UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Sixth Amendment to Credit Agreement
On March 24, 2023 (the “Sixth Amendment Effective Date”), Ribbon Communications Inc. (the “Company”), Ribbon Communications Operating Company, Inc. (the “Borrower”), and certain of their subsidiaries entered into a Sixth Amendment to Credit Agreement (the “Sixth Amendment”), which amends that certain Credit Agreement (as previously amended, the “Existing Credit Agreement” and, as amended by the Sixth Amendment, the “Credit Agreement”; the credit facilities thereunder, the “Senior Secured Credit Facilities”), dated as of March 3, 2020, by and among the Company, as a guarantor, the Borrower, Citizens Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), a lender, issuing lender, swingline lender, joint lead arranger and bookrunner, Santander Bank, National Association, as a lender, joint lead arranger and bookrunner, and the other lenders party thereto (each, together with Citizens Bank, N.A. and Santander Bank, National Association, referred to individually as a “Lender”, and collectively, the “Lenders”). The Sixth Amendment, among other changes, expressly permits the Private Placement (as defined below), the net proceeds of which will be used to pay down a portion of the outstanding amount of term loans under the Credit Agreement. In addition, the Sixth Amendment reduces the amount available for revolving loans under the Senior Secured Credit Facilities to $75 million and reduces the sublimit available for letters of credit. The Sixth Amendment also updates the benchmark interest rate provisions under the Credit Agreement to replace the London interbank offered rate (LIBOR) with a term rate based on the Secured Overnight Financing Rate (“Term SOFR”).
The Sixth Amendment increases the maximum Consolidated Net Leverage Ratio (as defined in the Credit Agreement), which the Borrower must comply with on a quarterly basis. Pursuant to the Sixth Amendment, the Company will not be required to comply with a maximum Consolidated Senior Net Leverage Ratio (as defined in the Credit agreement) until the end of the fiscal quarter ending June 30, 2024 (such compliance, at and after such time, to be tested on a quarterly basis).
After giving effect to the Sixth Amendment, loans incurred under the Senior Secured Credit Facilities will bear interest, at the Borrower’s option, at either the Term SOFR rate plus a margin of 4.50% per year, or the base rate (the highest of the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50%, or the prime rate announced from time to time in The Wall Street Journal) plus a margin of 3.50% per year (such margins being referred to as the “Applicable Margin”). Pursuant to the Sixth Amendment, the commitment fee applied to the daily amount of unused portions of the commitments under the Credit Agreement is 0.50% per year. The Sixth Amendment prohibits the Borrower from making certain acquisitions, certain repurchases of equity, certain dividends and certain other restricted payments, and certain investments, in each case, until after the delivery (or deemed delivery upon filing of such financial statements with the Securities and Exchange Commission (the “SEC”)) to the Administrative Agent of the Company’s unaudited quarterly financial statements for the Company’s fiscal quarter ending March 31, 2024.
The foregoing summary of the terms of the Sixth Amendment is qualified in its entirety by reference to the Sixth Amendment, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Private Placement
Securities Purchase Agreement
On March 28, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) for the sale by the Company in a private placement (the “Private Placement”) of (i) 55,000 shares of the Company’s Series A preferred stock, par value $0.01 per share (the “Preferred Stock”), at a price per share of $970, and (ii) warrants (the “Warrants” and, together with the Preferred Stock, the “Securities”) to purchase up to an aggregate of 4,858,090 shares (the “Warrant Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The Private Placement closed on March 30, 2023 (the “Closing Date”).
The aggregate gross proceeds for the issuance and sale of the Securities were approximately $53.4 million, before deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Private Placement to pay down a portion of the outstanding amount of term loans under the Credit Agreement.
The Private Placement was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act. The Securities were offered without any general solicitation by the Company or its representatives. The Securities sold and issued in the Private Placement are not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the “SEC”) or an applicable exemption from the registration requirements.
The Purchase Agreement provides the Purchasers with certain registration rights that require the Company to file a registration statement on Form S-3 (the “Registration Statement”) with the SEC within 30 days following the Closing Date to register the Securities and the Warrant Shares for resale by the Purchasers. The Company also agreed, among other things, to indemnify the selling securityholders under the Registration Statement from certain liabilities and to pay all fees and expenses incident to the Company’s performance of or compliance with the registration of the Securities.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Purchase Agreement, which is filed as Exhibit 10.2 hereto, and is incorporated herein by reference.
Preferred Stock
Pursuant to the terms of the Purchase Agreement, the Company filed with the Delaware Secretary of State a Certificate of Designation, Preferences and Rights (the “Certificate of Designation”) designating 63,250 shares of the Preferred Stock, effective as of the Closing Date, which is attached as Exhibit 3.1 to this Current Report on Form 8-K.
Dividends. The holders of the Preferred Stock will be entitled to receive cumulative dividends, at a rate of 9.25% prior to the first anniversary of the Closing Date, 9.75% per annum on or after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date and 12.00% on or after the second anniversary of the Closing Date and thereafter, and in accordance with the terms of the Certificate of Designation.
Preferred dividends will be payable (i) in-kind from the Closing Date until the first anniversary of the Closing Date, (ii) on or after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, in kind or in cash, at the Company’s option, and (iii) after the second anniversary of the Closing Date, in cash. In the event that the Company does not declare and pay the full amount of dividends in cash, the dividend base amount for the Preferred Stock will automatically increase at the above dividend rate, on a compounding basis.
Redemption. At any time or from time to time on or after the first anniversary of the Closing Date, the Company, at its option, may redeem any shares of the Preferred Stock for cash at the redemption prices per share (expressed as percentages of the liquidation preference of the Preferred Stock to be redeemed) set forth as follows: (i) 103%, on or after the first anniversary of the Closing Date; and (ii) 102%, on or after the second anniversary of the Closing Date and thereafter. The Preferred Stock is subject to mandatory redemption on September 30, 2025 at a purchase price per share of 102% multiplied by the liquidation preference of the Preferred Stock.
Ranking. The Preferred Stock ranks senior to the Common Stock and any other equity securities the Company may issue in the future with respect to payment of dividends and distribution of assets upon liquidation, dissolution, winding up or Change of Control Event (as defined in the Certificate of Designation).
Liquidation. Upon the occurrence of any Trigger Event (as defined in the Certificate of Designation), the holders of Preferred Stock shall be entitled to cause the Company to immediately redeem for cash all, but not less than all, of the outstanding shares of Preferred Stock at a purchase price per share of 102% multiplied by the liquidation preference of the Preferred Stock.
Conversion to Indebtedness. In the event any redemption of the shares of the Preferred Stock is prohibited on the Redemption Date by the express terms of the Credit Agreement, as in effect as of the Closing Date, then in lieu of such redemption and payment on such date, the redemption of such shares of Preferred Stock shall occur on a date that is no later than 91 days after the date on which the principal amount of the loans under the Credit Agreement has been repaid; provided, if such shares of Preferred Stock are, due to such express terms, not permitted to be repaid on the date of repayment of such loans, and all of the loans have been repaid in full, the shares of Preferred Stock shall be automatically, and without further action or consideration by the holder, be converted into a promissory note in favor of the holders, obligating the Company or its successor in interest to pay an amount equal to the Liquidation Preference on a date no later than 91 days after the date on which the principal amount of the loans under the Credit Agreement has been repaid.
Voting Rights. The Certificate of Designation provides that the Preferred Stock will have no voting rights other than the right to vote, subject to certain exceptions, with respect to any amendment of the Certificate of Incorporation (including the Certificate of Designation), any issuance of Capital Stock (as defined in the Certificate of Designation), any increase or decrease of the authorized number of shares of Preferred Stock and any merger or consolidation of the Company, and shall not be entitled to vote on any other matter except to the extent required under the General Corporation Law of the State of Delaware.
There is no established public trading market for the Preferred Stock and the Company does not intend to list the Preferred Stock on any national securities exchange or nationally recognized trading system.
The foregoing description of the terms of Certificate of Designation does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designation, which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.
Warrants
The Warrants are exercisable for shares of Common Stock immediately at an exercise price equal to $3.77, which represents a 15% premium to the lower of (i) the closing price of the Common Stock on March 24, 2023 and (ii) the two day VWAP (as defined in the Purchase Agreement) of March 27, 2023 and March 28, 2023 (the “Exercise Price”), and will expire four years from the date of issuance. The Exercise Price is subject to customary adjustments for stock dividends, stock splits, recapitalizations and the like, and subject to price-based adjustment, on a weighted average basis, in the event of any issuance of Common Stock or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Exercise Price (subject to certain exceptions). There is no established public trading market for the Warrants and the Company does not intend to list the Warrants on any national securities exchange or nationally recognized trading system. The Warrants were issued pursuant to a Warrant Agreement (the “Warrant Agreement”), dated March 30, 2023, between the Company and American Stock Transfer & Trust Company, LLC, as the warrant agent.
The foregoing descriptions of the terms of Warrants and the Warrant Agreement do not purport to be complete and are qualified in their entirety by reference to the full texts of the form of Warrant and Warrant Agreement, which are filed as Exhibits 4.1 and 10.3 hereto and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Sixth Amendment is incorporated by reference into this Item 2.03.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Private Placement is incorporated by reference into this Item 3.02. The Securities were offered and sold in transactions exempt from registration under the Securities Act, in reliance on Section 4(a)(2) thereof. The Securities have not been registered under the Securities Act and such Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Neither this Current Report on Form 8-K nor any of the exhibits attached hereto is an offer to sell or the solicitation of an offer to the Securities or any other securities of the Company.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Certificate of Designation is incorporated by reference into this Item 5.03.
| Item 7.01 | Regulation FD Disclosure. |
On March 30, 2023, the Company issued a press release in accordance announcing the closing of the Private Placement. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information contained in this Item 7.01 and the attached Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information contained in this Item 7.01 and the attached Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the anticipated proceeds from the Private Placement and the use thereof. The words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements as a result of various important factors, including risks relating to the expected use of net proceeds from the Private Placement and risks described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and risks described in other filings that the Company makes with the SEC in the future. Any forward-looking statements contained in this Current Report on Form 8-K speak only as of the date hereof, and the Company expressly disclaims any obligation to update any forward-looking statements, whether because of new information, future events or otherwise.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Below is a list of exhibits included with this Current Report on Form 8-K.
*Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Ribbon Communications Inc. | |||
| By: | /s/ Patrick Macken | ||
| Name: | Patrick Macken | ||
| Title: | Executive Vice President and Chief Legal Officer | ||
Date: March 30, 2023
Exhibit 3.1
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES A PREFERRED STOCK OF
RIBBON COMMUNICATIONS INC.
On March 30, 2023, the Board of Directors of Ribbon Communications Inc., a Delaware corporation (the “Company”), adopted the following resolution designating and creating, out of the authorized and unissued shares of preferred stock, par value $0.01 per share, of the Company (the “Preferred Stock”), 63,250 authorized shares of a series of Preferred Stock titled the “Series A Preferred Stock”:
RESOLVED that, pursuant to the Certificate of Incorporation, the By-Laws and applicable law, a series of Preferred Stock titled the “Series A Preferred Stock,” and having a par value of $0.01 per share and an initial number of authorized shares equal to 63,250, is hereby designated and created out of the authorized and unissued shares of Preferred Stock, which series has the rights, designations, preferences and other provisions set forth below.
Section 1. Classification and Number of Shares. The shares of such series of Preferred Stock shall be classified as “Series A Preferred Stock” (the “Series A Preferred Stock”). The number of authorized shares constituting the Series A Preferred Stock shall be 63,250. That number from time to time may be increased (but not in excess of the total number of authorized shares of preferred stock, less all shares of any other series of preferred stock authorized at the time of such increase) or decreased (but not below the number of shares of Series A Preferred Stock then outstanding) by (a) further resolution duly adopted by the Board and (b) the filing of a certificate of amendment to this Certificate of Designation, signed by an officer of the Company, with the Secretary of State of the State of Delaware, and (c) without the vote or consent of the holders of the Series A Preferred Stock, except as otherwise required by this Certificate of Designations. The Company shall not have the authority to issue fractional shares of Series A Preferred Stock.
Section 2. Ranking. The Series A Preferred Stock will rank, with respect to dividend rights and rights upon Liquidation Events:
| (a) | senior to the Common Stock and each other class or series of Capital Stock (including without limitation, any other series of preferred stock) of the Company now existing or hereafter authorized, classified or reclassified, contingent equity liabilities and future equity distributions of the Company (such Capital Stock, “Junior Stock”); and |
| (b) | on a parity basis with each other class or series of Capital Stock of the Company hereafter authorized, classified or reclassified, the terms of which expressly provide that such class or series ranks on a parity basis with the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (such Capital Stock, “Parity Stock”). |
Section 3. Definitions. As used herein with respect to Series A Preferred Stock:
“Accrued Dividends” means, as of any date, with respect to any shares of Series A Preferred Stock, all Preferred Dividends that have accrued on such shares pursuant to Section 4, whether or not declared, but that have not, as of such date, been paid in cash.
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to a Investor, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Investor will be deemed to be an Affiliate of such Investor.
“Board” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board of Directors for the purposes in question.
“Business Day” means any weekday that is not a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to be closed.
“By-Laws” means the Amended and Restated By-Laws of the Company, as may be amended from time to time.
“Capital Stock” means, with respect to any Person, any and all shares of, interests in, rights to purchase, warrants to purchase, options for, participations in or other equivalents of or interests in (however designated) stock issued by such Person.
“Certificate of Designations” means this Certificate of Designation, Preferences and Rights, as may be amended from time to time.
“Certificate of Incorporation” means the Restated Certificate of Incorporation of the Company, as may be amended from time to time.
“Change of Control” means (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding (x) any employee benefit plan of such person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan and (y) the Permitted Investors (as defined in the Credit Agreement), shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d) 5 under the Exchange Act), directly or indirectly, of 40% or more of the voting power for the appointment of directors of the Company (determined on a fully diluted basis); (b) during any period of twelve (12) consecutive months commencing on March 3, 2020, a majority of the members of the board of directors of the Company cease to be composed of individuals (disregarding individuals who cease to serve due to death or disability) (i) who were members of that board on the first day of such period, (ii) whose appointment to that board was approved by individuals referred to in clause (i) above constituting at the time of such appointment at least a majority of that board or (iii) whose appointment to that board was approved by individuals referred to in clauses (i) or (ii) above or this clause (iii) constituting at the time of such appointment at least a majority of that board (in each case, such approval either by a specific vote or by approval of the Company’s proxy or information statement in which such member was named as a nominee for election as a director); (c) at any time, the Company shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of each Loan Party (as defined in the Credit Agreement) (free and clear of all Liens (other than Liens created by the Security Documents and Liens permitted by Section 7.3 of the Credit Agreement); (d) Ribbon Communications Operating Company, Inc. shall cease to be a wholly-owned direct Subsidiary of the Company; or (e) 100% of the Capital Stock of any Loan Party other than the Company shall cease to be owned directly by another Loan Party.
“Change of Control Effective Date” has the meaning set forth in Section 7(c).
“Change of Control Purchase Date” means, with respect to each share of Series A Preferred Stock, the date on which the Company makes the payment in full of the Change of Control Purchase Price for such share to the Holder thereof.
“Change of Control Purchase Price” means, per share of Series A Preferred Stock (expressed as percentages of the Liquidation Preference set forth below), if redeemed during the 12-month period beginning on March 30 of the years
indicated below:
| Year | Change of Control Purchase Price | |||
| 2024 | 103.000 | % | ||
| 2025 and thereafter | 102.000 | % | ||
“Change of Control Redemption” has the meaning set forth in Section 7(a).
2
“close of business” means 5:00 p.m. (New York City time).
“Common Stock” means the common stock, par value $0.0001 per share, of the Company.
“Company” has the meaning set forth in the recitals above.
“Credit Agreement” means that certain credit agreement, dated March 3, 2020, by and among the Company, Ribbon Communications Operating Company, Inc., a Delaware corporation, the guarantors party thereto, the lenders party thereto, and Citizens Bank, N.A., as administrative agent for the lenders thereunder, as may be amended, amended and restated, supplemented or otherwise modified from time to time.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Face Value” means, as of the Original Issuance Date, for each share of Series A Preferred Stock, a dollar amount equal to $1,000.00.
“GAAP” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements of the Financial Accounting Standards Board or in such other statements by such other entity as have been generally accepted by the accounting professionals, which are in effect from time to time.
“Holder” means a Person in whose name any Series A Preferred Stock is registered in the Register.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Investors” means such funds or accounts managed or sub-managed by the entities set forth on Schedule I hereto.
“Junior Stock” has the meaning set forth in Section 2(a).
“Lien” means, any mortgage, deed of trust, pledge, hypothecation, collateral assignment, 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 any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).
“Liquidation Event” means any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.
“Liquidation Preference” means, with respect to any share of Series A Preferred Stock, as of any date, the Face Value increased by Accrued Dividends with respect to such share.
“Maturity Date” means September 30, 2025.
“NASDAQ” means The Nasdaq Global Select Market (or its successor).
“Notice of Redemption” has the meaning set forth in Section 6(f)(i).
“Notice of Trigger Event” has the meaning set forth in Section 6(f)(ii).
“Original Issuance Date” means the date of closing pursuant to the Securities Purchase Agreement.
“Person” means any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any other entity.
“PIK Dividends” has the meaning set forth in Section 4(b)(i).
“Preferential Dividend Base Amount” means, as to shares of Series A Preferred Stock, initially the Face Value per share, subject to adjustment as set forth in Section 4(b), including, for the avoidance of doubt, pursuant to any PIK Dividends.
3
“Preferential Dividend Payment Date” means March 31, June 30, September 30 and December 31 of each year, commencing on June 30, 2023; provided that if any such Preferential Dividend Payment Date is not a Business Day, then the applicable Preferred Dividend shall be payable on the next Business Day immediately following such Preferential Dividend Payment Date, without any interest.
“Preferential Dividend Period” means, in respect of any share of Series A Preferred Stock, the period from (and including) the Original Issuance Date of such share to (but excluding) the next Preferential Dividend Payment Date and, subsequently, in each case the period from (and including) any Preferential Dividend Payment Date to (but excluding) the next Preferential Dividend Payment Date.
“Preferential Dividend Rate” means the percentages set forth below.
| Prior to the first anniversary of the Original Issuance Date |
9.25% per annum
|
|
On or after the first anniversary of the Original Issuance Date but prior to the second anniversary of the Original Issuance Date
|
9.75% per annum |
| On or after the second anniversary of the Original Issuance Date and thereafter | 12.00% per annum |
“Preferential Dividend Record Date” means, with respect to any Preferential Dividend Payment Date, the March 15, June 15, September 15 and December 15, as the case may be, immediately preceding the relevant Preferential Dividend Payment Date. These Preferential Dividend Record Dates shall apply regardless of whether a particular Preferential Dividend Record Date is a Business Day.
“Preferential Dividend Record Holder” means, with respect to any Preferential Dividend Payment Date, a Holder of record of the shares of Series A Preferred Stock as such holder appears on the stock register of the Company at the close of business on the related Preferential Dividend Record Date.
“Preferred Stock” has the meaning set forth in the Recitals.
“Redemption Date” mean a date that is fixed for redemption of the Series A Preferred Stock by the Company in accordance with Section 6.
“Register” means the securities register maintained in respect of the Preferred Stock by the Company, or, to the extent the Company has engaged a transfer agent, such transfer agent.
“Securities Purchase Agreement” means that certain Securities Purchase Agreement between the Company and the Investors dated as of March 28, 2023, as it may be amended, supplemented or otherwise modified from time to time, with respect to the issuance and sale of the Preferred Stock.
“Series A Preferred Stock” has the meaning set forth in Section 1.
“Subsidiary” means as to any Person, a corporation, company, partnership, limited liability company or other entity of which shares, 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, 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” (a) shall refer to a Subsidiary or Subsidiaries of the Company and (b) will not include any unrestricted Subsidiary.
“Super Majority Holders” means Holders representing at least sixty-six and two-thirds percent (66 2/3%) of the then-issued and outstanding shares of Series A Preferred Stock.
4
“Tax” or “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Transfer Agent” means the Person acting as Transfer Agent, Registrar and paying agent for the Series A Preferred Stock and its successors and assigns, which may be the Company or one of its Affiliates. The initial Transfer Agent shall be American Stock Transfer & Trust Company, LLC.
“Trigger Event” means:
| (a) | failure by the Company to make any payment of dividends on any Dividend Payment Date or any other amounts (including, without limitation, the Liquidation Preference, the redemption prices pursuant to Section 6 or the repurchase price pursuant to Section 7(a)) as required hereunder when the same becomes due and payable (whether at maturity or otherwise); |
| (b) | the Company or any of its Subsidiaries fail to comply with any of the covenants hereunder and such failure continues for thirty (30) continuous days; |
| (c) | the Company contests in writing the validity or enforceability of this Certificate of Designations or any provision herein and fails to withdraw such contestation within ten (10) days thereafter; |
| (d) | the Company or any of its Subsidiaries commences or is subject to a case or proceeding pursuant to or within the meaning of any bankruptcy or insolvency law; or |
| (e) | a court of competent jurisdiction enters an order or decree (that remains unstayed and in effect for sixty (60) days) that would result in fines or damages against the Company or any of its Subsidiaries in an amount exceeding $15,000,000. |
Section 4. Dividends.
Holders shall be entitled to receive dividends of the type and in the amount determined as set forth in this Section 4.
| (a) | [Reserved.] |
| (b) | Preferential Dividends. |
| (i) | Subject to the rights of holders of any class or series of Capital Stock senior to the Series A Preferred Stock, a preferential cumulative return on the Preferential Dividend Base Amount of the Series A Preferred Stock (the “Preferential Dividends”) shall accumulate daily in arrears, whether or not earned or declared by the Board, at the Preferential Dividend Rate. Preferential Dividends shall be payable in cash (other than a PIK Dividend, as described below) quarterly on each Preferential Dividend Payment Date at such Preferential Dividend Rate, and shall accumulate from the most recent Preferential Dividend Payment Date or, prior to the first Preferential Dividend Payment Date, from the Original Issuance Date, whether or not in any Preferential Dividend Periods there have been funds legally available. Preferential Dividends shall be payable in cash only when, as and if declared by the Board on the relevant Preferential Dividend Payment Date to Preferential Dividend Record Holders on the immediately preceding Preferential Dividend Record Date, to the extent that such Series A Preferred Stock remains outstanding on the applicable Preferential Dividend Payment Date; provided that the Preferential Dividend Record Date for any such Preferential Dividends shall not precede the date on which such dividend was so declared; provided, further that the Board may declare an amount to be paid in cash in respect of a part of, rather than all, of the Preferential Dividend payable on such Preferential Dividend Payment Date. The amount of Preferential Dividends payable on each share of Series A Preferred Stock for each Preferential Dividend Period shall be computed based upon the actual number of days elapsed during such period over a 360-day year (consisting of twelve 30-day months). The Company shall provide written notice to the holders of Series A Preferred Stock that it intends to pay a Preferential Dividend in cash at least five (5) days prior to the applicable Preferential Dividend Payment Date. In the event that the Company does not declare and pay the full amount of Preferential Dividends in cash as described above, the Preferential Dividend Base Amount of the Series A Preferred Stock shall automatically increase at the Preferential Dividend Rate, on a compounding basis, on such Preferential Dividend Payment Date with respect to any Preferential Dividend Base Amount for which Preferential Dividends remain unpaid (the “PIK Dividends” and, together with the Preferential Dividends, the “Preferred Dividends”). Thereafter, the Preferential Dividends shall accrue and be payable on such increased Preferential Dividend Base Amount. Preferred Dividends shall be paid pro rata (based on the number of shares of Series A Preferred Stock held by the Holder) to the Holders of shares of Series A Preferred Stock entitled thereto (for the avoidance of doubt, taking into account any differences in Issuance Date). |
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| (ii) | Preferred Dividends shall be payable, to the extent that such Series A Preferred Stock remains outstanding on the applicable Preferential Dividend Payment Date, (i) from the Original Issue Date until but prior to the first anniversary of the Original Issuance Date, in PIK Dividends, (ii) on or after the first anniversary of the Original Issuance Date but prior to the second anniversary of the Original Issuance Date, in PIK Dividends or in cash, at the Company’s option, and (iii) on or after the second anniversary of the Original Issuance Date, in cash. The amount of Preferred Dividends payable on each share of Series A Preferred Stock for each Preferential Dividend Period shall be computed based upon the actual number of days elapsed during such period over a 360-day year (consisting of twelve 30-day months). The Company shall provide written notice to the holders of Series A Preferred Stock that it intends to pay a Preferred Dividend in cash at least five (5) days prior to the applicable Preferential Dividend Payment Date. |
| (iii) | Notwithstanding anything to the contrary contained herein, any PIK Dividend (1) shall be treated as an accrued but unpaid dividend of the Series A Preferred Stock that compounds, whether or not declared by the Board, and (2) shall not be declared as a dividend by the Board (A) unless and until such PIK Dividend is paid to the Holders of the Series A Preferred Stock immediately in cash (it being understood that no dividends may be declared and paid in securities or otherwise “in kind”) or (B) in anticipation of a redemption of the Series A Preferred Stock or any liquidation of the Company. |
| (c) | Priority of Dividends. So long as any shares of Series A Preferred Stock remain outstanding, unless full Preferred Dividends on all outstanding shares of Series A Preferred Stock that have accrued from and including the Original Issuance Date have been declared and paid in cash or have been or contemporaneously are declared and a sum sufficient for the payment of those Preferred Dividends in cash has been or is set aside for the benefit of the Holders, the Company may not declare any dividend on, or make any distributions relating to, Junior Stock or Parity Stock, or redeem, purchase, acquire (either directly or through any Subsidiary) or make a liquidation payment relating to, any Junior Stock or Parity Stock, other than: |
| (i) | purchases, redemptions or other acquisitions of shares of Junior Stock in accordance with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors or consultants, in each case, to the extent in effect as of the Original Issuance Date; |
| (ii) | payment of any dividends or distributions in respect of Junior Stock where the dividend or distribution is in the form of the same stock or rights to purchase the same stock as that on which the dividend is being paid; or |
| (iii) | any dividend “in kind” in connection with the implementation of a shareholders’ rights or similar plan, or the redemption or repurchase of any rights under any such plan. |
Notwithstanding the foregoing, for so long as any shares of Series A Preferred Stock remain outstanding, if Preferential Dividends are not declared and paid in full upon the shares of Series A Preferred Stock and any Parity Stock, all Preferential Dividends declared upon shares of Series A Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of Preferential Dividends declared per share will bear to each other the same ratio that all accrued and unpaid Preferential Dividends as of the end of the most recent Preferential Dividend Period per share of Series A Preferred Stock and accrued and unpaid Preferential Dividends as of the end of the most recent dividend period per share of any Parity Stock bear to each other.
