline Loans, to be applied pursuant to subsection (b) below.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, the Issuing Lender and the Swingline Lender as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(b)           Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.22 or Section 2.21 in respect of Letters of Credit and Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of LOC Obligations and Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(c)           Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, shall no longer be required to be held as Cash Collateral pursuant to this Section 2.22 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent, the Issuing Lender and the Swingline Lender that there exists excess Cash Collateral; provided that, subject to Section 2.21, the Person providing Cash Collateral, the Issuing Lender and the Swingline Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to enter into this Agreement and to make the Extensions of Credit herein provided for, the Credit Parties hereby represent and warrant to the Administrative Agent and to each Lender that:

 

Section 3.1            Financial Condition.

 

(a)           (i) The audited and unaudited financial statements most recently delivered pursuant to Section 5.1 herein:

 

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(A)          were prepared in accordance with GAAP (to the extent applicable) consistently applied throughout the period covered thereby, except as otherwise expressly noted therein;

 

(B)          fairly present the financial condition of the Parent and its Subsidiaries as of the date or dates thereof (subject to normal year-end adjustments) and results of operations for the period covered thereby; and

 

(C)          show all Indebtedness and other liabilities in excess of $500,000 in aggregate principal amount, direct or contingent, of the Parent and its Subsidiaries as of the date thereof, including liabilities for taxes, commitments and other contingent obligations, in each case, to the extent required to be disclosed under GAAP.

 

(b)           The written projections of the Parent and its Subsidiaries through fiscal year 2023 provided to the Administrative Agent on or before the Closing Date have been prepared in good faith based upon reasonable assumptions.

 

Section 3.2            No Change.

 

Since December 30, 2018 (and, after delivery of annual audited financial statements in accordance with Section 5.1(a), from the date of the most recently delivered annual audited financial statements) there has been no development or event which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

Section 3.3            Corporate Existence; Compliance with Law.

 

Each of the Credit Parties (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the requisite corporate or limited liability company power, authority and right to own and operate all its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified to conduct business and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to so qualify or be in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 3.4            Corporate Power; Authorization; Enforceable Obligations.

 

Each of the Credit Parties has full corporate or limited liability company power, authority and right to execute, deliver and perform the Credit Documents to which it is party and has taken all necessary limited liability company or corporate action to authorize the execution, delivery and performance by it of the Credit Documents to which it is party.  No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery or performance of any Credit Document by the Credit Parties (other than those which have been obtained) or with the validity or enforceability of any Credit Document against the Credit Parties (except such filings as are necessary in connection with the perfection of the Liens created by such Credit Documents).  Each Credit Document to which it is a party has been duly executed and delivered on behalf of each of the Credit Parties.  Each Credit Document to which it is a party constitutes a legal, valid and binding obligation of each of the Credit Parties,

 

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enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).  No Credit Party nor any Subsidiary thereof is an EEA Financial Institution.

 

Section 3.5            Compliance with Laws; No Conflict; No Default.

 

(a)           The execution, delivery and performance by each Credit Party of the Credit Documents to which such Credit Party is a party, in accordance with their respective terms, the borrowings hereunder and the transactions contemplated hereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) violate any Requirement of Law relating to such Credit Party, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws, articles of organization, operating agreement or other organizational documents of such Credit Party or any material indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any license, permit or other approval required by any Governmental Authority (collectively “Governmental Approvals”) relating to such Person, except to the extent that such conflict, breach or default with respect to any such indenture, agreement or instrument could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Liens arising under the Credit Documents.

 

(b)           Each Credit Party (i) (x) has all Governmental Approvals required by law for it to conduct its business in all material respects, each of which is in full force and effect, (y) each such Governmental Approval is final and not subject to review on appeal and (z) each such Governmental Approval is not the subject of any pending or, to the best of its knowledge, threatened attack by direct or collateral proceeding, and (ii) is in compliance with each Governmental Approval applicable to it and in compliance with all other Requirements of Law relating to it or any of its respective properties, in each case except to the extent the failure to obtain such Governmental Approval or failure to comply with such Governmental Approval or Requirement of Law could not reasonably be expected to have a Material Adverse Effect.

 

(c)           None of the Credit Parties is in default under or with respect to any of its Material Contracts, or any judgment, order or decree to which it is a party, in any respect which could reasonably be expected to have a Material Adverse Effect.  No Default or Event of Default has occurred and is continuing.

 

Section 3.6            No Material Litigation.

 

Set forth on Schedule 3.6 is a list, as of the Closing Date, of any material litigation, investigation, bankruptcy or insolvency, injunction, order or claim affecting or relating to any Credit Party or any of its Subsidiaries, any such Person’s properties or revenues, or any Credit Document that is pending or, to the knowledge of the Credit Parties, threatened, by or against any Credit Party or any of its Subsidiaries or against any of its or their respective properties or revenues that has not been settled, dismissed, vacated, discharged or terminated.  No litigation, investigation, bankruptcy or insolvency, injunction, order or claim affecting or relating to any Credit Party or any of its Subsidiaries, any such Person’s properties or revenues, or any Credit Document is pending or, to the knowledge of the Credit Parties, threatened, by or against any Credit Party or any of its Subsidiaries or against any of its or their respective properties or revenues that has not been settled, dismissed, vacated, discharged or terminated which could reasonably

 

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be expected to have a Material Adverse Effect, and no judgments are outstanding which could reasonably be expected to have a Material Adverse Effect.

