Exhibit 10.20

Execution Version

AMENDMENT No. 4, dated as of August 13, 2020 (this “Amendment”), to the Credit Agreement, dated as of October 16, 2012 (as amended, restated, modified and supplemented from time to time prior to the effectiveness of this Amendment, including pursuant to Amendment No. 1, dated as of August 16, 2016, Amendment No. 2, dated as of September 29, 2016 and Amendment No. 3, dated as of January 13, 2017, the “Credit Agreement”), among LESLIE’S POOLMART, INC., a Delaware corporation (the “Parent Borrower”), LESLIE’S HOLDINGS, INC., a Delaware corporation (“Holdings”), the Subsidiary Borrowers from time to time party thereto, the several banks and other financial institutions or entities from time to time party thereto (the “Lenders”), BANK OF AMERICA, N.A., as administrative agent and collateral agent (in such capacity, including any successor thereto, the “Administrative Agent”) and U.S. Bank National Association, as co-collateral agent (in such capacity, including any successor thereto, the “Co-Collateral Agent”), by and among the Parent Borrower, the Subsidiary Borrowers, the Guarantors party hereto, each Lender, the Administrative Agent and the Co-Collateral Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, the parties desire to amend the Credit Agreement on the terms set forth herein;

NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

Section 1. Amendment. The Credit Agreement is, effective as of the Amendment No. 4 Effective Date (as defined below), hereby amended to (i) delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto (the “Amended Credit Agreement”) and (ii) replace the Schedules referenced therein in their entirety with the Schedules annexed hereto as Exhibit B.

Section 2. Representations and Warranties, No Default. The Borrowers hereby represent and warrant that as of the date hereof (i) no Default or Event of Default exists and is continuing and (ii) all representations and warranties of the Loan Parties contained in the Credit Agreement and the Loan Documents are true and correct in all material respects (except for representations and warranties that are already qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) on and as of the date hereof, as though made on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (except for representations and warranties that are already qualified by materiality, in which case such representations and warranties shall be true and correct in all respects) as of such earlier date.

Section 3. Effectiveness. This Amendment shall become effective on the date that the following conditions have been satisfied or waived (the “Amendment No. 4 Effective Date”):

(1) the Administrative Agent shall have received executed signature pages of this Amendment, from each Loan Party, the Administrative Agent and each Lender;

(2) the Administrative Agent shall have received a Note executed by the Borrowers in favor of each Lender that has requested a Note at least three Business Days prior to the Amendment No. 4 Effective Date;

(3) the Administrative Agent shall have received a legal opinion of Kirkland & Ellis LLP, counsel to the Loan Parties, which opinion shall be in form and substance reasonably satisfactory to the Administrative Agent;

(4) the Administrative Agent shall have received a solvency certificate signed by the Chief Financial Officer (or other officer with substantially similar responsibilities) of the Parent Borrower certifying as to the solvency (as set forth in Section 5.16 of the Amended Credit Agreement) of the Borrowers and their Subsidiaries, on a consolidated basis, on the Amendment No. 4 Effective Date;

(5) the Administrative Agent shall have received a certificate of each Loan Party, dated the Amendment No. 4 Effective Date, substantially in the form of Exhibit I to the Amended Credit Agreement, with appropriate insertions and attachments;

(6) the Administrative Agent shall have received good standing certificates of each Loan Party from its jurisdiction of organization;

(7) the Administrative Agent shall have received a certificate signed by a Responsible Officer of the Parent Borrower certifying that (i) the conditions specified in Sections 2 hereof have been satisfied and (ii) since September 28, 2019, no Material Adverse Effect has occurred;

(8) the Administrative Agent shall have received a Borrowing Base Certificate for the month ended July, 2020, and executed by a Responsible Officer of the Parent Borrower. After giving effect to (i) any funding of the Loans on the Amendment No. 4 Effective Date and (ii) 2all Letters of Credit to be issued at, or immediately subsequent to, the Amendment No. 4 Effective Date, Excess Availability shall not be less than 50% of the outstanding Line Cap;

(9) arrangements reasonably satisfactory to the Administrative Agent shall have been made for the execution, delivery and filing of such Collateral Documents, including, for the avoidance of doubt, the filing of any agreements covering Intellectual Property with the applicable filing office;

(10) (i) upon the reasonable request of any Lender made at least five (5) days prior to the Amendment No. 4 Effective Date, the Parent Borrower shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the PATRIOT Act, in each case at least three (3) days prior to the Amendment No. 4 Effective Date and (ii) at least three (3) days prior to the Amendment No. 4 Effective Date, any Loan Party that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall have delivered, to each Lender that so requests at least five (5) days prior to the Amendment No. 4 Effective Date, a Beneficial Ownership Certification in relation to such Loan Party;

(11) the Administrative Agent shall have received an executed (i) Joinder Agreement, dated as of the date hereof, by and among Horizon Spa & Pool Parts, Inc., a Delaware corporation (“Horizon”) and the Administrative Agent, and (ii) Assumption Agreement, dated as of the date hereof, by and among Horizon and the Administrative Agent; and

 

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(12) the Borrower shall have paid, or concurrently herewith shall pay, to the Administrative Agent and the Lead Arranger (as defined in the Amended Credit Agreement) such fees as have separately been agreed by the Parent Borrower, the Administrative Agent and the Lead Arranger (including legal fees of the Administrative Agent and the Lead Arranger to the extent an invoice therefor is received by the Parent Borrower at least three (3) business days prior to the Amendment No. 4 Effective Date).

Section 4. Post-Closing Covenant. Within 30 days after the Amendment No. 4 Effective Date (as such date may be extended by the Administrative Agent in its sole discretion, which extension may be given by electronic mail) the Parent Borrower shall have delivered insurance endorsements, naming the Administrative Agent, on behalf of the Lenders, and the Co-Collateral Agent as an additional insured or co-lender’s loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitute Collateral.

Section 5. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or any other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 6. Applicable Law. The provisions of Section 11.14 and Section 11.15 of the Amended Credit Agreement shall apply to this Amendment mutatis mutandis.

Section 7. Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

Section 8. Effect of Amendment. Except as expressly set forth herein, (i) this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Co-Collateral Agent or any other Person, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of either such agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement as amended hereby, or any other Loan Document as amended hereby, is hereby ratified and re-affirmed in all respects and shall continue in full force and effect. This Amendment shall constitute a Loan Document for purposes of the Credit Agreement and from and after the Amendment No. 4 Effective Date, all references to the Credit Agreement in any Loan Document and all references in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, shall, unless expressly provided otherwise, refer to the Amended Credit Agreement. Each of the Loan Parties hereby consents to this Amendment and confirms that all obligations of such Loan Party under the Loan Documents to which such Loan Party is a party shall continue to apply to the Amended Credit Agreement.

Section 9. Reaffirmation. Each of the Loan Parties hereby consents to the amendment of the Credit Agreement described in Section 1 of this Amendment and hereby confirms its respective guarantees, pledges, grants of security interests, subordinations and other obligations, as applicable, under and subject to the terms of each of the Loan Documents to which it is party, and confirms, agrees and acknowledges that, notwithstanding the consummation of this Amendment, such guarantees, pledges, grants of security interests, subordinations, any and all Liens previously granted to the Administrative Agent, for the benefit of the Secured Parties, and other obligations, and the terms of each of the Loan Documents to which it is a party, except as expressly modified by this Amendment, are not affected or impaired in any manner whatsoever and shall continue to be in full force and effect and shall

 

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also guarantee and secure all obligations as amended and reaffirmed pursuant to the Credit Agreement and this Amendment. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement, as modified by this Amendment, or any other Loan Document is hereby ratified and re-affirmed in all respects and shall continue in full force and effect. From and after the effective date of this Amendment, all references to the Credit Agreement in any Loan Document shall, unless expressly provided otherwise, refer to the Amended Credit Agreement.

[Remainder of page left intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

[Signature Page to ABL Amendment No. 4]

 

[Signature Page to ABL Amendment No. 4]

 

[Signature Page to ABL Amendment No. 4]

 

[Signature Page to ABL Amendment No. 4]

EXHIBIT A

Amended Credit Agreement

See attached.

EXHIBIT A

CREDIT AGREEMENT

Dated as of October 16, 2012,

As Amendedas amended by

Amendment No. 1, dated as of August 16, 2016,

Amendment No. 2, dated as of September 29, 2016

and

Amendment No. 3, dated as of January 13, 2017

and

Amendment No. 4, dated as of August 13, 2020

among

LESLIE’S POOLMART, INC.,

as the Parent Borrower,

LESLIE’S HOLDINGS, INC.,

as Holdings,

Thethe Subsidiary Borrowers named herein,

BANK OF AMERICA, N.A. ,

as Administrative Agent,

U.S. BANK NATIONAL ASSOCIATION,

as Co-Collateral Agent and Syndication Agent,

and

The Other Lenders Party Hereto

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

BOFA SECURITIES, INC.

and

U.S. BANK NATIONAL ASSOCIATION,

as Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

 

				Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01		Defined Terms			1
Section 1.02		Other Interpretive Provisions Terms Generally			4871
Section 1.03		Accounting Terms ; GAAP			4972
Section 1.04		Rounding Currencies			4972
Section 1.05		Times of Day			49
Section 1.06		Letter of Credit Amounts			50
Section 1.07  1.06		Joint and Several Liability of Borrowers for Obligations			5072
Section 1.07		Parent Borrower			73
Section 1.08		Parent Borrower Certain Calculations and Tests.			5073
Section 1.09		Administrative Agent and Co-Collateral Agent			5074
Section 1.10		Required Financial Statements			74
Section 1.11		Interest Rates			74
ARTICLE II
THE REVOLVING CREDIT COMMITMENTS AND CREDIT EXTENSIONS
Section 2.01		Revolving Credit Commitments			5175
Section 2.02		Termination or Reduction of Revolving Credit Commitments			5175
Section 2.03		[Reserved]			5276
Section 2.04		[Reserved]			5276
Section 2.05		Borrowings, Conversions and Continuations of Loans			5276
Section 2.06		Swing Line Commitment			5478
Section 2.07		Procedure for Swing Line Borrowing; Refunding of Swing Line Loans			5578
Section 2.08		Incremental Credit Extensions			5679
Section 2.09		Prepayments			5881
Section 2.10		Interest			5881
Section 2.11		Fees			5982
Section 2.12		Computation of Interest and Fees			6083
Section 2.13		Evidence of Debt			6083
Section 2.14		Payments Generally; Administrative Agent’s Clawback			6083
Section 2.15		Sharing of Payments by Lenders			6285
Section 2.16		Letters of Credit Commitment			6385
Section 2.17		Procedure for Issuance of Letter of Credit			6487
Section 2.18		L/C Fees and Other Charges			6587
Section 2.19		L/C Participations			6588
Section 2.20		Letters of Credit Reimbursement Obligation of the Borrowers			6789
Section 2.21		Letters of Credit Obligations Absolute			6789
Section 2.22		Letter of Credit Payments			6890
Section 2.23		Letter of Credit Applications			6890
Section 2.24		Defaulting Lender Adjustments			6890

 

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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01		Taxes			7092
Section 3.02		Illegality			7395
Section 3.03		Inability to Determine Rates			7495
Section 3.04		Increased Costs; Reserves on Eurodollar Rate Loans			7497
Section 3.05		Compensation for Losses			7699
Section 3.06		Mitigation Obligations; Replacement of Lenders			7799
Section 3.07		Survival			77100
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Section 4.01		Conditions to Effectiveness			77100
Section 4.02		Conditions to Each Extension of Credit			79
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01		Existence, Qualification and Power Organization; Powers			80103
Section 5.02		Authorization; No Contravention			80104
Section 5.03		Enforceability			86
Section 5.04		Governmental Authorization; Other Consents Approvals			81105
Section 5.04		Binding Effect			81
Section 5.05		Financial Statements; No Material Adverse Effect Title to Properties; Possession Under Leases			81105
Section 5.06		Litigation Subsidiaries			82106
Section 5.07		No Default Litigation; Compliance with Laws			82106
Section 5.08		Ownership of Property; Liens; Investments Federal Reserve Regulations			82106
Section 5.09		Environmental Compliance Investment Company Act			83107
Section 5.10		Insurance Financial Statements			84107
Section 5.11		Taxes Tax Returns			84107
Section 5.12		ERISA Compliance No Material Misstatements			84109
Section 5.13		Subsidiaries; Equity Interests; Loan Parties Environmental Matters			85113
Section 5.14		Margin Regulations; Investment Company Act Collateral Documents			85113
Section 5.15		Disclosure Location of Real Property and Leased Premises			85114
Section 5.16		Compliance with Laws Solvency			86114
Section 5.17		Intellectual Property; Licenses, Etc No Material Adverse Effect			86115
Section 5.18		Solvency Insurance			86115
Section 5.19		Labor Matters USA PATRIOT Act; FCPA; OFAC; Anti-Terrorism			86115
Section 5.20		Collateral Documents Intellectual Property; Licenses, Etc.			87116
Section 5.21		Indebtedness and Liens Employee Benefit Plans			87116

 

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Section 5.22		Licenses and Permits			87
Section 5.23		Status as Senior Debt			87
Section 5.24		Deposit Accounts; Credit Card Arrangements			87117
Section 5.25		USA PATRIOT Act; FCPA; OFAC; Anti-Terrorism			88
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.01		Financial Statements Existence; Businesses and Properties			89117
Section 6.02		Certificates; Other Information Insurance			90118
Section 6.03		Notices Taxes			93118
Section 6.04		Payment of Obligations Financial Statements			94118
Section 6.05		Preservation of Existence, Etc Litigation and Other Notices			94125
Section 6.06		Maintenance of Properties Compliance with Laws			94128
Section 6.07		Maintenance of Insurance Inspection Rights; Books			94128
Section 6.08		Compliance Use of Proceeds			95129
Section 6.09		Books and Records Compliance with Environmental Laws			96129
Section 6.10		Inspection Rights			96
Section 6.11		Use of Proceeds			96
Section 6.12		Covenant to Guarantee Obligations and Give Security			97129
Section 6.13		Compliance with Environmental Laws Further			98131
Section 6.14  6.12		Preparation of Environmental Reports			98131
Section 6.15		Further Assurances			99
Section 6.16		Designation as Senior Debt			99
Section 6.17  6.13		Cash Management			99132
Section 6.18  6.14		Physical Inventories			101133
Section 6.19		Compliance with Terms of Leaseholds			101
ARTICLE VII
NEGATIVE COVENANTS
Section 7.01		Liens Indebtedness			101134
Section 7.02		Indebtedness Liens			104138
Section 7.03		Investments Sale and Lease-Back Transactions			107147
Section 7.04		Fundamental Changes			108
Section 7.05		Dispositions			109
Section 7.06		Restricted Payments Investments, Loans and Advances			111147
Section  7.077.05		Change in Nature of Business Mergers			112153
Section 7.08
Section 7.06		Restricted Payments			117157
Section 7.07		Transactions with Affiliates			112161
Section 7.08		Business of the Borrowers and their Subsidiaries			165
Section 7.09		Burdensome Limitation on Payments and Modifications of Indebtedness; Modifications of Certificate of Incorporation, By Laws and Certain Other Agreements; etc.			113165
Section 7.10		Use of Proceeds Holdings Covenant			114169

 

 

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Section 7.11		Change in Fiscal Year			114
Section 7.12		Prepayments, Etc. of Indebtedness			114
Section 7.13		Amendment, Etc. of Term Loan Documents and Indebtedness			114
Section 7.14		Holding Company			114
Section 7.15		Swap Contracts			115
Section 7.16		Designation as Designated Senior Debt			115
Section 7.17		Deposit Accounts			115170
Section 7.18		Limitations on Sales and Leasebacks			115
Section 7.19  7.12		Minimum Consolidated Fixed Charge Coverage Ratio			115170
Section 7.20  7.13		Clean Down			115170
Section 7.14		Sanctions; Anti-Corruption Laws			170
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01		Events of Default			116171
Section 8.02		Right to Cure			118175
Section 8.03		Remedies upon Event of Default			119176
Section 8.04		Application of Funds			120176
ARTICLE IX
AGENTS
Section 9.01		Appointment and Authority			121177
Section 9.02		Rights as a Lender			122178
Section 9.03		Exculpatory Provisions			122178
Section 9.04		Reliance by Administrative Agent			123179
Section 9.05		Delegation of Duties			123179
Section 9.06		Resignation of Administrative Agent			124180
Section 9.07		Non-Reliance on Administrative Agent, Co-Collateral Agent and Other Lenders			125181
Section 9.08		No Other Duties, Etc.			126181
Section 9.09		Administrative Agent May File Proofs of Claim			126182
Section 9.10		Collateral and Guaranty Matters			127182
Section 9.11		Indemnification			128183
Section 9.12		Withholding Taxes			128184
Section 9.13		Reports and Financial Statements			129184
ARTICLE X
CONTINUING GUARANTY
Section 10.01		Guaranty			130185
Section 10.02		Rights of Lenders			130185
Section 10.03		Certain Waivers			130186
Section 10.04		Obligations Independent			131186

 

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Section 10.05		Subrogation			131186
Section 10.06		Termination; Reinstatement			131186
Section 10.07		Subordination			131186
Section 10.08		Stay of Acceleration			132187
Section 10.09		Condition of the Borrowers			132187
ARTICLE XI
MISCELLANEOUS
Section 11.01		Amendments, Etc			132187
Section 11.02		Notices; Effectiveness; Electronic Communications			134189
Section 11.03		No Waiver; Cumulative Remedies			136190
Section 11.04		Expenses; Indemnity; Damage Waiver			136191
Section 11.05		Payments Set Aside			138192
Section 11.06		Successors and Assigns			138193
Section 11.07		Treatment of Certain Information; Confidentiality			142196
Section 11.08		Right of Setoff			143197
Section 11.09		Interest Rate Limitation			143197
Section 11.10		Counterparts; Integration; Effectiveness			144197
Section 11.11		Survival of Representations and Warranties			144197
Section 11.12		Severability			144198
Section 11.13		Replacement of Lenders			144198
Section 11.14		Governing Law; Jurisdiction; Etc.			145198
Section 11.15		WAIVER OF JURY TRIAL			146199
Section 11.16		No Advisory or Fiduciary Responsibility			146200
Section 11.17		USA PATRIOT Act Notice			147200
Section 11.18		Electronic Execution of Assignments and Certain Other Documents			148201
Section 11.19		No Strict Construction			148201
Section 11.20		Attachments			148201
Section 11.21		Acknowledgement and Consent to Bail-In of EEA Financial Institutions			148201
Section 11.22		Acknowledgement Regarding Any Supported QFCs			202

 

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SCHEDULES
1.01		Revolving Credit Commitments
5.01		Loan Parties
5.03		Certain Authorizations
5.08(c
5.04		Governmental Approvals
5.05		Possession under Leases
5.06		Subsidiaries
5.11		Taxes
5.13		Environmental Matters
5.15(1)		Owned Material Real Property
5.08(d)(i)		Leased Real Property (Lessee)
5.08(d)(ii)
5.15(2)		Leased Material Real Property (Lessor)
5.08(e)		Existing Investments
5.10
5.18		Insurance
5.13		Subsidiaries and Other Equity Investments
5.17
5.20		Intellectual Property Rights
5.19		Labor Matters
5.24
5.22(a)		Deposit Accounts;
5.22(b)		Processing and Payment Arrangements
6.02
6.04		Certain Reporting Requirements
6.12		Subsidiary Guarantors
7.01(b)		Existing Liens
7.02		Existing Indebtedness
7.08
7.02(db)		Existing Liens
7.04(a)		Existing Investments
7.07		Transactions with Affiliates
7.09		Burdensome Agreements
11.02		Administrative Agent’s Office, Certain Addresses for Notices