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| (d) | [Reserved]. |
| (e) | Other Dividends and Repurchases. So long as any shares of Series A Preferred Stock remain outstanding, the Company may not declare any dividend on, or make any distributions relating to, Junior Stock, or redeem, purchase, acquire (either directly or through any Subsidiary) or make a liquidation payment relating to, any Junior Stock, in each case other than in the form of Junior Stock. |
Section 5. Liquidation Rights.
| (a) | Liquidation. In the event of any Liquidation Event, the Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Stock, and subject to the rights of the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per share of Series A Preferred Stock equal to the Liquidation Preference. |
| (b) | Partial Payment. If in connection with any distribution described in Section 5(a) above, the assets of the Company or proceeds therefrom are not sufficient to pay in full the aggregate liquidating distributions required to be paid pursuant to Section 5(a) above to all Holders, the amounts distributed to the Holders shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled if all amounts payable thereon were paid in full. |
Section 6. Redemption.
| (a) | Optional Redemption. Shares of Series A Preferred Stock may be redeemed by the Company in accordance with this Section 6(a). |
| (i) | The Company may not redeem any shares of Series A Preferred Stock prior to first anniversary of the Original Issuance Date. At any time or from time to time on or after the first anniversary of the Original Issuance Date, the Company, at its option, may redeem for cash any shares of Series A Preferred Stock at the redemption prices per share of Series A Preferred Stock (expressed as percentages of the Liquidation Preference set forth below) if redeemed during the 12-month period beginning on March 30 of the years indicated below: |
| Year | Redemption Price | |||
| 2024 | 103.000 | % | ||
| 2025 and thereafter | 102.000 | % | ||
| (b) | Mandatory Redemption. The Company will, on the Maturity Date, redeem for cash (the “Mandatory Redemption”) from each Holder of Series A Preferred Stock, all outstanding shares of Series A Preferred Stock held by such Holder at a purchase price per share of Series A Preferred Stock equal to 102.000% multiplied by the Liquidation Preference (the “Mandatory Redemption Price”); provided, however, the Company shall only be required to pay the Mandatory Redemption Price to the extent such purchase can be made out of funds legally available therefor. |
| (c) | Class Protective Provisions. Upon the occurrence of a Trigger Event, each Holder of outstanding shares of Series A Preferred Stock may, at such Holder’s election, require the Company to redeem for cash (the “Trigger Event Redemption”) all, but not less than all, of such Holder’s outstanding shares of Series A Preferred Stock at a purchase price per share of Series A Preferred Stock equal to 102.000% multiplied by the Liquidation Preference (the “Protective Redemption Price”); provided, however, the Company shall only be required to pay the Protective Redemption Price to the extent such purchase can be made out of funds legally available therefor. |
| (d) | Redemption Date. If the Redemption Date falls after a Preferential Dividend Record Date for the payment of dividends declared on the Series A Preferred Stock before the Dividend Payment Date corresponding to that Preferential Dividend Record Date, holders of the shares of Series A Preferred Stock at the close of business on that Preferential Dividend Record Date shall be entitled to receive the dividend payable on those shares on the corresponding Dividend Payment Date. The price payable on such Redemption Date will include only the Redemption Price, but will not include any amount in respect of dividends on the Series A Preferred Stock declared and payable on such corresponding Dividend Payment Date. |
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| (e) | Number of Shares. If fewer than all the outstanding shares of Series A Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board and the shares to be redeemed shall be selected on a pro rata basis (with any fractional shares being rounded to the nearest whole share), by lot or any other method as may be determined by the Board, in its discretion, to be fair and appropriate. |
| (f) | Notice of Redemption; Notice of Trigger Event. |
| (i) | Notice of redemption of the Series A Preferred Stock pursuant to Section 6(a) or 6(b) (the “Notice of Redemption”) shall be given by facsimile, email, overnight courier or first class mail, postage prepaid, addressed to the Holders of record of the Series A Preferred Stock. Such Notice of Redemption shall be delivered to each Holder at least five (5) days and not more than sixty (60) days before the proposed redemption date and shall state: (1) the applicable redemption date; (2) the number of shares of Series A Preferred Stock held by the Holder and to be redeemed; (3) the applicable redemption price per share of Series A Preferred Stock; (4) the place or places where certificates for such shares of Series A Preferred Stock, if any, are to be surrendered for payment. |
| (ii) | Notice of the occurrence of a Trigger Event pursuant to Section 6(c) (the “Notice of Trigger Event”) shall be given by facsimile, email, overnight courier or first class mail, postage prepaid, addressed to the Holders of record of the Series A Preferred Stock. Such Notice of Trigger Event shall be mailed to each Holder as soon as practicable after the occurrence of any Trigger Event but in any case not more than five (5) Business Days after the occurrence thereof. Such Notice of Trigger Event shall state: (1) the date on which such Trigger Event occurred; (2) the applicable redemption price per share of Series A Preferred Stock; (3) that an election form is attached or where to obtain such an election form; and (4) the date by which each such Holder shall be required to provide notice to the Company of its election to cause such redemption and the place or places where such Holders must send their election form along with certificates for such shares of Series A Preferred Stock, if any, are to be surrendered for payment. The date to be set by the Company by which each Holder shall be required to affirmatively elect to cause the Company to so redeem its shares of Series A Preferred Stock shall be a date no earlier than fifteen (15) days after the date such Notice of Trigger Event was delivered to all Holders, as aforesaid. |
| (iii) | Each Holder of Series A Preferred Stock electing to cause the Company to redeem its shares of Series A Preferred Stock in accordance with Section 6(f)(ii) shall deliver its duly completed election form to the Company by the date and at the location as set forth in the Notice of Trigger Event. Any such election may be withdrawn and cancelled by any such Holder by further notice delivered to the Company no later than the Business Day prior to the specified date of redemption. |
| (g) | Treatment of Shares; Partial Redemption. Until a share of Series A Preferred Stock is redeemed by the payment or deposit in full of the redemption price as provided in Section 6(h), such share of Series A Preferred Stock will remain outstanding and will be entitled to all of the powers, designations, preferences and other rights provided herein. In the event that an optional redemption is effected with respect to shares of Series A Preferred Stock representing less than all shares of Series A Preferred Stock held by a Holder, promptly following such optional redemption, the Company shall reflect in the Register the remaining shares of Series A Preferred Stock held by such Holder. |
| (h) | Sufficient Funds. If the Company shall not have sufficient funds legally available to redeem all shares of Series A Preferred Stock required under this Section 6, the Company shall (i) redeem, pro rata among the Holders, a number of shares of Series A Preferred Stock with an aggregate redemption price equal to the amount legally available for the purchase of shares of Series A Preferred Stock and (ii) purchase any shares of Series A Preferred Stock not purchased because of the foregoing limitations at the applicable redemption price as soon as practicable after the Company is able to make such purchase out of assets legally available for the purchase of such share of Series A Preferred Stock. For the avoidance of doubt, dividends will continue to accrue on the Preferred Stock until such time as the shares of Preferred Stock are actually purchased. The inability of the Company (or its successor) to make a purchase payment for any reason shall not relieve the Company (or its successor) from its obligation to effect any required purchase when, as and if permitted by applicable law. Notwithstanding the foregoing, in the event a Holder exercises a Trigger Event Redemption pursuant to this Section 6 at a time when the Company is restricted or prohibited (contractually or otherwise) from redeeming some or all of the Series A Preferred Stock subject to the Trigger Event Redemption, the Company will use its reasonable best efforts to obtain the requisite consents to remove or obtain an exception or waiver to such restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to comply with its obligations under this Section 6. For so long as a failure to comply with this Section 6 has occurred and is continuing, the restrictions set forth in Section 4(c) with respect to restrictions on dividends or distributions relating to Junior Stock shall apply mutatis mutandis. |
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| (i) | With respect to any share of Series A Preferred Stock to be redeemed by the Company pursuant to Section 6(a), 6(b) or 6(c) and which has been redeemed in accordance with the provisions of this Section 6, (i) such share shall no longer be deemed outstanding and (ii) all rights with respect to such share shall cease and terminate other than the rights of the Holder thereof to receive the redemption price therefor. |
| (j) | Unless full cumulative dividends on all shares of Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of Preferred Stock shall be redeemed unless all outstanding shares of Preferred Stock are simultaneously redeemed and the Company shall not purchase or otherwise acquire directly or indirectly any shares of Preferred Stock. |
Section 7. Change of Control.
| (a) | Repurchase at the Option of the Holder. Upon the occurrence of a Change of Control, each Holder of outstanding shares of Series A Preferred Stock may, at such Holder’s election, require the Company to redeem (the “Change of Control Redemption”) all or part of such Holder’s shares of Series A Preferred Stock at a purchase price per share of Series A Preferred Stock, payable in cash, equal to the Change of Control Purchase Price; provided, however, the Company shall only be required to pay the Change of Control Purchase Price to the extent such purchase can be made out of funds legally available therefor. |
| (b) | Initial Change of Control Notice. On or before the fifteenth (15th) Business Day prior to the anticipated Change of Control Effective Date (or, if later, promptly after the Company discovers that a Change of Control may occur), a written notice (the “Initial Change of Control Notice”) shall be sent by or on behalf of the Company to the Holders as they appear in the records of the Company, which notice shall set forth a description of the anticipated Change of Control and contain (i) the date on which the Change of Control is anticipated to be effected (or, if applicable, the date on which a Schedule TO or other schedule, form or report disclosing a Change of Control was filed) and (ii) a description of the material terms and conditions of the Change of Control. No later than ten (10) Business Days following receipt of the Initial Change of Control Notice, any Holder that desires to exercise its rights pursuant to Section 7(a) shall notify the Company in writing thereof and shall specify (x) whether such Holder is electing to exercise its right to effect a Change of Control Redemption of all or a portion of its shares of Series A Preferred Stock pursuant to Section 7(a), and (y) the number of shares of Series A Preferred Stock subject to the Change of Control Redemption. |
| (c) | Final Change of Control Notice. Within five (5) Business Days following the effective date of the Change of Control (the “Change of Control Effective Date”) (or, if the Change of Control had already occurred as specified in Section 7(b), within five (5) Business Days of the Company becoming aware thereof, the Company shall deliver to each Holder a written notice setting forth: |
| (i) | a statement setting forth in reasonable detail the calculation of the Change of Control Purchase Price with respect to such Holder; |
| (ii) | the Change of Control Purchase Date, which shall be no later than thirty (30) days after such notice is sent; provided, that a reasonable amount of time shall be provided between delivery of such notice and the Change of Control Purchase Date to allow such Holder to comply with the instructions delivered pursuant to Section 7(c)(iii) below; and |
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| (iii) | the instructions a Holder must follow to receive the Change of Control Purchase Price in connection with such Change of Control, which shall be no more than the items set forth in Section 7(d) below. |
| (d) | Change of Control Redemption Procedure. To receive the Change of Control Purchase Price, a Holder must complete and sign the redemption notice in the form attached hereto as Exhibit A (the “Change of Control Redemption Notice”) and surrender in accordance with the instructions delivered pursuant to Section 7(c)(iii), the certificates (if any) representing the shares of Series A Preferred Stock to be repurchased by the Company or lost stock affidavits therefor, to the extent applicable. |
| (e) | Delivery upon Change of Control Redemption. Upon a Change of Control Redemption, subject to Section 7(g) below, the Company (or its successor) shall promptly deliver or cause to be delivered to the Holder by wire transfer of immediately available funds, the Change of Control Purchase Price for such Holder’s shares of Series A Preferred Stock. |
| (f) | Treatment of Shares; Partial Exercise. Until a share of Series A Preferred Stock is redeemed by the payment or deposit in full of the applicable Change of Control Purchase Price as provided in Section 7(i), such share of Series A Preferred Stock will remain outstanding and will be entitled to all of the powers, designations, preferences and other rights provided herein. In the event that a Change of Control Redemption is effected with respect to shares of Series A Preferred Stock representing less than all shares of Series A Preferred Stock held by a Holder, promptly following such Change of Control Redemption, the Company shall reflect in the Register the remaining shares of Series A Preferred Stock held by such Holder. |
| (g) | Sufficient Funds. If the Company shall not have sufficient funds legally available to redeem all shares of Series A Preferred Stock required under Section 7(a), the Company shall (i) redeem, pro rata among the Holders, a number of shares of Series A Preferred Stock with an aggregate Change of Control Purchase Price equal to the amount legally available for the purchase of shares of Series A Preferred Stock and (ii) purchase any shares of Series A Preferred Stock not purchased because of the foregoing limitations at the applicable Change of Control Purchase Price as soon as practicable after the Company is able to make such purchase out of assets legally available for the purchase of such share of Series A Preferred Stock. For the avoidance of doubt, dividends will continue to accrue on the Preferred Stock until such time as the shares of Preferred Stock are actually purchased. The inability of the Company (or its successor) to make a purchase payment for any reason shall not relieve the Company (or its successor) from its obligation to effect any required purchase when, as and if permitted by applicable law. Notwithstanding the foregoing, in the event a Holder exercises a Change of Control Redemption pursuant to this Section 7 at a time when the Company is restricted or prohibited (contractually or otherwise) from redeeming some or all of the Series A Preferred Stock subject to the Change of Control Redemption, the Company will use its reasonable best efforts to obtain the requisite consents to remove or obtain an exception or waiver to such restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to comply with its obligations under this Section 7. For so long as a failure to comply with this Section 7 has occurred and is continuing, the restrictions set forth in Section 4(c) with respect to restrictions on dividends or distributions relating to Junior Stock shall apply mutatis mutandis. |
| (h) | Change of Control Agreements. The Company shall not enter into any agreement for, or otherwise willingly engage in, a transaction constituting a Change of Control, unless (i) such agreement provides for or does not interfere with or prevent (as applicable) the exercise by the Holders of their Change of Control Redemption in a manner that is consistent with and gives effect to this Section 7, and (ii) the acquiring or surviving Person in such Change of Control represents or covenants, in form and substance reasonably satisfactory to the Board acting in good faith, that at the closing of such Change of Control, to the effect that such Person shall have sufficient funds (which may include, without limitation, cash and cash equivalents on the Company’s balance sheet, the proceeds of any debt or equity financing, available lines of credit or uncalled capital commitments) to consummate such Change of Control and the payment of the Change of Control Purchase Price in respect of all shares of Series A Preferred Stock then outstanding. |
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| (i) | With respect to any share of Series A Preferred Stock to be redeemed by the Company pursuant to the Change of Control Redemption and which has been redeemed in accordance with the provisions of this Section 7, (i) such share shall no longer be deemed outstanding and (ii) all rights with respect to such share shall cease and terminate other than the rights of the Holder thereof to receive the Change of Control Purchase Price therefor. |
Section 8. Redemption Limitations; Conversion to Indebtedness. Notwithstanding anything to the contrary contained herein, in the event any redemption of the shares of Series A Preferred Stock shall be prohibited on the date specified herein by the express terms of the Credit Agreement, as in effect as of the date hereof, then in lieu of such redemption and payment on such date, the redemption of such shares of Series A Preferred Stock shall occur on a date that is no later than 91 days after the date on which the principal amount of the loans under the Credit Agreement has been repaid; provided, if such shares of Series A Preferred Stock are, due to such express terms, not permitted to be repaid on the date of repayment of such loans, and all of the loans have been repaid in full, the shares of Series A Preferred Stock shall be automatically, and without further action or consideration by the Holder, be converted into a promissory note in favor of the Holders, obligating the Company or its successor in interest to pay an amount equal to the applicable redemption price on a date no later than 91 days after the date on which the principal amount of the loans under the Credit Agreement has been repaid.
Section 9. Voting Rights.
| (a) | General. No Holder of shares of Series A Preferred Stock shall be entitled to a vote on any matter submitted to a vote of stockholders of the Company, except as otherwise provided herein or as required by applicable law. The Holders of shares of Series A Preferred Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Certificate of Incorporation and the Bylaws as if they were holders of record of Common Stock for such meeting. |
| (b) | Series A Preferred Stock Adverse Changes. So long as any shares of Series A Preferred Stock are outstanding, in addition to any other vote required by applicable law, the Company may not take, and may not permit any of its Subsidiaries to directly or indirectly take, any of the following actions (including by means of merger, consolidation, reorganization, recapitalization or otherwise) without the prior affirmative vote or written consent from the Super Majority Holders, voting as a separate class: |
| (i) | amend, alter, repeal or otherwise modify (whether by merger, consolidation or otherwise) any provision of the Certificate of Incorporation (including this Certificate of Designations) in a manner that would adversely affect the powers, preferences, rights or privileges of the Series A Preferred Stock; |
| (ii) | authorize, create, increase the authorized amount of, or issue any class or series of Capital Stock of the Company or any security convertible into, or exchangeable or exercisable for any of the foregoing, or reclassify any security into, any Capital Stock of the Company ranking senior or pari passu to the Series A Preferred Stock (provided, however, that the authorization, creation, increase in the authorized amount of, or issuance of any class or series of Junior Stock or any security convertible into, or exchangeable or exercisable for any of the foregoing, or reclassification of any security into, Junior Stock will not require the vote or consent of any Holders); |
| (iii) | increase or decrease the authorized number of shares of Series A Preferred Stock (except for the cancellation and retirement of shares set forth in Section 10) or issue additional shares of Series A Preferred Stock other than in connection with the transactions described in the securities purchase agreements dated on or around March 28, 2023; and |
| (iv) | unless the conditions set forth in Section 7(h) (Change of Control Agreements) are satisfied, consummate any binding share exchange or reclassification involving the Series A Preferred Stock, or any merger or consolidation of the Company with another entity, unless in each case (x) the shares of Series A Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Company is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series A Preferred Stock immediately prior to such consummation, taken as a whole. |
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| (c) | Each Holder of Series A Preferred Stock will have one (1) vote per share on any matter on which Holders of Series A Preferred Stock are entitled to vote separately as a class, whether at a meeting or by written consent. |
Section 10. Status of Shares. Shares of Series A Preferred Stock that have been issued and reacquired in any manner, whether by redemption, repurchase or otherwise, shall thereupon be retired and shall have the status of authorized and unissued shares of preferred stock of the Company undesignated as to series, and may be redesignated as any series of preferred stock of the Company and reissued.
Section 11. Creation of Capital Stock. Subject to Section 9(b), the Board, or any duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Capital Stock of the Company.
Section 12. No Sinking Fund. Shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund.
Section 13. Taxes. Transfer Taxes. The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series A Preferred Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series A Preferred Stock or other securities in a name other than the name in which the shares of Series A Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment, unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable. All payments and distributions (or deemed distributions) on the shares of Series A Preferred Stock shall be subject to withholding and backup withholding of taxes to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by the Holders.
Section 14. Notices. All notices referred to herein shall be in writing (which may include electronic communications) and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof (if personally delivered; if delivered via e-mail prior to 5:00 p.m. (E.T. time) on any Business Day or the next Business Day after the date of transmission delivered via e-mail later than 5:00 p.m. (E.T. time) or a day other than a Business Day) or three (3) Business Days after the mailing thereof if sent by overnight courier or registered or certified mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Certificate of Designations) with postage prepaid, addressed, (i) if to the Company, to its office at 6500 Chase Oaks Boulevard, Suite 100, Plano, Texas 75023 (Attention: Patrick W. Macken, Executive Vice President, Chief Legal Officer and Secretary), or to any transfer or other agent of the Company designated to receive such notice as permitted by this Certificate of Designations; (ii) if to any Holder, to such Holder at the address of such Holder as listed in the Register or otherwise appearing on the books of the Company; or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given. If a notice or communication is given in the manner provided in this Certificate of Designations within the time prescribed, it is duly given, whether or not the addressee receives it, provided that electronic communications shall only be deemed received upon acknowledgement of receipt.
Section 15. Facts Ascertainable. When the terms of this Certificate of Designations refer to a specific agreement or other document to determine the meaning or operation of a provision hereof, the Secretary of the Company shall maintain a copy of such agreement or document at the principal executive offices of the Company and a copy thereof shall be provided free of charge to any Holder who makes a request therefor. The Secretary of the Company shall also maintain a written record of the Original Issuance Date, the number of shares of Series A Preferred Stock issued to a Holder and shall furnish such written record free of charge to any Holder who makes a request therefor.
Section 16. Waiver. Notwithstanding any provision in this Certificate of Designations to the contrary, any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Holders of a majority of the shares of Series A Preferred Stock then outstanding; provided, that any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder that requires the approval of Super Majority Holders may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Super Majority Holders.
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Section 17. Severability. If any term of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms set forth herein, which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such term, unless so expressed herein.
Section 18. No Preemptive Rights. The Holders shall have no preemptive or preferential rights to purchase or subscribe for any stock, obligations, warrants or other securities of the Company of any class or series.
Section 19. No Other Rights. The Series A Preferred Stock will have no rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, except as provided in this Certificate of Designations or the Certificate of Incorporation or as provided by applicable law.
SECTION 20. Rule 144A. At any time the Company is not subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act, the Company shall, upon written request, furnish to any Holder, beneficial owner or prospective purchaser of the Series A Preferred Stock, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act of 1933, as amended (the “Securities Act”), to facilitate the resale of such Series A Preferred Stock pursuant to Rule 144A under the Securities Act. The Company shall take such further action as any such beneficial owner may reasonably request to the extent required from time to time to enable such beneficial Holder to sell such Series A Preferred Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.
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IN WITNESS WHEREOF, Ribbon Communications Inc. has caused this certificate to be duly executed by its authorized signatory as of the date first written above.
| RIBBON COMMUNICATIONS INC. | ||
| By: | /s/ Bruce McClelland | |
| Name: Bruce McClelland | ||
| Title: President and Chief Executive Officer | ||
Schedule I
| 1. | Sidus Double Alpha Fund, LTD |
| 2. | Sidus Investment Partners, LP |
| 3. | Sidus Double Alpha Fund LP |
| 4. | Jon D and Linda W Gruber Trust |
| 5. | Manatuck Hill Scout Fund, LP |
| 6. | Pacific Capital Management LLC |
| 7. | Funicular Funds, LP |
| 8. | BRF Investments, LLC |
| 9. | OhSang Kwon |
| 10. | Swarth Investments Ltd. |
| 11. | Client Accounts Managed by Neuberger Berman |
| 12. | Intrinsic Edge Capture LP |
| 13. | Heritage PE (OEP) III, L.P. |
| 14. | Boothbay Absolute Return Strategies LP |
| 15. | Herald Investment Management Limited |
| 16. | JPMC Heritage Parent LLC |
Exhibit A
RIBBON COMMUNICATIONS INC.
CHANGE OF CONTROL REDEMPTION NOTICE
Reference is made to the Certificate of Designation, Preferences and Rights of the Series A Preferred Stock of Ribbon Communications Inc. (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to require the Company to redeem the number of shares of Series A Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), of Ribbon Communications Inc., a Delaware corporation (the “Company”), indicated below at a purchase price per share of Series A Preferred Stock, payable in cash, equal to the Change of Control Purchase Price (as defined in the Certificate of Designations) upon, and subject to the occurrence of, the Change of Control described in the Initial Change of Control Notice. Each capitalized term used herein that is not otherwise defined shall have the meaning set forth in the Certificate of Designations.
| Number of shares of Series A Preferred Stock to be redeemed: |
| Share certificate no(s). of Series A Preferred Stock to be redeemed: |
| Tax ID Number (if applicable): |
| Please direct the above cash payment to the following name and address: |
| Name: |
| Address: |
| Telephone Number: |
| Email: |
| By: |
| Title: |
| Dated: |
| Payment Instructions for cash payment: |
| Account Number: |
| Bank Number: |
[NOTE TO HOLDER — THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT (IF ANY).]
ACKNOWLEDGMENT
[The Company hereby acknowledges the attached Change of Control Redemption Notice and will direct the cash payment to the account specified in such notice.]
By:
Name:
Title:
Exhibit 4.1
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
THIS WARRANT IS ONE OF THE WARRANTS TO PURCHASE COMMON STOCK ISSUED PURSUANT TO THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF MARCH 28, 2023, BY AND AMONG THE COMPANY AND THE INVESTORS REFERRED TO THEREIN. ANY HOLDER OF THIS WARRANT TAKES SUCH WARRANT SUBJECT TO THE TERMS AND CONDITIONS OF SUCH SECURITIES PURCHASE AGREEMENT AND, BY ITS ACCEPTANCE HEREOF, AGREES TO ABIDE BY THE TERMS AND CONDITIONS THEREOF NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN.
RIBBON COMMUNICATIONS INC.
Warrant To Purchase Common Stock
Warrant No.: [•]
Number of Shares of Common Stock: [•]
Date of Issuance: March 30, 2023 (“Issuance Date”)
Ribbon Communications Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [Investor], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date, (as defined below), [•] ([•]) fully paid nonassessable shares of Common Stock, subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, this “Warrant”), shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “March 2023 Warrants”) issued pursuant to Section 2.2(a)(iii) of that certain Securities Purchase Agreement, dated as of March [•], 2023 (the “Subscription Date”), by and among the Company and the investors (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”). Capitalized terms used herein and not otherwise defined shall have the definitions ascribed to such terms in the Securities Purchase Agreement.
| 1. | EXERCISE OF WARRANT. |
(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)), this Warrant may be exercised by the Holder at any time or times on or after the Issuance Date, in whole or in part, by (i) delivery to the Warrant Agent of a duly executed written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) payment to the Warrant Agent of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash by wire transfer of immediately available funds to an account designated in writing by the Warrant Agent or (B) by notifying the Company in writing that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(c)). No ink-original Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice be required, provided that the Warrant Agent and the Company shall have no liability to the Holder for honoring a non-medallion guaranteed Exercise Notice that the Warrant Agent or the Company reasonably believes to be genuine. The registered Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first (1st) Trading Day following the Trading Day on which the Holder has delivered an Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise) to the Warrant Agent (for purposes of this Warrant, if an Exercise Notice is delivered to the Warrant Agent on a day that is not a Trading Day, such Exercise Notice shall be deemed to have been delivered on the first Trading Day following the day of actual delivery), the Warrant Agent shall transmit by electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder. On or before the earlier of (i) the second (2nd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in each case, following the date on which the Holder has delivered the Exercise Notice and the Aggregate Exercise Price to the Warrant Agent (or notice of a Cashless Exercise to the Company) (a “Share Delivery Date”), the Warrant Agent shall (X) provided that the Company’s transfer agent (the “Transfer Agent”) is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program and (A) the Warrant Shares are subject to an effective resale registration statement in favor of the Holder and the Holder has delivered to the Company a representation that such Warrant Shares have been sold pursuant to such registration statement or (B) if exercised via Cashless Exercise, at a time when Rule 144 would be available for immediate resale of the Warrant Shares by the Holder, and the Holder has delivered to the Company a representation that such Warrant Shares have been sold pursuant to Rule 144, cause the aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to be transmitted by Transfer Agent to the Holder by crediting the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, or (Y) if (A) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or (B) the Warrant Shares are not subject to an effective resale registration statement in favor of the Holder or the Holder has not delivered to the Company a representation that such Warrant Shares have been sold pursuant to such registration statement and, if exercised via Cashless Exercise, at a time when Rule 144 would not be available for immediate resale of the Warrant Shares by the Holder or the Holder has not delivered to the Company a representation that such Warrant Shares have been sold pursuant to such registration statement, cause the Transfer Agent to (i) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee and bearing such restrictive legends as the Company deems necessary, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise, or (ii) issue and dispatch by electronic mail to the address as specified in the Exercise Notice, evidence of book entry, registered in the Company’s share register in the name of the Holder or its designee and bearing such restrictive legends as the Company deems necessary, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise. The Company shall be responsible for all fees and expenses of the Warrant Agent and the Transfer Agent and all fees and expenses with respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Upon delivery of the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates or book entry evidence evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than five (5) Trading Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 6(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. If the materials discussed in this Section 1(a) are received or deemed to be received after the Expiration Date, the Exercise Notice (or notice of a Cashless Exercise) will be null and void and any funds delivered to the Company will be returned to the Holder, as soon as practicable. In no event will interest accrue on any funds deposited with the Company or its warrant agent in respect of an exercise or attempted exercise of the Warrants.
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(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $3.77, subject to adjustment as provided herein.
(c) Company’s Failure to Timely Deliver Securities. If either (i) the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the applicable Share Delivery Date, if (A) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, a certificate or book entry for the number of shares of Common Stock to which the Holder is entitled and register such Common Stock on the Company’s share register or (B) if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant, (ii) the Company shall not within thirty (30) days after the Issuance Date file with the SEC a registration statement for the resale by the Holder or any transferee therefrom of the Warrant Shares (the “Registration Statement”), or (iii) a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares is not available for the issuance or resale, as applicable, of such Warrant Shares during a time when a registration statement is required to be available pursuant to the Securities Purchase Agreement and (A) the Company fails to promptly, but in no event later than one (1) Business Day after such registration statement becomes unavailable, to so notify the Holder and (B) the Company is unable to deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system (the event described in the immediately foregoing clause (iii) is hereinafter referred as a “Notice Failure” and together with the events described in clauses (i) and (ii) above, an “Exercise Failure”), then, in addition to all other remedies available to the Holder, if on or prior to the applicable Share Delivery Date either (i) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate or book entry to the Holder and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (II) below or (ii) a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account with DTC for such shares of Common Stock shall terminate, or (II) promptly honor its obligation to deliver to the Holder a certificate or certificates or book entry or entries representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable, and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock, times (y) any trading price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the date of the applicable Exercise Notice and ending on the applicable Share Delivery Date.
Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause the Transfer Agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1(a) by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Warrant Shares during a time when a registration statement is required to be available pursuant to the Securities Purchase Agreement and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise.
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(d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):
Net Number = (A x B) – (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant is then being exercised.
B= as applicable: (i) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder indicated in the Exercise Notice, either (x) the Weighted Average Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice, or (y) the Weighted Average Price of the Common Stock on the Trading Day of the applicable Exercise Notice if such Exercise Notice is executed and delivered during “regular trading hours” on a Trading Day pursuant to Section 1(a) hereof, or (iii) the Weighted Average Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day.
C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
(e) Disputes. In the case of a dispute as to the determination of the Exercise Price, the Black Scholes Value (as defined below) or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.
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(f) Beneficial Ownership Limitations on Exercises. Notwithstanding anything to the contrary contained herein, the Warrant Agent shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, and any such exercise shall be null and void and treated as if never made, to the extent that as a result of, and after giving effect to, such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise; provided, however, that such Maximum Percentage shall not apply to either JPMorgan Chase & Co. or Swarth Investments Inc., in each case together with its Attribution Parties. For purposes of this Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Warrant Agent receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant to this Section 1(e), to exceed the Maximum Percentage, the Holder must notify the Warrant Agent of a reduced number of Warrant Shares to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Warrant Agent shall return to the Holder any Exercise Price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Warrant Agent shall within one (1) Trading Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. The number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Warrant Agent shall return to the Holder the Exercise Price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Warrant Agent, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Warrant Agent and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of March 2023 Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(e) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(e) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
(a) Adjustment Upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.
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(b) Adjustment to Exercise Price and Number of Warrant Shares for Subsequent Issuances. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 2(b) (in each case, after taking into consideration any prior adjustments pursuant to this Section 2(b) or otherwise), with any such adjustment automatically becoming effective without further action of any person required; provided, that there shall be no adjustment to the number of Warrant Shares acquirable upon exercise of the Warrant, as provided in this Section 2(b) (an “Adjustment”), unless and until such Adjustment, together with any previous Adjustments to the number of Warrant Shares so acquirable which would otherwise have resulted in an Adjustment were it not for this proviso, would require an increase or decrease of at least 5% of the total number of Warrant Shares so acquirable at the time of such Adjustment, in which event such Adjustment and all such previous Adjustments shall immediately occur.
(i) Definitions. For purposes of this Section 2(b), the following terms shall have the following meanings:
“Excluded Issuances” means any issuance or sale (or deemed issuance or sale in accordance with Section 2(b)(iv)) by the Company after the Issuance Date of: (a) shares of Common Stock issued upon the exercise of the Warrants; or (b) shares of Common Stock under the Company’s Amended and Restated 2019 Incentive Award Plan.
“Independent Financial Expert” shall mean a nationally recognized accounting, investment banking or consultant firm, which firm does not have a material financial interest or other material economic relationship with either the Company or any of its Affiliates or the Holder or any of its Affiliates that is, in the good faith judgment of the Company’s board of directors (the “Board”), qualified to perform the task for which it has been engaged.
“Trading Day” shall mean a day on which trading in the shares of Common Stock (or other applicable security) generally occurs on the principal exchange or market on which the shares of Common Stock (or other applicable security) are then listed or traded; provided that if the shares of Common Stock (or other applicable security) are not so listed or traded, “Trading Day” means a Business Day.
“VWAP” shall mean, as of any date of determination, the average per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “RBBN US<equity> VAP” (or its equivalent successor if such Bloomberg page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day reasonably determined, using a volume-weighted average method, by an Independent Financial Expert appointed (and compensated by the Company) for such purpose). The VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
(ii) Adjustment for Common Stock Issuances. If the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or is deemed to have issued or sold, any shares of Common Stock for consideration per share less than the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale) (“Adjustment Trigger Shares”), then immediately upon such issuance or sale (or deemed issuance or sale), the Exercise Price shall be reduced to the weighted average per share consideration received by the Company for all Adjustment Trigger Shares so issued or sold (or deemed issued or sold) from and after the Issuance Date, as determined in good faith by the Board, and the number of Warrant Shares will be proportionately increased.
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(iii) Exceptions to Adjustment Upon Issuance of Common Stock. Anything herein to the contrary notwithstanding, there shall be no adjustment to the Exercise Price or the number of Warrant Shares issuable upon exercise of this Warrant with respect to any Excluded Issuance.
(iv) Adjustment for Certain Events. For purposes of determining the adjusted Exercise Price and number of Warrant Shares under Section 1(a) hereof, the following shall be applicable:
(A) Issuance of Options. If the Company shall, at any time or from time to time after the Issuance Date, grant or sell any options, whether or not such options or the right to convert or exchange any convertible securities issuable upon the exercise of such options are immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 2(b)(iv)(C)) for which Common Stock is issuable upon the exercise of such options or upon the conversion or exchange of convertible securities issuable upon the exercise of such options is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such options, then the total maximum number of shares of Common Stock issuable upon the exercise of such options or upon conversion or exchange of the total maximum amount of convertible securities issuable upon the exercise of such options shall be deemed to have been issued as of the date of granting or sale of such options at a price per share equal to the quotient obtained by dividing of (a) the total amount, if any, received or receivable by the Company as consideration for the granting, sale, or exercise of all such options (which sum shall constitute the applicable consideration received for purposes of Section 1(a)), by (b) the total maximum number of shares of Common Stock issuable upon the exercise of all such options or upon the conversion or exchange of all convertible securities issuable upon the exercise of all such options, and the number of Warrant Shares will be proportionately increased. No further adjustment of the Exercise Price or the number of Warrant Shares shall be made upon the actual issuance of Common Stock or of convertible securities upon exercise of such options or upon the actual issuance of Common Stock upon conversion or exchange of convertible securities issuable upon exercise of such options.