 

Section 3.7            Investment Company Act; Etc.

 

No Credit Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.  No Credit Party is a subject to regulation under the Federal Power Act, the Interstate Commerce Act, or any federal or state statute or regulation limiting its ability to incur the Secured Obligations.

 

Section 3.8            Margin Regulations.

 

No part of the proceeds of any Loan hereunder will be used directly or indirectly for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  The Credit Parties (a) are not engaged, principally or as one of their important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” “margin stock” within the respective meanings of each of such terms under Regulation U and (b) taken as a group do not own “margin stock” except as identified in the financial statements referred to in Section 3.1 and the aggregate value of all “margin stock” owned by the Credit Parties taken as a group does not exceed 25% of the value of their assets.

 

Section 3.9            ERISA.

 

Except as set forth in Schedule 3.9, no Reportable Event has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code, including minimum funding requirements under Code Section 430, except to the extent that any such occurrence or failure to comply would not reasonably be expected to have a Material Adverse Effect.  No termination of a Single Employer Plan has occurred resulting in any liability that has remained unfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period which could reasonably be expected to have a Material Adverse Effect.  The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by an amount which, as determined in accordance with GAAP, could reasonably be expected to have a Material Adverse Effect.  Neither any Credit Party, nor any of its Subsidiaries nor any Commonly Controlled Entity is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan which could reasonably be expected to have a Material Adverse Effect.  As of the Closing Date the Borrower is not nor will be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.

 

Section 3.10         Environmental Matters.

 

Except for exceptions to the following which, either individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect:

 

(a)           To the knowledge of the Credit Parties, the facilities and properties owned, leased or operated by the Credit Parties or any of their Subsidiaries (the “Properties”) do not contain any Hazardous Materials in amounts or concentrations which (i) constitute a violation of, or (ii) could give rise to liability under, any Environmental Law.

 

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(b)           The Properties and all operations of the Credit Parties and their Subsidiaries at the Properties are in compliance, and have in the last five years been in compliance, in all material respects with all applicable Environmental Laws, and, to the knowledge of the Credit Parties, there is no contamination at, under or about the Properties or violation of any Environmental Law with respect to the Properties or the business operated by the Credit Parties or any of their Subsidiaries (the “Business”).

 

(c)           No Credit Party nor any Subsidiary thereof has received any written or actual notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Business, nor does any Credit Party nor any Subsidiary thereof have knowledge or reason to believe that any such notice will be received or is being threatened.

 

(d)           Hazardous Materials have not been transported or disposed of from the Properties in violation of, or in a manner or to a location which could give rise to liability under, any Environmental Law, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of the Properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Law.

 

(e)           No judicial proceeding or governmental or administrative action is pending or, to the knowledge of any Credit Party or any Subsidiary thereof, threatened, under any Environmental Law to which the Borrower or any other Credit Party or any Subsidiary is or will be named as a party with respect to the Properties or the Business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Properties or the Business.

 

(f)            There has been no release or threat of release of Hazardous Materials at or from the Properties, or arising from or related to the operations of the Borrower or any other Credit Party or any Subsidiary in connection with the Properties or otherwise in connection with the Business, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws.

 

Section 3.11         Purpose of Loans.

 

The proceeds of the Extensions of Credit shall be used solely by the Borrower as follows:

 

(a)           with respect to the Loans, to (i) to refinance certain existing indebtedness of the Borrower and its Subsidiaries including all indebtedness outstanding under the Existing Credit Agreement, (ii) finance restaurant construction costs, (iii) pay costs, fees and expenses in connection with such new restaurant construction, (iv) refinance existing Indebtedness of the Borrower, (v) pay any fees and expenses in connection with this Agreement, and (vi) provide for the working capital and general corporate requirements of the Parent, the Borrower and its Subsidiaries (including, without limitation, Restricted Payments permitted hereunder and to finance Permitted Acquisitions); and

 

(b)           the Letters of Credit shall be used only for or in connection with appeal bonds, reimbursement obligations arising in connection with surety and reclamation bonds, reinsurance, domestic or international trade transactions and obligations not otherwise aforementioned relating to transactions entered into by the applicable account party in the ordinary course of business.

 

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Section 3.12         Subsidiaries.

 

Set forth on Schedule 3.12 is a complete and accurate list of all Subsidiaries of the Credit Parties as of the Closing Date.  Information on the attached Schedule includes state of incorporation or organization; the number of authorized shares of each class of Capital Stock or other equity interests; the number of outstanding shares of each class of Capital Stock or other equity interests, the owner thereof and the percentage of such ownership; and the number and effect, of all outstanding options, warrants, rights of conversion or purchase and similar rights.  The outstanding Capital Stock and other equity interests of all such Subsidiaries that is owned by a Credit Party is validly issued, fully paid and non-assessable and is owned free and clear of all Liens (other than those arising under or contemplated in connection with the Credit Documents).