 

EXHIBITS
		Form of
A-1		Committed Loan Notice
A-2		Conversion/Continuation Notice
B		Lender Addendum
C		Revolving Credit Note
D		Compliance Certificate[Reserved]
E		Assignment and Assumption
F		Guarantee and Collateral Agreement

 

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G H I J K L M N O		Opinion Matters – Counsel to Loan Parties Perfection Certificate I Closing Certificate J Collateral Access Agreement Customs Broker Agreement Borrowing Base Certificate Credit Card Notification[Reserved] Joinder Agreement United States Tax Compliance Certificate

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (this “Agreement”) is entered into as of October 16, 2012 and amended by Amendment No. 1, dated as of August 16, 2016, Amendment No. 2, dated as of September 29, 2016 and, Amendment No. 3, dated as of January 13, 2017 and Amendment No. 4, dated as of August 13, 2020, among LESLIE’S POOLMART, INC., a Delaware corporation (“Leslie’s” or the “Parent Borrower”), the Subsidiary Borrowers from time to time party hereto, LESLIE’S HOLDINGS, INC., a Delaware corporation (“Holdings”), each lender from time to time party hereto, BANK OF AMERICA, N.A., as Administrative Agent, and U.S. BANK NATIONAL ASSOCIATION, as Co-Collateral Agent.

PRELIMINARY STATEMENTS:

TheAs of the Amendment No. 4 Effective Date, the Borrowers have requested that the Lenders provide a $150,000,000200,000,000 asset based revolving credit facility to be used, in part, to (i) refinance the existing indebtedness incurred under that certain credit agreement, dated as of November 30, 2010 (the “Existing Credit Agreement”), by and among Leslie’s Poolmart, Inc., Leslie’s Holdings, Inc. and Bank of America, N.A., as Administrative Agent and the other lenders party thereto, as amended,this Agreement and (ii) for other general corporate purposes (including permitted acquisitions), and the Lenders have indicated their willingness to lend, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“ABL Priority Collateral” has the meaning ascribed to such term in the Intercreditor Agreement.

“ACH” means automated clearing house transfers.

“Acceptable Document of Title” means, with respect to any Inventory, a negotiable bill of lading or other Document (as defined in the UCC) that (a) is issued by a common carrier which is not an Affiliate of any Loan Party which is in actual possession of such Inventory, (b) reflects a Borrower as consignee or, if requested by the Administrative Agent after the occurrence and during the continuance of an Event of Default, names the Administrative Agent as consignee, and (c) is not subject to any Lien (other than Permitted Liens described in clauses (a), (db), (nl) and (w) of Section 7.017.02).

 

“Accounting Change” has the meaning ascribed thereto in Section 1.03.

“Accounts” means “accounts” as defined in the UCC, and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a policy of insurance issued or to be issued, (d) for a secondary obligation incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information contained on or for use with the card.

“ACH” means automated clearing house transfers.

“Acquisition” means the acquisition of Holdings pursuant to the Acquisition Agreement.

“Acquisition Agreement” means Agreement and Plan of Merger dated as of January 13, 2017 by and among Bubbles Buyer, Inc., Bubbles Merger Sub, Inc. and Holdings. .

“Adjustment Date” means the first day of each Fiscal Quarter, commencing with the Fiscal Quarter beginning December 30, 2012.

“Additional Lender” has the meaning ascribed thereto in Section 2.08(d).

“Adjustment” has the meaning specified in Section 3.03(c).

“Adjustment Date” means the first day of each fiscal quarter, commencing with the fiscal quarter beginning October 1, 2020.

“Administrative Agent” means Bank of America, N.A. in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent Fee Letter” means the Administrative Agent Fee Letter dated as of the ClosingAmendment No. 4 Effective Date by and between the Administrative Agent and the Parent Borrower.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 annexed to Amendment No. 4, or such other address or account as the Administrative Agent may from time to time notify to the Parent Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Advisor” has the meaning ascribed thereto in Section 11.06(d).

“Affiliate” means, with respect to any 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.

“Agent Parties” has the meaning ascribed thereto in Section 11.02(c).

“Aggregate Commitments” means the Revolving Credit Commitments of all the Lenders. “Aggregate Exposure” means, with respect to any Lender at any time, an amount equal to the aggregate amount of such Lender’s Revolving Credit Commitment then in effect or, if the Revolving Credit Commitments have been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.

“Agreement”means this Credit Agreementhas the meaning ascribed in the preamble.

 

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“AHYDO Catch-Up Payment” means any redemption, retirement or repayment made in respect of Indebtedness to the extent required to prevent such Indebtedness from being treated as an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Code and so that such Indebtedness shall be treated as not having “significant original issue discount” within the meaning of Section 163(i)(2) of the Code.

“Amendment No. 4” means Amendment No. 4 to this Agreement, dated as of August 13, 2020.

“Amendment No. 1” means4 Effective Date” has the meaning set forth in Amendment No. 1 to this Agreement, dated as of August 16, 20164.

“Amendment No. 1 Effective DateAnnual Financial Statements” has the meaning set forth in Amendment No. 1.

“Amendment No. 2” means Amendment No. 2 to this Agreement, dated as of September 29, 2016.

“Amendment No. 2 Effective Date” has the meaning set forth in Amendment No. 2.

“Amendment No. 3” means Amendment No. 3 to this Agreement, dated as of January 13, 2017.

“Amendment No. 3 Effective Date” has the meaning set forth in Amendment No. 3ascribed thereto in Section 6.04(a).

“Applicable Margin” means:

(a) From and after the ClosingAmendment No. 4 Effective Date until the first Adjustment Date no less than the percentages set forth in Level III of the pricing grid below; and

(b) From and after the first Adjustment Date and on each Adjustment Date thereafter, the Applicable Margin shall be determined from the pricing grid below based upon Average Daily Excess Availability for the most recently ended Fiscal Quarterfiscal quarter immediately preceding such Adjustment Date; provided that if any Borrowing Base Certificates are at any time restated or otherwise revised (including as a result of an audit) or if the information set forth in any Borrowing Base Certificates otherwise proves to be false or incorrect such that the Applicable Margin would have been higher than was otherwise in effect during any period, without constituting a waiver of any Default or Event of Default arising as a result thereof, interest due under this Agreement shall be immediately recalculated at such higher rate for any applicable periods and shall be due and payable on demand.

 

Level		Average Daily Excess Availability as a Percentage of the Aggregate Commitments		Eurodollar Rate Loans Applicable Margin		Base Rate Loans Applicable Margin
I		Greater than 66 2/350%		1.25%1.75%			0.25	%0.75%
II		Greater than 33 1/3% but		1.50%			0.50	%
		less than or equal to 66 2/3%
IIIII		Less than or equal to 33 1/350%		1.75%2.00%			0.75	%1.00%

 

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Notwithstanding anything to the contrary herein contained, upon the occurrence of an Event of Default for failure to deliver a Borrowing Base Certificate pursuant to Section 6.04(d), the Applicable Margin, at the option of the Administrative Agent or at the direction of the Required Lenders, shall be immediately increased to the percentages set forth in Level IIIII of the pricing grid above (even if the Average Daily Excess Availability requirements for a different Level have been met) for so long as such Event of Default is continuing.

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of such Lender’s Aggregate Exposure at such time to the sum of the Aggregate Exposures of all Lenders.

“Application” means an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit to be issued (which application shall be subject to Section 2.23).

“Appraised Value” means the net orderly liquidation value of the Borrowers’ Inventory (expressed as a percentage of the Cost of such Inventory) as determined from time to time by an independent appraiser engaged by the Administrative Agent.

“Approved Fund” means 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.

“Asset Sale” means any loss, damage, destruction or condemnation of, or any sale, transfer or other disposition (including any Sale and Lease-Back Transaction) to any Person of any asset or assets of the Parent Borrower or any Restricted Subsidiary.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means 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 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

 

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“Audited Financial Statements” means the audited consolidated balance sheet of the Parent Borrower and its Subsidiaries for the Fiscal YearsYear ended October 3, 2009, October 2, 2010 and October 1, 2011September 28, 2019, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such Fiscal YearsYear of the Parent Borrower and its Subsidiaries, including the notes thereto.

“Availability Reserves” means, without duplication of any other Reserves or items that are otherwise addressed or excluded through eligibility criteria, such reserves, if any, as the Administrative Agent and Co-Collateral Agent from time to time determine in their reasonable discretion as being reasonably required pursuant to this Agreement, equal to the sum of (a) the amount of all sales taxes that have been collected by the Borrowers and not remitted to any state taxing authority when due, (b) an amount equal to two (2) months’ gross rent for (i) each leased Store of the Borrowers located in a Landlord Lien State (consistent with the Administrative Agent’s and Co-Collateral Agent’s usual practices) other than those Stores with respect to which the Administrative Agent has received a Collateral Access Agreement, and (ii) each leased distribution center or other location at which Inventory is maintained (but excluding any Store) other than those distribution centers and other locations with respect to which the Administrative Agent has received a Collateral Access Agreement, (c) Customer Credit Liabilities and customer deposits, (d) an amount based on rent which is past due for more than ten days for any of the Borrowers’ leased locations, with the exception of past due rent that is the subject of a Permitted Protest as determined by the Administrative Agent and the Co-Collateral Agent in their reasonable discretion, (e) an amount equal to 50% of the liabilities for gift cards accrued by the Borrowers, as shown on the most recent balance sheet of the Parent Borrower in accordance with GAAP, (f) such other reserves as the Administrative Agent and the Co-Collateral Agent from time to time determines in their reasonable discretion as being reasonably required pursuant to this Agreement, including, without limitation, reserves implemented in connection with Permitted Liens and Permitted Indebtedness, but in the case of each of the foregoing, only to the extent such Liens, encumbrances and Indebtedness relate or in any way affect the Borrowing Base, (g) Bank Product Reserves and (h) Cash Management Reserves.