(B) Issuance of Convertible Securities. If the Company shall, at any time or from time to time after the Issuance Date, grant or sell any convertible securities, whether or not the right to convert or exchange any such convertible securities is immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 2(b)(iv)(C)) for which Common Stock is issuable upon the conversion or exchange of such convertible securities is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such convertible securities, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of the total maximum amount of such convertible securities shall be deemed to have been issued as of the date of granting or sale of such convertible securities at a price per share equal to the quotient obtained by dividing (a) the total amount, if any, received or receivable by the Company as consideration for the granting, sale, or exercise of such convertible securities (which sum shall constitute the applicable consideration received for purposes of Section 1(a)), by (b) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such convertible securities, and the number of Warrant Shares will be proportionately increased. No further adjustment of the Exercise Price or the number of Warrant Shares shall be made upon the actual issuance of Common Stock upon conversion or exchange of such convertible securities or by reason of the issue or sale of convertible securities upon exercise of any options to purchase any such convertible securities for which adjustments of the Exercise Price have been made pursuant to the other provisions of this Section 2(b)(iv).
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(C) Calculation of Consideration Received. If the Company shall, at any time or from time to time after the Issuance Date, issue or sell, or is deemed to have issued or sold, any shares of Common Stock, options or convertible securities: (A) for cash, the consideration received therefor shall be deemed to be the net amount received or receivable by the Company therefor; (B) for consideration other than cash, the amount of the consideration other than cash received or receivable by the Company shall be the fair market value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration received or receivable by the Company shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system covering such security) for such securities as of the end of business on the date of receipt of such securities; or (C) for no specifically allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated transaction, the amount of the consideration therefor shall be deemed to be the fair market value of such portion of the aggregate consideration received or receivable by the Company in such transaction as is attributable to such shares of Common Stock, options or convertible securities, as the case may be, issued in such transaction. The net amount of any cash consideration and the fair market value of any consideration other than cash or marketable securities shall be determined in good faith by the Board.
(v) Certificate as to Adjustment.
(A) As promptly as reasonably practicable following any adjustment of the Exercise Price and/or the number of Warrant Shares, but in any event not later than 15 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof. All calculations of Exercise Price under this Section 2(b) shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.
(B) As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than 15 Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.
3. FUNDAMENTAL TRANSACTIONS. In the event of a Fundamental Transaction, the Company shall make appropriate provision to ensure that (a) the purchaser (or its parent) shall assume this Warrant (with appropriate changes to the Exercise Price to take into account the value of the securities substituted for the Common Stock so as to preserve the intrinsic spread between the fair market value of any substituted securities and the Exercise Price), or (b) Holder will thereafter have the right to receive upon an exercise of this Warrant, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to such Fundamental Transaction, such securities, cash or other assets (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive on a per share basis upon the happening of such Fundamental Transaction had this Warrant been exercised immediately prior to such Fundamental Transaction (without regard to any limitations on the exercise of this Warrant); provided, however, that following any Fundamental Transaction, this Warrant shall only be exercisable via Cashless Exercise. The provisions of this Section 3 shall apply similarly and equally to successive Fundamental Transactions.
Notwithstanding the foregoing, at the request of the Holder delivered at any time commencing on the earliest to occur of (a) the public disclosure of the consummation of any Fundamental Transaction, (b) the consummation of any Fundamental Transaction and (c) the Holder first becoming aware of the consummation of any Fundamental Transaction through the date that is sixty (60) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K filed with the SEC, the Company or the successor entity (as the case may be) shall purchase this Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.
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4. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) shall, so long as any of the March 2023 Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of the March 2023 Warrants, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the March 2023 Warrants then outstanding (without regard to any limitations on exercise).
5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
6. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Warrant Agent, whereupon the Warrant Agent will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(d)), registered with the Company as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 6(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company (who may be in-house counsel) stating that such transfer may be made and indicating whether the new Warrants must also bear the restrictive legend.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company and the Warrant Agent shall execute and deliver to the Holder a new Warrant (in accordance with Section 6(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 6(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no March 2023 Warrants for fractional Warrant Shares shall be given.
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(d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 6(a), Section 6(b) or Section 6(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
7. PRINCIPAL MARKET REGULATION. Unless permitted by the applicable rules and regulations of the Principal Market, the Company shall not issue any Warrant Shares if the issuance of such Warrant Shares would exceed the aggregate number of shares of Common Stock which the Company may issue upon exercise of the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal Market (the number of shares which may be issued without violating such rules and regulations, the “Exchange Cap”). Notwithstanding the foregoing, such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be reasonably satisfactory to the Holder. In the event that any Holder shall sell or otherwise transfer such Holder’s Warrant, the Exchange Cap restrictions set forth herein shall continue to apply to the Warrant and such transferee.
8. RULE 144. At any time the Company is not subject to the reporting requirements under Section 13 or 15(d) of the 1934 Act, the Company shall, upon written request, furnish to any Holder, beneficial owner or prospective purchaser of the Warrants, the information required to be delivered pursuant to Rule 144A(d)(4) under the 1933 Act to facilitate the resale of such Warrants pursuant to Rule 144A under the 1933 Act. The Company shall take such further action as any such beneficial owner may reasonably request to the extent required from time to time to enable such beneficial Holder to sell such Warrants in accordance with Rule 144A under the 1933 Act, as such rule may be amended from time to time.
9. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 7.3 of the Securities Purchase Agreement. The Company will give written notice to the Holder (a) promptly following any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (b) at least ten (10) days prior to the date on which the Company closes its books or takes a record (i) with respect to any dividend or distribution upon the shares of Common Stock, (ii) with respect to any grants, issuances or sales of any options, convertible securities or rights to purchase stock, warrants, securities or other property, in each case pro rata to all record holders of Common Stock, or (iii) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.
10. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Required Holders. Any amendment or waiver by the Company and the Required Holders shall be binding on the Holder of this Warrant and all holders of the March 2023 Warrants.
11. GOVERNING LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
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12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and all of the Purchasers and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Black Scholes Value or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via electronic mail within three (3) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price, the Black Scholes Value or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within three (3) Business Days submit via electronic mail (a) the disputed determination of the Exercise Price or the Black Scholes Value, as applicable, together with the Company’s and Holder’s respective calculations, to an independent, reputable investment bank or financial services firm selected by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned, or delayed, or (b) the disputed arithmetic calculation of the Warrant Shares, together with the Company’s and Holder’s respective calculations, to an independent, outside accountant, selected by the Holder and approved by the Company, such approval not to be unreasonably withheld, conditioned, or delayed. The Company shall cause the investment bank, financial services firm or accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s, financial services firm’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The costs of such investment bank, financial services firm or accountant shall be allocated by such firm between the Company and the Holder proportionally based on such firm’s determination or calculation and the Company’s and Holder’s respective calculations submitted to such firm.
14. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement), at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to seek an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
15. TRANSFER. This Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company, except as may otherwise be required by Section 4.1 of the Securities Purchase Agreement.
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16. SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
17. DISCLOSURE. Upon delivery by the Company to the Holder of any notice required to be given in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall contemporaneously with any such delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that any notice required to be delivered by the Company in accordance with the terms of this Warrant contains material, nonpublic information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
18. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “1933 Act” means the Securities Act of 1933, as amended.
(b) “Affiliate” shall have the meaning ascribed to such term in Rule 405 of the 1933 Act.
(c) “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(d) “Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request pursuant to Section 3, which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest closing sale price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to Section 3 and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 3, (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 3 and (2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to Section 3 if such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Fundamental Transaction and (B) the date of the Holder’s request pursuant to Section 3.
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(e) “Bloomberg” means Bloomberg Financial Markets.
(f) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York, New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York, New York generally are open for use by customers on such day.
(g) “Common Stock” means (i) the Company’s shares of common stock, par value $0.0001 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification, reorganization or recapitalization of such Common Stock.
(h) “Expiration Date” means the date that is forty-eight (48) months after the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next day that is not a Holiday.
(i) “Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
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(j) “Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(k) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
(l) “Principal Market” means The Nasdaq Global Select Market.
(m) “Required Holders” means the holders of the March 2023 Warrants representing at least a majority of the shares of Common Stock underlying the March 2023 Warrants then outstanding.
(n) “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the principal securities exchange or securities market on which the Common Stock is then traded as in effect on the date of delivery of the applicable Exercise Notice.
(o) “Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(p) “Subsidiary” has the meaning as set forth in the Securities Purchase Agreement.
(q) “Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock on such day, then on the principal securities exchange or securities market on which the Common Stock is then traded.
(r) “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as such market publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York time (or such other time as such market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets Inc.). If the Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 11 with the term “Weighted Average Price” being substituted for the term “Exercise Price.” All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction during the applicable calculation period.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set out above in accordance with the terms of the Warrant.
| RIBBON COMMUNICATIONS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
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EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
RIBBON COMMUNICATIONS INC.
The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of Ribbon Communications Inc., a Delaware corporation (the “Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________ a “Cash Exercise” with respect to _________________ Warrant Shares; and/or____________ a “Cashless Exercise” with respect to _______________ Warrant Shares, resulting in a delivery obligation of the Company to the Holder of __________ shares of Common Stock representing the applicable Net Number.
2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Warrant Agent in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Warrant Agent shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant as follows, subject to Section 1(a) of the Warrant.
| ____________ | Warrant Shares have been sold pursuant to an effective resale registration statement and should be credited to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system pursuant to the information that accompanies this notice; and/or |
| ____________ | Warrant Shares acquired via Cashless Exercise have been sold pursuant to Rule 144 and the Holder has delivered to the Company representations from the Holder and the Holder’s broker indicating such and such Warrant Shares should be credited to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system pursuant to the information that accompanies this notice; and/or |
| ____________ |
Warrant Shares represented by a certificate or evidence of book entry should be sent to the Holder or its designee at the address below. |
Date: _______ __, ________
| Name of Registered Holder | ||
| By: | ||
| Name: | ||
| Title: | ||
Address for certificate or evidence of book entry delivery (if applicable):
DTC Information (if applicable):
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs American Stock Transfer & Trust Company, LLC to issue the above indicated number of shares of Common Stock.
| RIBBON COMMUNICATIONS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
Exhibit 10.1
Execution Version
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of March 24, 2023, is by and among (a) RIBBON COMMUNICATIONS OPERATING COMPANY, INC., a Delaware corporation (the “Borrower”), (b) the Guarantors party hereto, (c) the Lenders (as hereinafter defined) party hereto, and (d) CITIZENS BANK, N.A., as administrative agent for the Lenders hereunder (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto (a) in the Amendment Effective Date Credit Agreement (as hereinafter defined) on and after the Amendment Effective Date until the occurrence of the Sixth Amendment Operative Date and (b) in the Amendment Operative Date Credit Agreement or in the Replacement Amendment Operative Date Credit Agreement (each, as hereinafter defined), as applicable, on and after the Sixth Amendment Operative Date.
W I T N E S S E T H
WHEREAS, the Loan Parties, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Credit Agreement dated as of March 3, 2020 (as amended, modified, extended, restated, replaced or supplemented from time to time prior to the date hereof, the “Existing Credit Agreement”);
WHEREAS, certain loans or other extensions of credit under the Existing Credit Agreement or other Existing Documents (as defined below) bear or are permitted to bear interest, or incur or are permitted to incur fees, commissions or other amounts, based on the London interbank offered rate for U.S. Dollars (“USD LIBOR”) in accordance with the terms of the Existing Credit Agreement or the other Existing Documents;
WHEREAS, the parties hereto have determined that USD LIBOR should be replaced with an alternative benchmark rate for purposes of the Existing Credit Agreement and the other Existing Documents for settings of benchmark rates that occur on or after the Sixth Amendment Operative Date (as defined below); and
WHEREAS, the parties hereto, including Lenders that constitute Required Lenders consent to the amendments and modifications to the Existing Documents set forth herein, have determined to make such amendments and modifications;
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENT EFFECTIVE DATE AMENDMENTS TO CREDIT AGREEMENT
1.1 Amendment. Section 1.1 of the Existing Credit Agreement is hereby amended to add the following defined terms, in their appropriate alphabetical order (the Existing Credit Agreement, as amended by this Section 1.1 is referred to herein as the “Amendment Effective Date Credit Agreement”):
“Sixth Amendment”: the Sixth Amendment to Credit Agreement, dated as of the Sixth Amendment Effective Date, by and among Holdings, the Borrower, the Lenders party thereto and the Administrative Agent.
“Sixth Amendment Effective Date”: has the meaning set forth in the Sixth Amendment.
ARTICLE II
SIXTH AMENDMENT OPERATIVE DATE AMENDMENTS TO CREDIT AGREEMENT
2.1 Amendment.
(a) If
the conditions to the effectiveness of the Sixth Amendment Operative Date set forth in Section 4.1 are satisfied, the Amendment Effective
Date Credit Agreement is hereby amended to delete the red stricken text (indicated textually in the same manner as the following example:
stricken text), add the blue -underlined text (indicated textually in the same manner
as the following example: underlined text) and move the green stricken text (indicated textually
in the same manner as the following example: stricken text) to where the green underlined
text is located (indicated textually in the same manner as the following example: underlined text),
as set forth in the conformed copy of the Amendment Operative Date Credit Agreement (the “Amendment Operative Date Credit
Agreement”) attached as Annex A hereto.
(b) If
the conditions to the effectiveness of the Sixth Amendment Operative Date set forth in Section 4.1 are not satisfied, the Amendment
Effective Date Credit Agreement is hereby amended to delete the red stricken text (indicated textually in the same manner as the following
example: stricken text), add the blue -underlined text (indicated textually in the same
manner as the following example: underlined text) and move the green stricken text (indicated
textually in the same manner as the following example: stricken text) to where the
green underlined text is located (indicated textually in the same manner as the following example: underlined
text), as set forth in the conformed copy of the Replacement Amendment Operative Date Credit Agreement (the “Replacement
Amendment Operative Date Credit Agreement”) attached as Annex B hereto.
ARTICLE III
CONDITIONS TO EFFECTIVENESS OF AMENDMENT EFFECTIVE DATE
3.1 Closing Conditions. The amendments set forth in Article I hereof shall become effective as of the day and year set forth above (the “Amendment Effective Date”) upon satisfaction of the following conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):
(a) Executed Amendment. The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Loan Parties, the Lenders constituting Required Lenders under the Credit Agreement and the Administrative Agent.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS OF SIXTH AMENDMENT OPERATIVE DATE
4.1 Closing Conditions. Subject to the provisions of Section 8.1 below, the amendments set forth in Section 2.1(a) (and not the amendments set forth in Section 2.1(b)) shall become effective as of the day and year that the following conditions are satisfied (in each case, in form and substance reasonably acceptable to the Administrative Agent) (the “Sixth Amendment Operative Date”); provided that if the following conditions are not satisfied on or prior to March 31, 2023, then, the Sixth Amendment Operative Date will nonetheless be deemed to have occurred, and the amendments set forth in Section 2.1(b) (and not the amendments set forth in Section 2.1(a)) shall become effective as of the Business Day immediately following March 31, 2023, without any consent or further action by any party hereto or any party to any other Loan Document:
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(a) Term Loan Paydown. The Administrative Agent shall have received evidence satisfactory to it that (i) the Borrower has received the proceeds from the issuance of preferred equity (the “Sixth Amendment Preferred Equity Issuance”), on terms satisfactory to the Administrative Agent in its reasonable discretion, and (ii) the proceeds of the Sixth Amendment Preferred Equity Issuance have been used to repay a minimum of $75,000,000 of outstanding Term Loans in inverse order of maturity.
(b) Sixth Amendment Preferred Equity Issuance Documents. The Administrative Agent shall have received all of the material executed documentation relating to the Sixth Amendment Preferred Equity Issuance, which shall be reasonably satisfactory to the Administrative Agent, in its reasonable discretion (the “Sixth Amendment Preferred Equity Issuance Documents”).
(c) Fees and Expenses. The Administrative Agent shall have received all fees required to be paid on the Sixth Amendment Operative Date, and all reasonable and documented fees and expenses for which invoices have been presented (including the reasonable and documented fees and expenses of legal counsel to the Administrative Agent to the extent invoiced in reasonable detail at least two Business Days prior to the Amendment Effective Date (except as otherwise reasonably agreed by the Borrower).
ARTICLE V
MISCELLANEOUS
5.1 Amended Terms. (a) On and after the Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Amendment Effective Date Credit Agreement (as defined herein) and (b) on and after the Sixth Amendment Operative Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Amendment Operative Date Credit Agreement or the Replacement Amendment Operative Date Credit Agreement, as applicable. Except as specifically amended hereby or otherwise agreed, the Amendment Effective Date Credit Agreement (and the Amendment Operative Date Credit Agreement or, if applicable, the Replacement Amendment Operative Date Credit Agreement) is hereby ratified and confirmed and shall remain in full force and effect according to its terms.
5.2 Representations and Warranties of Loan Parties. Each of the Loan Parties represents and warrants as follows, as of the Amendment Effective Date:
(a) (i) Each Loan Party has the power and authority, and the legal right, to make, deliver and perform this Amendment; (ii) each Loan Party has taken all necessary organizational or corporate action to authorize the execution, delivery and performance of this Amendment; (iii) no material Governmental Approval or consent or authorization of, filing with, notice to or other act by or in respect of, any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment, except Governmental Approvals, consents, authorizations, filings and notices that have been obtained or made and are in full force and effect; (iv) this Amendment has been duly executed and delivered on behalf of each Loan Party party hereto; and (v) this Amendment constitutes a legal, valid and binding obligation of each Loan Party party hereto, enforceable against each such Loan 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).
(b) Each of the representations and warranties made by each Loan Party in or pursuant to any Loan Document (i) that is qualified by materiality is true and correct in all respects, and (ii) that is not qualified by materiality, is true and correct in all material respects, in each case, on and as of the Amendment Effective Date as if made on and as of the Amendment Effective Date, except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date (or in all respects to the extent such representation and warranty is qualified by materiality).
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(c) No Default or Event of Default has occurred and is continuing as of or on the Amendment Effective Date or after giving effect to this Amendment.
(d) The Loan Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Secured Parties, which security interests and Liens are perfected in accordance with the terms of the Loan Documents and prior to all Liens other than Liens permitted pursuant to Section 7.3 of the Credit Agreement.
(e) Other than as set forth herein, the Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.
5.3 Reaffirmation of Obligations. (a) Each Loan Party hereby, on the Amendment Effective Date, ratifies the Amendment Effective Date Credit Agreement and acknowledges and reaffirms (i) that it is bound by all terms of the Amendment Effective Date Credit Agreement applicable to it, (i) that it is responsible for the observance and full performance of its respective Obligations, and (ii) that the security interest granted to the Administrative Agent pursuant to the Loan Documents, as amended hereby, in all of its right, title, and interest in all then existing and thereafter acquired or arising Collateral in order to secure the payment and performance of the Obligations, is continuing and is and shall remain in full force and effect both immediately prior to and after entering into this Amendment. The parties hereto acknowledge and agree that the amendment of the Existing Credit Agreement pursuant to this Amendment and all other Loan Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Existing Credit Agreement and the other Loan Documents as in effect immediately prior to the Amendment Effective Date.
(b) Each Loan Party hereby will (and is hereby deemed to), on the Sixth Amendment Operative Date, ratify the Amendment Operative Date Credit Agreement or the Replacement Amendment Operative Date Credit Agreement, as applicable, and acknowledge and reaffirm (i) that it is bound by all terms of the Amendment Operative Date Credit Agreement or the Replacement Amendment Operative Date Credit Agreement, as applicable, in each case, applicable to it, (i) that it is responsible for the observance and full performance of its respective Obligations, and (ii) that the security interest granted to the Administrative Agent pursuant to the Loan Documents, as amended hereby, in all of its right, title, and interest in all then existing and thereafter acquired or arising Collateral in order to secure the payment and performance of the Obligations, is continuing and is and shall remain in full force and effect both immediately prior to and after entering into this Amendment. The parties hereto acknowledge and agree that the amendment of the Amendment Effective Date Credit Agreement pursuant to this Amendment and all other Loan Documents amended and/or executed and delivered in connection herewith shall not constitute a novation of the Amendment Effective Date Credit Agreement and the other Loan Documents as in effect immediately prior to the Sixth Amendment Operative Date.
5.4 Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.
5.5 Expenses. The Borrower agrees to pay all reasonable and documented out of pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable and documented out of pocket costs and expenses of the Administrative Agent’s outside legal counsel.
4
5.6 Further Assurances. The Loan Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.
5.7 Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.
5.8 Counterparts; Telecopy. This Amendment may be executed in multiple counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract. Delivery of an executed signature page counterpart hereof by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic association of signatures and records on electronic platforms, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform Electronic Transactions Act or the Uniform Commercial Code, each as amended, and the parties hereto hereby waive any objection to the contrary, provided that nothing herein shall require the Administrative Agent to accept electronic signature counterparts in any form or format after the date hereof.
5.9 No Actions, Claims, Etc. As of the date hereof, each of the Loan Parties hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.
5.10 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
5.11 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
5. 12 Submission to Jurisdiction; Waivers. The jurisdiction, service of process, venue and waiver of jury trial provisions set forth in Section 10.14 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.
ARTICLE VI
DEFINITIONS
6.1 Definitions. The following terms shall have the following meanings for purposes of this Amendment and the provisions contained herein.
| (a) | “Existing Documents” means the Existing Credit Agreement, each “Loan Document” and all other agreements, documents and instruments executed and delivered in connection with the Existing Credit Agreement and the extensions of credit thereunder, each as amended or otherwise modified immediately prior to giving effect to this Amendment, including without limitation any note, guarantee or security document, or mortgage; provided, that no derivative, swap agreement, hedge agreement or ISDA confirmation (or other analogous or similar document) shall constitute an Existing Document for purposes of this Amendment or the provisions contained in this Amendment. |
5
ARTICLE VII
EXISTING EURODOLLAR LOANS
7.1 Existing Eurodollar Loans. Notwithstanding the Sixth Amendment Operative Date with respect to this Amendment, (i) the terms applicable to “Eurodollar Loans” (as defined in the Amendment Effective Date Credit Agreement) under the Amendment Effective Date Credit Agreement (each such Loan, an “Existing Eurodollar Loan”) shall continue in full force and effect and shall continue to apply to each such Existing Eurodollar Loan having an “Interest Period” (as defined in the Amendment Effective Date Credit Agreement) that commenced prior to the Sixth Amendment Operative Date until the expiration of such then current “Interest Period” (as defined in the Amendment Effective Date Credit Agreement) for such Existing Eurodollar Loan and (ii) at the end of such current “Interest Period” (as defined in the Amendment Effective Date Credit Agreement) for each Existing Eurodollar Loan, (A) all accrued and unpaid interest on such Existing Eurodollar Loans shall be paid in full and (B) such Existing Eurodollar Loans shall be either repaid as provided in the Amendment Operative Date Credit Agreement or in the Replacement Amendment Operative Date Credit Agreement, as applicable (which repayment will be made, or not made, in the Borrower’s sole discretion), or such Existing Eurodollar Loans shall be converted to an ABR Loan or a SOFR Loan, in each case, in the manner set forth in the Amendment Operative Date Credit Agreement or in the Replacement Amendment Operative Date Credit Agreement, as applicable.
ARTICLE VIII
AMENDMENT MECHANICS
8.1 Amendment Mechanics. Immediately upon the satisfaction of the closing conditions set forth in Section 4.1 above on the Sixth Amendment Operative Date, the Amendment Operative Date Credit Agreement shall become effective and the Replacement Amendment Operative Date Credit Agreement attached as Annex B hereto shall be deleted in its entirety and such annex shall be marked “reserved” without any consent or further action by any party hereto or any party to any other Loan Document; provided that in the event the closing conditions set forth in Section 4.1 above are not satisfied on or prior to March 31, 2023, then, the Sixth Amendment Operative Date will nonetheless be deemed to have occurred, and the Replacement Amendment Operative Date Credit Agreement shall become effective as of the Business Day immediately following March 31, 2023, and the Amendment Operative Date Credit Agreement attached as Annex A hereto shall be deleted in its entirety and such annex shall be marked “reserved” without any consent or further action by any party hereto or any party to any other Loan Document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
| BORROWER: | ||
| RIBBON COMMUNICATIONS OPERATING COMPANY, INC. | ||
| By: | /s/ Miguel A. Lopez | |
| Name: | Miguel A. Lopez | |
| Title: | President and Chief Executive Officer | |
| GUARANTORS: | ||
| RIBBON COMMUNICATIONS INC. | ||
| GENBAND INC. | ||
| By: | /s/ Miguel A. Lopez | |
| Name: | Miguel A. Lopez | |
| Title: | President and Chief Executive Officer | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| ADMINISTRATIVE AGENT: | ||
| CITIZENS BANK, N.A. | ||
| as the Administrative Agent | ||
| By: | /s/ David W. Stack | |
| Name: | David W. Stack | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| CITIZENS BANK, N.A. | ||
| as a Lender | ||
| By: | /s/ David W. Stack | |
| Name: | David W. Stack | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| Bank of Hope, | ||
| as a Lender | ||
| By: | /s/ David Hill | |
| Name: | David Hill | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| Fifth Third Bank | ||
| as a Lender | ||
| By: | /s/ Scott Unkraut | |
| Name: | Scott Unkraut | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| BANK OF AMERICA, N.A., | ||
| as a Lender | ||
| By: | /s/ Adam Rose | |
| Name: | Adam Rose | |
| Title: | SVP | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| BARCLAYS BANK PLC, | ||
| as a Lender | ||
| By: | /s/ Sean Duggan | |
| Name: | Sean Duggan | |
| Title: | Director | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| Silicon Valley Bridge Bank, N.A., | ||
| as a Lender | ||
| By: | /s/ John Ryan | |
| Name: | John Ryan | |
| Title: | Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| JPMorgan Chase Bank, N.A., | ||
| as a Lender | ||
| By: | /s/ Richard Ong Pho | |
| Name: | Richard Ong Pho | |
| Title: | Executive Director | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| M&T Bank | ||
| as a Lender | ||
| By: | /s/ Don Lobdell | |
| Name: | Don Lobdell | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| HSBC Bank USA, National Association, | ||
| as a Lender | ||
| By: | /s/ Andrew Everett | |
| Name: | Andrew Everett | |
| Title: | Senior Vice President | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| Santander Bank NA, | ||
| as a Lender | ||
| By: | /s/ Irv Roa | |
| Name: | Irv Roa | |
| Title: | Managing Director | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
| LENDERS: | ||
| Citibank, N.A., | ||
| as a Lender | ||
| By: | /s/ Tony Sood | |
| Name: | Tony Sood | |
| Title: | Director | |
[Signature Page to Sixth Amendment to Credit Agreement (Ribbon)]
Annex A
Amendment Operative Date Credit Agreement
See attached.