 

Section 3.13         Ownership; Insurance.

 

Each of the Credit Parties is the owner of, and has good and, to the extent applicable, marketable title to, and adequate insurance coverage for, all of its respective assets that, together with assets leased or licensed by the Credit Parties, represents all assets individually or in the aggregate material to the conduct of the businesses of the Credit Parties taken as a whole, and none of such assets is subject to any Lien other than Permitted Liens.  Each Credit Party enjoys peaceful and undisturbed possession under all of its leases and all such leases are valid and subsisting and in full force and effect other than exceptions to the foregoing that could not reasonably be expected to have a Material Adverse Effect.  The Credit Parties have delivered, or made available for review, complete and accurate copies of all material leases to the Administrative Agent as of the Closing Date.

 

Section 3.14         Indebtedness.

 

Except as otherwise permitted under Section 6.1, the Credit Parties and their Subsidiaries have no Indebtedness.

 

Section 3.15         Taxes.

 

Each of the Credit Parties and their Subsidiaries has filed, or caused to be filed, all tax returns (federal, state, local and foreign) required to be filed and paid (a) all amounts of taxes shown thereon to be due (including interest and penalties) and (b) all other taxes, fees, assessments and other governmental charges (including mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing by it, except for such taxes (i) which are not yet delinquent or (ii) that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP.  None of the Credit Parties is aware as of the Closing Date of any proposed tax assessments against it or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect.

 

Section 3.16         Intellectual Property.

 

Each of the Credit Parties and its Subsidiaries owns, or has the legal right to use, all trademarks, tradenames, copyrights, patents, technology, know-how and processes necessary for each of them to conduct its business as currently conducted.  Set forth on Schedule 3.16 is a list of all material Intellectual Property owned by the Credit Parties and their Subsidiaries or that any Credit Party or any of its Subsidiaries has the right to use.  Except as provided on Schedule 3.16, no claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property owned by a Credit Party or the validity or effectiveness of any such Intellectual Property owned by a Credit Party, nor do any Credit Party or any of its Subsidiaries know of any such claim, and, to the knowledge of any Credit Party and its Subsidiaries, the use of such Intellectual Property by any Credit Party or any of its

 

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Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Schedule 3.16 may be updated from time to time by the Borrower to include new material Intellectual Property by giving written notice thereof to the Administrative Agent.

 

Section 3.17         Solvency.

 

The fair saleable value of all Credit Parties’ assets, taken as a whole and measured on a going concern basis, exceeds all probable liabilities of the Credit Parties, taken as a whole, including those to be incurred pursuant to this Agreement.  The Credit Parties, on a consolidated basis, (a) do not have unreasonably small capital in relation to the business in which they are or propose to be engaged or (b) have not incurred, or believe that they will incur after giving effect to the transactions contemplated by this Agreement, debts beyond its ability to pay such debts as they become due.

 

Section 3.18         Investments.

 

All Investments of each of the Credit Parties and their Subsidiaries are Permitted Investments.

 

Section 3.19         Location of Collateral.

 

Set forth on Schedule 3.19(a) is a list of the owned and leased real Properties of the Credit Parties and their Subsidiaries as of the Closing Date, with street address, county and state where located as of the Closing Date, an indication of whether such real Property is owned or leased and, in the case of leased real property, the annual rental value thereof.  Set forth on Schedule 3.19(b) is a list of all locations (other than locations set forth on Schedule 3.19(a)) where any tangible personal property of the Credit Parties with a fair market value equal to or greater than $1,000,000 is located as of the Closing Date, including county and state where located as of the Closing Date.  Set forth on Schedule 3.19(c) is the chief executive office and principal place of business of the Credit Parties as of the Closing Date.  Except as noted on Schedule 3.19(d), as of the Closing Date no personal property of any Credit Party is (i) stored with a bailee, warehouseman, processor or similar Person or (ii) consigned to any Person.

 

Section 3.20         No Burdensome Restrictions.

 

None of the Credit Parties or any of its Subsidiaries is a party to any agreement or instrument or subject to any other obligation or any charter or corporate restriction or any provision of any Applicable Law that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 3.21         Brokers’ Fees.

 

Except as set forth on Schedule 3.21, none of the Credit Parties or any of its Subsidiaries have any obligation to any Person in respect of any finder’s, broker’s, investment banking or other similar fee in connection with any of the transactions contemplated under the Credit Documents other than the closing and other fees payable pursuant to this Agreement and the Fee Letter.

 

Section 3.22         Labor Matters.

 

There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Credit Parties or any of its Subsidiaries as of the Closing Date, other than as set forth in Schedule 3.22 hereto.  As of the Closing Date none of the Credit Parties or any of its Subsidiaries (i) has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the five years preceding the

 

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Closing Date, other than as set forth in Schedule 3.22 hereto or (ii) has knowledge of any pending strike, walkout or work stoppage that could, in either case, reasonably be expected to have a Material Adverse Effect.