“Average Daily Excess Availability” means the average daily Excess Availability for the immediately preceding Fiscal Quarter.

“Available Revolving Credit Commitment” means, with respect to any Lender at any time, an amount equal to (a) such Lender’s Revolving Credit Commitment then in effect minus (b) such Lender’s Revolving Extensions of Credit then outstanding; provided, that in calculating any Lender’s Revolving Extensions of Credit for the purpose of determining such Lender’s Available Revolving Credit Commitment pursuant to Section  2.11(ba), the aggregate principal amount of Swing Line Loans then outstanding shall be deemed to be zero.

“Average Revolving Loan UtilizationDaily Excess Availability” means, at any Adjustment Date, the average daily outstanding amount of Loans and Letters of CreditExcess Availability for the Fiscal Quarter immediately preceding such Adjustment Date, divided by the Aggregate Commitments at such timefiscal quarter.

“Backstop LC” has the meaning ascribed thereto in the definition of the term “Cash Collateralize”.

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

 

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

“Bank of America” means Bank of America, N.A. and its successors.

“Bank Product Reserves” means such reserves as the Administrative Agent from time to time determines in its reasonable discretion as being appropriate to reflect the liabilities and obligations of the Borrowers and their Subsidiaries with respect to Bank Products then provided or outstanding.

“Bank Products” means any services or facilities provided to any Loan Party by any Lender or any of its Affiliates (but excluding Cash Management Services) on account of (a) credit cards, (b) Swap Contracts, (c) purchase cards, (d) merchant services constituting a line of credit and (e) leasing.

“Bank Product Reserves” means such reserves as the Administrative Agent from time to time determines in its reasonable discretion as being appropriate to reflect the liabilities and obligations of the Borrowers and their Subsidiaries with respect to Bank Products then provided or outstanding.

“Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus ¹/2 of 1% and (c) the Eurodollar Rate plus 1.00%. For purposes hereof: “Prime Rate” means, at any time,, (b) the rate of interest per annumin effect for such day as publicly announced or otherwise identified from time to time by Bank of America, N.A. at its principal office in New York, New York from time to time by Bank of America as its “prime rate. The parties hereto acknowledge that the,” and (c) the Eurodollar Rate plus 1.00% (which rate, for the avoidance of doubt, shall not be less than the LIBOR Floor). The “prime rate” is a rate announced publiclyset by Bank of America, N.A. as its prime rate based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. If the Base Rate is being used as an index or basealternate rate and shall not necessarily be its lowest or best rate charged to its customers or other banksof interest pursuant to Section 3.03 hereof, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Beneficial Owner” has the meaning given to that term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will not be deemed to have beneficial ownership of any securities that such “person” has the right to acquire or vote only upon the happening of any future event or contingency (including the passage of time) that has not yet occurred. The terms “Beneficially Owns,” “Beneficially Owned” and “Beneficial Ownership” have a corresponding meaning.

 

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“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

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

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Blocked Account” has the meaning ascribed thereto in Section 6.176.13(a)(ii).

“Blocked Account Agreement” has the meaning ascribed thereto in Section 6.176.13(a)(ii).

“Blocked Account Bank” means each bank with whom deposit accounts are maintained in which any funds of any of the Loan Parties from one or more DDAs are concentrated and with whom a Blocked Account Agreement has been, or is required to be, executed in accordance with the terms hereof.

“Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower Materials” has the meaning ascribed thereto in Section 6.04.

“Borrowers” means the Parent Borrower and the Subsidiary Borrowers, collectively.

“Borrower Materials” has the meaning ascribed thereto in Section 6.02.

“Borrowing” means Loans of the same Type, made on the same date and, in the case of Eurodollar Rate Loans, as to which a single Interest Period is in effect.

“Borrowing Base” means, at any time of calculation, an amount equal to:

(a) the lesser of (i) $50,000,000 and (ii) 100% of cash and Cash Equivalents that are either held collectively in deposit accounts and securities accounts either (x) maintained with the Administrative Agent or (y) that constitute Blocked Accounts or that otherwise are the subject of a control agreement in favor of the Administrative Agent, subject to no other Liens (other than non-consensual Liens and Liens permitted by clauses (a), (l) and (wbb)(i) and (iii) of Section 7.017.02); plus

(b) the Credit Card Receivables Component; plus

(c) the Trade Receivables Component; plus

(d) the Inventory Component; plus

(e) the Letter of Credit Component; minus

(f) the then amount of all Availability Reserves.

“Borrowing Base Certificate” has the meaning ascribed thereto in Section  6.026.04(id).

 

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“Borrowing Date” means any Business Day specified by the Borrowers as a date on which the Borrowers requests the relevant Lenders to make Loans hereunder.

“Budget” has the meaning ascribed thereto in Section 6.04(f).

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located or the Parent Borrower’s headquarters are located and, if such day relates to any; provided that when used in connection with a Eurodollar Rate Loan, meansthe term “Business Day” also excludes any such day on which banks are not open for dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations) which is, or should be in accordance with GAAP, reflected as a “capital expenditure” in a consolidated statement of cash flows of such Person for the period in which such expenditure occurs, but excluding (i) expenditures constituting reinvestment of Net Cash Proceeds permitted by Section 2.09(b)(ii) and (ii) leasehold improvement expenditures funded directly or indirectly with cash allowances provided by landlords in the ordinary course of business.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases

“Capital Lease Obligations” means, with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other similar 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 purposes hereof, the amount of such obligations at any time will be the capitalized amount thereof at such time determined in accordance with GAAP.

“Capital Stock” means:

(a) in the case of a corporation, corporate stock;

(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“Captive Insurance Company” means a Wholly Owned Subsidiary of any Borrower created solely for providing self-insurance for the Borrowers and their Subsidiaries and engaging in no other activities other than activities ancillary thereto and necessary for the maintenance of corporate existence.

 

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“Cash Collateral Account” means a blocked non-interest-bearing account established by one or more of the Loan Parties with, and in the name of, the Administrative Agent, for its own benefit and the ratable benefit of the other Secured Parties, under the sole and exclusive dominion and control of the Administrative Agent, in the name of the Administrative Agent or as the Administrative Agent shall otherwise direct, in which deposits are required to be made in accordance with Section 2.09(b)(i), Section 2.24(a) or Section 8.03.

“Cash Collateralize” means, as to any Letter of Credit, to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the relevant Issuing Lender and the Lenders, as collateral for the L/C Obligations, (i) cash or deposit balances in an amount equal to 103% of the aggregate amount available to be drawn under the applicable Letter of Credit pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the relevant Issuing Lender, or (ii) a “backstop” letter of credit (a “Backstop LC”) in an amount equal to 100% of the aggregate amount available to be drawn under the applicable Letter of Credit pursuant to documentation in form and substance, and with a counterparty, reasonably satisfactory to the Administrative Agent and the relevant Issuing Lender; provided that in the case of this clause (ii), the Administrative Agent or the relevant Issuing Lender may, at their discretion, demand at any time that such Backstop LC be funded or be replaced with a new Backstop LC with revised terms or a different counterparty reasonably satisfactory to them, in each case upon a determination by the Administrative Agent or the relevant Issuing Lender, acting reasonably and in good faith, that the credit risk to the Lenders of the relevant Backstop LC issuer in respect of the relevant Letter of Credit has deteriorated in any material respect. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Dominion Event” means either (i) the occurrence and continuance of any Event of Default or (ii) Excess Availability at any time is less than the greater of (A) 12.5% of the Line Cap at the time of calculation, or (B)  $8,750,00012,500,000 . For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be deemed continuing (i) so long as such Event of Default has not been waived, and/or (ii) if the Cash Dominion Event arises pursuant to clause (ii) above, until Excess Availability has exceeded the amounts required pursuant to clause (ii) of this definition for thirty (30) consecutive days, in which case a Cash Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement; provided that a Cash Dominion Event shall be deemed continuing (even if an Event of Default is no longer continuing and/or Excess Availability exceeds the required amount for thirty (30) consecutive days) at all times after a Cash Dominion Event has occurred and been discontinued on five (5) occasion(s) after the ClosingAmendmen t No. 4 Effective Date.