Conformed through FifthSixth Amendment dated June 30, 2022Operative
Date
Execution Version
SENIOR SECURED CREDIT FACILITIES
CREDIT AGREEMENT
dated as of March 3, 2020,
among
RIBBON COMMUNICATIONS INC.,
as a Guarantor,
RIBBON COMMUNICATIONS OPERATING COMPANY, INC.,
as the Borrower,
The Several Lenders from Time to Time PartY Hereto,
CITIZENS BANK, N.A.
as Administrative Agent, Issuing Lender and Swingline Lender,
and
CITIZENS
BANK, N.A.
and
Santander Bank, National Association,
as Joint Lead Arrangers and Bookrunners
Table of Contents
Page
| SECTION 1 DEFINITIONS | 2 |
| 1.1 | Defined Terms | 2 |
| 1.2 | Other Definitional Provisions | 51 |
| 1.3 | Rounding | 52 |
| 1.4 | Currency | 52 |
| 1.5 | Limited Condition Acquisitions | 53 |
| 1.6 | Rates | 53 |
| SECTION 2 AMOUNT AND TERMS OF COMMITMENTS | 54 |
| 2.1 | Term Commitments | 54 |
| 2.2 | Procedure for Term Loan Borrowing | 54 |
| 2.3 | Repayment of Term Loans | 54 |
| 2.4 | Revolving Commitments | 55 |
| 2.5 | Procedure for Revolving Borrowing | 56 |
| 2.6 | Swingline Commitment | 56 |
| 2.7 | Procedure for Swingline Borrowing; Refunding of Swingline Loans | 57 |
| 2.8 | Overadvances | 58 |
| 2.9 | Fees | 58 |
| 2.10 | Termination or Reduction of Commitments | 59 |
| 2.11 | Optional Loan Prepayments | 59 |
| 2.12 | Mandatory Prepayments | 60 |
| 2.13 | Conversion and Continuation Options | 62 |
| 2.14 | Limitations
on |
62 |
| 2.15 | Interest Rates and Payment Dates | 62 |
| 2.16 | Computation of Interest and Fees | 63 |
| 2.17 | Inability to Determine Interest Rate | 63 |
| 2.18 | Pro Rata Treatment and Payments | 66 |
| 2.19 | Illegality; Requirements of Law | 70 |
| 2.20 | Taxes | 71 |
| 2.21 | Indemnity | 75 |
| 2.22 | Change of Lending Office | 75 |
| 2.23 | Substitution of Lenders | 76 |
| 2.24 | Defaulting Lenders | 77 |
-i-
Table of Contents
(continued)
Page
| 2.25 | Joint and Several Liability | 79 |
| 2.26 | Notes | 79 |
| 2.27 | Incremental Facility | 79 |
| 2.28 | Credit Agreement Refinancing Indebtedness | 82 |
| 2.29 | Discounted Prepayments | 83 |
| SECTION 3 LETTERS OF CREDIT | 85 |
| 3.1 | L/C Commitment | 85 |
| 3.2 | Procedure for Issuance of Letters of Credit | 86 |
| 3.3 | Fees and Other Charges | 87 |
| 3.4 | L/C Participations; Existing Letters of Credit | 87 |
| 3.5 | Reimbursement | 88 |
| 3.6 | Obligations Absolute | 89 |
| 3.7 | Letter of Credit Payments | 89 |
| 3.8 | Applications | 89 |
| 3.9 | Interim Interest | 89 |
| 3.10 | Cash Collateral | 90 |
| 3.11 | Additional Issuing Lenders | 91 |
| 3.12 | Resignation of the Issuing Lender | 91 |
| 3.13 | Applicability of UCP and ISP | 91 |
| SECTION 4 REPRESENTATIONS AND WARRANTIES | 91 |
| 4.1 | Financial Condition | 91 |
| 4.2 | No Change | 92 |
| 4.3 | Existence; Compliance with Law | 92 |
| 4.4 | Power, Authorization; Enforceable Obligations | 92 |
| 4.5 | No Legal Bar | 92 |
| 4.6 | Litigation | 93 |
| 4.7 | No Default | 93 |
| 4.8 | Ownership of Property; Liens; Investments | 93 |
| 4.9 | Intellectual Property | 93 |
| 4.10 | Taxes | 93 |
| 4.11 | Federal Regulations | 94 |
| 4.12 | Labor Matters | 94 |
-ii-
Table of Contents
(continued)
Page
| 4.13 | ERISA | 94 |
| 4.14 | Investment Company Act; Other Regulations | 95 |
| 4.15 | Subsidiaries | 95 |
| 4.16 | Use of Proceeds | 95 |
| 4.17 | Environmental Matters | 96 |
| 4.18 | Accuracy of Information, etc. | 96 |
| 4.19 | Security Documents | 97 |
| 4.20 | Solvency; Voidable Transaction | 97 |
| 4.21 | Regulation H | 97 |
| 4.22 | [Reserved] | 97 |
| 4.23 | [Reserved] | 97 |
| 4.24 | Insurance | 98 |
| 4.25 | No Casualty | 98 |
| 4.26 | [Reserved] | 98 |
| 4.27 | [Reserved] | 98 |
| 4.28 | OFAC | 98 |
| 4.29 | Anti-Corruption Laws; Patriot Act | 98 |
| SECTION 5 CONDITIONS PRECEDENT | 99 |
| 5.1 | Conditions to Initial Extension of Credit | 99 |
| 5.2 | Conditions to Each Extension of Credit | 102 |
| 5.3 | Post-Closing Conditions Subsequent | 103 |
| SECTION 6 AFFIRMATIVE COVENANTS | 103 |
| 6.1 | Financial Statements | 103 |
| 6.2 | Certificates; Reports; Other Information | 104 |
| 6.3 | Lender Calls | 105 |
| 6.4 | Payment of Obligations | 106 |
| 6.5 | Maintenance of Existence; Compliance | 106 |
| 6.6 | Maintenance of Property; Insurance | 106 |
| 6.7 | Inspection of Property; Books and Records; Discussions | 106 |
| 6.8 | Notices | 107 |
| 6.9 | Environmental Laws | 108 |
| 6.10 | [Reserved] | 108 |
-iii-
Table of Contents
(continued)
Page
| 6.11 | [Reserved] | 108 |
| 6.12 | Additional Collateral, Etc. | 108 |
| 6.13 | Designation of Subsidiaries and Unrestricted Subsidiaries | 111 |
| 6.14 | Use of Proceeds | 111 |
| 6.15 | [Reserved] | 111 |
| 6.16 | Anti-Corruption Laws | 111 |
| 6.17 | Further Assurances | 111 |
| SECTION 7 NEGATIVE COVENANTS | 112 |
| 7.1 | Financial Condition Covenants | 112 |
| 7.2 | Indebtedness | 114 |
| 7.3 | Liens | 116 |
| 7.4 | Fundamental Changes | 118 |
| 7.5 | Disposition of Property | 119 |
| 7.6 | Restricted Payments | 120 |
| 7.7 | [Reserved] | 122 |
| 7.8 | Investments | 123 |
| 7.9 | ERISA | 127 |
| 7.10 | [Reserved] | 127 |
| 7.11 | Transactions with Affiliates | 127 |
| 7.12 | Sale Leaseback Transactions | 127 |
| 7.13 | Swap Agreements | 127 |
| 7.14 | Accounting Changes | 127 |
| 7.15 | Negative Pledge Clauses | 127 |
| 7.16 | Clauses Restricting Subsidiary Distributions | 128 |
| 7.17 | Lines of Business | 128 |
| 7.18 | [Reserved] | 128 |
| 7.19 | [Reserved] | 128 |
| 7.20 | Amendments to Organizational Agreements and Material Contracts | 128 |
| 7.21 | Use of Proceeds | 129 |
| 7.22 | Subordinated Indebtedness | 129 |
| 7.23 | Anti-Terrorism Laws | 129 |
-iv-
Table of Contents
(continued)
Page
| SECTION 8 EVENTS OF DEFAULT | 129 |
| 8.1 | Events of Default | 129 |
| 8.2 | Remedies Upon Event of Default | 132 |
| 8.3 | Application of Funds | 133 |
| SECTION 9 THE ADMINISTRATIVE AGENT | 134 |
| 9.1 | Appointment and Authority | 134 |
| 9.2 | Delegation of Duties | 135 |
| 9.3 | Exculpatory Provisions | 135 |
| 9.4 | Reliance by Administrative Agent | 136 |
| 9.5 | Notice of Default | 136 |
| 9.6 | Non-Reliance on Administrative Agent and Other Lenders | 137 |
| 9.7 | Indemnification | 137 |
| 9.8 | Agent in Its Individual Capacity | 138 |
| 9.9 | Successor Administrative Agent | 138 |
| 9.10 | Collateral and Guaranty Matters | 139 |
| 9.11 | Administrative Agent May File Proofs of Claim | 140 |
| 9.12 | No Other Duties, etc. | 141 |
| 9.13 | Cash Management Bank and Qualified Counterparty Reports | 141 |
| 9.14 | Survival | 141 |
| 9.15 | Certain ERISA Matters | 141 |
| SECTION 10 MISCELLANEOUS | 142 |
| 10.1 | Amendments and Waivers | 142 |
| 10.2 | Notices | 147 |
| 10.3 | No Waiver; Cumulative Remedies | 148 |
| 10.4 | Survival of Representations and Warranties | 148 |
| 10.5 | Expenses; Indemnity; Damage Waiver | 149 |
| 10.6 | Successors and Assigns; Participations and Assignments | 150 |
| 10.7 | Adjustments; Set-off | 155 |
| 10.8 | Payments Set Aside | 155 |
| 10.9 | Interest Rate Limitation | 156 |
| 10.10 | Counterparts; Electronic Execution of Assignments | 156 |
| 10.11 | Severability | 156 |
-v-
Table of Contents
(continued)
Page
| 10.12 | Integration | 156 |
| 10.13 | GOVERNING LAW | 156 |
| 10.14 | Submission to Jurisdiction; Waivers | 157 |
| 10.15 | Acknowledgements | 157 |
| 10.16 | Releases of Guarantees and Liens | 158 |
| 10.17 | Treatment of Certain Information; Confidentiality | 158 |
| 10.18 | [Reserved] | 159 |
| 10.19 | Judgment Currency; Exchange Rates | 159 |
| 10.20 | Patriot Act | 160 |
| 10.21 | Acknowledgement and Consent to Bail-In of Affected Financial Institutions | 160 |
| 10.22 | Acknowledgment Regarding any Supported QFCs | 161 |
-vi-
Table of Contents
(continued)
Schedules
| Schedule 1.1A: | Commitments |
| Schedule 1.1B: | Existing Letters of Credit |
| Schedule 4.5: | Requirements of Law |
| Schedule 4.9: | Intellectual Property |
| Schedule 4.15: | Subsidiaries |
| Schedule 5.3: | Post-Closing Conditions Subsequent |
| Schedule 7.2(d): | Existing Indebtedness |
| Schedule 7.2(m): | Factoring Arrangements |
| Schedule 7.3(f): | Existing Liens |
| Schedule 7.8: | Investments |
| Schedule 7.11: | Transactions with Affiliates |
| Schedule 7.16(f): | Existing Negative Pledge Clauses |
| Schedule 7.17(vii): | Existing Clauses Restricting Subsidiary Distributions |
Exhibits
| Exhibit A: | [Reserved] |
| Exhibit B: | Form of Compliance Certificate |
| Exhibit C: | Form of Secretary’s/Managing Member’s Certificate |
| Exhibit D: | Form of Solvency Certificate |
| Exhibit E: | Form of Assignment and Assumption |
| Exhibits F-1 – F-4: | Forms of U.S. Tax Compliance Certificate |
| Exhibit G: | Reserved |
| Exhibit H-1: | Form of Revolving Loan Note |
| Exhibit H-2: | Form of Swingline Loan Note |
| Exhibit H-3: | Form of Term Loan Note |
| Exhibit I: | [Reserved] |
| Exhibit J: | Form of Collateral Information Certificate |
| Exhibit K: | Form of Notice of Borrowing |
| Exhibit L: | Form of Notice of Conversion/Continuation |
-vii-
CREDIT AGREEMENT
THIS Credit Agreement (this “Agreement”), dated as of March 3, 2020, is entered into by and among RIBBON COMMUNICATIONS INC., a Delaware corporation (“Holdings”), RIBBON COMMUNICATIONS OPERATING COMPANY, INC., a Delaware corporation formerly known as Sonus Networks, Inc. (the “Borrower”), the several banks and other financial institutions or entities from time to time party to this Agreement (each a “Lender” and, collectively, the “Lenders”), CITIZENS BANK, N.A. (“Citizens”), as the Issuing Lender and the Swingline Lender, and Citizens, as Administrative Agent.
recitals:
WHEREAS, capitalized terms used in these recitals will have the respective meanings set forth for such terms in Section 1.1;
WHEREAS, pursuant to the transactions undertaken in connection with that certain Agreement and Plan of Merger, dated as of November 14, 2019 (including all exhibits and schedules thereto, as amended, restated, supplemented or otherwise modified prior to the Closing Date, the “Acquisition Agreement”), by and among Holdings, Ribbon Communications Israel Ltd., a company incorporated under the Laws of the State of Israel and an indirect wholly owned Subsidiary of Borrower, Eclipse Communications Ltd., a company incorporated under the Laws of the State of Israel and an indirect wholly owned Subsidiary of the Borrower (“Merger Sub”), ECI Telecom Group Ltd., a company incorporated under the Laws of the State of Israel (“ECI Telecom Group” and, together with its Subsidiaries, the “Acquired Business”) and ECI Holding (Hungary) Korlátolt Felelősségű Társaság, a company incorporated under the Laws of Hungary (“ECI Holding (Hungary) KFT”), solely in its capacity as the “shareholder representative” under the Acquisition Agreement, Merger Sub will merge with and into ECI Telecom Group, with ECI Telecom Group surviving such merger as an indirect, wholly-owned subsidiary of Borrower (the “Acquisition”);
Whereas,
the Lenders have agreed to extend certain credit facilities to the Borrower, upon the terms and conditions specified in this Agreement,
in an aggregate principal amount not to exceed $500,000,000as
of the Sixth Amendment Operative Date $330,453,477.67, consisting of a term loan facility in the aggregate principal amount
of $400,000,000255,453,477.67,
and a revolving loan facility to the Borrower in an aggregate principal amount of $100,000,00075,000,000,
including a letter of credit sub-facility in the aggregate availability amount of $30,000,00020,000,000 (as a sublimit of such revolving loan facility), and a swingline sub-facility in the aggregate availability amount of
$20,000,000 (as a sublimit of such revolving loan facility);
WHEREAS, the proceeds of the Term Loans funded on the Closing Date and any Initial Revolving Borrowings will be used on the Closing Date to (A) consummate the Acquisition and the other Closing Date Transactions, (B) repay the Acquired Business Existing Debt and (C) pay the Closing Date Transaction Costs;
WHEREAS, each Guarantor has agreed to guarantee the Obligations of the Borrower; and
WHEREAS, each Loan Party has agreed to secure all of its Obligations by granting to the Administrative Agent, for the benefit of the Secured Parties, a first priority lien (subject to Liens permitted by the Loan Documents) on its personal property and assets as and to the extent described in the Security Documents.
Now, Therefore, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement (including the recitals hereof), the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.
“20% Cap”: as defined in the definition of Consolidated Adjusted EBITDA.
“2022 Audited Financial Statement Delivery Date”: the date on which the audited financial statements and the related compliance certificate for the fiscal year ending December 31, 2022 are delivered to the Administrative Agent pursuant to Section 6.1(a) and Section 6.2(b), respectively.
“ABR”:
for any day, a rate per annum equal to the higher of (a) the Prime Rate in effect on such day and,
(b) the Federal Funds Effective Rate in effect for such day plus 0.50% ;and
(c) the Daily SOFR Rate on such day plus 1.00% per annum, provided that in
no event shall the ABR be deemed toshall
at no time be less than 0.00%the
Floor. If the Administrative
Agent shall have determined (which determination shall be conclusive absent
clearly manifest error) that it is unable to ascertain the Federal Funds Rate or the Daily SOFR Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition of
the term Federal Funds Rate, the ABR shall be determined without regard to clause (b) or (c), as applicable, of the preceding
sentence until the circumstances giving rise to such inability no longer exist. Any change in the ABR due to a change
in the Prime Rate or,
the Federal Funds Effective Rate or
the Daily SOFR Rate, as applicable, shall be effective as of the opening of
business onfrom
and including the effective daydate
of thesuch
change in such ratesthe
Prime Rate, the Federal Funds Rate or the Daily SOFR Rate, as applicable, respectively.
“ABR Loans”: Loans, the rate of interest applicable to which is based upon the ABR.
“Acceptable Discount Price” as defined in Section 2.29(b).
“Accounting Change”: is defined in the definition of “GAAP.”
“Accounts”: all “accounts” (as defined in the UCC) of a Person, including, without limitation, accounts, accounts receivable, monies due or to become due and obligations in any form (whether arising in connection with contracts, contract rights, instruments, general intangibles, or chattel paper), in each case whether arising out of goods sold or services rendered or from any other transaction and whether or not earned by performance, now or hereafter in existence, and all documents of title or other documents representing any of the foregoing, and all collateral security and guaranties of any kind, now or hereafter in existence, given by any Person with respect to any of the foregoing. Unless otherwise stated, the term “Account,” when used herein, shall mean an Account of the Group Members.
“Acquired Business”: has the meaning given in the recitals hereto.
“Acquired Business Existing Debt”: means indebtedness and other obligations that do not expressly survive termination and repayment thereof, and which are outstanding immediately prior to the Closing Date, under the Senior Finance Agreement dated as of March 14, 2018 by and among ECI Telecom B.V. as the Borrower, Promontoria Holding 206 B.V. and J.P. Morgan Securities PLC as the Arrangers and Promontoria Holding 206 B.V. as the Agent and the Security Agent, as amended, supplemented or modified from time to time.
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“Acquisition”: has the meaning given in the recitals hereto.
“Acquisition Agreement”: has the meaning given in the recitals hereto.
“Acquisition Agreement Representations”: means such of the representations and warranties made by ECI Telecom Group, with respect to ECI Telecom Group and/or its Subsidiaries, in the Acquisition Agreement to the extent a breach of such representations and warranties is materially adverse to the interests of the Lenders hereunder.
“Administrative Agent”: Citizens, in its capacity as the administrative agent for the Lenders and the collateral agent for the Secured Parties under this Agreement and the other Loan Documents, together with any of its successors in such capacity.
“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Lender”: is defined in Section 2.23.
“Affiliate”: with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided that, neither the Administrative Agent nor the Lenders shall be deemed Affiliates of the Loan Parties solely as a result of the exercise of their rights and remedies under, and in accordance with, the Loan Documents.
“Agent Parties”: is defined in Section 10.2(c)(ii).
“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to the sum of (a) without duplication of clause (b), the aggregate then unpaid principal amount of such Lender’s Term Loans, (b) without duplication of clause (a), the aggregate amount of such Lender’s Term Commitments then in effect and (c) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.
“Agreement”: is defined in the preamble hereto.
“Agreement Currency”: is defined in Section 10.19.
“Applicable Discount Price”: is defined in Section 2.29(b).
“Applicable
Margin”: with respect to Revolving Loans, with respect to Term Loans funded on the Closing Date and with respect to the
Third Amendment Term Loan funded on the Third Amendment Effective Date, commencing on the
first Business Day immediately following the date on which Holdings delivers a Compliance Certificate pursuant to Section 6.2(b),
the rate per annum set forth under the relevant column heading below based upon the Consolidated Net Leverage Ratio in such Compliance
Certificate:(x) 4.50%
per annum for SOFR Loans and (y) 3.50% per annum for ABR Loans.
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|
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Notwithstanding
the foregoing, (a) until the delivery of the first Compliance Certificate required to be delivered pursuant to Section 6.2(b) after
the Closing Date, (x) the Applicable Margin shall be the rates corresponding to Level II in the foregoing table and (y) the
Commitment Fee Rate shall be the rate corresponding to Level I in the foregoing table, (b) if Holdings fails to deliver the financial
statements required by Section 6.1 and the related Compliance Certificate required by Section 6.2(b),
by the respective date required thereunder after the end of any related fiscal quarter of Holdings, the Applicable Margin and the Commitment
Fee Rate shall be the rates corresponding to Level I in the foregoing table until such financial statements and Compliance Certificate
are delivered, and (c) no reduction to the Applicable Margin or the Commitment Fee Rate shall become effective at any time (x) when
an Event of Default has occurred and is continuing or (y) the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents have been declared to be due and payable in accordance with Section 8.2.
If,
as a result of any restatement of or other adjustment to the financial statements of the Loan Parties or for any other reason, the Administrative
Agent determines that (x) the Consolidated Net Leverage Ratio as calculated by Holdings as of any applicable date was inaccurate
and (y) a proper calculation of the Consolidated Net Leverage Ratio would have resulted in different pricing for any period, then
(i) if the proper calculation of the Consolidated Net Leverage Ratio would have resulted in higher pricing for such period, the
Borrower shall automatically and retroactively be obligated to pay to the Administrative Agent, for the benefit of the applicable Lenders,
promptly on demand by the Administrative Agent, an amount equal to the excess of the amount of interest and fees that should have been
paid for such period over the amount of interest and fees actually paid for such period; and (ii) if the proper calculation of the
Consolidated Net Leverage Ratio would have resulted in lower pricing for such period, neither the Administrative Agent nor any Lender
shall have any obligation to repay any interest or fees to the Borrower.
With respect to Incremental Term Loans, Extended Term Loans, Extended Revolving Commitments and any Credit Agreement Refinancing Indebtedness, the “Applicable Margin” shall be as set forth in the applicable Incremental Joinder, Extension Amendment or Refinancing Amendment, as applicable.
“Application”: an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to issue a Letter of Credit.
“Approved Fund”: any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
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“Asset Sale”: any Disposition of property or series of related Dispositions of property (excluding any such Disposition of property permitted by clauses (a) through (q) of Section 7.5) that yields gross proceeds to any Group Member (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $5,000,000.
“Assignment and Assumption”: an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.6), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.
“Available Amount”: as at any date of determination, a cumulative amount equal to, without duplication, (a) $25,000,000 (the “Starter Basket”), plus (b) commencing after the end of the fiscal year ending December 31, 2021, the amount of Excess Cash Flow not applied to make a prepayment pursuant to Section 2.12(d) (excluding the amount of any reduction in Excess Cash Flow pursuant to Section 2.12(d) resulting from a voluntary prepayment), plus (c) the aggregate amount of capital contributions by Holdings to the capital of the Borrower made after the Closing Date and in cash or Cash Equivalents (other than with respect to Disqualified Stock or pursuant to a Specified Equity Contribution or in connection with the Sixth Amendment Preferred Equity Issuance), plus (d) the net cash proceeds received by Holdings after the Closing Date (and prior to such date of determination) from issuances or sales of its Capital Stock (that is not Disqualified Stock or in connection with the Sixth Amendment Preferred Equity Issuance), other than with respect to Specified Equity Contributions, plus (e) returns, profits, distributions and similar amounts received in cash or Cash Equivalents by the Borrower and its Subsidiaries on Investments made using the Available Amount not in excess of such Investments made with the Available Amount, plus (f) any Declined Amounts, plus (g) amounts received by the Borrower or any of its Subsidiaries in cash from the sale of the Capital Stock of any joint venture or any dividend or other distribution by any joint venture, in each case with respect to this clause (g), to the extent such equity interests or dividend are from an Investment made with the Available Amount, in each case with respect to the preceding clauses (b) through (g) to the extent not otherwise applied to a purpose permitted under this Agreement, minus (h) the aggregate amount of any Restricted Payments actually made pursuant to Section 7.6(l), minus (i) the aggregate amount of any Investments actually made pursuant to Section 7.8(u).
“Available Incremental Amount”: as of any date of determination, an amount equal to (a) the sum of (i) the Fixed Incremental Amount and (ii) the Ratio Incremental Amount minus (b) the aggregate principal amount of Incremental Facilities (excluding the Third Amendment Term Loan) previously incurred pursuant to Section 2.27.
“Available Revolving Commitment”: at any time, an amount equal to (i) the Total Revolving Commitments in effect at such time, minus (ii) the aggregate undrawn amount of all outstanding Letters of Credit at such time, minus (iii) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, minus (iv) the aggregate principal balance of any Revolving Loans outstanding at such time.
“Available
Tenor”: as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if
such Benchmark is a term rate, any tenor for such Benchmark (or
payment period for interest calculated with reference to such Benchmark,as applicable,component
thereof) that is or may be used for determining the length of an Interest Period pursuant to this Agreement or
(y) otherwise, any payment
period for interest calculated with reference to such Benchmark (or
component thereof), as applicable, that is or may be used for determining any frequency of making payments of interest calculated with
reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance
of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause
(v) of Section 2.17(bc)(iv).
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“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-in Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code”: Title 11 of the United States Code entitled “Bankruptcy.”
“Benchmark”:
initially, USD LIBORthe
Term SOFR Reference Rate; provided that if a Benchmark Transition Event, a
Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date
have occurred with respect to USD LIBORthe
Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement
to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause
(i) of Section 2.17(b).c)(i).
Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement”: for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(1) the
sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;
(a) (2) the
sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement
Adjustment; or
(b) (3) the
sum of: (ai)
the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as
the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to
(iA)
any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental
Body or (iiB)
any evolving or then-prevailing market convention for determining a benchmark rate and
any adjustment applicable thereto, as a replacement forto
the then-current Benchmark for U.S. dollar-denominatedDollar-denominated
syndicated credit facilities at such time and (bii)
the related Benchmark Replacement Adjustment;
provided, that any such Benchmark Replacement shall be administratively feasible as determined by the Administrative Agent in its sole discretion.
If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
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provided
that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or
other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion;
provided, further that, notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of
a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be
deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of
this definition (subject to the proviso above). If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above
would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other
Loan Documents.
“Benchmark
Replacement Adjustment”:
with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for
any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
(1) for
purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in
the order below that can be determined by the Administrative Agent:
(a) the
spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero)
as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the
Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable
Corresponding Tenor;
(b) the
spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set
for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective
upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and
(2) for
purposes of clause (3) of the definition of “Benchmark Replacement,”
Adjustment”:
with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement,
the spread adjustment, or method for calculating or determining such spread adjustment,
(which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower
for the applicable Corresponding Tenor giving due consideration to (ia)
any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement
of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on
the applicable Benchmark Replacement Date or (iib)
any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such
spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S.
dollar-denominatedDollar-denominated
syndicated credit facilities;.
provided
that, in the case of clause (1) above, such adjustment is displayed on a screen or other information
service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable
discretion.
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“Benchmark
Replacement Conforming Changes”: with respect to any Benchmark Replacement (including Term SOFR after a Term SOFR Transition
Event), any technical, administrative or operational changes (including changes
to the definition of “ABR,” the definition of “Business Day,” the definition of “Interest Period,”
timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or
continuation notices, length of lookback periods, the applicability of breakage provisions,
and other technical, administrative or operational matters) that the Administrative Agent, in consultation with the Borrower, 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, in consultation with the Borrower, determines that no
market practice for the administration of such Benchmark Replacement exists, in such other manner
of administration as the Administrative Agent, in consultation with the Borrower, decides
is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Replacement Date”: a date and time determined by Administrative Agent, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:
(a) (1) in
the case of clause (1a)
or (2b)
of the definition of “Benchmark Transition Event,”,
the later of (ai)
the date of the public statement or publication of information referenced therein and (bii)
the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely
ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b) (2) in
the case of clause (3c)
of the definition of “Benchmark Transition Event,”,
the first
date of the publicon
which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of
the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark
(or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the
most recent statement or publication of information referenced
therein;in
such clause (c), even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
(3) in
the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders
and the Borrower pursuant to Section 2.17(b); or
(4) in
the case of an Early Opt-in Election, the sixth (6th) Business Day
after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received,
by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of
such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising
the Required Lenders.
For
the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date
occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will
be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark
Replacement Date” will be deemed to have occurred in the case of clause (1a)
or (2b)
with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current
Available Tenors of such Benchmark (or the published component used in the calculation thereof).
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“Benchmark Transition Event”: the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) (1) a
public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used
in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark
(or such component thereof), permanently or indefinitely,;
provided that, at the time of such statement or publication, there is no successor administrator that will continue
to provide any Available Tenor of such Benchmark (or such component thereof);
(b) (2) a
public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published
component used in the calculation thereof), the Board of Governors of the Federal
Reserve SystemBoard,
the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component),
a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar
insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator
of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof)
permanently or indefinitely,;
provided that, at the time of such statement or publication, there is no successor administrator that will continue
to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) (3) a
public statement or publication of information by the regulatory supervisor foror
on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof)
or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that all Available
Tenors of such Benchmark (or such component thereof) are no longernot,
or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability
Period”: the period (if any) (xa)
beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of
that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for
all purposes hereunder and under any Loan Document in accordance with Section 2.17(bc)(i) and
(yb)
ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan
Document in accordance with Section 2.17(bc)(i).
“Benefit Plan”: 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 and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Benefitted Lender”: is defined in Section 10.7(a).
“BHC Affiliate”: with respect to any party, an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Blocked Person”: is defined in Section 7.23.
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“Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Borrower”: is defined in the preamble hereto.
“Borrowing Date”: any Business Day specified by the Borrower in a Notice of Borrowing as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.
“Business”: is defined in Section 4.17(b).
“Business
Day”: (a) aany
day other than a Saturday, Sunday or other day on which commercial
banks in the State ofBoston,
Massachusetts or New York are authorized or required by law to close; provided that,
in either case, with respect to notices and determinations in connection with, and payments of principal and interest on, Eurodollar
Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market..
“Capital Lease Obligations”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided, that for all purposes hereunder, the amount of obligations under any capital lease shall be the amount thereof calculated without giving effect to Accounting Standards Codification 842 (or any other modification to GAAP prior to, on, or after the date hereof) requiring operating leases to be recharacterized or treated as capital leases.
“Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
“Captive Insurance Subsidiary”: any Subsidiary that is subject to regulation as an insurance company (or any Subsidiary thereof).
“Cash Collateral”: is defined in the definition of “Cash Collateralize.”
“Cash Collateralize” or “Cash Collateralization”: to pledge and deposit with or deliver to (a) with respect to Obligations in respect of Letters of Credit, the Administrative Agent, for the benefit of the Issuing Lender and one or more of the Lenders, as applicable, as collateral for L/C Exposure or obligations of the Lenders to fund participations in respect thereof, cash or deposit account balances or, if the Administrative Agent and the Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and such Issuing Lender; (b) with respect to Obligations arising under any Cash Management Agreement in connection with Cash Management Services, the applicable Cash Management Bank, for its own or any of its applicable Affiliate’s benefit, as provider of such Cash Management Services, cash or deposit account balances or, if the Administrative Agent and the applicable Cash Management Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to such Cash Management Bank; or (c) with respect to Obligations in respect of any Specified Swap Agreements, the applicable Qualified Counterparty, as Collateral for such Obligations, cash or deposit account balances or, if such Qualified Counterparty shall agree in its sole discretion, other credit support, in each case in amount and pursuant to documentation in form and substance satisfactory to such Qualified Counterparty. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
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“Cash Equivalents”: (a) Dollars or money in foreign currencies received in the ordinary course of business that are readily convertible into Dollars; (b) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (c) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of six months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $250,000,000; (d) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within six months from the date of acquisition; (e) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (c) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (f) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (g) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (c) of this definition; (h) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (g) of this definition; or (i) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000, (j) in the case of any Group Member organized or having its principal place of business outside the United States, investments denominated in the currency of the jurisdiction in which such Group Member is organized or has its principal place of business which are similar and of comparable credit quality to the items specified in clauses (b) through (i) above; or (k) investments consistent with Holdings’ investment policy approved by its board of directors as in effect on the Closing Date (or otherwise amended with the consent of the Administrative Agent), a true and correct copy of which has been delivered to the Administrative Agent prior to the Closing Date.
“Cash Management Agreement”: is defined in the definition of “Cash Management Services.”
“Cash Management Bank”: any Person that is a Lender or an Affiliate of a Lender, in its capacity as a party to a Cash Management Agreement.
“Cash Management Services”: cash management and other financial services (other than to the extent constituting Specified Swap Agreements) provided to one or more of the Group Members by a Cash Management Bank which may include treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system), merchant services, direct deposit of payroll, business credit card (including so-called "purchase cards", "procurement cards" or "p-cards"), credit card processing services, debit cards, stored value cards, and check cashing services identified in such Cash Management Bank’s various cash management services or other similar agreements (each, a “Cash Management Agreement”).
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“Casualty Event”: any damage to or any destruction of, or any condemnation or other taking by any Governmental Authority of any property of the Loan Parties.
“Certificated Securities”: is defined in Section 4.19(a).
“Change of Control”: (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding (x) any employee benefit plan of such person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan and (y) the Permitted Investors, shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d) 5 under the Exchange Act), directly or indirectly, of 40% or more of the voting power for the appointment of directors of Holdings (determined on a fully diluted basis); (b) during any period of twelve (12) consecutive months commencing on the Closing Date, a majority of the members of the board of directors of Holdings cease to be composed of individuals (disregarding individuals who cease to serve due to death or disability) (i) who were members of that board on the first day of such period, (ii) whose appointment to that board was approved by individuals referred to in clause (i) above constituting at the time of such appointment at least a majority of that board or (iii) whose appointment to that board was approved by individuals referred to in clauses (i) or (ii) above or this clause (iii) constituting at the time of such appointment at least a majority of that board (in each case, such approval either by a specific vote or by approval of the Holdings’ proxy or information statement in which such member was named as a nominee for election as a director); (c) at any time, Holdings shall cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of each Loan Party free and clear of all Liens (other than Liens created by the Security Documents and Liens permitted by Section 7.3); (d) the Borrower shall cease to be a wholly-owned direct Subsidiary of Holdings; or (e) 100% of the Capital Stock of any Loan Party other than Holdings shall cease to be owned directly by another Loan Party.
“Citizens”: is defined in the preamble hereto.
“Closing Date”: the date on which all of the conditions precedent set forth in Section 5.1 are satisfied or waived by the Administrative Agent and, as applicable, the Lenders or the Required Lenders. For the avoidance of doubt, the Closing Date occurred on March 3, 2020.
“Closing Date Consolidated Adjusted EBITDA”: is $134,642,865.00.
“Closing Date Consolidated Net Leverage Ratio”: is 2.85:1.00.