 

Section 3.23         Security Documents.

 

The Security Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are currently (or will be, upon the filing of appropriate financing statements and grants of security in Intellectual Property, in each case in favor of the Administrative Agent) perfected security interests and Liens, prior to all other Liens other than Permitted Liens.

 

Section 3.24         Accuracy and Completeness of Information.

 

No written report, financial statement, certificate or other information furnished by or on behalf of any Credit Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Credit Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits any material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading as of the date furnished; provided that, with respect to projected financial information and other forward looking information, each Credit Party represents only that such information was prepared in good faith on the basis of the assumptions stated therein, which assumptions were reasonable at the time prepared in light of the conditions existing at such time, and represented, at the time of delivery, such Credit Party’s reasonable estimate of its future financial condition and performance (it being understood that projections by their nature are inherently uncertain, actual results may differ from projections and such differences may be material).  There is no fact now known to any Credit Party or any of its Subsidiaries which has, or could reasonably be expected to have, a Material Adverse Effect, which fact has not been set forth herein, in the financial statements of the Credit Parties furnished to the Administrative Agent, or in any certificate, opinion or other written statement made or furnished by or on behalf of the Credit Parties to the Administrative Agent and/or the Lenders.  As of the Closing Date, all of the information included in the Beneficial Ownership Certification is true and correct.

 

Section 3.25         Material Contracts.

 

Schedule 3.25 sets forth a complete and accurate list of all Material Contracts of the Borrowers and their Subsidiaries in effect as of the Closing Date.  As of the Closing Date, other than as set forth in Schedule 3.25, each such Material Contract is, and after giving effect to the transactions contemplated by the Credit Documents will be, in full force and effect in accordance with the terms thereof and no Borrower or Subsidiary thereof has violated in any material respect any such Material Contract.  The Borrowers have delivered or made available to the Administrative Agent for its review a correct and complete copy of each written agreement listed in Schedule 3.25 (as amended to date) and a written summary setting forth the terms and conditions of each oral agreement referred to in such Schedule.

 

Section 3.26         Anti-Corruption Laws; Anti-Money Laundering Laws and Sanctions.

 

(a)           None of (i) any Credit Party, any of their Subsidiaries, any of their respective directors, officers, or, to the knowledge of any such Credit Party or such Subsidiary, any of their respective employees or Affiliates, or (ii) to the knowledge of any Credit Party, any agent or representative of any Credit Party or any of their Subsidiaries that will act in any capacity in connection with or benefit from the credit facility established hereunder, (A) is a Sanctioned Person or currently the subject or target of

 

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any Sanctions, (B) is controlled by or is acting on behalf of a Sanctioned Person, (C) has its assets located in a Sanctioned Country, (D) is under administrative, civil or criminal investigation for an alleged violation of, or received notice from or made a voluntary disclosure to any governmental entity regarding a possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions by a governmental authority that enforces Sanctions or any Anti-Corruption Laws or Anti-Money Laundering Laws, or (E) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons.

 

(b)           Each Credit Party and their Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by the Credit Parties and their Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions.

 

(c)           Each Credit Party and their Subsidiaries, each director, officer, and to the knowledge of such Credit Party, employee, agent and Affiliate of each such Credit Party and Subsidiary, is in compliance with all Anti-Corruption Laws, Anti-Money Laundering Laws in all material respects and applicable Sanctions.

 

(d)           No proceeds of any Extension of Credit have been used, directly or indirectly, by any Credit Party, any of their Subsidiaries or any of their respective directors, officers, employees and agents in violation of Section 5.17(a).

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1            Conditions to Closing and Initial Extensions of Credit.

 

This Agreement shall become effective upon, and the obligation of each Lender to make the initial Extensions of Credit on the Closing Date is subject to, the satisfaction of the following conditions precedent:

 

(a)           Execution of Credit Documents.  The Administrative Agent shall have received (i) counterparts of this Agreement, (ii) for the account of each Revolving Lender requesting the same, a Revolving Note, (iii) for the account of each Term Loan Lender requesting the same, a Term Loan Note, (iv) for the account of the Swingline Lender, the Swingline Note, and (v) counterparts to the Security Agreement and the Pledge Agreement, in each case conforming to the requirements of this Agreement and executed by a duly authorized officer of each party thereto, and in each case in form and substance reasonably satisfactory to the Lenders.

 

(b)           Authority Documents.  The Administrative Agent shall have received the following:

 

(i)            Articles of Incorporation/Charter Documents.  Copies of the articles of incorporation or other charter documents, as applicable, of each Credit Party (A) certified by a secretary or assistant secretary of such Credit Party as of the Closing Date to be true and complete and (B) with respect to each Credit Party other than Western Franchise Development, Inc., certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state of its incorporation.

 

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(ii)           Resolutions.  Copies of resolutions of the board of directors of each Credit Party approving and adopting the Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by a secretary or assistant secretary of such Credit Party (pursuant to a secretary’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) as of the Closing Date to be true and correct and in force and effect as of such date.