“Cash Equivalents” means any of the following types of Investments:

(a) Dollars, Canadian dollars, Japanese yen, pounds sterling, euros or the national currency of any participating member of the European Union or, in the case of any Foreign Subsidiary, any local currencies held by it from time to time in the ordinary course of business and not for speculation;

(b) (a) readily marketabledirect obligations issued or directly and fullyof the United States of America or any member of the European Union or any agency thereof or obligations guaranteed or insured by the United States of America or any member of the European Union or any agency or instrumentality thereof having, in each case, with maturities of not more than 365 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereofexceeding two years;

 

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(b)        

(c) time deposits or insured , eurodollar time deposits, certificates of deposit or bankers’ acceptances that are either (i) issued by (or with) (A) a Lender or (B) any commercial bank organized under the laws of the United States of America, any state thereof or the District of Columbia or that is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, or (ii) in an amount of less than $250,000 in the aggregate issued by any other commercial bank insured by the Federal Deposit Insurance Corporationand money market deposits, in each case, with maturities of not more than 365 daysexceeding one year from the date of acquisition thereof;

(c) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, and overnight bank deposits, in each case, with maturities any commercial bank having capital, surplus and undivided profits of not less than $250,000,000;

(d) repurchase obligations for underlying securities of the types described in clauses (b) and (c) above and clause (f) below entered into with a bank meeting the qualifications described in clause (c) above;

(e) commercial paper or variable or fixed rate notes maturing not more than 365 days fromone year after the date of acquisition thereof;

(d) commercial paperissued by a corporation rated at least “PrimeP -1” (or the then equivalent grade) by Moody’s or at least “A- 1” by S&P (or the thenreasonably equivalent grade) by S&P, in each caseratings of another internationally recognized rating agency);

(f) securities with maturities of not more than 365 daystwo years or less from the date of acquisition thereof;

(e) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (a) above or that are (i) marketable general obligations issued or fully guaranteed by any state of the United States of America or, commonwealth or territory of the United States of America, or by any political subdivision of any such state or any public instrumentalityor taxing authority thereof maturing within 365 days, having one of the date of purchase and, at the time of purchase, havingtwo highest rating categories obtainable from either Moody’s or S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

(g) Indebtedness issued by Persons (other than the Sponsors) with a credit rating of “A” or better from either S&P orat least “A 2” by Moody’s or “A” by S&P (or carrying anreasonably equivalent rating by a nationallyratings of another internationally recognized rating agency), if both of S&P and Moody’s cease publishing ratings of investments) or (ii) investments in certificates of deposit, eurodollar time deposits, bankers’ acceptances or

 

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overnight bank deposits issued by a bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital, surplus and undivided profits totaling more than $500,000,000 and ratedin each case, with maturities not exceeding one year from the date of acquisition, and marketable short-term money market and similar securities having a rating of at least “AP-2”by S&P) andor “A-2”byfrom either Moody’s or S&P (or carrying anreasonably equivalent rating by a nationallyratings of another internationally recognized rating agency, if both of S&P and Moody’s cease publishing ratings of investments), maturing within 365 days of purchase; and

(f) Investments, classified in accordance with GAAP as current assets of Holdings or any of its Subsidiaries, in money market or similar investment programs which invest solely in Investments of the character, quality and maturity described in clauses (a), (b), (c), (d) and (e) of this definition or money market programs registered under the Investment Company Act of 1940 and which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P);

(h) Investments in money market funds with average maturities of 12 months or less from the date of acquisition that are rated “Aaa3” by Moody’s and “AAA” by S&P (or reasonably equivalent ratings of another internationally recognized rating agency);

(i) instruments equivalent to those referred to in clauses (a) through (h) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above customarily utilized in the countries where any such Restricted Subsidiary is located or in which such Investment is made; and

(j) shares of mutual funds whose investment guidelines restrict 95% of such funds’ investments to those satisfying the provisions of clauses (a) through (i) above.

“Cash Management Bank” means any provider of Cash Management Services that, at the time such Cash Management Obligations were entered into or, if entered into prior to the Amendment No. 4 Effective Date, on the Amendment No. 4 Effective Date, was the Administrative Agent, a Lender or an Affiliate of the foregoing, whether or not such Person subsequently ceases to be the Administrative Agent, a Lender or an Affiliate of the foregoing.

“Cash Management Obligations” means obligations owed by any Loan Party to any Cash Management Bank in respect of or in connection with Cash Management Services and designated by the Cash Management Bank and the Parent Borrower in writing to the Administrative Agent as “Cash Management Obligations” under this Agreement.

“Cash Management Reserves” means such reserves as the Administrative Agent and the Co-Collateral Agent, from time to time, determine determines in theirits reasonable discretion as being appropriate to reflect the reasonably anticipated liabilities and obligations of the Parent Borrower and its Subsidiaries with respect to Cash Management Services then provided or outstanding.

 

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“Cash Management Services” means any one or more of the following types or services or facilities provided to the Parent Borrower or any of its Subsidiaries by any Lender or any of its Affiliates: (a) ACH transactions, (b)treasury, depository, pooling, netting, overdraft, stored value card, purchase card (including so called “procurement card” or “P-card”), debit card, credit card, cash management, supply chain finance services, (including, without limitation, controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer services, (c) foreign exchange facilities, (d) credit or debit cards, and (e) merchanttrade payable services and supplier accounts receivables purchases) and similar services not constituting a Bank Product.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and regulations promulgated thereunder.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

“CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

and any automated clearing house transfer of funds.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority. For purposes of this definition (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, are in each case deemed to have been adopted and to have taken effect after the date of this Agreement.

“Change of Control”means an event or series of events by which:will be deemed to occur if:

(a) at any time,

(i) Holdings ceases to Beneficially Own, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Parent Borrower; or

(ii) a “change of control” (or comparable event) occurs under the Term Loan Facility or the New Senior Notes Indenture or the documentation governing any Permitted Refinancing Indebtedness in respect of any of the foregoing, in each case, if any Indebtedness is outstanding under such agreement; or

(iii) a majority of the seats (other than vacant seats) on the Board of Directors of Holdings shall at any time be occupied by persons who were not (A) nominated by or whose nomination was not approved by the Board of Directors of Holdings or a Permitted Holder, (B) appointed by directors so nominated or approved or (C) appointed by a Permitted Holder;

 

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(b) (a) at any time prior to the creationconsummation of a Public MarketQualified IPO, the Equity Investors shallPermitted Holders, taken together, cease to own beneficially, eitherBeneficially Own, directly or indirectly, equity securities in HoldingsVoting Stock representing 50% or more than 50% of the combinedaggregate ordinary voting power of all equity securities entitled to vote for members of the board of directors or equivalent governing body of Holdings (the “Board of Directors”) (such equity securities excluding any class of preferred stock with a right to elect two or fewer such members so long as at all times at least a majority of the Board of Directors shall have been elected by the Equity Investors), with such equity securities being referred to hereinafter as the “Voting Shares”represented by the issued and outstanding Equity Interests of Holdings (determined on a fully diluted basis but without giving effect to contingent voting rights not yet vested); or

(c) (b) at any time after the creationconsummation of a Public MarketQualified IPO, any “person” or “group” (as such terms are used in Sectionswithin the meaning of Rules 13(d)-3 and 14(d) of13d-5 under the Securities Exchange Act of 1934, but excluding any employee benefit plan of such Person orand its subsidiaries, and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than any of the Equity Investors, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934Permitted Holders, acquires Beneficial Ownership of Voting Stock of a Parent Entity representing (a) of more than 35% or more of the combinedaggregate ordinary voting power offor the Voting Shares of Holdings, and at such time,election of directors represented by the issued and outstanding Equity Investors beneficially own, directly or indirectly, a lesserInterests of such Parent Entity (determined on a fully diluted basis but without giving effect to contingent voting rights that have not yet vested) and (b) more than the percentage of the combinedaggregate ordinary voting power of the Voting Shares of Holdings; provided that any plan, agreement or arrangement among the Equity Investors and any such “person” or “group” shall not be considered to represent a “group” for purposes of this definition so long as the Equity Investors continue to have Voting Shares sufficient to enable them to elect, and have not granted a proxy preventing them from electing, a greater number of members of the Board of Directors than such person or group would have without the participation of the Equity Investors pursuant to any such plan, agreement or arrangementfor the election of directors that gave rise tois at the determination in question; ortime Beneficially Owned, directly or indirectly, by the Permitted Holders, taken together (determined on a fully diluted basis but without giving effect to contingent voting rights that have not yet vested).

(c) except as permitted by Section 7.04, Holdings shall cease to own (directly or indirectly) and control legally and beneficially the Equity Interests in the Parent Borrower; or

(d) a “change of control” or any comparable term under, and as defined in any instrument, document or agreement relating to Indebtedness above the Threshold Amount shall have occurred and not been the subject of a waiver or other modification, in any case that gives the holders thereof the immediate right to require Holdings or any of its Subsidiaries to repurchase, offer to repurchase or immediately repay such Indebtedness.

 

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“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01October 16, 2012.

“Co-Collateral Agent” means U.S. Bank National Association in its capacity as Co-Collateral Agent under this Agreement, or any successor co-collateral agent.

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

“Collateral” means all of the property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties, including the “Collateral” referred to in the Collateral Documents.

“Collateral Access Agreement” means an agreement substantially in the form of Exhibit J.

“Collateral Documents” means, collectively, the Guarantee and Collateral Agreement, each of the collateral assignments, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent pursuant to Section 6.126.10, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

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

“Commitment Fee Rate” means 0.250.375% per annum.

“Committed Loan Notice” means a notice of a Borrowing, which, if in writing, shall be substantially in the form of Exhibit A-1 or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Parent Borrower.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of Exhibit DCompany Competitor” means any competitor of the Parent Borrower and/or any of its Subsidiaries.

“Competitor Debt Fund Affiliate” means, with respect to any Company Competitor or any Affiliate thereof, any debt fund, investment vehicle, regulated bank entity or unregulated lending entity (in each case, other than any Disqualified Institution or any Excluded Party) that is (i) primarily engaged in, or advise funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business for financial investment purposes and (ii) managed, sponsored or advised by any Person that is controlling, controlled by or under common control with the relevant Company Competitor or Affiliate thereof, but only to the extent that no personnel involved with the investment in the relevant Competitor or its Affiliates, or the management, control or operation thereof, (A) makes (or has the right to make or participate with others in making) investment decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity or (B) has access to any information (other than information that is publicly available) relating to any Borrower and/or any entity that forms part of its business (including any of its Subsidiaries).

 

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“Concentration Account” has the meaning ascribed thereto in Section  6.176.13(b).

“consolidated” means, when used to modify a financial term, test, statement, or report of a Person, the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries.