“Closing Date Transaction Costs” means the fees, costs and expenses paid or payable by Holdings, the Borrower or the Subsidiaries in connection with the Closing Date Transactions.
“Closing Date Transactions” means the Initial Credit Extension, the repayment release or discharge of the Acquired Business Existing Debt and Indebtedness under the Existing Credit Agreement on the Closing Date, the consummation of the Acquisition on the Closing Date, the payment of the Closing Date Transaction Costs, and the other transactions consummated (or to be consummated) on or about the Closing Date (including the Specified Closing Date Transactions, but excluding transactions giving rise to Post-Closing Intercompany Indebtedness).
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document. For the avoidance of doubt, no Excluded Asset (as defined in the Guarantee and Collateral Agreement) shall constitute “Collateral.”
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“Collateral Information Certificate”: the Collateral Information Certificate to be executed and delivered by the Loan Parties pursuant to Section 5.1, substantially in the form of Exhibit J.
“Collateral-Related Expenses”: all costs and expenses of the Administrative Agent paid or incurred in connection with any sale, collection or other realization on the Collateral, including reimbursement in accordance with Section 10.5 hereof or as set forth in the applicable Security Document for costs, expenses and liabilities and advances made or incurred by the Administrative Agent in connection therewith (including as described in Section 6.6 of the Guarantee and Collateral Agreement), and all amounts for which the Administrative Agent is entitled to indemnification under the Security Documents and all advances made by the Administrative Agent in accordance with the Security Documents for the account of any Loan Party.
“Commitment”: as to any Lender, the sum of its Term Commitment and its Revolving Commitment.
“Commitment
Fee Rate”: the ratemeans
0.50% per annum set forth under the relevant column heading under the definition of
“Applicable Margin”.
“Commitment Period”: the period from and including the Closing Date to the Revolving Termination Date.
“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), as amended from time to time, and any successor statute.
“Communications”: is defined in Section 10.2(c)(ii).
“Compliance Certificate”: a certificate duly executed by a Responsible Officer of Holdings substantially in the form of Exhibit B.
“Conforming Changes”: with respect to either the use or administration of the Benchmark, or any Benchmark Replacement, any technical, administrative or operational changes (including, for example and not by way of limitation or prescription, changes to the definition of “ABR,” the definition of “Business Day,” the definition of “Interest Period” or any similar or analogous definition, the definition of “U.S. Government Securities Business Day,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.21, and other technical, administrative or operational matters) that the Administrative Agent, in consultation with the Borrower, decides may be appropriate in connection with the use or administration of the Benchmark or to reflect the adoption and implementation of any Benchmark Replacement or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
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“Consolidated Adjusted EBITDA”: with respect to Holdings and its consolidated Subsidiaries for any period, (a) Consolidated Net Income, plus (b) the sum, without duplication, of the amounts for such period, but solely to the extent decreasing Consolidated Net Income for such period, of (i) Consolidated Interest Expense, plus (ii) provisions for taxes based on income, plus (iii) total depreciation expense, plus (iv) total amortization expense, plus (v) other non-cash items reducing Consolidated Net Income (excluding (A) any such non-cash item to the extent that it represents an accrual or reserve (“Accrual”) for potential cash items in any future period (“Future Cash Payments”), provided that, to the extent at the time such Future Cash Payment is made in the same trailing four quarter period, the amount actually paid in cash for such Future Cash Payment is less than the Accrual related thereto, an amount equal to such difference shall be added back to Consolidated Adjusted EBITDA for the period in which such Future Cash Payment is made and (B) write-downs, write-offs or reserves with respect to accounts receivables and inventory), plus (vi) non-cash foreign exchange translation adjustments or other realized non-cash losses from foreign currency exchange, plus (vii) costs and expenses relating to the negotiation, preparation, execution and delivery of the Loan Documents and the definitive documentation in connection with the Sixth Amendment Preferred Equity Issuance, plus (viii) losses in connection with casualty events to the extent covered by insurance with respect to which the applicable insurer has assumed responsibility (without regard to proceeds of business interruption insurance), plus (ix) restructuring and related costs, plus (x) acquisition, integration and related costs, plus (xi) [reserved], plus (xii) non-cash charges for employee compensation plans, plus (xiii) any extraordinary expenses or losses (including extraordinary losses from the Disposition of assets outside of the ordinary course of business), plus (xiv) restructuring and related costs incurred in the fiscal quarters ending March 31, 2022 and June 30, 2022, in an aggregate amount not to exceed $5,000,000; provided, that such add-backs shall no longer be included in any calculation of Consolidated Adjusted EBITDA following the fiscal quarters ending on March 31, 2023 (with respect to costs incurred in the fiscal quarter ending March 31, 2022) and June 30, 2023 (with respect to costs incurred in the fiscal quarter ending June 30, 2022), as applicable, plus (xv) non-cash purchase accounting adjustments consisting of a dollar-for-dollar adjustment for that portion of revenue that would have been recorded in the relevant period had the balance of deferred revenue recorded on the closing balance sheet before application of purchase accounting not been adjusted downward to fair value to be recorded on the opening balance sheet in conformity with GAAP purchase accounting rules, plus (xvi) the amount of synergies that are projected by the Borrower in good faith to result from the Closing Date Transactions, the Post-Closing Transfer and the incurrence of Post-Closing Intercompany Indebtedness no later than 12 months after the Closing Date, in an amount not to exceed $12,000,000, plus (xvii) the amount of “run rate” savings, operating expense reductions and synergies that are projected by the Borrower in good faith to result from actions taken or committed to be taken no later than 12 months after the end of such Test Period (which amounts will be determined by the Borrower in good faith and calculated on a Pro Forma Basis as though amounts had been realized on the first day of the Test Period for which Consolidated Adjusted EBITDA is being determined), net of the amount of actual benefits realized during such Test Period from such actions, plus (xviii) restructuring and related costs unrelated to the Closing Date Transactions incurred by the Loan Parties no later than June 30, 2020, in an amount not to exceed $10,000,000, minus (c) the sum, without duplication, of the following amounts for such period, but solely to the extent increasing Consolidated Net Income for such period (i) non-cash items increasing Consolidated Net Income for such period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period), plus (ii) interest income, plus (iii) any extraordinary income or gains (including extraordinary gains from the Disposition of assets outside of the ordinary course of business);
provided that Consolidated Adjusted EBITDA for any period shall be determined on a Pro Forma Basis to give effect to (x) any Permitted Acquisitions or (y) any disposition of any business or assets consummated during such period outside of the ordinary course of business, in each case as if such transaction occurred on the first day of such period.
Notwithstanding the foregoing, for any twelve month period, the aggregate amount of all addbacks pursuant to clauses (b)(ix), (b)(x), (b)(xvi) and (b)(xvii) shall not exceed 20% of Consolidated Adjusted EBITDA (calculated prior to giving effect to any of the addbacks described in this sentence and the addback in clause (b)(xiv) above) (such limit, the “20% Cap”); provided that addbacks pursuant to clauses (b)(ix) and (b)(x) (excluding addbacks for integration and restructuring costs) incurred prior to the Closing Date or otherwise in connection with the Closing Date Transactions, the Post-Closing Transfer and the incurrence of Post-Closing Intercompany Indebtedness will not be subject to the 20% Cap.
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For purposes of calculating Consolidated Adjusted EBITDA for any period that includes any one or more fiscal quarters ending from, and including, December 31, 2018 through September 30, 2019, Consolidated Adjusted EBITDA for such fiscal quarter will be deemed to be the amounts set forth in the table below, subject to pro forma adjustment as set forth herein:
| Fiscal Quarter ended: | Consolidated Adjusted EBITDA | |||
| December 31, 2018 | $ | 40,399,000 | ||
| March 31, 2019 | $ | 1,965,000 | ||
| June 30, 2019 | $ | 28,674,000 | ||
| September 30, 2019 | $ | 34,470,000 | ||
“Consolidated Capital Expenditures”: for any period, with respect to Holdings and its consolidated Subsidiaries, the aggregate amount of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Lease Obligations which is capitalized on the consolidated balance sheet of Holdings) by such Group Members during such period for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of Holdings; provided that “Consolidated Capital Expenditures” shall not include expenditures (a) in respect of normal replacements and maintenance which are properly charged to current operations, (b) made in connection with the replacement, substitution or restoration of assets to the extent financed (i) from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored or (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, or (c) made as a tenant as leasehold improvements during such period to the extent reimbursed by the landlord during such period.
“Consolidated Fixed Charge Coverage Ratio”: with respect to Holdings and its consolidated Subsidiaries for any period, the ratio of (a) the sum of (i) Consolidated Adjusted EBITDA for such period minus (ii) the portion of taxes based on income actually paid in cash (net of any cash refunds received) during such period minus (iii) Consolidated Capital Expenditures (excluding the principal amount funded with the Loans incurred in connection with such expenditures) to (b) Consolidated Fixed Charges for such period.
“Consolidated Fixed Charges”: with respect to Holdings and its consolidated Subsidiaries for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period, plus (b) scheduled payments made during such period on account of principal of Indebtedness of Holdings and its consolidated Subsidiaries (including scheduled principal payments in respect of the Term Loans), plus (c) cash Restricted Payments (other than intercompany Restricted Payments). For purposes of calculating the Consolidated Fixed Charge Coverage Ratio, (i) Consolidated Interest Expense for the first four fiscal quarters ending after the Closing Date shall be annualized and calculated as follows: from the Closing Date through the end of the fourth fiscal quarter ending after the Closing Date, such amount during such period shall be divided by the number of days in such period and then multiplied by 365 days, and (ii) scheduled principal payments for such period shall be annualized and calculated as follows: for the (A) first fiscal quarter following the Closing Date, the actual amount for such quarter times four (4), (B) second fiscal quarter following the Closing Date, the actual amount for such fiscal quarter plus the actual amount for the first fiscal quarter following the Closing Date times two (2), and (C) for the third fiscal quarter following the Closing Date, the actual amount for such fiscal quarter plus the actual amount for the first fiscal quarter following the Closing Date plus the actual amount for the second fiscal quarter following the Closing Date times four-thirds (4/3).
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“Consolidated
Funded Indebtedness”: as of any date of determination, for Holdings and its consolidated Subsidiaries, the sum (without
duplication) of (a) all Indebtedness of such Persons for borrowed money (andincluding
any other Junior Debt Incurrence Event and
including the Sixth Amendment Preferred Equity Issuance) as at such date, including all current maturities and current
sinking fund payments in respect of any such Indebtedness whether or not required to be paid within one year from the date of its creation
(excluding intercompany Indebtedness among Group Members (which shall include, for the avoidance of doubt, Indebtedness constituting
Specified Closing Date Intercompany Indebtedness and Indebtedness constituting Post-Closing Intercompany Indebtedness)), plus (b) Indebtedness
of such Persons in respect of each Loan and Letter of Credit issued hereunder.
“Consolidated Interest Expense”: for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of Holdings and its consolidated Subsidiaries for such period with respect to all outstanding Indebtedness of such Persons (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP).
“Consolidated Net Leverage Ratio”: with respect to Holdings and its Consolidated Subsidiaries as at the last day of any period, the ratio of (a) Consolidated Funded Indebtedness on such day, minus all Unrestricted Cash on such day in an amount not to exceed $25,000,000, to (b) Consolidated Adjusted EBITDA for such period.
“Consolidated Net Income”: for any period, the consolidated net income (or loss) of Holdings and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from the calculation of “Consolidated Net Income” (a) the income (or deficit) of any such Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings or one of its Subsidiaries, (b) the income (or deficit) of any such Person (other than a Subsidiary of Holdings in which Holdings or one of its Subsidiaries has an ownership interest), except to the extent that any such income is actually received by Holdings or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings (or loss to the extent that Holdings or any wholly-owned Subsidiary thereof is not required to directly or indirectly fund such loss) of any Subsidiary of Holdings to the extent that the declaration or payment of dividends or similar distributions (or loans constituting Subordinated Indebtedness in lieu of a distribution) by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document), any applicable Operating Document or Requirement of Law applicable to such Subsidiary.
“Consolidated Senior Net Leverage Ratio”: with respect to Holdings and its Consolidated Subsidiaries as at the last day of any period, the ratio of (a) Consolidated Funded Indebtedness on such day secured on a pari passu basis with the Obligations, minus all Unrestricted Cash on such day in an amount not to exceed $25,000,000, to (b) Consolidated Adjusted EBITDA for such period.
“Consolidated Total Liabilities”: on any date of determination, obligations that should, under GAAP, be classified as liabilities on the Group Members’ consolidated balance sheet.
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“Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control”: the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Control Investment Affiliate”: as to any Person, any other Person that (a) directly or indirectly, is in Control of, is Controlled by, or is under common Control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies.
“Corresponding Tenor”: with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Covered Entity”: any of the following:
(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R § 47.3(b); or
(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Credit Agreement Refinancing Indebtedness”: secured or unsecured Indebtedness (regardless of whether constituting Subordinated Indebtedness) of the Borrower in the form of (i) Refinancing Term Commitments, Refinancing Term Loans, Refinancing Revolving Commitments or Refinancing Revolving Loans or (ii) other unsecured or junior lien term loans or notes, in the case of this clause (ii), governed by definitive documentation other than this Agreement; provided that: (a) such Indebtedness is incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace, or refinance, in whole or part, any Loans (“Refinanced Indebtedness”); (b) such Indebtedness is in an original aggregate principal amount not greater than the Refinanced Indebtedness; (c) such Indebtedness will not mature prior to the final maturity date of the Refinanced Indebtedness, or have a shorter weighted average life to maturity than the Refinanced Indebtedness; (d) any mandatory prepayments of any Credit Agreement Refinancing Indebtedness may not be made except to the extent that prepayments are (A) permitted hereunder and (B) to the extent required hereunder, first made or offered pro rata to the Term Loans; (e) such Indebtedness is not incurred or guaranteed by any Person other than a Loan Party; and (f) if such Indebtedness is secured: (1) such Indebtedness is not secured by any assets or property of Holdings, the Borrower or any Subsidiary that does not constitute Collateral; (2) the security agreements relating to such Indebtedness are substantially similar to or the same as the Security Documents (as determined in good faith by the Borrower); and (3) if such Indebtedness is secured on a junior basis to the Loans, a representative, acting on behalf of the holders of such Indebtedness, has agreed to lien subordination terms reasonably acceptable to the Administrative Agent. The covenants and events of default applicable to such Credit Agreement Refinancing Indebtedness (for the avoidance of doubt, not including interest rate, fees, funding discounts and other pricing terms) shall be either (i) substantially identical to, or (taken as a whole as determined by the Borrower in good faith) no more favorable to the lenders or holders providing such Indebtedness than (as reasonably determined by the Administrative Agent), those applicable to such Refinanced Indebtedness or (ii) otherwise on customary market terms (taken as a whole as determined by the Borrower in good faith), including with respect to high yield debt securities to the extent applicable; provided that the foregoing restrictions set forth in this sentence will not apply to (1) terms addressed in clauses (a) through (f) of the first sentence of this paragraph, (2) interest rate, fees, funding discounts and other pricing terms, (3) redemption, prepayment or other premiums, (4) optional prepayment terms, (5) covenants and other terms that are (i) applied to the Loans existing at the time of incurrence of such Credit Agreement Refinancing Indebtedness (so that existing Lenders also receive the benefit of such provisions) and/or (ii) applicable only to periods after the maturity date of the Loans not constituting Refinanced Indebtedness at the time of incurrence of such Indebtedness and (6) terms that are approved by the Administrative Agent.
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“Daily
Simple SOFR”: for any day, SOFR, with the conventions for this rate (which will
include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended
by the Relevant Governmental Body for determininga rate
per annum equal to the greater of (a) the sum of (i) for any day (a “SOFR Rate Day”), a rate per annum equal
to SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business
Day prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR
Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR
Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the website of the SOFR Administrator plus (ii) the
Daily Simple SOFR Adjustment, and (b) the Floor.
“Daily
Simple SOFR” for syndicated business loans; provided,
that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then
the Administrative Agent may establish another convention in its reasonable discretion. Adjustment”
means 0.11448%.
“Daily SOFR Rate” means, for any day, a rate per annum equal to Term SOFR in effect on such day for a one-month Interest Period (subject to the Floor referred to in the definition of “Term SOFR”).
“Debtor Relief Laws”: the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, examinership, administration, insolvency, reorganization, court scheme of arrangement or similar debtor relief laws or laws affecting the rights of creditors of the United States or other applicable jurisdictions from time to time in effect.
“Declined Amount”: is defined in Section 2.12(e).
“Default”: any event that constitutes an Event of Default or that, with the giving of any notice, the lapse of time, or both, would constitute an Event of Default.
“Default Rate”: is defined in Section 2.15.
“Default Right”: has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
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“Defaulting Lender”: subject to Section 2.24(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s reasonable determination that one or more conditions precedent to funding set forth in Section 5.2 (or, with respect to the Initial Credit Extension, Section 3.1 (and not Section 3.2)) (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s reasonable determination that a condition precedent to funding set forth in Section 5.2 (or, with respect to the Initial Credit Extension, Section 3.1 (and not Section 3.2)) (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) become the subject of a Bail-In Action or (iii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; 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 company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.24(b)) upon delivery of written notice of such determination to the Borrower, the Issuing Lender, the Swingline Lender and each Lender.
“Deferred Payment Obligations”: is defined in Section 7.2.
“Deferred Revenue”: all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue on the Group Members’ consolidated financial statements in accordance with GAAP.
“Deposit Account”: any “deposit account” as defined in the UCC with such additions to such term as may hereafter be made.
“Designated Jurisdiction”: any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“Determination Date”: is defined in the definition of “Pro Forma Basis”.
“Discharge of Obligations”: subject to Section 10.8, the satisfaction of the Obligations (including all such Obligations relating to Cash Management Services) by the payment in full, in cash (or, as applicable, Cash Collateralization in accordance with the terms hereof) of the principal of and interest on or other liabilities relating to each Loan and any previously provided Cash Management Services, all fees and all other expenses or amounts payable under any Loan Document (other than inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made), and other Obligations under or in respect of Specified Swap Agreements and Cash Management Services, to the extent (a) any such Obligations in respect of Specified Swap Agreements have, if required by any applicable Qualified Counterparties, been Cash Collateralized, (b) no Letter of Credit shall be outstanding (or, as applicable, each outstanding and undrawn Letter of Credit has been Cash Collateralized in accordance with the terms hereof), (c) no Obligations in respect of any Cash Management Services are outstanding (or, as applicable, all such outstanding Obligations in respect of Cash Management Services have been Cash Collateralized in accordance with the terms hereof), and (d) the aggregate Commitments of the Lenders are terminated.
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“Discount Price Range” as defined in Section 2.29(b).
“Discounted Prepayment” as defined in Section 2.29(a).
“Discounted Prepayment Amount” as defined in Section 2.29(b).
“Discounted Prepayment Notice” as defined in Section 2.29(b).
“Discounted Prepayment Offeror” as defined in Section 2.29(a).
“Discounted Prepayment Response Date” as defined in Section 2.29(b).
“Disposition”: with respect to any property (including, without limitation, Capital Stock of Holdings or any of its Subsidiaries), any sale, lease, Sale Leaseback Transaction, assignment, conveyance, transfer, encumbrance or other disposition thereof and any issuance of Capital Stock of Holdings or any of its Subsidiaries. The terms “Dispose” and “Disposed of” shall have correlative meanings.
“Disqualified Stock”: any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is ninety-one (91) days after the date on which the Loans mature. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that Holdings and its Subsidiaries may become obligated to pay upon maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock or portion thereof, plus accrued dividends. On the Sixth Amendment Operative Date, the Sixth Amendment Preferred Equity Issuance does not constitute Disqualified Stock.
“Division”: in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including as contemplated under Section 18-217 of the Delaware Limited Liability Company Act, or any analogous action taken pursuant to any other applicable Requirements of Law.
“Dollar Equivalent”: on any date of determination (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any currency other than Dollars, the equivalent in Dollars of such amount, determined by the Administrative Agent using the applicable Exchange Rate with respect to such currency at the time in effect.
“Dollars” and “$”: dollars in lawful currency of the United States.
“Domestic Subsidiary”: any Subsidiary of Holdings organized under the laws of the United States, any state thereof or the District of Columbia.
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“Early
Opt-in Election”: if the then-current Benchmark is USD LIBOR, the occurrence of:
(1) a
notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties
hereto that at least five currently outstanding U.S. dollar-denominated syndicated credit facilities at
such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate
based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for
review), and
(2) the
joint election by the Administrative Agent and the Borrower to trigger a fallback from USD LIBOR and the provision by the Administrative
Agent of written notice of such election to the Lenders.
“ECI Holding (Hungary) KFT”: has the meaning given in the recitals hereto.
“ECI Telecom B.V.”: has the meaning given in the definition of “Post-Closing Transfer”.
“ECI Telecom Group”: has the meaning given in the recitals hereto.
“ECI Telecom LTD”: has the meaning given in the definition of “Post-Closing Intercompany Indebtedness”.
“ECI Telecom U.S.”: has the meaning given in the definition of “Post-Closing Transfer”.
“EEA Financial Institution”: (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”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee”: any Person (other than an Excluded Lender) that meets the requirements to be an assignee under Section 10.6(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 10.6(b)(iii)).
“Environmental Laws”: any and all foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements 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 hereafter be in effect.
“Environmental Liability”: any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) a violation of an Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Materials of Environmental Concern, (c) exposure to any Materials of Environmental Concern, (d) the release or threatened release of any Materials of Environmental Concern into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
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“ERISA”: the Employee Retirement Income Security Act of 1974, as amended, including (unless the context otherwise requires) any rules or regulations promulgated thereunder.
“ERISA Affiliate”: each business or entity which is, or within the last six years was, a member of a “controlled group of corporations,” under “common control” or an “affiliated service group” with any Loan Party within the meaning of Section 414(b), (c), (m) or (n) of the Code, required to be aggregated with any Loan Party under Section 414(o) of the Code, or is, or within the last six years was, under “common control” with any Loan Party, within the meaning of Section 4001(a)(14) of ERISA.
“ERISA Event”: any of (a) a reportable event as defined in Section 4043 of ERISA with respect to a Pension Plan, excluding, however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event; (b) the applicability of the requirements of Section 4043(b) of ERISA with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Pension Plan where an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such plan within the following 30 days; (c) a withdrawal by any Loan Party or, to the knowledge of any Loan Party, any ERISA Affiliate thereof from a Pension Plan or the termination of any Pension Plan resulting in liability under Sections 4063 or 4064 of ERISA; (d) the withdrawal of any Loan Party or, to the knowledge of any Loan Party, any ERISA Affiliate thereof in a complete or partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any Loan Party or any ERISA Affiliate thereof of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA; (e) the filing of a notice of intent to terminate, the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (f) the imposition of liability on any Loan Party or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the failure by any Loan Party or any ERISA Affiliate thereof to make any required contribution to a Pension Plan, or the failure to meet the minimum funding standard of Section 412 of the Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430 of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (h) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered to critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (i) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (j) the imposition of any liability under Title I or Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate thereof; (k) an application for a funding waiver under Section 303 of ERISA or an extension of any amortization period pursuant to Section 412 of the Code with respect to any Pension Plan; (l) the occurrence of a material non-exempt prohibited transaction under Sections 406 or 407 of ERISA for which any Loan Party or any Subsidiary thereof may be directly or indirectly liable; (m) a material violation of the applicable requirements of Section 404 or 405 of ERISA of the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person for which any Loan Party or any ERISA Affiliate thereof may be directly or indirectly liable; (n) the occurrence of an act or omission which could give rise to the imposition on any Loan Party or any ERISA Affiliate thereof of material fines, penalties, taxes or related charges under Chapter 43 of the Code or under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (o) the assertion of a material claim (other than routine claims for benefits) against any Pension Plan or the assets thereof, or against any Loan Party or any Subsidiary thereof in connection with any such Pension Plan; (p) receipt from the IRS of notice of a material failure of any Pension Plan to qualify under Section 401(a) of the Code, or the material failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Code; or (q) the imposition of any lien (or the fulfillment of the conditions for the imposition of any lien) on any of the rights, properties or assets of any Loan Party or any ERISA Affiliate thereof, in either case pursuant to Title I or IV of ERISA, including Section 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the Code.
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“ERISA Funding Rules”: the rules regarding minimum required contributions (including any installment payment thereof) to Pension Plans, as set forth in Section 412 of the Code and Section 302 of ERISA, with respect to Plan years ending prior to the effective date of the Pension Protection Act of 2006, and thereafter, as set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Eurocurrency
Reserve Requirements”: for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency
reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
“Eurodollar
Base Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
by the Administrative Agent by reference to USD LIBOR (or the Benchmark Replacement) for deposits (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period in Dollars, determined as of approximately 11:00 A.M. (London, England
time) two (2) Business Days prior to the beginning of such Interest Period (as set forth by Bloomberg Information Service or any
successor thereto or any other commercially available service selected by the Administrative Agent which provides quotations of USD LIBOR).
In the event that the Administrative Agent determines that USD LIBOR is not available, the “Eurodollar Base Rate” shall be
determined by reference to the rate per annum equal to the offered quotation rate to first class banks in the London interbank market
by Citizens for deposits (for delivery on the first day of the relevant Interest Period) in Dollars of amounts in same day funds comparable
to the principal amount of the applicable Loan of the Administrative Agent, in its capacity as a Lender, for which the Eurodollar Base
Rate is then being determined with maturities comparable to such period, as of approximately 11:00 A.M. (London, England time) two
(2) Business Days prior to the beginning of such Interest Period; provided that, in all
events, such Eurodollar Base Rate shall not be less than 0%.
“Eurodollar
Loans”: Loans the rate of interest applicable to which is based upon the Eurodollar Rate.
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“Eurodollar
Rate”: with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula:
The
Eurodollar Rate shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Requirements; provided
that the Eurodollar Rate shall not be less than 0.00%.
“Eurodollar
Tranche”: the collective reference to Eurodollar Loans under a particular
Facility (other than the L/C Facility), the then current Interest Periods with respect to all of which begin on the same date and end
on the same later date (whether or not such Loans shall originally have been made on the same day).
“Event of Default”: any of the events specified in Section 8.1; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.
“Excess Cash Flow”: for any fiscal year (or other period) of Holdings, the excess, if any, of:
(a) the sum of:
(i) Consolidated Adjusted EBITDA for such fiscal year, plus
(ii) any decrease in Working Capital, minus
(b) the sum of (without duplication):
(i) any taxes paid in cash on a consolidated basis during such period by the Group Members, plus
(ii) the aggregate amount actually paid by the Group Members in cash during such fiscal year (or other period) (or committed to be paid in cash during or after such fiscal year (or other period) but prior to the applicable Excess Cash Flow Application Date; provided, that any such committed amount shall be paid no later than 120 days following the date of such commitment) on account of (x) Consolidated Capital Expenditures (excluding the principal amount of Loans incurred in connection with such expenditures) and (y) Permitted Acquisitions and other Investments permitted hereunder (excluding intercompany Investments and any such payments financed with the proceeds of any Funded Debt), plus
(iii) the aggregate amount of all regularly scheduled and mandatory principal payments of all Indebtedness of Group Members made in cash during such period (other than in respect of Term Loans, Incremental Term Loans, Extended Term Loans or Credit Agreement Refinancing Indebtedness to the extent such payment is made with the proceeds received from the issuance or incurrence of long-term Indebtedness (other than revolving Indebtedness)), plus
(iv) increases in Working Capital, plus
(v) Consolidated Interest Expense actually paid in cash, plus
(vi) cash payments constituting the purchase price, net working capital or purchase price adjustments, earn-outs, deferred purchase price payments and similar obligations paid by the Group Members in respect of any Permitted Acquisitions (other than to the extent funded with Funded Debt or proceeds from the issuance or sale of Capital Stock to any Person (other than a Group Member) in any Group Member), plus
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(vii) other items paid in cash during such period, in each case, to the extent included as an “add-back” in the calculation of Consolidated EBITDA, plus
(viii) permitted Restricted Payments paid in cash (excluding Restricted Payments to another Group Member).
“Exchange Act”: the Securities Exchange Act of 1934, as amended from time to time and any successor statute.
“Exchange Rate”: on any day with respect to any currency (each, an “Agreed Currency”), the rate at which such currency may be exchanged into Dollars, as set forth at approximately 11:00 A.M., on such day on the applicable page of the Bloomberg Service reporting the exchange rates for such Agreed Currency. In the event such exchange rate does not appear on the applicable page of such service, the Exchange Rate shall be determined by reference to such other publicly available services for displaying currency exchange rates as may be agreed upon by the Administrative Agent and the Borrower, or, in the absence of such agreement, such Exchange Rate shall instead be determined by the Administrative Agent based on current market spot rates determined by the Administrative Agent in its reasonable discretion; provided that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent, after consultation with the Borrower, may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
“Excluded Lender”: (a) any Person specifically identified by name in writing to the Administrative Agent by Holdings or the Borrower on or prior to November 14, 2019, (b) any competitor of any Loan Party that is designated in writing to the Administrative Agent by Holdings or the Borrower from time to time, (c) any vulture/distressed debt fund that is designated in writing to the Administrative Agent by Holdings or the Borrower (x) on or prior to the Closing Date or (y) after the Closing Date and subject to the Administrative Agent’s consent (not to be unreasonably withheld or delayed) and (d) any reasonably identifiable (on the basis of its name or as identified from time to time in writing by or on behalf of Holdings or any of its Subsidiaries) Affiliate of the entities described in the preceding clauses (a), (b) and (c) other than bona fide debt funds. Notwithstanding the foregoing, the addition of any Person to the list of Excluded Lenders shall become effective two (2) Business Days after identification to the Administrative Agent by Holdings or the Borrower (and for the avoidance of doubt, shall not apply retroactively prior to such effective date). The list of Excluded Lenders shall be made available by the Administrative Agent (and the Borrower hereby authorizes the Administrative Agent to make the list of Excluded Lenders available) to the Lenders promptly after request therefor (and the Borrower hereby authorizes the Lenders to make the list of Excluded Lenders available to prospective Lenders constituting Eligible Assignees). For the avoidance of doubt, no Person that is a Lender, Participant, party to an Assignment and Assumption or a participation agreement to become a Lender or Participant, as applicable, prior to the effectiveness of any update to the list of Excluded Lenders shall be an Excluded Lender hereunder. The Administrative Agent shall have no obligation to monitor any non-compliance by any Lender hereunder with respect to provisions relating to Excluded Lenders.