 

(iii)          Bylaws/Operating Agreement.  A copy of the bylaws or comparable operating agreement of each Credit Party certified by a secretary or assistant secretary of such Credit Party (pursuant to a secretary’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) as of the Closing Date to be true and correct and in force and effect as of such date.

 

(iv)          Good Standing.  Copies of certificates of good standing, existence or its equivalent with respect to each Credit Party certified as of a recent date by the appropriate Governmental Authorities of the state of incorporation or organization.

 

(v)           Incumbency.  An incumbency certificate of each Credit Party certified by a secretary or assistant secretary (pursuant to a secretary’s certificate in substantially the form of Exhibit 4.1(b) attached hereto) to be true and correct as of the Closing Date.

 

(c)           Legal Opinions of Counsel.  The Administrative Agent shall have received opinions of legal counsel (including local counsel to the extent required by the Administrative Agent) for the Credit Parties, dated the Closing Date and addressed to the Administrative Agent and the Lenders in form and substance reasonably acceptable to the Administrative Agent.

 

(d)           Personal Property Collateral.  The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent:

 

(i)            searches of Uniform Commercial Code filings in the jurisdiction of the state of incorporation or organization of each Credit Party and each other jurisdiction deemed necessary by the Administrative Agent and copies of the financing statements on file in such jurisdictions;

 

(ii)           UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the Collateral;

 

(iii)          searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as reasonably requested by the Administrative Agent in order to perfect the Administrative Agent’s security interest in the Intellectual Property;

 

(iv)          all stock or membership certificates, if any, evidencing the Capital Stock pledged to the Administrative Agent pursuant to the Pledge Agreement, together with duly executed in blank undated stock or transfer powers attached thereto;

 

(v)           all instruments and chattel paper individually in excess of $500,000 in the possession of any of the Credit Parties, together with allonges or assignments as may be necessary or appropriate to perfect the Administrative Agent’s security interest in such instruments and chattel paper;

 

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(vi)          with respect to the deposit accounts and securities accounts of the Credit Parties, such control agreements as may be required pursuant to the terms of Section 5.14; and

 

(vii)         such other duly executed agreements or consents as are necessary, in the Administrative Agent’s reasonable discretion, to perfect the Administrative Agent’s security interest in the Collateral.

 

(e)           Liability, Casualty, Business Interruption and Food Borne Illness Insurance.  The Administrative Agent shall have received copies of insurance policies or certificates of insurance evidencing liability, casualty, business interruption and food borne illness insurance meeting the requirements set forth herein or in the Security Documents.  The Administrative Agent shall be named as loss payee, as its interest may appear, and/or additional insured with respect to such insurance, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice (or ten (10) days, in the event of cancellation for non-payment of premium) before any such policy or policies shall be altered or canceled.

 

(f)            Fees.  The Administrative Agent and the Lenders shall have received all fees, if any, owing pursuant to the Fee Letters and Section 2.6.

 

(g)           Litigation.  Except for litigation disclosed on Schedule 3.6, there shall not exist any material litigation, investigation, bankruptcy or insolvency, injunction, order or claim affecting or relating to any Credit Party or any of its Subsidiaries or with respect to this Agreement and the other Credit Documents that has not been settled, dismissed, vacated, discharged or terminated prior to the Closing Date.

 

(h)           Solvency Certificate.  The Administrative Agent shall have received an officer’s certificate prepared by the chief financial officer or the treasurer of the Parent as to the financial condition, solvency and related matters of the Credit Parties, taken as a whole, in substantially the form of Exhibit 4.1(h) hereto.

 

(i)            Account Designation Notice.  The Administrative Agent shall have received the executed Account Designation Notice in the form of Exhibit 1.1(a) hereto.

 

(j)            Corporate Structure.  The corporate, capital and ownership structure of the Credit Parties and their Subsidiaries shall be as described in Schedule 3.12, and shall otherwise be reasonably satisfactory to the Administrative Agent and the Lenders.

 

(k)           Consents.  The Administrative Agent shall have received evidence that all material governmental, shareholder, board of director and third party consents and approvals necessary in connection with the financings and other transactions contemplated hereby have been obtained.

 

(l)            Compliance with Laws.  The financings and other transactions contemplated hereby shall be in compliance with all Applicable Laws (including all applicable securities and banking laws, rules and regulations).

 

(m)          Bankruptcy.  There shall be no bankruptcy or insolvency proceedings with respect to any Credit Party or any of its Subsidiaries.

 

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(n)           Material Adverse Effect.  No material adverse change shall have occurred since December 30, 2018 in the business, properties, operations or financial condition of the Credit Parties and their Subsidiaries taken as a whole.

 

(o)           Financial Statements.  The Administrative Agent shall have received copies of (i) the audited consolidated financial statements of the Parent and its Subsidiaries for the fiscal year ended December 30, 2018 and (ii) the unaudited consolidated financial statements of the Parent and its Subsidiaries for the fiscal quarter ended October 6, 2019, each in form and substance reasonably satisfactory to it.