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“Excluded Subsidiary”: means (i) any Foreign Subsidiary; (ii) any Foreign Subsidiary Holding Company; (iii) any Subsidiary of a Foreign Subsidiary or a Foreign Subsidiary Holding Company; (iv) any Subsidiary to the extent that the provision of a guarantee from such entity would result in material adverse tax consequences to Holdings, any parent company thereof, or any of the Subsidiaries (as reasonably determined by the Borrower), (v) each Subsidiary to the extent that such Subsidiary is prohibited by any applicable Requirement of Law from guaranteeing the Obligations, (vi) any Immaterial Subsidiary, (vii) any Unrestricted Subsidiary, (viii) each Subsidiary if, and for so long as, the guarantee of the Obligations by such Subsidiary would require the consent, approval, license or authorization of a Governmental Authority or under any binding Contractual Obligation with any Person other than Holdings, the Borrower or any Subsidiary existing on the Closing Date (or, if later, the date such Subsidiary is acquired or the date such Contractual Obligation is entered into (so long as such Contractual Obligation is not incurred for the sole purpose of making such Subsidiary an Excluded Subsidiary), except to the extent such consent, approval, license or authorization has actually been obtained), (ix) each Subsidiary that is a not-for-profit organization, (x) each Captive Insurance Subsidiary and (xi) any Subsidiary to the extent that the costs of a guarantee from such Subsidiary would be excessive relative to the expected benefits to be obtained by the Secured Parties from such guarantee (as reasonably determined by the Borrower and the Administrative Agent in good faith).
“Excluded Swap Obligations”: with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee Obligation of such Guarantor with respect to, or the grant by such Guarantor of a Lien 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 at the time such Guarantee Obligation of such Guarantor, or the grant by such Guarantor of such Lien, becomes effective with respect to such Swap Obligation. If such a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee Obligation or Lien is or becomes excluded in accordance with the first sentence of this definition.
“Excluded Taxes”: any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of any Recipient, U.S. withholding Taxes imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Loan or Commitment or otherwise under a Loan Document pursuant to a law in effect on the date on which (i) such Recipient acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.23) or becomes a Recipient hereunder or (ii) such Recipient changes its principal office or its lending office, except in each case to the extent that, pursuant to Section 2.20(b), amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a party hereto or to such Recipient immediately before it changed its principal office or its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.20(f), and (d) any Taxes imposed under FATCA.
“Existing Credit Agreement”: means that certain Amended and Restated Credit Agreement dated as of April 29, 2019, among Holdings, the Borrower, the Guarantors party thereto, the lenders party thereto and Silicon Valley Bank, as administrative agent, as amended, modified, supplemented or restated from time to time.
“Existing Letters of Credit”: the letters of credit described on Schedule 1.1B. For the avoidance of doubt, the Existing Letters of Credit include letters of Credit issued for the account of GENBAND Ireland Limited.
“Extended Revolving Commitment”: as defined in Section 10.1(i).
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“Extended Term Lender”: as defined in Section 10.1(i).
“Extended Term Loans”: as defined in Section 10.1(i).
“Extension”: as defined in Section 10.1(i).
“Extension Amendment”: as defined in Section 10.1(i).
“Extension Offer”: as defined in Section 10.1(i).
“Facility”: each of (a) the Term Facility, (b) the L/C Facility (which is a sub-facility of the Revolving Facility), and (c) the Revolving Facility.
“FASB ASC”: the Accounting Standards certification of the Financial Accounting Standards Board.
“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention implementing such sections of the Code.
“Federal
Funds Effective Rate”: 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 on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it; provided
that, in all events, such Federal Funds Effective Rate shall not be less than 0%..
“Federal Reserve Board” the Board of Governors of the Federal Reserve System of the United States.
“Fee Letter”: the fee letter agreement dated as of November 14, 2019, by and among the Borrower and the Administrative Agent, as amended, modified, supplemented or restated from time to time.
“Fifth Amendment Effective Date”: June 30, 2022.
“First Amendment to Credit Agreement”: the First Amendment to Credit Agreement, dated as of the Term B Assignment Date, by and among Holdings, the Borrower, the Lenders party thereto and the Administrative Agent.
“Fixed Incremental Amount”: means, as of the date of determination, the sum of (a) the greater of (i) 100% of Closing Date Consolidated Adjusted EBITDA and (ii) an amount equal to 100% of Consolidated Adjusted EBITDA as of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.1, minus (b) the aggregate principal amount of Incremental Facilities previously incurred in reliance on this definition (excluding the Third Amendment Term Loan), plus (c) without duplication, the aggregate principal amount of (i) any voluntary prepayments of Term Loans, voluntary redemptions of Term Loans and repurchases and debt buybacks (to the extent of cash paid by the Borrower or any Subsidiary in respect thereof) of Term Loans and (ii) payments made pursuant to Section 2.23 (provided that the outstanding Loans and Revolving Commitments of any Affected Lender are paid in full, and are not assigned pursuant to Section 10.6(b)), plus (d) the aggregate principal amount of voluntary permanent reductions of Revolving Commitments; provided that in the case of each of clauses (c) and (d), only to the extent not funded with the proceeds of Funded Debt and excluding the aggregate amount of any such Indebtedness incurred (or subsequently reclassified as incurred) in reliance on the Ratio Incremental Amount.
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“Floor”:
the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this
Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurodollar Base Rate.0.00%
per annum.
“Foreign Lender”: a Lender that is not a U.S. Person (including a Lender that is disregarded for U.S. federal income tax purposes whose tax owner is not a U.S. Person).
“Foreign Subsidiary”: any Subsidiary of Holdings that is not a Domestic Subsidiary.
“Foreign Subsidiary Holding Company”: any direct or indirect Subsidiary of Holdings, substantially all of the assets of which consist of the Capital Stock (or Capital Stock and indebtedness) of one or more controlled foreign corporations (within the meaning of Section 957 of the Code) or other Foreign Subsidiary Holding Companies.
“Fronting Exposure”: at any time there is a Defaulting Lender, as applicable, (a) with respect to the Issuing Lender, such Defaulting Lender’s Revolving Percentage of the outstanding L/C Exposure other than L/C Exposure 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 Revolving Percentage of outstanding Swingline Loans made by the Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.
“Fund”: any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities.
“Funded Debt” means (a) all Indebtedness of Holdings and its Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including Indebtedness in respect of the Loans and (b) without duplication, any Indebtedness incurred pursuant to a Junior Debt Incurrence Event.
“Funding Office”: the office of the Administrative Agent specified in Section 10.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.
“GAAP”: generally accepted accounting principles in the United States as in effect from time to time. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the Group Members’ financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC, or the adoption of IFRS.
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“Genband Holdings”: is defined in the definition of “Specified Closing Date Intercompany Indebtedness.”
“Governmental Approval”: any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority”: the government of the United States of America 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 or the European Central Bank), and any group or body charged with setting accounting or regulatory capital rules or standards (including the Financial Standards Board, the Bank for International Settlements, the Basel Committee on Banking Supervision and any successor or similar authority to any of the foregoing).
“Group Members”: the collective reference to Holdings and its Subsidiaries.
“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement dated as of the Closing Date by and among the Loan Parties and the Administrative Agent, as amended, supplemented or otherwise modified.
“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees, any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee 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 Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.
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“Guarantors”: a collective reference to Holdings and each first-tier Domestic Subsidiary of Holdings, and any other Domestic Subsidiary of Holdings that is not an Excluded Subsidiary, in each case, to the extent any such Person has become a Guarantor pursuant to the requirements of Section 6.12 hereof and/or the Guarantee and Collateral Agreement. For the avoidance of doubt, no Excluded Subsidiary shall be required to be a Guarantor under this Agreement or any other Loan Document.
“Holdings”: has the meaning in the preamble hereto.
“IFRS”: international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.
“Immaterial Subsidiary”: at any date of determination, any Subsidiary of Holdings designated as such by such Loan Party in writing and which as of such date (a) holds assets representing 1.0% or less of Holdings’ consolidated total assets (excluding Investments in Subsidiaries and intercompany receivables that would be eliminated in consolidated financial statements, and goodwill) (determined in accordance with GAAP), (b) has generated less than 1.0% of Holdings’ consolidated total revenues (excluding any intercompany revenue that would be eliminated in consolidated financial statements) determined in accordance with GAAP for the four fiscal quarter period ending on the last day of the most recent period for which financial statements have been delivered after the Closing Date pursuant to Section 6.1(c); provided that all Subsidiaries that are individually “Immaterial Subsidiaries” shall not have aggregate consolidated total assets (excluding Investments in Subsidiaries and intercompany receivables that would be eliminated in consolidated financial statements, and goodwill) that would represent 2.5% or more of Holdings’ consolidated total assets as of such date or have generated 2.5% or more of Holdings’ consolidated total revenues (excluding any intercompany revenue that would be eliminated in consolidated financial statements) for such four fiscal quarter period, in each case determined in accordance with GAAP, and (c) owns no material Intellectual Property. No Person may be a Loan Party and simultaneously an Immaterial Subsidiary.
“Incremental Facilities”: as defined in Section 2.27.
“Incremental Joinder”: an instrument, in form and substance reasonably satisfactory to the Administrative Agent, by which a Lender becomes a party to this Agreement pursuant to Section 2.27.
“Incremental Term Facility”: as defined in Section 2.27.
“Incremental Term Loan”: an incremental term loan under any Incremental Term Loan Facility.
“Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money and any other Junior Debt Incurrence Event, (b) all Deferred Payment Obligations and other obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations and all Synthetic Lease Obligations of such Person, (f) all obligations of such Person, whether or not matured, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Capital Stock in such Person or any other Person (including, without limitation, Disqualified Stock and the Sixth Amendment Preferred Equity Issuance), or any warrant, right or option to acquire such Capital Stock, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, but limited to the value of the property owned by such Person securing such obligation if such obligations is not otherwise recourse to such Person, and (j) the net obligations of such Person in respect of Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.
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“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee”: is defined in Section 10.5(b).
“Initial Credit Extension”: is defined in Section 5.1.
“Initial Revolving Borrowing”: (x) one or more borrowings of Revolving Loans on the Closing Date in amounts not to exceed up to (i) $25,000,000 (including for paying the Closing Date Transaction Costs), plus (ii) amounts necessary to repay Acquired Business Existing Debt constituting revolving loans, plus (iii) amounts necessary to provide for working capital (including any working capital adjustment), plus (iv) amounts required to fund any additional fees payable resulting from the exercise of “Market Flex” under the Fee Letter, and (y) Letters of Credit issued on the Closing Date to replace or backstop letters of credit of the Acquired Business existing on the Closing Date prior to the consummation of the Acquisition.
“Insolvency Proceeding”: (a) any case, action or proceeding before any court or other Governmental Authority, relating to (i) bankruptcy, suspension of payments, a moratorium of any indebtedness, administration, examinership, reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise), insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, (ii) any general compromise, arrangement, assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of any Person’s creditors generally or any substantial portion of such Person’s creditors, or (iii) the appointment of a liquidator, receiver, examiner, administrative receiver, administrator, compulsory manager or other similar officer in relation to any of the foregoing, in each case undertaken under U.S. federal, state or foreign law, including any Debtor Relief Law.
“Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.
“Intellectual Property Security Agreement”: an intellectual property security agreement entered into between a Loan Party and the Administrative Agent pursuant to the terms of the Guarantee and Collateral Agreement in form and substance satisfactory to the Administrative Agent, together with each other intellectual property security agreement and supplement thereto delivered pursuant to Section 6.12, in each case as amended, restated, supplemented or otherwise modified from time to time.
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“Interest
Payment Date”: (a) as to any ABR Loan (including any Swingline Loan), the first Business Day of each calendar quarter
to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any EurodollarSOFR
Loan having an Interest Period of three (3) months or less, the last Business Day of such Interest Period, (c) as to any EurodollarSOFR
Loan having an Interest Period longer than three (3) months, each day that is three (3) months (or, if such date is not a Business
Day, the Business Day next succeeding such date) after the first day of such Interest Period and the last Business Day of such Interest
Period, and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan and any Swingline Loan), the date of any repayment
or prepayment made in respect thereof.
“Interest
Period”: as to any EurodollarSOFR Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such EurodollarSOFR
Loan and ending one (1), three (3), or six (6) months thereafter, as selected by the Borrower in its Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last
day of the Interest Period then-applicable to such EurodollarSOFR
Loan and ending one (1), two (2) (if available), three (3), or six (6) months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent in a Notice of Conversion/Continuation not later than 11:00 A.M. on the date that is three (3) Business
Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period 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;
(ii) the
Borrower may not select an Interest Period under a particular Facility that would extend beyond the Revolving Termination Date (in the
case of Revolving Facility) or beyond the Term Loan Maturity Date (in the case of Term Loans); and
(iii) any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.;
and
(iv) no tenor that has been removed from this definition pursuant to Section 2.17(c)(iv) shall be available for specification in such Notice of Borrowing.
“Interest Rate Agreement”: any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (a) for the purpose of hedging the interest rate exposure associated with Holdings’ and its Subsidiaries’ operations, and (b) not for speculative purposes.
“Inventory”: all “inventory,” as such term is defined in the UCC, now owned or hereafter acquired by any Loan Party, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of any Loan Party for sale or lease or are furnished or are to be furnished under a contract of service, or that constitutes raw materials, work in process, finished goods, returned goods, or materials or supplies of any kind used or consumed or to be used or consumed in such Loan Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.
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“Investments”: is defined in Section 7.8.
“IRS”: the United States Internal Revenue Service, or any successor thereto.
“ISDA
Definitions”: the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor
thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from
time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP”: with respect to any Letter of Credit, 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).
“Issuing Lender”: means, collectively, each of (a) Silicon Valley Bank or any Affiliate thereof, in its capacity as issuer of the Existing Letters of Credit, (b) Citizens or any Affiliate thereof, in its capacity as issuer of any Letter of Credit (other than the Existing Letters of Credit), and (c) any other Lender that may become an Issuing Lender pursuant to Section 3.11 or 3.12, in such Lender’s capacity as issuer of any Letter of Credit. The Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Lender or other financial institutions, in which case the term “Issuing Lender” shall include any such Affiliate or other financial institution with respect to Letters of Credit issued by such Affiliate or other financial institution. For the avoidance of doubt, no Lender shall become an Issuing Lender hereunder unless it shall so agree.
“Issuing Lender Fees”: is defined in Section 3.3(a).
“Judgment Currency”: is defined in Section 10.19.
“Junior Debt Incurrence Event”: the incurrence by the Borrower of contractually junior lien (as related to liens in favor of Administrative Agent securing the Loans) or unsecured Indebtedness, or the issuance of any preferred Capital Stock, in each case permitted hereunder on terms reasonably satisfactory to the Administrative Agent in an aggregate principal amount equal to at least $50,000,000; provided that any such Indebtedness shall have a maturity date (or, in the case of preferred Capital Stock, shall not be redeemable until the date) that is later than the later of the Revolving Termination Date or the Term Loan Maturity Date. For the avoidance of doubt, any Indebtedness incurred pursuant to a Junior Debt Incurrence Event that is secured shall constitute Subordinated Indebtedness; provided further, that the Sixth Amendment Preferred Equity Issuance shall not constitute a Junior Debt Incurrence Event.
“L/C Advance”: each L/C Lender’s funding of its participation in any L/C Disbursement in accordance with its L/C Percentage of the L/C Commitment.
“L/C Commitment”: as to any L/C Lender, the obligation of such L/C Lender, if any, to purchase an undivided interest in the Issuing Lenders’ obligations and rights under and in respect of each Letter of Credit (including to make payments with respect to draws made under any Letter of Credit pursuant to Section 3.5(b)) in an aggregate principal amount not to exceed the amount set forth under the heading “L/C Commitment” opposite such L/C Lender’s name on Schedule 1.1A or in the Assignment and Assumption pursuant to which such L/C Lender becomes a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The L/C Commitment is a sublimit of the Revolving Commitment and the aggregate amount of the L/C Commitments shall not exceed the amount of the Total L/C Commitments at any time.
“L/C Disbursements”: a payment or disbursement made by the Issuing Lender pursuant to a Letter of Credit.
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“L/C Exposure”: at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time. The L/C Exposure of any L/C Lender at any time shall equal its L/C Percentage of the aggregate L/C Exposure at such time.
“L/C Facility”: the L/C Commitments and the extensions of credit made thereunder.
“L/C Fee Payment Date”: is defined in Section 3.3(a).
“L/C Lender”: a Lender with an L/C Commitment.
“L/C Percentage”: as to any L/C Lender at any time, the percentage of the Total L/C Commitments represented by such L/C Lender’s L/C Commitment, as such percentage may be adjusted as provided in Section 2.23.
“L/C-Related Documents”: collectively, each Letter of Credit (including any Existing Letter of Credit), all applications for any Letter of Credit (and applications for the amendment of any Letter of Credit) submitted by the Borrower to the Issuing Lender and any other document, agreement and instrument relating to any Letter of Credit, including any of the Issuing Lender’s standard form documents for letter of credit issuances.
“LCA Election”: is defined in Section 1.5.
“LCA Test Date”: is defined in Section 1.5.
“Lenders”: is defined in the preamble hereto; provided that unless the context otherwise requires, each reference herein to the Lenders shall be deemed to include the Issuing Lender and the Swingline Lender.
“Letter of Credit”: is defined in Section 3.1(a); provided that such term shall also include each Existing Letter of Credit.
“Letter of Credit Availability Period”: the period from and including the Closing Date to but excluding the Letter of Credit Maturity Date.
“Letter of Credit Fees”: is defined in Section 3.3(a).
“Letter of Credit Fronting Fees”: is defined in Section 3.3(a).
“Letter of Credit Maturity Date”: the date occurring 15 days prior to the Revolving Termination Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).
“Lien”: any mortgage, deed of trust, pledge, hypothecation, collateral assignment, 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 any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).
“Limited Condition Acquisition” means any Permitted Acquisition by the Borrower and/or one or more Subsidiaries the consummation of which is not conditioned on the availability of, or on obtaining, third party financing.
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“Liquidity”: the sum of Unrestricted Cash plus the Available Revolving Commitment.
“Loan”: any loan made or maintained by any Lender pursuant to this Agreement.
“Loan Documents”: this Agreement, each Security Document, each Note, the Fee Letter, the Reaffirmation Agreement, each Compliance Certificate, each Notice of Borrowing, each Incremental Joinder, any Extension Amendment, any Refinancing Amendment, each Notice of Conversion/Continuation, the Solvency Certificate, the Collateral Information Certificate, each L/C-Related Document binding on a Loan Party, and any agreement creating or perfecting rights in cash collateral pursuant to the provisions of Section 3.10, or otherwise pursuant to this Agreement and the other Loan Documents, and any amendment, waiver, supplement or other modification to any of the foregoing. For the avoidance of doubt, the term “Loan Documents” shall not include any Specified Swap Agreement and shall not include the definitive documentation entered into in connection with the Sixth Amendment Preferred Equity Issuance.
“Loan Parties”: collectively, the Borrower and the Guarantors.
“Mandatory Prepayment Date”: is defined in Section 2.12(e).
“March 31, 2024, Financial Statement Delivery Date”: the date on which the financial statements and the related compliance certificate for the fiscal quarter ending March 31, 2024, are delivered to the Administrative Agent pursuant to Section 6.1(c) and Section 6.2(b), respectively.
“Material Adverse Effect”: (a) a material adverse change in the business, operations, or condition (financial or otherwise) of the Loan Parties, taken as a whole; (b) a material impairment in the perfection or priority of the Administrative Agent’s Lien in any material Collateral or in the value of such Collateral; or (c) a material impairment of the ability of the Loan Parties to perform their respective obligations (including their payment obligations) under any Loan Document to which they are a party.
“Materials of Environmental Concern”: any substance, material or waste that is defined, regulated, governed or otherwise characterized under any Environmental Law as hazardous or toxic or as a pollutant or contaminant (or by words of similar meaning and regulatory effect), any petroleum or petroleum products, asbestos, polychlorinated biphenyls, urea-formaldehyde insulation, molds or fungus, and radioactivity, radiofrequency radiation at levels known to be hazardous to human health and safety.
“Merger Sub”: has the meaning in the recitals hereto.
“Minority Lender”: is defined in Section 10.1(b).
“Moody’s”: Moody’s Investors Service, Inc.
“Mortgaged Properties”: the real properties as to which, pursuant to Section 6.12(b) or otherwise, the Administrative Agent, for the benefit of the Secured Parties, shall be granted a Lien pursuant to the Mortgages.
“Mortgages”: each of the mortgages, deeds of trust, deeds to secure debt or such equivalent documents hereafter entered into and executed and delivered by one or more of the Loan Parties to the Administrative Agent, in each case, as such documents may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time and in form and substance reasonably acceptable to the Administrative Agent.
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“Multiemployer Plan”: a “multiemployer plan” (within the meaning of Section 3(37) of ERISA) to which any Loan Party or any ERISA Affiliate thereof makes, is making, or is obligated or, at any time, within the preceding six years, has been obligated to make, contributions.
“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) and other customary costs, fees and expenses actually incurred in connection therewith and net of taxes paid and the Borrower’s reasonable and good faith estimate of income, franchise, sales, and other applicable taxes required to be paid by any Group Member in connection with such Asset Sale or Recovery Event, the computation of which shall, in each such case, take into account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits, and tax credit carry forwards, and similar tax attributes and (b) in connection with any issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary costs, fees and expenses actually incurred in connection therewith.
“Non-Consenting Lender”: any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Affected Lenders in accordance with the terms of Section 10.1 and (b) has been approved by the Required Lenders.
“Non-Defaulting Lender”: at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Loan Party Dedicated Investments Basket”: as defined in Section 7.8(f)(iii).
“Non-Loan Party Investments Cap”: as defined in Section 7.8(j).
“Non-Loan Party Permitted Acquisitions Cap”: as defined in Section 7.8(n)(xii).
“Note”: a Term Loan Note, a Revolving Loan Note or a Swingline Loan Note.
“Notice of Borrowing”: a notice substantially in the form of Exhibit K.
“Notice of Conversion/Continuation”: a notice substantially in the form of Exhibit L.
“Obligations”: the
unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed or allowable in such proceeding) the Loans and all other obligations
and liabilities (including any fees or expenses that accrue after the filing of any petition in bankruptcy, or the commencement of any
Insolvency Proceeding, relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed or allowable
in such proceeding) of the Loan Parties to the Administrative Agent, the Issuing Lender or any other Lender, or of any Group Member to
any applicable Cash Management Bank and any Qualified Counterparty party to a Specified Swap Agreement, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, any Cash Management Agreement, the Letters of Credit, any Specified Swap Agreement or any other document
made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, payment
obligations, fees, indemnities, costs, and expenses (including all reasonable and documented out-of-pocket fees, charges and disbursements
of counsel to the Administrative Agent, the Issuing Lender, any other Lender, any applicable Cash Management Bank or Qualified Counterparty,
to the extent that any applicable Cash Management Agreement or Specified Swap Agreement, as applicable, requires the reimbursement by
any applicable Loan Party of any such expenses, in each case of the foregoing, in accordance with Section 10.5 or other applicable
provisions of the Loan Documents, Cash Management Agreements or Specified Swap Agreements) that are required to be paid by any Loan Party
pursuant to any Loan Document, Cash Management Agreement, Specified Swap Agreement or otherwise. For the avoidance of doubt, the Obligations
shall not include (i) any obligations arising under any warrants or other equity instruments issued by any Loan Party to any Lender,
or (ii) solely with respect to any Guarantor that is not a Qualified
ECP Guarantor, any Excluded Swap Obligations of such Guarantor or (iii) obligations
arising in connection with the Sixth Amendment Preferred Equity Issuance.
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“OFAC”: the Office of Foreign Assets Control of the United States Department of the Treasury and any successor thereto.
“Operating Documents”: for any Person as of any date, such Person’s constitutional documents, formation documents and/or certificate of incorporation (or equivalent thereof), and, (a) if such Person is a corporation or company, its bylaws or memorandum and articles of association (or equivalent thereof) in current form, (b) if such Person is a limited liability company, its limited liability company agreement and each related plan of division and certificate of division (or similar agreements), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes”: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.23).
“Overadvance”: is defined in Section 2.8.
“Participant”: is defined in Section 10.6(d).
“Participant Register”: is defined in Section 10.6(d).
“Patriot Act”: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Title III of Pub. L. 107-56, signed into law October 26, 2001.
“PBGC”: the Pension Benefit Guaranty Corporation, or any successor thereto.
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“Pension Plan”: an employee pension plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that is or was at any relevant time maintained or sponsored by any Loan Party or any ERISA Affiliate thereof or to which any Loan Party or any ERISA Affiliate thereof makes contributions or has any outstanding liability, and (ii) that is or was subject to the provisions of Title IV of ERISA or Sections 412 and 430 of the Code or Sections 302 and 303 of ERISA and in respect of which any Loan Party or any ERISA Affiliate thereof is (or if such plan were terminated would under Section 4069 of ERISA be deemed to be) a “contributing sponsor” as defined in Section 4001(a)(13) of ERISA.
“Permitted Acquisition”: is defined in Section 7.8(n).
“Permitted Investors”: the collective reference to JPMorgan Chase Bank, N.A. and its Affiliates, and “Initial OEP Stockholders” as that term is defined in the Principal Stockholders Agreement as in effect on the Closing Date and ECI Holding (Hungary) KFT, in each case, together with any Control Investment Affiliate thereof.
“Permitted Ratio Debt” means Indebtedness of the Borrower and/or any one or more Subsidiaries; provided that:
(a) subject to the provisions of Section 1.5 to the extent an LCA Election has been made with respect to a Permitted Acquisition corresponding to the incurrence of such Indebtedness, immediately before and after giving effect thereto and to the use of the proceeds thereof, no Event of Default has occurred and is continuing or would result therefrom;
(b) such Indebtedness shall be (i) Subordinated Indebtedness or (ii) unsecured;
(c) immediately
after giving effect to the issuance, incurrence, or assumption of such Indebtedness and excluding the cash proceeds to the Borrower or
any Subsidiary therefrom that are actually applied or intended to be applied to a particular use or transaction as of the date of incurrence
thereof (but otherwise giving effect to the use of such proceeds so applied or intended to be applied), (i) prior to a
Junior Debt Incurrence Eventthe March 31, 2024,
Financial Statement Delivery Date, the Consolidated Net Leverage Ratio as of the Test Period most recently ended shall
be equal to or less than the Closing Date Consolidated Net Leverage Ratio, and (ii) from and after a
Junior Debt Incurrence Eventthe March 31, 2024,
Financial Statement Delivery Date, (A) the Consolidated Senior Net Leverage Ratio as of the Test Period most recently
ended shall be equal to or less than 2.85:1.00 and (B) the Consolidated Net Leverage Ratio as of the Test Period most recently ended
shall be equal to or less than 3.85:1.00;
(d) such Indebtedness does not mature prior to the date that is 180 days after the Term Loan Maturity Date at the time such Indebtedness is incurred, or have a shorter weighted average life to maturity than, the Term Loans at the time such Indebtedness is incurred;
(e) if such Indebtedness is secured on a junior basis to the Term Loans, then (i) such Indebtedness will not be secured by any property or assets of Holdings, the Borrower or any Subsidiary other than the Collateral and (ii) a representative, acting on behalf of the holders of such Indebtedness, has agreed to lien subordination terms reasonably acceptable to the Administrative Agent;
(f) Permitted Ratio Debt will not be guaranteed by any Person other than the Loan Parties; and
(g) the other terms applicable to such Indebtedness are substantially identical to, or (taken as a whole as determined by the Borrower and the Administrative Agent in good faith) no more favorable to the lenders or holders providing such Permitted Ratio Debt than, those applicable to the Term Loans; provided that this clause (g) will not apply to (1) interest rate, fees, funding discounts and other pricing terms (and Permitted Ratio Debt shall not be subject to, and shall not trigger, any most favored nation pricing protection), (2) redemption, prepayment or other premiums, (3) optional prepayment terms, and (4) covenants and other terms that are (i) approved by the Administrative Agent, (ii) applied to the Term Loans existing at the time of incurrence of such Permitted Ratio Debt (so that existing Term Lenders also receive the benefit of such provisions) and/or (iii) applicable only to periods after the Term Loan Maturity Date at the time of incurrence of such Indebtedness.
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“Person”: any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Platform”: is any of Debt Domain, Intralinks, Syndtrak, DebtX or a substantially similar electronic transmission system.
“Post-Closing Intercompany Indebtedness”: indebtedness put in place after the Closing Date owed by the Borrower to ECI Telecom LTD, a company incorporated under the Laws of the State of Israel (“ECI Telecom LTD”), in exchange for the transfer of certain assets of ECI Telecom LTD to the Borrower, as described in the Specified Closing Date Transactions.
“Post-Closing Transfer”: the sale, subsequent to consummation of the Acquisition, by ECI Telecom Holdings B.V., a private company organized and existing under the laws of the Netherlands (“ECI Telecom Holdings”) of its ownership of the Capital Stock of ECI Telecom, Inc., a Delaware corporation (“ECI Telecom US”) to the Borrower or an affiliate of the Borrower, as a result of which ECI Telecom US will become a direct or indirect wholly-owned Subsidiary of the Borrower.;
“Principal Stockholders Agreement”: that certain First Amended and Restated Stockholders Agreement made as of March 3, 2020 by and among Holdings, JPMC Heritage Parent LLC, a Delaware limited liability company, Heritage PE (OEP) III, L.P., a Cayman Islands exempted limited partnership, ECI Holding (Hungary) KFT, and future parties that may execute a joinder thereto, as the same has been amended, restated, supplemented or otherwise modified in a manner that is not adverse to the Lenders.
“Prime Rate”: the rate of interest per annum announced from time to time in the money rates section of the Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of the Wall Street Journal, becomes unavailable for any reason as determined by the Administrative Agent, the “Prime Rate” shall mean the rate of interest per annum announced by Citizens as its prime rate then in effect at its principal office in the State of New York (such Citizens announced Prime Rate not being intended to be the lowest rate of interest charged by Citizens in connection with extensions of credit to debtors).
“Pro Forma Basis”: with respect to any calculation or determination for any period, in making such calculation or determination on the specified date of determination (the “Determination Date”), pro forma effect will be given to: (a) the acquisition or disposition of companies, divisions or lines of businesses by Holdings and its Subsidiaries, including any acquisition or disposition of a company, division or line of business since the beginning of the reference period by a Person that became a Subsidiary after the beginning of the applicable period; and (b) the discontinuation of any discontinued operations; in each case of clauses (a) and (b), that have occurred since the beginning of the applicable period and before the Determination Date as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of such period. To the extent that pro forma effect is to be given to an acquisition or disposition of a company, division or line of business, the pro forma calculation will be calculated in good faith by a responsible financial or accounting officer of Holdings in accordance with Regulation S-X under the Securities Act based upon the most recent four full fiscal quarters for which financial statements have been delivered pursuant to Section 6.1.
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“Projections”: is defined in Section 6.2(c).
“Properties”: is defined in Section 4.17(a).
“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“QFC”: has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“Qualified Counterparty”: with respect to any Specified Swap Agreement, any counterparty thereto that, at the time such Specified Swap Agreement was entered into or as of the Closing Date, was the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender.
“Qualified ECP Guarantor”: in respect of any Swap Obligation, (a) each Guarantor that has total assets exceeding $10,000,000 at the time the relevant Guarantee Obligation of such Guarantor provided in respect of, or the Lien granted by such Guarantor to secure, such Swap Obligation (or guaranty thereof) becomes effective with respect to such Swap Obligation, and (b) any other Guarantor that (i) constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder, or (ii) can cause another Person (including, for the avoidance of doubt, any other Guarantor not then constituting a “Qualified ECP Guarantor”) to qualify as an “eligible contract participant” at such time by entering into a “keepwell, support, or other agreement” as contemplated by Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Qualifying Term Loans” as defined in Section 2.29(c).
“Ratio
Incremental Amount”: an aggregate principal amount of Indebtedness that, immediately after the incurrence thereof on Pro
Forma Basis, would not result in, (a) prior to a Junior Debt Incurrence Eventthe
March 31, 2024, Financial Statement Delivery Date, the Borrower’s Consolidated Net Leverage Ratio being greater
than 2.75:1.00 and (b) from and after a Junior Debt Incurrence Eventthe
March 31, 2024, Financial Statement Delivery Date, (A) the Borrower’s Consolidated Senior Net Leverage
Ratio being greater than 2.75:1.00 and (B) the Borrower’s Consolidated Net Leverage Ratio being greater than 3.75:1.00 (assuming,
in each case, that (x) the full amount of any Revolving Facility Increase incurred at such time is fully drawn and (y) the proceeds
of any such Incremental Facility incurred at such time shall not be netted from Consolidated Funded Indebtedness for purposes of calculating
the Ratio Incremental Amount).
“Ratio Investments Basket”: as defined in Section 7.8(r).
“Recipient”: the (a) Administrative Agent, (b) any Lender or (c) the Issuing Lender, as applicable.
“Recovery Event”: any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.
“Reference
Time”: with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London
time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR,
the time determined by the Administrative Agent in its reasonable discretion.
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“Refinanced Indebtedness”: is defined in the definition of Credit Agreement Refinancing Indebtedness.
“Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower executed by each of (a) the Borrower and Holdings, (b) the Administrative Agent and (c) each Lender and/or prospective lender that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Section 2.28.
“Refinancing Commitments” means any Refinancing Term Commitments or Refinancing Revolving Commitments.
“Refinancing Loans” means any Refinancing Term Loans or Refinancing Revolving Loans.
“Refinancing Revolving Commitments” means one or more tranches of Revolving Commitments that result from a Refinancing Amendment.
“Refinancing Revolving Loans” means one or more tranches of Revolving Loans that result from a Refinancing Amendment.
“Refinancing Term Commitments” means one or more tranches of Term Commitments that result from a Refinancing Amendment.
“Refinancing Term Loans” means one or more tranches of Term Loans that result from a Refinancing Amendment.
“Refunded Swingline Loans”: is defined in Section 2.7(b).
“Register”: is defined in Section 10.6(c).
“Regulation T”: Regulation T of the Board as in effect from time to time.
“Regulation U”: Regulation U of the Board as in effect from time to time.
“Regulation X”: Regulation X of the Board as in effect from time to time.
“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Loan Party in connection therewith that are not applied to prepay the Loans or other amounts pursuant to Section 2.12(e) as a result of the delivery of a Reinvestment Notice.
“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.
“Reinvestment Notice”: a written notice executed by a Responsible Officer stating that no Event of Default has occurred and that the Borrower or Holdings (directly or indirectly through a Guarantor) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets useful in its business.
“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire or repair assets useful in the applicable Group Member’s business.
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“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the earlier of (a) the date occurring 180 days after such Reinvestment Event; provided that such date shall be extended to 365 days if the Loan Parties have entered into a binding commitment to reinvest the Net Cash Proceeds subject to such Reinvestment Event within such 180 day period, and (b) the date on which the Borrower (or its Subsidiaries) shall have determined not to, acquire or repair assets useful in the Borrower’s business with all or any portion of the relevant Reinvestment Deferred Amount.
“Related Parties”: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental
Body”: the Board of Governors of the Federal Reserve SystemBoard
or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board
of Governors of the Federal Reserve SystemBoard
and/or the Federal Reserve Bank of New York, or any successor thereto.
“Replacement Lender”: is defined in Section 2.23.
“Required Lenders”: at any time, (a) if only one Lender holds the outstanding Term Loans and the Revolving Commitments, such Lender; and (b) if more than one Lender holds the outstanding Term Loans and Revolving Commitments, then at least three Lenders who hold more than 50% of the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding, and (ii) the Total Revolving Commitments (including, without duplication, the L/C Commitments) then in effect or, if the Revolving Commitments have been terminated, the Total Revolving Extensions of Credit then outstanding; provided that for the purposes of this clause (b), the outstanding principal amount of the Term Loans held by any Defaulting Lender and the Revolving Commitments of, and the portion of the Revolving Loans and participations in L/C Exposure and Swingline Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided further that a Lender and its Affiliates shall be deemed one Lender.
“Requirement of Law”: as to any Person, any law, treaty, rule or regulation (including any rule, official directive, request or guideline (whether or not having the force of law) of any Governmental Authority) or determination of an arbitrator or a court or other Governmental Authority (including the Basel Committee on Banking Supervision and any successor thereto or similar authority or successor thereto), 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.
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”: the chief executive officer, president, vice president, chief financial officer, treasurer, assistant treasurer, or controller of the Borrower or Holdings, but in any event, with respect to financial matters, the chief financial officer, treasurer, assistant treasurer, or controller of the Borrower or Holdings.
“Restricted Payments”: is defined in Section 7.6 and do not include, for the avoidance of doubt, amounts paid in-kind with respect to preferred Capital Stock (including amounts that when capitalized, become additional Capital Stock).
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“Revolving
Commitment”: as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and participate in Swingline
Loans and Letters of Credit in an aggregate principal amount not to exceed the amount set forth under the heading “Revolving Commitment”
opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption, Incremental Joinder, Extension
Amendment or Refinancing Amendment, as applicable, pursuant to which such Lender became a party hereto, as the same may be changed from
time to time pursuant to the terms hereof (including in connection with assignments and Incremental Facilities permitted hereunder). The
original amount of the Total Revolving Commitments is
$100,000,000on the Sixth Amendment Operative Date is
$75,000,000. The L/C Commitment and the Swingline Commitment are each sublimits of the Total Revolving Commitments.
“Revolving Commitment Increase”: is defined in Section 2.27.
“Revolving Extensions of Credit”: as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, plus (b) such Lender’s L/C Percentage of the aggregate undrawn amount of all outstanding Letters of Credit (including the Existing Letter of Credit) at such time, plus (c) such Lender’s L/C Percentage of the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, plus (d) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.
“Revolving Facility”: the Revolving Commitments and the extensions of credit made thereunder.
“Revolving Lender”: each Lender that has a Revolving Commitment or that holds Revolving Loans.
“Revolving Loan Conversion”: is defined in Section 3.5(b).
“Revolving Loan Note”: a promissory note in the form of Exhibit H-1, as it may be amended, supplemented or otherwise modified from time to time.
“Revolving Loans”: as defined in Section 2.4(a).
“Revolving Percentage”: as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the aggregate principal amount of all Revolving Loans then outstanding; provided that in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Total Revolving Commitments, the Revolving Percentages shall be determined in a manner designed to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Revolving Lenders on a ratable basis.
“Revolving Termination Date”: March 3, 2025, as extended in accordance with any Extension Amendment solely with respect to the Extended Revolving Commitments governed thereby.
“S&P”: Standard & Poor’s Ratings Services.
“Sale Leaseback Transaction”: any arrangement with any Person or Persons, whereby in contemporaneous or substantially contemporaneous transactions a Loan Party sells substantially all of its right, title and interest in any property and, in connection therewith, acquires, leases or licenses back the right to use all or a material portion of such property.
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“Sanction(s)”:
any international economic sanction or trade embargoes imposed, administered or enforced by the United States Government (including OFAC),
the Cayman Islands government, the United Nations Security Council, the European Union, HerHis
Majesty’s Treasury or other relevant sanctions authority applicable to the Group Members and their business to the extent not in
contravention of the foregoing authorities.
“SEC”: the Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.
“Secured Parties”: the collective reference to any holder of the Obligations, including the Administrative Agent, the Lenders (including any Issuing Lender in its capacity as Issuing Lender and any Swingline Lender in its capacity as Swingline Lender, any Cash Management Bank (in its or their respective capacities as providers of Cash Management Services), and any Qualified Counterparties.
“Securities Account”: any “securities account” as defined in the UCC with such additions to such term as may hereafter be made.
“Securities Act”: the Securities Act of 1933, as amended from time to time and any successor statute.
“Security Documents”: the collective reference to, the Guarantee and Collateral Agreement, each Pledge Supplement, each Assumption Agreement, the Mortgages, each Intellectual Property Security Agreement, and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the Obligations of any Loan Party arising under any Loan Document.
“SOFR”:
with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the
SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.
“SOFR
Administrator”: the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Sixth Amendment”: the Sixth Amendment to Credit Agreement, dated as of the Sixth Amendment Effective Date, by and among Holdings, the Borrower, the Lenders party thereto and the Administrative Agent.
“Sixth Amendment Effective Date”: has the meaning set forth in the Sixth Amendment.
“Sixth Amendment Operative Date”: has the meaning set forth in the Sixth Amendment.
“Sixth Amendment Preferred Equity Issuance”: the issuance by Holdings of preferred equity and warrants to purchase common stock on or after the Sixth Amendment Operative Date.
“Sixth Amendment Preferred Equity Issuance Cap”: $80,000,000 plus any dividends paid-in-kind pursuant to the Sixth Amendment Preferred Equity Issuance Documents.
“Sixth Amendment Preferred Equity Issuance Documents”: has the meaning set forth in the Sixth Amendment.
“SOFR
Administrator’s Website”:”:
a rate equal to the secured overnight financing rate as published by the SOFR Administrator on the website of the Federal
Reserve Bank of New YorkSOFR Administrator,
currently at http://www.newyorkfed.org, (or
any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time).
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“SOFR Administrator”: the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Borrowing” means, as to any borrowing, the SOFR Loans comprising such borrowing.
“SOFR Loan” means a Loan that bears interest at a rate based on Term SOFR.
“SOFR Tranche”: the collective reference to SOFR Loans under a particular Facility (other than the L/C Facility), the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).
“Solvency Certificate”: the Solvency Certificate, dated the Closing Date, delivered to the Administrative Agent pursuant to Section 5.1(p), which Solvency Certificate shall be in substantially the form of Exhibit D.
“Solvent”: when used with respect to any Person, as of any date of determination, (a) the fair value of the assets of such Person and its Subsidiaries, on a consolidated basis, exceeds their debts and liabilities, direct, subordinated, contingent or otherwise, on a consolidated basis; (b) the present fair saleable value of the property of such Person and its Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of their debts and other liabilities, direct, subordinated, contingent or otherwise, on a consolidated basis, as such debts and other liabilities become absolute and matured; (c) such Person and its Subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, direct, subordinated, contingent or otherwise, on a consolidated basis, as such liabilities become absolute and matured; and (d) such Person and its Subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which they have unreasonably small capital.
For purposes of this definition, the amount of any contingent liability at any time will be computed as the amount that would reasonably be expected to become an actual and matured liability.
“Specified Closing Date Intercompany Indebtedness”: (a) that certain indebtedness put in place on or about the Closing Date owed from the Borrower to Genband Holdings B.V., an indirect wholly-owned subsidiary of Holdings (“Genband Holdings”) in the original principal amount of approximately $2,500,000, (b) that certain indebtedness put in place on or about the Closing Date owed from Ribbon Israel Limited, a direct wholly-owned subsidiary of the Borrower, to the Borrower in the original principal amount of approximately $156,000,000, (c) that certain indebtedness put in place on or about the Closing Date owed from Ribbon Israel Limited, a direct wholly-owned subsidiary of the Borrower, to ECI Telecom LTD in the original principal amount of approximately $9,100,000, (d) that certain indebtedness put in place on or about the Closing Date owed from ECI Telecom Group to the Borrower in the original principal amount of approximately $46,000,000 and (e) that certain indebtedness put in place on or about the Closing Date owed from ECI Telecom Holdings to the Borrower in the original principal amount of approximately $65,000,000, in each case of the preceding clauses (a) through (e), as described in the Specified Closing Date Transactions.
“Specified Closing Date Transactions”: those transactions described in the Ernst and Young LLP structure slides for “Project Elastic”, dated as of February 20, 2020 and delivered to the Administrative Agent on February 24, 2020, including, without limitation, the transactions described therein giving rise to Specified Closing Date Intercompany Indebtedness and to Post-Closing Intercompany Indebtedness.
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“Specified Representations”: the representations and warranties of the Borrower and the Guarantors (after giving effect to the Acquisition) set forth in Sections 4.3(a), 4.4(a), 4.4(b), 4.4(d), 4.4(e), 4.5 (but only with respect to the Operating Documents of the Borrower and the Guarantors, and limited to the execution, delivery and performance of the Loan Documents, incurrence of the indebtedness thereunder and the granting of the guarantees and security interests in respect thereof), 4.11 (solely as to the use of proceeds of the Initial Credit Extension on the Closing Date), 4.14(a), 4.19(a), 4.20(a) (solely as to the Solvency on a consolidated basis of the Loan Parties on the Closing Date), 4.28 (solely as to the use of proceeds of the Initial Credit Extension on the Closing Date), and 4.29 (solely as to the use of proceeds of the Initial Credit Extension on the Closing Date).
“Specified Swap Agreement”: any Swap Agreement entered into by a Group Member and any Qualified Counterparty to the extent permitted under Section 7.13.
“Subordinated Debt Document”: any agreement, certificate, document or instrument executed or delivered by Holdings or any Subsidiary and evidencing Subordinated Indebtedness.
“Subordinated Indebtedness”: Indebtedness of a Loan Party subordinated to the Obligations (or secured by Liens subordinated to the Liens securing the Obligations) pursuant to subordination terms (including payment, lien and remedies subordination terms, as applicable) reasonably acceptable to the Administrative Agent; provided that, for the avoidance of doubt, neither the subordination of the priority of any Lien securing any Indebtedness (other than the Obligations), nor the fact that any Indebtedness is unsecured, shall be construed to be the subordination of such Indebtedness in right of payment to the Obligations; provided further that, the Sixth Amendment Preferred Equity Issuance shall not constitute Subordinated Indebtedness.
“Subsidiary”: as to any Person, a corporation, company, partnership, limited liability company or other entity of which shares, 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, 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 (a) shall refer to a Subsidiary or Subsidiaries of Holdings and (b) will not include any Unrestricted Subsidiary.
“Surety Indebtedness”: as of any date of determination, indebtedness (contingent or otherwise) owing to sureties arising from surety bonds issued on behalf of any Loan Party or its respective Subsidiaries as support for, among other things, their contracts with customers, whether such indebtedness is owing directly or indirectly by such Loan Party or any such Subsidiary.
“Swap Agreement”: any agreement with respect to any swap, hedge, forward, future or derivative transaction or option or similar agreement (including without limitation, any Interest Rate Agreement) involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of a Loan Party and its Subsidiaries shall be deemed to be a “Swap Agreement.”
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“Swap Obligation”: with respect to any Guarantor, any obligation of such Guarantor 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.
“Swap Termination Value”: in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date any such Swap Agreement has been closed out and termination value determined in accordance therewith, such termination value, and (b) for any date prior to the date referenced in clause (a), the amount determined as the mark-to-market value for such Swap Agreement, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include a Qualified Counterparty).
“Swingline Commitment”: the obligation of the Swingline Lender to make Swingline Loans to the Borrower pursuant to Section 2.6 in an aggregate principal amount at any one time outstanding not to exceed $20,000,000.
“Swingline Lender”: Citizens, in its capacity as the lender of Swingline Loans or such other Lender as the Borrower may from time to time select as the Swingline Lender hereunder pursuant to Section 2.7(f); provided that such Lender has agreed to be a Swingline Lender.
“Swingline Loan Note”: a promissory note in the form of Exhibit H-2, as it may be amended, supplemented or otherwise modified from time to time.
“Swingline Loans”: is defined in Section 2.6.
“Swingline Participation Amount”: is defined in Section 2.7(c).
“Synthetic Lease Obligation”: the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term
Commitment”: as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower in an aggregate
principal amount not to exceed the amount set forth (a) with respect to Term Loans constituting a portion of the Initial Credit Extension,
under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1A, (b) with respect to Incremental
Term Loans, in the applicable Incremental Joinder (or, with respect to the Third Amendment Term Loan, the Third Amendment Term Commitment),
(c) with respect to Extended Term Loans, in the applicable Extension Amendment and (d) with respect to Refinancing Term Loans,
in the applicable Extension Amendment. The original aggregate principal
amount of the Term Commitments on the ClosingSixth
Amendment Operative Date is $400,000,000255,453,477.67.
“Term Facility”: the Term Commitments and the Term Loans made thereunder.
“Term Lender”: each Lender that has a Term Commitment or that holds a Term Loan.
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“Term Loan”: collectively, (a) the term loans made by the Lenders pursuant to Section 2.1 (which shall include, for the avoidance of doubt, the Third Amendment Term Loan), (b) Incremental Term Loans, (c) Extended Term Loans and (d) Refinancing Term Loans.
“Term Loan Maturity Date”: March 3, 2025, as extended in accordance with any Extension Amendment, solely with respect to any Extended Term Loans governed thereby.
“Term Loan Note”: a promissory note in substantially the form of Exhibit H-3, as it may be amended, supplemented or otherwise modified from time to time.
“Term Percentage”: as to any Term Lender at any time, the percentage which such Lender’s Term Commitments and funded Term Loans then constitutes of the aggregate Term Commitments and funded Term Loans of all Lenders.
“Term SOFR”: rate per annum equal to the greater of (a) the sum of (i) Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period; provided, however, that if as of 5:00 p.m. (New York City time) on any Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Term SOFR Determination Day plus (ii) the Term SOFR Adjustment, and (b) the Floor.
“Term SOFR Adjustment”: (a) with respect to an Interest Period of one month, 0.11448%, (b) with respect to an Interest Period of three months, 0.26161% and (c) with respect to an Interest Period of six months, 0.42826%.
“Term SOFR Administrator”: CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Term
SOFR”: for the applicable Corresponding Tenor as of the applicable Reference Time,
Reference Rate”: the forward-looking term
rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.published
by the Term SOFR Administrator and displayed on CME’s Market Data Platform (or other commercially available source providing such
quotations as may be selected by the Administrative Agent from time to time).
“Term
SOFR Notice” means a notification by the Administrative Agent to the Lenders of (i) the
occurrence of a Term SOFR Transition Event and (ii) the determination of the proposed Benchmark Replacement Adjustment related to
Term SOFR, if any.
“Term
SOFR Transition Event” means the determination by the Administrative Agent, in consultation with the Borrower, that (a) Term
SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible
for the Administrative Agent, and (c) a Benchmark Transition Event has previously occurred resulting in a Benchmark Replacement in
accordance with Section 2.17(b) that is not Term SOFR.
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“Third Amendment”: the Third Amendment to Credit Agreement, dated as of the Third Amendment Effective Date, by and among Holdings, the Borrower, the Lenders party thereto and the Administrative Agent.
“Third Amendment Effective Date”: March 3, 2021.
“Third Amendment Term Commitment”: as to any Lender, the obligation of such Lender, if any, to make the Third Amendment Term Loan to the Borrower on the Third Amendment Effective Date in an aggregate principal amount not to exceed the amount set forth with respect to the Third Amendment Term Loans under the heading “Third Amendment Term Commitment” opposite such Lender’s name on Schedule 1.1A attached to the Third Amendment. The original aggregate principal amount of the Third Amendment Term Commitments on the Third Amendment Effective Date is $74,625,000.
“Third Amendment Term Loan”: is defined in Section 2.1.
“Total Credit Exposure”: as to any Lender at any time, the unused Commitments, Revolving Extensions of Credit and outstanding Term Loans of such Lender at such time.
“Total
L/C Commitments”: at any time, the sum of all L/C Commitments at such time, as the same may be reduced from time to time
pursuant to Section 2.10 or 3.5(b). The initial amount
of the Total L/C Commitments on the ClosingSixth
Amendment Operative Date is $30,000,00020,000,000.
“Total
Revolving Commitments”: at any time, the aggregate amount of the Revolving Commitments then in effect. The original
amount of the Total Revolving Commitments is $100,000,000on
the Sixth Amendment Operative Date is $75,000,000. The L/C Commitment and the Swingline Commitment are sublimits of the
Total Revolving Commitments.
“Total Revolving Extensions of Credit”: at any time, the aggregate amount of the Revolving Extensions of Credit outstanding at such time.
“Trade Date”: is defined in Section 10.6(b)(i)(B).
“Transferee”: any Eligible Assignee or Participant, and in every case excluding all Excluded Lenders.
“Type”:
as to any Loan, its nature as an ABR Loan or a EurodollarSOFR
Loan.
“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
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“Unadjusted
Benchmark Replacement” shall mean the applicable
Benchmark Replacement excluding the related Benchmark Replacement
Adjustment.
“Unfriendly Acquisition”: any acquisition that has not, at the time of the first public announcement of an offer relating thereto, been approved by the board of directors (or other legally recognized governing body) of the Person to be acquired; except that with respect to any acquisition of a non-U.S. Person, an otherwise friendly acquisition shall not be deemed to be unfriendly if it is not customary in such jurisdiction to obtain such approval prior to the first public announcement of an offer relating to a friendly acquisition.
“Uniform Commercial Code” or “UCC”: the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time to time in the State of New York, or as the context may require, any other applicable jurisdiction.
“United States” and “U.S.”: the United States of America.
“Unrestricted Cash”: the sum of the aggregate amount of cash and Cash Equivalents held in accounts of Holdings and its Subsidiaries reflected in the combined consolidated balance sheet of Holdings and its Subsidiaries to the extent that it would not appear as “restricted” on the combined consolidated balance sheet of Holdings and its Subsidiaries (unless such appearance is related to the Loan Documents (or the Liens created thereunder)).
“Unrestricted Subsidiary” means, as of any date, collectively and individually, any direct or indirect subsidiary of the Borrower identified by the Borrower in writing to the Administrative Agent as being an “Unrestricted Subsidiary” pursuant to Section 6.13; provided that (a) except to the extent provided in Section 6.13, no Subsidiary may be designated (or re-designated) as an Unrestricted Subsidiary, and (b) no Person may be designated as an “Unrestricted Subsidiary” if such Person is not an “Unrestricted Subsidiary” or is a “Guarantor” under any agreement, document or instrument evidencing any Indebtedness for borrowed money of any Group Member. For purposes of calculating Investments permitted under Section 7.8, the (a) designation of any Subsidiary as an “Unrestricted Subsidiary” will constitute an Investment in an amount equal to the fair market value of such Subsidiary, determined as of the date of such designation by the Borrower in good faith, and (b) the designation of any Unrestricted Subsidiary as a Subsidiary shall constitute the incurrence of any Indebtedness and Liens and the making of any Investments of such Subsidiary existing at such time and shall constitute a return on any Investment by the Borrower in such Subsidiary in an amount equal to the fair market value at the date of such designation of the Borrower’s or its Subsidiary’s (as applicable) Investment in such Subsidiary. No Unrestricted Subsidiary may (a) own Capital Stock of any Subsidiary that is not an Unrestricted Subsidiary, or (b) be designated as an “Unrestricted Subsidiary” or thereafter continue to constitute an Unrestricted Subsidiary if such Person proposed to be designated as an Unrestricted Subsidiary owns, licenses or holds other rights in any Intellectual Property that is material to the business of the Borrower and its other Subsidiaries taken as a whole. On the Closing Date, immediately after giving effect to the Closing Date Transactions, there are no Unrestricted Subsidiaries.
“USD
LIBOR”: the London interbank offered rate for U.S. dollars.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association (or any successor thereto) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person”: any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
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“U.S. Tax Compliance Certificate”: is defined in Section 2.20(f).
“Voting Stock”: as to any Person, the Capital Stock of any class or classes or other equity interests (however designated and including general partnership interests in a partnership) having ordinary voting power for the election of directors or similar governing body of such Person.
“Withholding Agent”: as applicable, any applicable Loan Party and the Administrative Agent.
“Working Capital”: with respect to the Group Members, consolidated current assets (which shall exclude any cash or Cash Equivalents) minus consolidated current liabilities (which shall exclude any amount outstanding under the Revolving Facility and the current portion of any Indebtedness, in each case, to the extent included in “consolidated current liabilities”), in each case, determined in accordance with GAAP.
“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings given herein when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined herein, shall have the respective meanings given to them under GAAP, (ii) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) 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, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, (v) references to a given time of day shall, unless otherwise specified, be deemed to refer to New York City time, and (vi) references to agreements (including this Agreement) or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated, amended and restated, extended, or otherwise modified from time to time. Notwithstanding the foregoing clause (i), for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of any Group Member shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.
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(c) 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. The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (ii) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, and (iii) 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.
(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(e) Any reference in any Loan Document to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a Division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale or transfer, or similar term, as applicable, to, of or with a separate Person. Any Division of a limited liability company shall constitute a separate Person under the Loan Documents (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity) on the first date of its existence. In connection with any Division, if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then such asset shall be deemed to have been transferred from the original Person to the subsequent Person.
1.3 Rounding. Any financial ratios required to be maintained by the Borrower or Holdings pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest place by which such ratio is expressed herein.
1.4 Currency. For purposes of all calculations and determinations hereunder, and all certifications and financial statements delivered hereunder, all amounts represented by such terms shall be expressed in Dollars or the Dollar Equivalent thereof. The Administrative Agent shall determine the Dollar Equivalent of any amount when required or permitted hereby, and a determination thereof by the Administrative Agent shall be conclusive absent manifest error. The Administrative Agent may, but shall not be obligated to, rely on any determination by the Borrower. The Administrative Agent may determine or re-determine the Dollar Equivalent of any amount on any date in its reasonable discretion.
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1.5 Limited Condition Acquisitions. Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a)(i) calculating any applicable ratio (other than the Minimum Consolidated Fixed Charge Coverage Ratio, the Maximum Consolidated Senior Net Leverage Ratio and the Maximum Consolidated Net Leverage Ratio, in each case as at the last day of any period of four consecutive trailing fiscal quarters of Holdings, as required by Section 7.1) or the use of any basket, (ii) determining the accuracy of the representations and warranties set forth in Section 4 hereof or (iii) determining satisfaction of any conditions precedent, or (b) determining compliance with any provision that requires that no Default or Event of Default has occurred is continuing or would result therefrom (other than a Default or Event of Default pursuant to Section 8.1(a) or (f)), in each case of (a) and (b) in connection with a Limited Condition Acquisition, the date of determination of such ratio and determination of such compliance will, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Acquisition, an “LCA Election”), be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”). If on a Pro Forma Basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) calculated as if such Limited Condition Acquisition and other transactions had occurred at the beginning of the most recently ended period of four consecutive trailing fiscal quarters of Holdings ending prior to the LCA Test Date for which financial statements have been delivered pursuant to Section 6.1, the Borrower could have taken such action on the relevant LCA Test Date in compliance with the applicable requirements, then such provisions will be deemed to have been complied with, unless an Event of Default pursuant to Section 8.1(a) or (f) will be continuing on the date such Limited Condition Acquisition is consummated. For the avoidance of doubt, (i) if any of such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in Consolidated Adjusted EBITDA) at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (ii) such ratios and compliance with such conditions will not be tested at the time of consummation of such Limited Condition Acquisition or related transactions, except that on such date an Event of Default pursuant to Section 8.1(a) or (f) may not be continuing. If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or basket with respect to any other transaction on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such ratio or basket will be calculated on a Pro Forma Basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) both (a) have not been consummated and (b) have been consummated until such time as the applicable Limited Condition Acquisition has actually closed or the definitive agreement with respect thereto has been terminated or expires. Notwithstanding the foregoing, other than in connection with the creation of an additional tranche of Revolving Commitments in connection with a Limited Condition Acquisition as set forth in Section 2.27(a), the borrowing of any Revolving Loans in connection with a Limited Condition Acquisition shall be subject to the conditions set forth in Section 5.2.
1.6 Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) administration, construction, calculation, publication, continuation, discontinuation, movement, or regulation of, or any other matter related to, the ABR, the Benchmark, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), any component definition thereof or rates referred to in the definition thereof, including whether any Benchmark is similar to, or will produce the same value or economic equivalence of, any other rate or whether financial instruments referencing or underlying the Benchmark will have the same volume or liquidity as those referencing or underlying any other rate, (b) the impact of any regulatory statements about, or actions taken with respect to any Benchmark (or component thereof) or (c) changes made by any administrator to the methodology used to calculate any Benchmark (or component thereof). The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the ABR, the Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, such transactions. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the ABR, the Benchmark, or any alternative, successor or replacement rate (including any Benchmark Replacement), in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error with respect to calculation of any such rate (or component thereof) by any such information source or service.
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SECTION 2
AMOUNT AND TERMS OF COMMITMENTS
2.1 Term
Commitments. Subject to the terms and conditions hereof, each Term Lender severally agrees to make (a) a Term Loan to the
Borrower on the Closing Date in an amount equal to the amount of the Term Commitment of such Lender and (b) an Incremental Term
Loan to the Borrower on the Third Amendment Effective Date (the “Third Amendment Term Loan”) in an amount
equal to the amount of the Third Amendment Term Commitment of such Lender. The Term Loans may from time to time be EurodollarSOFR Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure
for Term Loan Borrowing. The Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing (which must be
received by the Administrative Agent prior to 11:00 A.M. (a) three (3) Business Days prior to the anticipated Closing
Date (or, with respect to the Third Amendment Term Loan, the anticipated Third Amendment Effective Date), in the case of EurodollarSOFR Loans,
or (b) one (1) Business Day prior to the anticipated Closing Date (or, with respect to the Third Amendment Term Loan, the
anticipated Third Amendment Effective Date), in the case of ABR Loans), requesting that the Term Lenders make the Term Loans on the
Closing Date or the Third Amendment Effective Date, as applicable, specifying the amount to be borrowed, the Type of Loan and, in
the case of EurodollarSOFR Loans,
specifying the length of the initial Interest Period therefor; provided that Term Loans made on the Third Amendment Effective Date
may only consist of ABR Loans unless the Borrower delivers a funding indemnity letter, in form and substance reasonably acceptable
to the Administrative Agent, not less than three (3) Business Days prior to the Third Amendment Effective Date. Upon receipt of
such Notice of Borrowing, the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 10:00 A.M. on
the Closing Date or Third Amendment Effective Date, as applicable, each Term Lender shall make available to the Administrative Agent
at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The
Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the
amount specified in the Notice of Borrowing in immediately available funds or, if so specified in the Notice of Borrowing, the
Administrative Agent shall wire transfer or otherwise credit all or a portion of such amount to the accounts specified in the Notice
of Borrowing.