 

(p)           [reserved]

 

(q)           Officer’s Certificates.  The Administrative Agent shall have received a certificate executed by a Responsible Officer of the Parent as of the Closing Date stating that (i) except as set forth on Schedule 3.6, there is no material pending or, to the knowledge of any Credit Party, threatened litigation, investigation, bankruptcy or insolvency, injunction, order or claim affecting or relating to any Credit Party or any of its Subsidiaries, this Agreement or the other Credit Documents, that has not been settled, dismissed, vacated, discharged or terminated prior to the Closing Date, (ii) no material adverse change shall have occurred since December 30, 2018 in the business, properties, operations or financial condition of the Credit Parties and their Subsidiaries taken as a whole, (iii) immediately after giving effect to this Agreement (including the initial Extensions of Credit hereunder), the other Credit Documents and all the transactions contemplated therein to occur on such date, (A) no Default or Event of Default exists and (B) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects and (iv) each of the Credit Parties, as applicable, has satisfied each of the conditions set forth in Section 4.1 and Section 4.2.

 

(r)            Patriot Act, etc.  The Borrower and each of the Guarantors shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the Patriot Act, applicable “know your customer” and anti-money laundering rules and regulations.  The Borrower shall have delivered to the Administrative Agent, and directly to any Lender requesting the same, a Beneficial Ownership Certification in relation to it (or a certification that such Borrower qualifies for an express exclusion from the “legal entity customer” definition under the Beneficial Ownership Regulations), in each case at least five (5) Business Days prior to the Closing Date.

 

(s)            Additional Matters.  All other documents and legal matters in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

 

Without limiting the generality of the provisions of Section 8.3, for purposes of determining compliance with the conditions specified in this Section 4.1, the Administrative Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

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Section 4.2            Conditions to All Extensions of Credit.

 

The obligation of each Lender to make any Extension of Credit (including, without limitation, any Swingline Loan made pursuant to the Autoborrow Feature) hereunder is subject to the satisfaction of the following conditions precedent on the date of making such Extension of Credit:

 

(a)           Representations and Warranties.  The representations and warranties made by the Credit Parties herein, in the Security Documents or which are contained in any certificate furnished at any time under or in connection herewith shall be true and correct on and as of the date of such Extension of Credit as if made on and as of such date, except for representations and warranties expressly stated to relate to a specific earlier date.

 

(b)           No Default or Event of Default.  No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to such Extension of Credit.

 

(c)           Compliance with Commitments.  Immediately after giving effect to the making of any such Extension of Credit (and the application of the proceeds thereof), (i) the sum of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall not exceed the Revolving Committed Amount, (ii) the LOC Obligations shall not exceed the LOC Sublimit and (iii) the Swingline Loans shall not exceed the Swingline Sublimit.

 

(d)           Additional Conditions to Revolving Loans.  If a Revolving Loan is requested, all conditions set forth in Section 2.1 shall have been satisfied.

 

(e)           Additional Conditions to Letters of Credit.  If the issuance of a Letter of Credit is requested, all conditions set forth in Section 2.3 shall have been satisfied.

 

(f)            Additional Conditions to Swingline Loans.  If a Swingline Loan is requested, all conditions set forth in Section 2.4 shall have been satisfied.

 

(g)           Additional Conditions to Canadian Dollar Extensions of Credit.  In the case of an Extension of Credit to be denominated in Canadian Dollars, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent or the Required Lenders would make it impracticable for such Extension of Credit to be denominated in Canadian Dollars.

 

Each request for an Extension of Credit (including, without limitation, any Swingline Loan made pursuant to the Autoborrow Feature, which shall be deemed a request by the Borrower for a Swingline Loan for purposes of this Section 4.2) and each acceptance by the Borrower of any such Extension of Credit shall be deemed to constitute representations and warranties by the Borrower as of the date of such Extension of Credit that the applicable conditions in paragraphs (a) through (g) of this Section have been satisfied.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

The Credit Parties hereby covenant and agree that on the Closing Date, and thereafter for so long as this Agreement is in effect and until the Commitments have terminated, no Note remains outstanding

 

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and unpaid and the Secured Obligations together with interest, Commitment Fee and all other amounts owing to the Administrative Agent or any Lender hereunder, are paid in full, the Credit Parties shall, and shall cause each of their Subsidiaries (other than in the case of Sections 5.1, 5.2 or 5.7 hereof), to:

 

Section 5.1            Financial Statements.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)           Annual Financial Statements.  As soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Parent, a copy of the consolidated balance sheet of the Parent and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows of the Parent and its consolidated Subsidiaries for such year which shall be audited by a firm of independent certified public accountants of nationally recognized standing reasonably acceptable to the Administrative Agent, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification or exception, or qualification indicating that the scope of the audit was inadequate to permit such independent certified public accountants to certify such financial statements without such qualification;

 

(b)           Quarterly Financial Statements.  As soon as available and in any event within forty-five (45) days after the end of each fiscal quarter of the Parent, a copy of the consolidated balance sheet of the Parent and its consolidated Subsidiaries as at the end of such period and related consolidated statements of income and retained earnings and of cash flows for the Parent and its consolidated Subsidiaries for such quarterly period and for the portion of the fiscal year ending with such period, in each case setting forth in comparative form consolidated figures for the corresponding period or periods of the preceding fiscal year (provided that the balance sheet will be compared to the balance sheet from the prior fiscal year end) subject to normal recurring year-end audit adjustments and the absence of footnotes);

 

(c)           Officer’s Certificate.  At the time of delivery of the financial statements provided for in Sections 5.1(a) and 5.1(b) above, a certificate of a Responsible Officer of the Parent substantially in the form of Exhibit 5.1(c), (i) demonstrating compliance with the financial covenants contained in Section 5.9 by calculation thereof as of the end of each such fiscal period and (iii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action the Credit Parties propose to take with respect thereto.

 

(d)           Annual Operating Budget and Cash Flow.  As soon as available, but in any event within sixty (60) days following the end of each fiscal year, a copy of the detailed annual operating budget or plan including cash flow projections of the Parent and its Subsidiaries for the next four fiscal quarter period prepared on a quarterly basis, in form and detail reasonably acceptable to the Administrative Agent, together with a summary of the material assumptions made in the preparation of such annual budget or plan;

 

all such financial statements to be complete and correct in all material respects (subject, in the case of interim statements, to normal recurring year-end audit adjustments) and to be prepared in reasonable detail and, in the case of the annual and quarterly financial statements provided in accordance with subsections (a) and (b) above, in accordance with GAAP applied consistently throughout the periods reflected therein and further accompanied by a description of, and an estimation of the effect on the financial statements on account of, a change, if any, in the application of accounting principles as provided in Section 1.3.  As to any information contained in materials furnished or made available

 

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pursuant to Section 5.2(b), Parent shall not be separately required to furnish such information under Section 5.1(a) or (b) above, but the foregoing shall not be in derogation of the obligation of Parent to furnish the information and materials described in Sections 5.1(a) and (b) above at the times specified therein.

 

Section 5.2            Certificates; Other Information.

 

Furnish to the Administrative Agent and each of the Lenders:

 

(a)           [reserved];

 

(b)           promptly after the same are sent or upon their becoming available, copies of or access to (i) all financial statements, reports, notices and proxy statements sent or made available by the Credit Parties to their equityholders, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any of the Credit Parties with any securities exchange or any governmental or private regulatory authority, and (iii) all press releases and other statements made available by any of the Credit Parties to the public concerning material developments in the business of any of the Credit Parties;

 

(c)           not less than twenty (20) Business Days prior to the consummation of any Permitted Acquisition with Total Consideration in excess of $5,000,000, the following information:

 

(i)            a reasonably detailed description of the material terms of such Permitted Acquisition (including, without limitation, the purchase price and method and structure of payment) and of each Target;

 

(ii)           to the extent available, audited financial statements of the Target for its two (2) most recent fiscal years prepared by independent certified public accountants acceptable to the Administrative Agent and unaudited fiscal year-to-date statements for the two (2) most recent interim periods;

 

(iii)          consolidated projected income statements of the Parent and its consolidated Subsidiaries (giving effect to such Permitted Acquisition and the consolidation with the Parent of each relevant Target) for the three (3)-year period following the consummation of such Permitted Acquisition, in reasonable detail, together with any appropriate statement of assumptions and pro forma adjustments reasonably acceptable to the Administrative Agent;

 

(iv)          a certificate, in form and substance reasonably satisfactory to the Administrative Agent, executed by a Responsible Officer of the Parent (A) setting forth a good faith estimate of the Total Consideration to be paid for each Target, and (B) certifying that (1) such Permitted Acquisition complies with the requirements set forth in the definition thereof in Section 1.1 of this Agreement and (2) after giving effect to such Permitted Acquisition and any borrowings in connection therewith, the Parent believes in good faith that it will have sufficient availability under the Revolving Commitments to meet its ongoing working capital requirements; and

 

(v)           any due diligence reports prepared by, or on behalf of, any Credit Party with respect to the Target;

 

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provided, that with respect to any Permitted Acquisition consummated within the first twenty (20) Business Days following the Closing Date, the delivery of the information required pursuant to clauses (i)-(v) above on the Closing Date shall satisfy the requirements of this Section 5.2(c).

 

(d)           promptly, such additional financial and other information as the Administrative Agent, or any Lender through the Administrative Agent, may from time to time reasonably request; and

 

(e)           concurrently with the delivery of the financial statements referred to in Section 5.1(b) above, notice of any acquisition or construction of a new restaurant; and

 

(f)            promptly upon the request thereof, such other information and documentation required under applicable “know your customer” rules and regulations, the Patriot Act, or any applicable Anti-Money Laundering Laws or Anti-Corruption Laws, in each case, as from time to time reasonably requested by the Administrative Agent or any Lender.