2.3 Repayment of Term Loans.
(a) the Term Loans (excluding any Incremental Term Loans (but including the Third Amendment Term Loan), Extended Term Loans or Refinancing Term Loans) shall be repaid in consecutive quarterly installments on the last day of each fiscal quarter set forth below, each in an aggregate amount set forth below:
| Date | Amount | |||
| March 31, 2021 | $ | 2,507,268.16 | ||
| June 30, 2021 | $ | 5,014,536.31 | ||
| September 30, 2021 | $ | 5,014,536.31 | ||
| December 31, 2021 | $ | 5,014,536.31 | ||
| March 31, 2022 | $ | 5,014,536.31 | ||
| June 30, 2022 | $ | 5,014,536.31 | ||
| September 30, 2022 | $ | 5,014,536.31 | ||
| December 31, 2022 | $ | 5,014,536.31 | ||
| March 31, 2023 | $ | 5,014,536.31 | ||
| June 30, 2023 | $ | 5,014,536.31 | ||
| September 30, 2023 | $ | 5,014,536.31 | ||
| December 31, 2023 | $ | 5,014,536.31 | ||
| March 31, 2024 | $ | 5,014,536.31 | ||
| June 30, 2024 | $ | 10,029,072.62 | ||
| September 30, 2024 | $ | 10,029,072.62 | ||
| December 31, 2024 | $ | 10,029,072.62 | ||
| Term Loan Maturity Date | Remaining Principal Balance of Term Loans | |||
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(b) In the event any Incremental Term Loans (other than the Third Amendment Term Loan), Extended Term Loans or Refinancing Term Loans are made, such Incremental Term Loans, Extended Term Loans or Refinancing Term Loans will be repaid in such installments as may be set forth in the applicable Incremental Joinder, Extension Amendment or Refinancing Amendment, as applicable.
(c) Notwithstanding the foregoing clauses (a) and (b):
(i) any installment payments contemplated by clause (a) or (b) above will be reduced in the order set forth in Section 2.11 or 2.12(e), as applicable, commencing with the next-occurring installment payment (for the avoidance of doubt, any such prepayment made on or prior to the 2022 Audited Financial Statement Delivery Date or made pursuant to Section 2.12(e)(ii), in each case, shall be applied to reduce the installment payment due on the Term Loan Maturity Date) in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with Sections 2.11 and 2.12, as applicable, or any Discounted Prepayments of the Term Loans in accordance with Section 2.29 or assignments to Holdings, the Borrower or any Subsidiary made pursuant to Section 10.6(h) (other than the open market assignment made pursuant to Section 10.6(h) on the Third Amendment Effective Date);
(ii) the rate of amortization (or the amount of any installment) with respect to any tranche of Loans may be increased (and the provisions of Section 2.3(a) or the applicable Incremental Amendment, Extension Amendment or Refinancing Amendment may be amended accordingly) without the consent of the Lenders or the Administrative Agent in connection with the incurrence of any subsequent Incremental Term Loans, Extended Term Loans or Refinancing Term Loans that also comprise part of such tranche of Loans; and
(iii) to the extent not previously paid, all Term Loans shall be due and payable on the Term Loan Maturity Date, together with accrued and unpaid interest on the principal amount to be paid to but excluding the date of payment.
2.4 Revolving Commitments.
Subject
to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (each, a
“Revolving Loan” and, collectively, the “Revolving Loans”) to the Borrower from
time to time during the Commitment Period in an aggregate principal amount at any one time outstanding which, when added to such
Lender’s (i) Revolving Percentage of the aggregate outstanding amount of the Swingline Loans and (ii) L/C Exposure,
does not exceed the amount of such Lender’s Revolving Commitment. In addition, (i) the Total Revolving Extensions of
Credit shall not at any time exceed the Total Revolving Commitments in effect at such time and (ii) borrowings under the
Revolving Commitments on the Closing Date shall not exceed the Initial Revolving Borrowing. During the Commitment Period, the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. Revolving Loans may from time to time be EurodollarSOFR Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.13.
The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination Date.
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2.5 Procedure
for Revolving Borrowing. The Borrower may borrow under the Revolving Commitments during the Commitment Period on any Business
Day; provided that the Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing (which must be
received by the Administrative Agent prior to 11:00 A.M. (a) three (3) U.S.
Government Securities Business Days prior to the requested Borrowing Date (which may be the anticipated Closing Date
with respect to the Initial Revolving Borrowing), in the case of EurodollarSOFR Loans,
or (b) one (1) Business Day prior to the requested Borrowing Date (which may be the anticipated Closing Date), in the case
of ABR Loans) (provided that any such Notice of Borrowing of ABR Loans under the Revolving Facility to finance payments under Section 3.5(a) may
be given not later than 11:00 A.M. on the date of the proposed borrowing), in each such case specifying (i) the amount and
Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date, (iii) in the case of EurodollarSOFR Loans,
the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor, and (iv)
instructions for remittance of the proceeds of the Loans to be borrowed; provided that (a) the effectiveness of a Notice of
Borrowing delivered in advance of the anticipated Closing Date may be conditioned on the consummation of the Acquisition and
(b) Revolving Loans made on the Closing Date or any of the three (3) Business Days following the Closing Date may only
consist of ABR Loans unless the Borrower delivers a funding indemnity letter, in form and substance reasonably acceptable to the
Administrative Agent, not less than three (3) Business Days prior to the date of the borrowing of such Revolving Loans. Each
borrowing under the Revolving Commitments shall be in minimum amounts equal to (A) $100,000 with respect to ABR Loans and
(B) $1,000,000 with respect to EurodollarSOFR Loans,
or, in each case, a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less
than such required minimum amount, such lesser amount); provided that the Swingline Lender may request, on behalf of the Borrower,
borrowings under the Revolving Commitments that are ABR Loans in other amounts pursuant to Section 2.7. Upon receipt of
any such Notice of Borrowing from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each
Revolving Lender will make the amount of its pro rata share of each such borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 P.M. on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative
Agent crediting such account as is designated in writing to the Administrative Agent by the Borrower with the amount specified in
the Notice of Borrowing in immediately available funds.
2.6 Swingline Commitment. Subject to the terms and conditions hereof, the Swingline Lender agrees to make available a portion of the credit accommodations otherwise available to the Borrower under the Revolving Commitments from time to time during the Commitment Period by making swing line loans (each a “Swingline Loan” and, collectively, the “Swingline Loans”) to the Borrower; provided that (a) the aggregate principal amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in effect, (b) the Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate amount of the Available Revolving Commitments would be less than zero or an Overadvance would exist, and (c) the Borrower shall not use the proceeds of any Swingline Loan to refinance any then outstanding Swingline Loan. During the Commitment Period, the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.
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2.7 Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans the Borrower shall give the Swingline Lender irrevocable telephonic or electronic notice (which notice must be received by the Swingline Lender not later than 12:00 P.M. on the proposed Borrowing Date) confirmed promptly in writing by a Notice of Borrowing, specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date (which shall be a Business Day during the Commitment Period), and (iii) instructions for the remittance of the proceeds of such Loan. Each borrowing under the Swingline Commitment shall be in an amount equal to $100,000 or a whole multiple of $100,000 in excess thereof. Promptly thereafter, on the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall make available to the Borrower an amount in immediately available funds equal to the amount of the Swingline Loan to be made by depositing such amount in the account designated in writing to the Administrative Agent by the Borrower. Unless a Swingline Loan is sooner refinanced by the advance of a Revolving Loan pursuant to Section 2.7(b) (subject to Section 2.7(c)), such Swingline Loan shall be repaid by the Borrower no later than the earlier of (x) ten (10) Business Days after the advance of such Swingline Loan and (y) the Revolving Termination Date.
(b) The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), on one Business Day’s telephonic notice given by the Swingline Lender to the Borrower and the Revolving Lenders no later than 12:00 P.M. and promptly confirmed in writing, request each Revolving Lender to make, and each Revolving Lender hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving Lender’s Revolving Percentage of the aggregate amount of such Swingline Loan (each a “Refunded Swingline Loan”) outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving Lender shall make the amount of such Revolving Loan available to the Administrative Agent at the Funding Office in immediately available funds, not later than 10:00 A.M. one Business Day after the date of such notice. The proceeds of such Revolving Loan shall immediately be made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loan. The Borrower irrevocably authorizes the Swingline Lender with notice to the Borrower to charge the Borrower’s accounts with the Administrative Agent (up to the amount available in each such account) immediately to pay the amount of any Refunded Swingline Loan to the extent amounts received from the Revolving Lenders are not sufficient to repay in full such Refunded Swingline Loan.
(c) If prior to the time that the Borrower has repaid the Swingline Loans pursuant to Section 2.7(a) or a Revolving Loan has been made pursuant to Section 2.7(b), one of the events described in Section 8.1(f) shall have occurred or if for any other reason, as determined by the Swingline Lender in its sole discretion, Revolving Loans may not be made as contemplated by Section 2.7(b), each Revolving Lender shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in Section 2.7(b) or on the date requested by the Swingline Lender (with at least one (1) Business Days’ notice to the Revolving Lenders), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation Amount”) equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of the aggregate principal amount of the outstanding Swingline Loans that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received from any Revolving Lender such Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Lender will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.
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(e) Each Revolving Lender’s obligation to make the Loans referred to in Section 2.7(b) and to purchase participating interests pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Revolving Lender or the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other Revolving Lender, or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.
(f) The Swingline Lender may resign at any time by giving 30 days’ prior notice to the Administrative Agent, the Lenders and the Borrower. Following such notice of resignation from the Swingline Lender, the Swingline Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the Required Lenders and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of the Swingline Lender. From and after the effective date of any such resignation or replacement, (i) the successor Swingline Lender shall have all the rights and obligations of the Swingline Lender under this Agreement with respect to Swingline Loans to be made by it thereafter and (ii) references herein and in the other Loan Documents to the term “Swingline Lender” shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the resignation of the Swingline Lender hereunder, the resigning Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of the Swingline Lender under this Agreement and the other Loan Documents with respect to only Swingline Loans made by it prior to such resignation that have not been repaid, but shall not be required to make any additional Swingline Loans.
2.8 Overadvances.
(a) If at any time or for any reason either the aggregate amount of the Total Revolving Extensions of Credit exceeds the amount of the Total Revolving Commitments then in effect, (any such excess, an “Overadvance”), the Borrower shall, if the amount of such Overadvance is (a) equal or greater than $1,000,000, immediately pay the full amount of such Overadvance to the Administrative Agent, on demand, or (b) less than $1,000,000, within one (1) Business Day after the receipt of a request by the Administrative Agent therefor, pay the full amount of such Overadvance to the Administrative Agent for application against the Revolving Extensions of Credit in accordance with the terms hereof.
(b) [Reserved].
2.9 Fees.
(a) Fee Letter. The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in the Fee Letter and to perform any other obligations contained therein.
(b) Commitment Fee. As additional compensation for the Revolving Commitments, the Borrower shall pay to the Administrative Agent for the account of the Lenders, in arrears, on the first day of each quarter prior to the Revolving Termination Date and on the Revolving Termination Date, a fee for the Borrower’s non-use of available funds in an amount equal to the Commitment Fee Rate per annum multiplied by the difference between (x) the Total Revolving Commitments (as they may be reduced from time to time) and (y) the average for the period of the daily closing balance of the Total Revolving Extensions of Credit (excluding in respect of Swingline Loans).
(c) Fees Nonrefundable. Except as set forth in the Fee Letter, all fees payable under this Section 2.9 shall be fully earned on the date paid and nonrefundable.
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2.10 Termination or Reduction of Commitments.
The
Borrower shall have the right, without penalty or premium, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving
Commitments; provided that no such termination or reduction of the Revolving Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Loans and Swingline Loans to be made on the effective date thereof, the Total
Revolving Extensions of Credit would exceed the Available Revolving Commitments. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect; provided
further, if in connection with any such reduction or termination of the Revolving Commitments a EurodollarSOFR Loan
is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.21. The Borrower shall have the right, without penalty or premium, upon not less than three
Business Days’ notice to the Administrative Agent, to terminate the L/C Commitments or, from time to time, to reduce the
amount of the L/C Commitments; provided that no such termination or reduction of L/C Commitments shall be permitted if, after
giving effect thereto, the Total L/C Commitments shall be reduced to an amount that would result in the aggregate L/C Exposure
exceeding the Total L/C Commitments (as so reduced). Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the L/C Commitments then in effect.
2.11 Optional
Loan Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent no later than 11:00 A.M. three (3) Business Days
prior thereto, in the case of EurodollarSOFR Loans,
and no later than 11:00 A.M. one (1) Business Day prior thereto, in the case of ABR Loans, which notice shall specify the
date and amount of the proposed prepayment; provided that if a EurodollarSOFR Loan
is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.21; provided further that if such notice of prepayment indicates that such prepayment is to
be funded with the proceeds of a refinancing, such notice of prepayment may be revoked if the financing is not consummated.
Prepayments made pursuant to this Section 2.11 on or prior to the 2022 Audited Financial Statement Delivery Date shall be
applied to the prepayment of installments due in respect of the Term Loans in inverse order of maturity (including to the bullet
payment on the Term Loan Maturity Date), and prepayments made pursuant to this Section 2.11 thereafter shall be applied to the
prepayment of installments due in respect of the Term Loans in direct order of maturity (unless otherwise directed by the Borrower),
in accordance with Sections 2.3 and 2.18(b)
Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an aggregate principal amount of $100,000 or a whole multiple thereof. The foregoing provisions set forth in this Section 2.11 will not apply with respect to any Discounted Prepayment governed by Section 2.29 or to any assignments to Holdings, the Borrower or any Subsidiary made pursuant to 10.6(h).
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2.12 Mandatory Prepayments.
(a) Without duplication of Section 2.12(b), if any Indebtedness shall be incurred by any Group Member which constitutes a Junior Debt Incurrence Event, an amount equal to 50% of the cash proceeds (net of (i) costs and fees associated with derivative transactions (including, without limitation, hedging transactions), the aggregate amount of share repurchases made with the proceeds of such Junior Debt Incurrence Event and permitted by Section 7.6(k), attorneys’ fees, accountants’ fees, investment banking fees, underwriting discounts and commissions and other customary costs, fees and expenses actually incurred in connection therewith and net of taxes paid and the Borrower’s reasonable and good faith estimate of income, franchise, sales, and other applicable taxes required to be paid by any Group Member in connection with such Junior Debt Incurrence Event and (ii) other amounts reasonably acceptable to the Administrative Agent) thereof shall be applied on the date of such incurrence toward the prepayment of the Term Loans and other amounts as set forth in Section 2.12(e).
(b) Without duplication of Section 2.12(a), if any Indebtedness shall be incurred by any Group Member (excluding any Indebtedness incurred in accordance with Section 7.2 (other than Credit Agreement Refinancing Indebtedness)), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such incurrence toward the prepayment of the Term Loans and other amounts as set forth in Section 2.12(e).
(c) If on any date any Group Member shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered within three Business Days after receipt thereof, such Net Cash Proceeds shall be applied after such third Business Day toward the prepayment of the Loans and other amounts as set forth in Section 2.12(e); provided that notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Loans and other amounts as set forth in Section 2.12(e).
(d) If, for any fiscal year of the Borrower commencing after the end of the fiscal year ending December 31, 2021, there shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow Application Date, apply the difference of 50% of such Excess Cash Flow minus the aggregate amount of any voluntary prepayments (including Discounted Prepayments made pursuant to Section 2.29 and assignments to Holdings, the Borrower or any Subsidiary made pursuant to Section 10.6(h), with the amount of such prepayment being equal to the amount actually paid by the Borrower (or Holdings or any Subsidiary, as applicable); provided, that, with respect to the open market purchase made pursuant to Section 10.6(h)(i) on the Third Amendment Effective Date, Excess Cash Flow shall not be reduced by the portion of such open market purchase funded with the proceeds of the Third Amendment Term Loan) of the Term Loans or to the extent the Revolving Commitment is permanently reduced by an amount equal to such payment, any voluntary prepayments of the Revolving Loans, made during such year; provided that such percentage shall be reduced to (i) 25% if the Consolidated Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 3.00 to 1.00 but greater than 2.00 to 1.00 and (ii) 0% if the Consolidated Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 2.00 to 1.00. Each such prepayment shall be made on a date (each an “Excess Cash Flow Application Date”) occurring no later than the earliest of three Business Days after (i) the date on which the financial statements of Holdings referred to in Section 6.1(a), for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Lenders, and (ii) the date such financial statements are actually delivered.
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(e) Amounts to be applied in connection with prepayments made pursuant to (i) this Section 2.12 (other than Section 2.12(a)) shall be applied to the prepayment of installments due in respect of the Term Loans in direct order of maturity for the next four scheduled payments of Term Loans required under Section 2.3, and then ratably to the remaining scheduled installments due in respect of the Term Loans in accordance with Sections 2.3 and 2.18(b); and (ii) Section 2.12(a) shall be applied to the prepayment of installments due in respect of the Term Loans in inverse order of maturity (including to the bullet payment on the Term Loan Maturity Date);
provided that any Term Lender may decline any such prepayment made pursuant to this Section 2.12 (other than any prepayment made with the proceeds of Credit Agreement Refinancing Indebtedness) (the aggregate amount of all such prepayments declined in connection with any particular prepayment, collectively, the “Declined Amount”), in which case the Declined Amount shall be distributed first, to the prepayment, on a pro rata basis, of the Term Loans held by Term Lenders that have elected to accept such Declined Amounts; second, to the extent of any residual, if no Term Loans remain outstanding, to the prepayment of the Revolving Loans in accordance with Section 2.15(c) (with no corresponding permanent reduction in the Revolving Commitments); third, to the extent of any residual, if no Term Loans or Revolving Loans remain outstanding, to the deposit of an amount in cash (in an amount not to exceed 105% of the then existing L/C Exposure) in a cash collateral account for the benefit of the L/C Lenders on terms and conditions satisfactory to the Issuing Lender; and fourth, to the extent of any residual, retained by the Borrower. Each prepayment of the Loans under this Section 2.12 (except in the case of Revolving Loans that are ABR Loans and Swingline Loans, in the event all Revolving Commitments have not been terminated) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. The Borrower shall deliver to the Administrative Agent and each Term Lender notice of each prepayment of Term Loans in whole or in part pursuant to this Section 2.12 not less than three (3) Business Days prior to the date such prepayment shall be made (each, a “Mandatory Prepayment Date”). Such notice shall set forth (i) the Mandatory Prepayment Date, (ii) the aggregate amount of such prepayment and (iii) the options of each Term Lender to (x) decline or accept its share of such prepayment and (y) to accept Declined Amounts. Any Term Lender that wishes to exercise its option to decline such prepayment or to accept Declined Amounts shall notify the Administrative Agent by facsimile not later than one (1) Business Day prior to the Mandatory Prepayment Date.
(f) The Borrower shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.12, a certificate signed by a Responsible Officer setting forth in reasonable detail the calculation of the amount of such prepayment or reduction.
(g) No prepayment fee or other penalty or premium shall be payable in respect of any mandatory prepayments made pursuant to this Section 2.12.
(h) Notwithstanding any provisions of this Section 2.12 to the contrary, to the extent the Borrower determines, acting in good faith, that any repatriation or distribution (or deemed repatriation or deemed distribution for tax purposes) to the Borrower of Net Cash Proceeds or Excess Cash Flow described in this Section 2.12 that are attributable to any Subsidiary would reasonably be expected to result in material adverse Tax consequences to any Group Member (as determined by the Borrower in good faith), or would be prohibited or restricted by applicable Requirements of Law, or applicable Operating Documents or material agreements of such Subsidiary, the applicable Net Cash Proceeds or Excess Cash Flow shall not be required to be so repatriated or distributed and the relevant amounts shall not be required to be prepaid in accordance with this Section 2.12. To the extent that the relevant adverse Tax consequences, restrictions imposed by Requirements of Law or restrictions set forth in the applicable Operating Documents or material agreements, in each case, would no longer be applicable at any time in the twelve (12) month period following the day that the relevant amounts would otherwise be required to be prepaid pursuant to this Section 2.12, the Borrower shall cause such amounts to be prepaid as and to the extent otherwise required pursuant to this Section 2.12. The Borrower will use commercially reasonable efforts to avoid or mitigate any material adverse Tax consequences, restrictions imposed by Requirements of Law and restrictions set forth in the applicable Operating Documents or material agreements, in each case, that would otherwise limit an obligation of the Borrower to make a mandatory prepayment in accordance with the terms of this Section 2.12.
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2.13 Conversion and Continuation Options.
(a) The
Borrower may elect from time to time to convert EurodollarSOFR Loans
to ABR Loans by giving the Administrative Agent prior irrevocable notice in a Notice of Conversion/Continuation of such election no
later than 11:00 A.M. on the Business Day preceding the proposed conversion date; provided that, if any such conversion of EurodollarSOFR Loans
shall occur on a date other than the last day of an Interest Period with respect thereto, the Borrower shall pay any amounts owing
pursuant to Section 2.21. The Borrower may elect from time to time to convert ABR Loans to EurodollarSOFR Loans
by giving the Administrative Agent prior irrevocable notice in a Notice of Conversion/Continuation of such election no later than
11:00 A.M. on the third U.S.
Government Securities Business Day preceding the proposed conversion date (which notice shall specify the length of
the initial Interest Period therefor); provided that no ABR Loan may be converted into a EurodollarSOFR Loan
when any Event of Default has occurred and is continuing. Upon receipt of any such notice, the Administrative Agent shall promptly
notify each relevant Lender thereof.
(b) Any
EurodollarSOFR
Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower
giving irrevocable notice in a Notice of Conversion/Continuation to the Administrative Agent, in accordance with the applicable provisions
of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loans; provided that no EurodollarSOFR
Loan may be continued as such when any Event of Default has occurred and is continuing; provided further that if
the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant
to the preceding proviso, such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period.
Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.
2.14 Limitations
on EurodollarSOFR
Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations
of EurodollarSOFR
Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that,
(a) after giving effect thereto, the aggregate principal amount of the EurodollarSOFR
Loans comprising each EurodollarSOFR
Tranche shall be equal to $1,000,000 or a whole multiple of $100,000 in excess thereof, and (b) no more than seven
(7) EurodollarSOFR
Tranches shall be outstanding at any one time.
2.15 Interest Rates and Payment Dates.
(a) Each EurodollarSOFR Loan
shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to (i) the
Eurodollar RateTerm
SOFR determined for such day plus (ii) the Applicable Margin for EurodollarSOFR Loans.
(b) Each ABR Loan (including any Swingline Loan) shall bear interest at a rate per annum equal to (i) the ABR plus (ii) the Applicable Margin for ABR Loans.
(c) During the continuance of an Event of Default, at the request of the Required Lenders, all overdue payments of principal and interest on outstanding Loans shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2.00% (the “Default Rate”); provided that the Default Rate shall apply to such overdue amounts automatically and without any Required Lender consent therefor upon the occurrence of any Event of Default arising under Section 8.1(a) or (f).
(d) Interest on the outstanding principal amount of each Loan shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to Section 2.15(c) shall be payable from time to time on demand.
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2.16 Computation of Interest and Fees.
(a) Interest
and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect
to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of each determination of a Eurodollar RateTerm
SOFR. Any change in the interest rate on a Loan resulting from a change in the ABR or
the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective
date and the amount of each such change in interest rate.
(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 quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.16(a).
2.17 Inability to Determine Interest Rate. Subject to Section 2.17(c), if, on or prior to the first day of any Interest Period for any SOFR Loan
(a) Temporary
Unavailability of LIBOR. If prior to the first day of any Interest Period, the Administrative
Agent shall have determined (which determination shall be conclusive and binding upon the Borrower)
in connection with any request for a Eurodollar Loan or a conversion to or a continuation thereof that, by reason of circumstances affecting
the relevant market or the Eurodollar Rate being otherwise unavailable, (a) Dollar deposits are not being offered to banks in the
London interbank market for the applicable amount and Interest Period of such requested Loan or conversion or continuation, as applicable,
(b) adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or (c) the Eurodollar
Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, then, in any such case (a), (b) or
(c), the Administrative Agent shall promptly notify the Borrower and the relevant Lenders thereof as soon as practicable thereafter.
Any such determination shall specify the basis for such determination and shall, in the absence of manifest error, be conclusive and
binding for all purposes. Thereafter, until such notice has been withdrawn by the Administrative Agent, (x) any Eurodollar Loans
under the relevant Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans
under the relevant Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued
as ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current
Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility
to Eurodollar Loans.
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(a) the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof, or
(b) the Required Lenders determine that for any reason in connection with any request for a SOFR Loan or a conversion thereto or a continuation thereof that Term SOFR for any requested Interest Period with respect to a proposed SOFR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, and the Required Lenders have provided notice of such determination to the Administrative Agent,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Upon notice thereof by the Administrative Agent to the Borrower, any obligation of the Lenders to make or maintain SOFR Loans, and any right of the Borrower to continue SOFR Loans or to convert ABR Loans to SOFR Loans shall be suspended (to the extent of the affected Interest Periods) until the Administrative Agent (with respect to clause (b), at the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, (i) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to ABR Loans in the amount specified therein and (ii) any outstanding affected SOFR Loans will be deemed to have been converted into ABR Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 2.21. Subject to Section 2.17(c), if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the interest rate on ABR Loans shall be determined by the Administrative Agent without reference to clause (c) of the definition of “ABR” until the Administrative Agent revokes such determination.
(c) (b) Benchmark
Replacement Setting.
(i) Benchmark
Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event or
an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the
Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement
is determined in accordance with clause (1) or (2a)
of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace
such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings
without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if
a Benchmark Replacement is determined in accordance with clause (3b)
of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace
such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New
York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders
without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document (other
than Benchmark Replacement Conforming Changes made in accordance with clause (ii) below) so long as the Administrative
Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required
Lenders. If
the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a monthly basis.
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(ii) Benchmark
Replacement Conforming Changes. In connection with the use,
administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to
make Benchmark Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan 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 or any other Loan Document.
(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, (Bi)
the implementation of any Benchmark Replacement, and
(Cii)
the effectiveness of any Benchmark Replacement Conforming Changes,
(D).
The Administrative Agent will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark
pursuant to clauseSection 2.17(c)(iv) below
and (Ey)
the commencement or conclusion of any Benchmark Unavailability Period, provided that the failure
to give such notice under this clause (E) shall not affect the commencement or conclusion of anyof
any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent
or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.17(bc),
including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance
or date and any decision to take or refrain from taking any action or any selection,
will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other
party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.17(bc).
(iv) Benchmark
Unavailability Period. Upon the Borrower’s receipt of notice of the
commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation
of any Loans to be made, converted or continued with respect to the then-current
Benchmark 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 ABR Loans. During any
Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is
not an Available Tenor, (i) the obligation of the Lenders to make or maintain Loans with
respect to such Benchmark shall be suspended, (ii) any request for a Borrowing of, conversion to or continuation of Loans with respect
to such Benchmark shall be ineffective and will be deemed to have been a request for a Borrowing
of or conversion to ABR Loans, and (iii) the component
of the ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination
of the ABR.
(iv) (v) Unavailability
of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection
with the implementation of a Benchmark Replacement (including Term SOFR after a Term SOFR Transition
Event)), (i) if the then-current Benchmark is a term rate (including the
Term SOFR or USD LIBORReference
Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that
publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the administrator
of such Benchmark or the regulatory supervisor for the administrator of such Benchmark has provided a public statement
or publication of information announcing that any tenor for such Benchmark is not
or will be no longernot
be representative, then the Administrative Agent may modify the definition of “Interest Period” (or
any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative
tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen
or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement
that it is not
or will no longernot
be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition
of “Interest Period” (or
any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed
tenor.
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(v) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of SOFR 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 ABR Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the ABR.
(vi) Term
SOFR Transition Event. Notwithstanding anything to the contrary herein or in any other Loan
Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date
have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement
will replace the then-current Benchmark for all purposes hereunder and under any other Loan Document in respect of such Benchmark setting
and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any
other Loan Document; provided that, this clause (f) shall not be effective unless the Administrative Agent has delivered to the
Lenders and the Borrower a Term SOFR Notice. For the avoidance of doubt, after consultation with the Borrower, the Administrative Agent
shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion.
(vii) Notwithstanding
anything herein or in any Loan Document to the contrary, the Administrative Agent and the Borrower shall cooperate in good faith and
use commercially reasonable efforts to satisfy any applicable requirements under proposed or final U.S. Treasury Regulations or other
Internal Revenue Service guidance such that the use of an alternate rate of interest pursuant to this Section 2.17
shall not result in a deemed exchange of any Loan under Section 1001 of the Code.
2.18 Pro Rata Treatment and Payments.
(a) Except as set forth in any Incremental Amendment, Extension Amendment or Refinancing Amendment, each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of the Commitments shall be made pro rata according to the respective Term Percentages, L/C Percentages or Revolving Percentages, as the case may be, of the relevant Lenders.
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(b) Except as otherwise provided herein (including as set forth in any Incremental Amendment, Extension Amendment or Refinancing Amendment), each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders. Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Except as otherwise provided in any Extension Amendment or Refinancing Amendment, each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders.
(d) Subject
to Section 2.20(a), all payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff and shall
be made prior to 11:00 A.M. on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding
Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. Any payment received by the Administrative Agent after 11:00 A.M. shall be deemed received
on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment hereunder (other than
payments on the EurodollarSOFR
Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a EurodollarSOFR
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. In the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to the proposed date of any borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date in accordance with Section 2, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not in fact made available to the Administrative Agent by the required time on the Borrowing Date therefor, such 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 on which such amount is made available to the Borrower but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, a rate equal to the greater of (A) the Federal Funds Effective Rate and (B) 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 rate per annum applicable to ABR Loans under the relevant Facility. 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.
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(f) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, their respective pro rata shares of the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Nothing herein shall be deemed to limit the rights of Administrative Agent or any Lender against the Borrower.
(g) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Section 2, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable extension of credit set forth in Section 5.1 or Section 5.2 are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(h) The obligations of the Lenders hereunder to (i) make Term Loans, (ii) make Revolving Loans, (iii) fund its participations in L/C Disbursements in accordance with its respective L/C Percentage, (iv) fund its respective Swingline Participation Amount of any Swingline Loan, and (v) make payments pursuant to Section 9.7, as applicable, are several and not joint. The failure of any Lender to make any such Loan, to fund any such participation or to make any such payment under Section 9.7 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.7.
(i) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(j) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest, fees, and Overadvances then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, fees, and Overadvances then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
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(k) If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or oth