 

Documents required to be delivered pursuant to Section 5.1(a) or (b), or Section 5.2(b) or (e) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Parent posts such documents, or provides a link thereto on Parent’s website; (ii) on which such documents are posted on Parent’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); or (iii) on which such documents are available on the website of the Securities and Exchange Commission at www.sec.gov.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the Issuing Lender materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on the Platform and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that at such time as and for so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Lender and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.15); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and each of the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

Section 5.3            Payment of Taxes and Other Obligations.

 

Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its taxes (Federal, state, local and any other taxes) and other material obligations and

 

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liabilities of whatever nature and any additional costs that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such taxes, obligations and liabilities (except where the failure to pay, discharge or satisfy such obligations and liabilities (other than taxes) could not reasonably be expected to have a Material Adverse Effect), except when the amount or validity of any such taxes, obligations and liabilities is currently being contested in good faith by appropriate proceedings and reserves, if applicable, in conformity with GAAP with respect thereto have been provided on the books of the Credit Parties.

 

Section 5.4            Maintenance of Existence.

 

Preserve, renew and keep in full force and effect its existence and good standing and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business and to maintain its goodwill; comply with all Material Contracts and Requirements of Law applicable to it except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 5.5            Maintenance of Property; Insurance.

 

(a)           Keep all material property useful and necessary in its business in good working order and condition (ordinary wear and tear and obsolescence excepted).

 

(b)           Maintain with financially sound and reputable insurance companies (i) insurance on all its property (including without limitation its tangible Collateral) insuring against at least such risks as are usually insured against in the same or a similar business, (ii) liability and food borne illness insurance covering at least such risks as are usually insured against in the same or a similar business; and furnish to the Administrative Agent, upon written request, full information as to the insurance carried.  The Administrative Agent shall be named as loss payee or mortgagee, as its interest may appear, or an additional insured, as applicable, with respect to such insurance policies, and each provider of such insurance policies shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or canceled (or ten (10) days, in the event of cancellation for non-payment of premium), and that no act or default of any Credit Party or any of its Subsidiaries or any other Person shall affect the rights of the Administrative Agent or the Lenders under such policy or policies.  The present insurance coverage of the Credit Parties as of the Closing Date is outlined as to carrier, policy number, expiration date, type and amount on Schedule 5.5(b).

 

(c)           In case of any material loss, damage to or destruction of the Collateral of any Credit Party or any material part thereof, such Credit Party shall promptly give written notice thereof to the Administrative Agent generally describing the nature and extent of such damage or destruction.

 

Section 5.6            Inspection of Property; Books and Records; Discussions.

 

Keep proper books of records and accounts in which full, true and correct entries (in all material respects) shall be made of all dealings and transactions in relation to its businesses and activities, such entries to be in conformity with GAAP and all Requirements of Law; and permit, during regular business hours and upon reasonable notice by the Administrative Agent or any Lender, the Administrative Agent or any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired, and to discuss the business, operations, properties and financial and other condition of the Credit Parties and their Subsidiaries with officers and employees of the Credit Parties and with its independent certified public

 

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accountants; provided, however, that the Credit Parties shall only be required to reimburse the expenses of the Administrative Agent for two such inspections and examinations in any fiscal year, unless an Event of Default has occurred and is continuing, in which case the Administrative Agent or any Lender (or any of its respective representatives or independent contractors) shall not be so limited.

 

Section 5.7            Notices.

 

Give notice in writing to the Administrative Agent (which shall promptly transmit such notice to each Lender) of:

 

(a)           promptly, but in any event within five (5) Business Days after any Credit Party knows or has reason to know thereof, the occurrence of any Default or Event of Default;

 

(b)           promptly, the occurrence of any default or event of default under any Material Contracts of any Credit Party or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect;

 

(c)           promptly, any litigation, or any investigation or proceeding known to any Credit Party (i) affecting any Credit Party or any of its Subsidiaries which, if adversely determined, could reasonably be expected to have a Material Adverse Effect or involve a monetary claim in excess of $10,000,000, (ii) affecting or with respect to this Agreement or any other Credit Document or (iii) involving an environmental claim or potential liability under Environmental Laws in excess of $5,000,000;

 

(d)           as soon as possible and in any event within thirty (30) days after any Credit Party knows or has reason to know thereof:  (i) the occurrence or expected occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC (other than a Permitted Lien) or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or any Credit Party or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan, in each case that could reasonably be expected to have a Material Adverse Effect or involve a monetary claim or potential liability in excess of $5,000,000;

 

(e)           any notice of any material violation of any Requirement of Law received by any Credit Party or any of its Subsidiaries from any Governmental Authority including, without limitation, any notice of material violation of Environmental Laws;

 

(f)            any labor controversy that has resulted in, or threatens to result in, a strike or other work action against any Credit Party or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect;

 

(g)           any attachment, judgment, lien, levy or order exceeding $10,000,000 that may be assessed against any Credit Party other than Permitted Liens; and

 

(h)           promptly, any other development or event which could reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Credit Parties

 

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