“Consolidated Debt” means, as of any date, the aggregate outstanding principal amount (without duplication) of all Indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of Capital Lease Obligations, Indebtedness for borrowed money, and Disqualified Stock of the Borrowers and the Restricted Subsidiaries and all Guarantees of the foregoing, determined on a consolidated basis in accordance with GAAP, based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

“Consolidated EBITDA” means with respect to the Parent Borrower and its Subsidiaries, for any Measurement Periodperiod, the sum (without duplication) of (i) Consolidated Net Income and (ii) to the extent Consolidated Net Income has been reduced thereby, (A) all income taxes of the Parent Borrower and its Subsidiaries paid or accrued in accordance with GAAP for such Measurement Period, (B) Consolidated Interest Expense, (C) Management Fees, (D) Consolidated Non-cash Charges, (E) Transaction Expenses incurred within twelve months of the Closing Date, of the Borrowers for such period:

(a) increased, in each case to the extent deducted in calculating such Consolidated Net Income (and without duplication), by:

(i) provision for taxes based on income, profits or capital, including state, franchise, excise and similar taxes and foreign withholding taxes paid or accrued, including any penalties and interest relating to any tax examinations, and state taxes in lieu of business fees (including business license fees) and payroll tax credits, income tax credits and similar tax credits, and including an amount equal to the amount of tax distributions actually made to the holders of Equity Interests of the Borrowers or any Parent Entity in respect of such period (in each case, to the extent attributable to the operations of the Borrowers and its Subsidiaries), which will be included as though such amounts had been paid as income taxes directly by the Borrowers; plus

(ii) Consolidated Interest Expense; plus

(iii) cash dividend payments (excluding items eliminated in consolidation) on any series of preferred stock or Disqualified Stock of any Borrower or any Restricted Subsidiary; plus

(iv) all depreciation and amortization charges and expenses; plus

(v) all

 

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(1) losses, charges and expenses relating to the Transactions;

(F2) transaction fees, costs and expenses incurred in connection with the issuance, prepayment or amendment of or refinancing of Indebtedness or issuance of equity permitted hereunder (in each case whether or not suchconsummation of any transaction that is out of the ordinary course of business (or any transaction isproposed but not consummated), (G) out-of-pocket costs and expenses related to actual or potential Investments permitted hereunderunder this Agreement, including equity issuances, investments, acquisitions (in each case whether or not such investment or acquisition is consummated), (H) fees, costs and expenses incurred under the Revolving Credit Facility, (I) non-recurring cash expenses or losses; provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (I) during the term of this Agreement shall not exceed $20,000,000 and shall be demonstrated in reasonable detail in the relevant Compliance Certificate (it being understood and agreed that Item 10(e) of Regulation S-K of the Securities Act of 1933 shall not constitute a limitation on any determination of non-recurring items and, dispositions, recapitalizations, mergers, option buyouts and the incurrence, modification or repayment of Indebtedness permitted to be incurred under this Agreement (including any Permitted Refinancing Indebtedness in respect thereof) or any amendments, waivers or other modifications under the agreements relating to such Indebtedness or similar transactions; and

(3) without duplication of any of the foregoing, non-operating or non-recurring items) and (J)professional fees, costs and expenses incurred in connection with the Acquisition incurred within twelve months of the closing date of the Acquisition less (iii) any non-cash items increasing Consolidated Net Income for the Measurement Period, all as determined on a consolidated basis for the Parent Borrower and its Subsidiaries in accordance with GAAP.

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Parent Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money and all principal obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial letters of credit), bankers’ acceptances, bank guaranties, surety bonds and other similar instruments, in each case, to the extent required to be reflected on a consolidated balance sheet of the Parent Borrower in accordance with GAAP and representing any unreimbursed drawings thereunder, (d) all obligations in respect of the deferred purchase price of property or services (other than (i) deferred compensation and (ii) trade accounts payable in the ordinary course of business) to the extent that the liability on account of any such obligations

 

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becomes fixed (including, without limitation, earn-outs to the extent they have been treated as a liability on the balance sheet in accordance with GAAP and such liability has become fixed), (e) all Attributable Indebtedness, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Parent Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Parent Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is non-recourse to the Parent Borrower or such Subsidiary, minus, unrestricted cash and Cash Equivalents (other than any cash or cash equivalents relating to or derived from any Cure Amount or from any incurrence of Indebtedness on the date of determination) up to $75,000,000 on the consolidated balance sheet of the Parent Borrower as at such date to the extent that the use thereof for application to payment of Indebtedness is not prohibited by law or any contract to which the Parent Borrower or any of its Subsidiaries is a party and provided that such cash and Cash Equivalents are not subject to any Liens other than Liens created under the Collateral Documents, Liens securing the Term Loan Facility or non-consensual Permitted Liens imposed under applicable law.for such period; plus

(vi) any expense or deduction attributable to minority Equity Interests of third parties in any Restricted Subsidiary that is not a Wholly Owned Subsidiary of any Borrower; plus

(vii) the amount of management, monitoring, consulting, transaction and advisory fees (including termination fees) and related indemnities, charges and expenses paid or accrued to or on behalf of any Parent Entity or any of the Permitted Holders, in each case, to the extent permitted by Section 7.07; plus

(viii) earn-out obligations incurred in connection with any Permitted Acquisition or other Investment; plus

(ix) all charges, costs, expenses, accruals or reserves in connection with the rollover, acceleration or payout of Equity Interests held by officers or employees of any Borrower and all losses, charges and expenses related to payments made to holders of options or other derivative Equity Interests in the common equity of any Borrower or any Parent Entity in connection with, or as a result of, any distribution being made to equityholders of such Person or any of its direct or indirect parents, which payments are being made to compensate such option holders as though they were equityholders at the time of, and entitled to share in, such distribution; plus

(x) all non-cash losses, charges and expenses, including any write-offs or write-downs; provided that if any such non-cash charge represents an accrual or reserve for potential cash items in any future four-fiscal quarter period (i) the applicable Borrower may determine not to add back such non-cash charge in the period for which Consolidated EBITDA is being calculated and (ii) to the extent the applicable Borrower does decide to add back such non-cash charge, the cash payment in respect thereof in such future four-fiscal quarter period will be subtracted from Consolidated EBITDA for such future four-fiscal quarter period;

 

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(xi) all costs and expenses in connection with pre-opening and opening of stores, distribution centers and other facilities that were not already excluded in calculating such Consolidated Net Income; and

(b) decreased, without duplication and to the extent increasing such Consolidated Net Income for such period, by non-cash gains (excluding any non-cash gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that were deducted (and not added back) in the calculation of Consolidated EBITDA for any prior period ending after the Closing Date).

To the extent items excluded in the calculation of Consolidated Net Income have been excluded on an after-tax basis, these same items shall be excluded on a pre-tax basis for purposes of the calculation of Consolidated EBITDA.

“Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of (a) (i) Consolidated EBITDA for the most recently ended Measurement Period prior to such daterecent period of four consecutive fiscal quarters for which Required Financial Statements have been delivered, calculated on a Pro Forma Basis, minus (ii) Unfinanced Capital Expenditures made in such period minus (iii) the aggregate amount of Federal, state, local and foreign income taxes paid in cash in such period to (b) the sum of (i) Debt Service Charges for such period plus (ii) the aggregate amount of all Restricted Payments paid in cash, in each case, of or by the Parent Borrower and its Restricted Subsidiaries for such period, all as determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, with respect to the Parent Borrower and its Restricted Subsidiaries for any Measurement Periodthe most recent period of four consecutive fiscal quarters for which Required Financial Statements have been delivered, the sum of, without duplication: (i) the aggregate of the interest expense of the Parent Borrower and its Restricted Subsidiaries for such Measurement Periodperiod determined on a consolidated basis in accordance with GAAP (excluding any accruals of dividends on preferred stock that are not paid in cash in such period, Indebtedness or Disqualified Capital Stock), including, without limitation, (a) any amortization of debt discount, (b) the net costs under Swap Contracts, (c) all capitalized interest and (d) the interest portion of any deferred payment obligation; and (ii) the interest component of capitalized lease obligations paid, accrued and/or scheduled to be paid or accrued by the Parent Borrower and its Restricted Subsidiaries during such Measurement Periodperiod as determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, with respect to the Parent Borrower and its Subsidiaries, for any Measurement Period, the aggregate net income (or loss) of the Parent Borrower and its Subsidiaries for such Measurement Period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom (a) after-tax gains from asset sales or abandonments or reserves relating thereto, (b) after-tax items classified as extraordinary or nonrecurring gains or losses, (c) the net income (but not loss) of any Subsidiary of the Parent Borrower to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is restricted by contract, operation of law or otherwise, (d) the net income of any person, other than a Subsidiary of the Parent Borrower, except to the extent of cash dividends or distributions paid to the Parent Borrower or to a wholly owned Subsidiary of the Parent Borrower by such person, (e) any restoration to income of any contingency, reserve,

 

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except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Closing Date, (f) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such Measurement Period whether or not such operations were classified as discontinued), (g) in the case of a successor to the Parent Borrower or any of its Subsidiaries by consolidation or merger or as a transferee of the Parent Borrower’s or any of its Subsidiaries’ assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and (h) accruals of dividends on preferred stock that are not paid in cash in such period, Indebtedness or Disqualified Capital Stock, to the extent that accrued dividends are classified as interest expense in accordance with GAAP.“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the net income (or loss) of such Person and its Restricted Subsidiaries for such period, calculated on a consolidated basis in accordance with GAAP (adjusted to reflect any charge, tax or expense incurred or accrued by Holdings or any Parent Entity during such period attributable to the operations of the Borrowers and their Subsidiaries as though such charge, tax or expense had been incurred by any Borrower, to the extent that such Borrower has made or would be entitled under the Loan Documents to make any Restricted Payment or other payment to or for the account of Holdings in respect thereof) and before any deduction for preferred stock dividends; provided that:

“Consolidated Non-cash Charges” means, with respect to the Parent Borrower and its Subsidiaries, for any Measurement Period, the aggregate depreciation, amortization

(a) all net after-tax extraordinary, nonrecurring or unusual gains, losses, income, expenses and charges, and in any event including all restructuring, severance, relocation, retention, consolidation, integration or other similar charges and expenses, contract termination costs, litigation costs, excess pension charges, system establishment charges, start-up or closure or transition costs, expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, fees, expenses or charges relating to curtailments or modifications to pension and post-retirement employee benefit plans, expenses associated with strategic initiatives, facilities shutdown and opening costs, and any fees, expenses, charges or change in control payments (including any transition-related expenses incurred before, on or after the Closing Date), will be excluded;

(b) all net after-tax income, loss, expense or charge from abandoned, closed or discontinued operations and any net after-tax gain or loss on the disposal of abandoned, closed or discontinued operations will be excluded;

(c) all net after-tax gain, loss, expense or charge attributable to business dispositions and asset dispositions other than in the ordinary course of business (as determined in good faith by a Responsible Officer of the Parent Borrower) will be excluded;

(d) all net after-tax income, loss, expense or charge attributable to the early extinguishment or cancellation of Indebtedness, Hedge Agreements or other derivative instruments will be excluded;

(e) all non-cash gain, loss, expense or charge attributable to the movement in the mark-to-market valuation of Hedge Agreements or other derivative instruments will be excluded;

(f) (i) the net income for such period of any Person that is not a Restricted Subsidiary of the referent Person, or that is accounted for by the equity method of accounting, will be included only to the extent of the amount of dividends or distributions or other payments that are paid in cash (or converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period; and (ii) the net income for such period will include any ordinary course dividends, distributions or other payments in cash received from any such Person during such period in excess of the amounts included in clause (i) hereof;

 

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(g) the cumulative effect of a change in accounting principles during such period will be excluded;

(h) the effects of purchase accounting, fair value accounting or recapitalization accounting adjustments (including the effects of such adjustments pushed down to the referent Person and its Restricted Subsidiaries) resulting from the application of purchase accounting, fair value accounting or recapitalization accounting in relation to any acquisition consummated before or after the Closing Date, and the amortization, write-down or write-off of any amounts thereof, net of taxes, will be excluded;

(i) all non-cash impairment charges and asset write-ups, write-downs and write-offs will be excluded;

(j) all non-cash expenses realized in connection with or resulting from stock option plans, employee benefit plans or agreements or post-employment benefit plans or agreements, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other similar rights will be excluded;

(k) any costs or expenses incurred in connection with the payment of dividend equivalent rights to option holders pursuant to any management equity plan, stock option plan or any other management or employee benefit plan or agreement or post-employment benefit plan or agreement will be excluded;

(l) [reserved];

(m) all amortization and write-offs of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge, commitment or other financing fees, will be excluded;

(n) any currency translation gains and losses related to changes in currency exchange rates (including remeasurements of Indebtedness and any net loss or gain resulting from Hedge Agreements for currency exchange risk), will be excluded;

(o) (a) the non-cash portion of “straight-line” rent expense will be excluded and (b) the cash portion of “straight-line” rent expense that exceeds the amount expensed in respect of such rent expense will be included;

(p) expenses and lost profits with respect to liability or casualty events or business interruption will be disregarded to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer, but only to the extent that such amount (i) has not been denied by the applicable carrier in writing and (ii) is in fact reimbursed within 365 days of the date on which such liability was discovered or such casualty event or business interruption occurred (with a deduction for any amounts so added back that are not reimbursed within such 365-day period); provided that any proceeds of such reimbursement when received will be excluded from the calculation of Consolidated Net Income to the extent the expense or lost profit reimbursed was previously disregarded pursuant to this clause (p);

 

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(q) losses, charges and expenses that are covered by indemnification or other reimbursement provisions in connection with any asset disposition will be excluded to the extent actually reimbursed, or, so long as such Person has made a determination that a reasonable basis exists for indemnification or reimbursement, but only to the extent that such amount is in fact indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 days);

(r) (a) cash costs and expenses in connection with pre-opening and opening of stores, distribution centers and other facilities for any four-quarter period, and all non-cash pre-opening costs and expenses, will be excluded, and (b) all income, loss, charges of the Parent Borrower and its Subsidiaries reducingand expenses associated with stores, distribution centers and other facilities closed in any period, or scheduled for closure within 12 months of the date on which Consolidated Net Income of the Parent Borrower and its Subsidiaries for such Measurement Period, determined on a consolidated basis in accordance with GAAP (including, without limitation, any LIFO adjustments, but excluding any such charge which requires an accrual of or a reserve for cash charges for any future period)is being calculated, will be excluded; and

(s) non-cash charges for deferred tax asset valuation allowances will be excluded.

“Consolidated Secured Net Debt” means, as of any date, all Consolidated Debt as of such date that is secured by a Lien on the Collateral, minus all Unrestricted Cash as of such date, in each case, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis; provided that for purposes of calculating the amount of Consolidated Secured Net Debt with respect to any Indebtedness being incurred in reliance on compliance with any financial ratio-based incurrence test, Unrestricted Cash will not include any proceeds received from such Indebtedness.

“Consolidated Total Assets” means, as of any date, the total assets of the Parent Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, determined based upon the most recent month-end financial statements available internally as of the date of determination, and calculated on a Pro Forma Basis.

“Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA of the Parent Borrower and its Subsidiaries for the most recently completed Measurement Period.

“Contractual Obligation” means, 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.Contribution Indebtedness” has the meaning assigned to such term in Section 7.01(p).

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

 

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“Conversion/Continuation Notice” means a notice of (a) a conversion of Loans from one Type to the other, or (b) a continuation of Eurodollar Rate Loans, pursuant to Section 2.05(a), which, if in writing, shall be substantially in the form of Exhibit A-2.

“Cost ” means the calculated cost of purchases, based upon the Borrowers’ accounting practices, known to the Administrative Agent, which practices are in effect on the ClosingAmendment No. 4 Effective Date as such calculated cost is determined from invoices received by the Borrowers, the Borrowers’ purchase journals or the Borrowers’ stock ledger. “Cost” does not include inventory capitalization costs (other than capitalized distribution costs) or other non-purchase price charges (such as freight) used in the Borrowers’ calculation of cost of goods sold.

“Covenant Compliance Event” means that Excess Availability at any time is less than the greater of (a) ten (10%) percent of the Line Cap or (b)  $7,000,00010,000,000 . For purposes hereof, the occurrence of a Covenant Compliance Event shall be deemed continuing until Excess Availability has exceeded the amounts set forth above for thirty (30) consecutive days, in which case a Covenant Compliance Event shall no longer be deemed to be continuing for purposes of this Agreement. The termination of a Covenant Compliance Event as provided herein shall in no way limit, waive or delay the occurrence of a subsequent Covenant Compliance Event in the event that the conditions set forth in this definition again arise.

“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning ascribed thereto in Section 11.22.

“Credit Card Advance Rate” means 90%.

“Credit Card Notifications” has the meaning ascribed thereto in Section 6.17.

“Credit Card Receivables Component” means the face amount of Eligible Credit Card Receivables multiplied by the Credit Card Advance Rate.

“Credit Extension” means the making of a Loan or the issuance of a Letter of Credit by a Lender or Issuing Lender, as the case may be.

“Cure Amount” has the meaning ascribed thereto in Section 8.02.

“Cure Right” has the meaning ascribed thereto in Section 8.02.

“Customer Credit Liabilities” means, at any time, the aggregate remaining value at such time of (a) outstanding gift certificates and gift cards sold by the Borrowers entitling the holder thereof to use all or a portion of the certificate or gift card to pay all or a portion of the purchase price for any Inventory, and (b) outstanding merchandise credits issued by the Borrowers.

 

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“Customs Broker Agreement” means an agreement in substantially the form attached hereto as Exhibit K among the applicable Borrower, a customs broker or other carrier, and the Administrative Agent, in which the customs broker or other carrier acknowledges that it has control over and holds the documents evidencing ownership of the subject Inventory for the benefit of the Administrative Agent and agrees, upon notice from the Administrative Agent, to hold and dispose of the subject Inventory solely as directed by the Administrative Agent.

“CVC” means CVC Capital Partners.

“DDA” means each checking or other demand deposit account maintained by any of the Loan Parties. All funds in each DDA shall be conclusively presumed to be Collateral and proceeds of Collateral and the Administrative Agent and the Lenders shall have no duty to inquire as to the source of the amounts on deposit in any DDA.

“Debt Representative” means, with respect to any Indebtedness that is secured on a junior basis to the Revolving Credit Loans, the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.

“Debt Service Charges”means, for any Measurement Periodperiod of four consecutive fiscal quarters for which Required Financial Statements have been delivered, the sum of (a) Consolidated Interest Expense paid in cash or required to be paid in cash for such period, plus (b) principal payments made or required to be made on account of Indebtedness (excluding the Obligations and any principal payments made with the proceeds of Permitted Refinancing Indebtedness or with the proceeds of Indebtedness under the Term Loan Facility, but including, without limitation, any Synthetic Lease Obligations“synthetic lease” obligations) for such period, in each case determined in accordance with GAAP.

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

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the applicable percentage set forth in Section 2.18(a) for Standby Letters of Credit or Commercial Letters of Credit, as applicable, plus 2% per annum.

“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.

“Defaulting Lender” means, subject to Section 2.24(b), any Lender that (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or participations in respect of Letters of Credit or Swing Line Loans, within one Business Day of the date required to be funded by it hereunder, (b) has notified the Parent Borrower, or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to

 

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its funding obligations hereunder or under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after a request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations 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) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; 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.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property (including, without limitation, any Equity Interests of any other Person held by a specified Person) by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, in each case, resulting in consideration to such Person (including assumption of liabilities) for any such transaction or series of related transactions in excess of $5,000,000.

Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by the Parent Borrower or any Restricted Subsidiary in connection with an Asset Sale that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Parent Borrower setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Non-Cash Consideration.

“Disinterested Director” means, with respect to any Person and transaction, a member of the Board of Directors of such Person who does not have any material direct or indirect financial interest in or with respect to such transaction.

“Disqualified Institution” means:

(a) (i) any Person identified in writing to the Joint Lead Arrangers and the Administrative Agent on July27, 2020, (ii) any Person that is identified in writing to the Joint Lead Arrangers and the Administrative Agent after July 27, 2020 and prior to the Amendment No. 4 Effective Date, if the disqualification of such Person is reasonably acceptable to the Joint Lead Arrangers, (iii) any Affiliate of any Person described in clauses (i) and/or (ii) above that is reasonably identifiable as an Affiliate of such Person solely on the basis of such Affiliate’s name and (iv) any other Affiliate of any Person described in clauses (i), (ii) and/or (iii) above that is identified in a written notice to the Joint Lead Arrangers (or, after the Amendment No. 4 Effective Date, the Administrative Agent) after August 13, 2020 (each such person, a “Disqualified Lending Institution”); it being understood that the Parent Borrower may withhold its consent to any Person that is known by it to be an Affiliate of a Disqualified Lending Institution regardless of whether such Person is reasonably identifiable as an Affiliate of such Person solely on the basis of such Affiliate’s name;

 

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(b) (i) any Company Competitor and/or any Affiliate of any Company Competitor (other than a Competitor Debt Fund Affiliate), in each case, who have been identified to the Joint Lead Arrangers and the Administrative Agent in writing on July 27, 2020 (or, after the Amendment No. 4 Effective Date, identified in writing to the Administrative Agent), (ii) any Affiliate (other than a Competitor Debt Fund Affiliate) of any Person described in clause (i) above that is reasonably identifiable as an Affiliate of such Person solely on the basis of such Affiliate’s name and (iii) any other Affiliate of any Person described in clauses (i) and/or (ii) above (other than a Competitor Debt Fund Affiliate) that is identified in a written notice to the Joint Lead Arrangers (or, after the Amendment No. 4 Effective Date, the Administrative Agent) after July 27, 2020; it being understood that the Parent Borrower may withhold its consent to any Person that is known by it to be an Affiliate of a Company Competitor regardless of whether such Person is reasonably identifiable as an Affiliate of such Person solely on the basis of such Affiliate’s name; and/or

(c) any Affiliate or representative of the Joint Lead Arrangers or the Administrative Agent that is engaged as a principal primarily in private equity, mezzanine financing or venture capital that is identified in writing to us on or prior to the date hereof (each such person, an “Excluded Party”);

provided that no written notice delivered pursuant to clauses (a)(ii), (a)(iv), (b)(i) and/or (b)(iii) above shall apply retroactively to disqualify any Person that has previously acquired an assignment or participation hereunder prior to the delivery of such notice.

“Disqualified CapitalLending Institution” has the meaning ascribed thereto in the definition of the term “Disqualified Institution”.

“Disqualified Stock” means those, with respect to any Person, any Equity Interests whichof such Person that, by their terms (or by the terms of any security into which suchor other Equity Interests into which they are convertible or for which they are redeemable or exchangeable at the option of the holder thereof), or upon the happening of any event, or condition:

(1) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise, or (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale are subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Revolving Credit Commitments);

(2) are redeemable at the sole option of the holder thereof.

“Distribution” means a distribution of up to $226,602,805 by the Parent Borrower (and the further distribution of such amount by Holdings to its shareholders) on or about the Amendment No. 1 Effective Date. (other than solely for Qualified Equity Interests), in whole or in part;

(3) provide for the scheduled payments of dividends in cash; or

(4) either mandatorily or at the option of the holders thereof, are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Stock,

in each case, prior to the date that is 91 days after the earlier of (x) the Revolving Credit Termination Date; and (y) the date on which the Loans and all other Obligations (other than Obligations in respect of contingent indemnification and reimbursement obligations that are not yet due and payable and for which

 

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no claim has been asserted) are repaid in full and the Revolving Credit Commitments are terminated; provided that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further, that if such Equity Interests are issued to any employee or to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Equity Interests will not constitute Disqualified Stock solely because they may be required to be repurchased by Holdings or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; and provided, further, that any class of Equity Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that is not Disqualified Stock will not be deemed to be Disqualified Stock.

“Dividing Person” has the meaning assigned to it in the definition of “Division.”

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

“Dollar” and “$” means lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary of any Borrower that is organized under the laws of the United States, any state thereof or the District of Columbia, and “Domestic Subsidiaries” means any two or more of them. Unless otherwise indicated in this Agreement, all references to Domestic Subsidiaries will mean Domestic Subsidiaries of any Borrower.

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

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

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

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)).

“Eligible Credit Card Receivables” means Accounts due to a Borrower on a non-recourse basis from Visa, Mastercard, American Express Company, Discover, and other major credit card processors, in each case acceptable to the Administrative Agent in its reasonable discretion, as arise in the ordinary course of business, which have been earned by performance, and are deemed by the Administrative Agent in its reasonable discretion to be eligible for inclusion in the calculation of the Borrowing Base. Without limiting the foregoing, none of the following shall be deemed to be Eligible Credit Card Receivables:

 

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(a) Accounts due from major credit card processors that have been outstanding for more than five (5) Business Days from the date of sale;

(b) Accounts due from major credit card processors with respect to which a Borrower does not have good, valid and marketable title, free and clear of any Lien (other than Liens granted to the Administrative Agent for the benefit of the Secured Parties and Liens in favor of the Term Loan Administrative Agent permitted by Section  7.017.02(wb));

(c) Accounts due from major credit card processors that are not subject to a first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties (it being the intent that chargebacks in the ordinary course by the credit card processors shall not be deemed violative of this clause (c));

(d) Accounts due from major credit card processors which are disputed, are with recourse, or with respect to which a claim, counterclaim, offset or chargeback has been asserted (to the extent of such claim, counterclaim, offset or chargeback);

(e) Accounts due from major credit card processors as to which the credit card processor has the right under certain circumstances to require a Borrower to repurchase the Accounts from such credit card processor;

(f) Accounts due from any Person on account of any private label credit card receivables of a Borrower in the name of such Person; or

(g) Accounts due from major credit card processors which the Administrative Agent determines in its reasonable discretion to be uncertain of collection.

“Eligible In-Transit Inventory” means, as of any date of determination thereof, without duplication of other Eligible Inventory, Inventory:

(a) which has been shipped (i) from a foreign location for receipt by a Borrower within sixty (60) days of the date of shipment, or (ii) from a domestic location for receipt by a Borrower within fifteen (15) days of the date of shipment, but, in either case, which has not yet been delivered to such Borrower;

(b) for which the purchase order is in the name of a Borrower and title has passed to such Borrower;

(c) for which an Acceptable Document of Title has been issued and, in the case of Inventory shipped from a foreign location of a Borrower, as to which the Administrative Agent has control over the documents of title which evidence ownership of the subject Inventory by virtue of either (i) the Administrative Agent’s actual possession of such documents of title or (ii) the receipt of a Customs Broker Agreement with each of such Borrower’s customs brokers and freight forwarders;

(d) which is insured in accordance with the terms of this Agreement; and

(e) which otherwise would constitute Eligible Inventory;

provided that the Administrative Agent may, in its reasonable discretion, exclude any particular Inventory from the definition of “Eligible In-Transit Inventory” in the event the Administrative Agent determines that such Inventory is subject to any Lien (other than Permitted Liens described in clauses (a), (db), (nl) and (w) of Section  7.017.02) .

 

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“Eligible Inventory” means, as of the date of determination thereof, without duplication, (i) Eligible In-Transit Inventory and (ii) items of Inventory of a Borrower that are (i) raw materials or (ii) finished goods, merchantable and readily saleable to the public in the ordinary course deemed by the Administrative Agent in its reasonable discretion to be eligible for inclusion in the calculation of the Borrowing Base, in each case that, except as otherwise agreed by the Administrative Agent, complies with each of the representations and warranties respecting Inventory made by the Borrowers in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the criteria set forth below. The following items of Inventory shall not be included in Eligible Inventory:

(a) Inventory that is not solely owned by a Borrower;

(b) Inventory that is leased by or is on consignment to a Borrower or to which a Borrower does not have good and valid title;

(c) Inventory (other than Eligible In -Transit Inventory or Inventory which is the subject of an Eligible Letter of Credit) that is not (i) located in the United States of America (excluding territories or possessions of the United States) or (ii) at a location that is owned or leased by a Borrower, except, with respect to this clause (ii) only, to the extent that such Borrower has furnished the Administrative Agent with (A) any UCC financing statements or other documents that the Administrative Agent may determine to be necessary to perfect its security interest in such Inventory at such location, and (B) if the value of the Inventory at a location is greater than $1,500,000, a Collateral Access Agreement executed by the Person owning such location on terms reasonably acceptable to the Administrative Agent;

(d) Inventory that is comprised of goods which (i) are damaged, defective, “seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or slow moving, or custom items, work in process, or that constitute spare parts, promotional, marketing, packaging and shipping materials or supplies used or consumed in a Borrower’s business or that are raw materials consisting of cartons or components, (iv) are not in compliance with all standards imposed by any Governmental Authority having regulatory authority over such Inventory, its use or sale, (v) that is vendor serviced merchandise not reflected in the stock ledger, or (vi) are bill and hold goods;

(e) Inventory that is not subject to a perfected first-priority security interest in favor of the Administrative Agent for its own benefit and the ratable benefit of the other Secured Parties;

(f) Inventory that consists of samples, labels, and other similar non-merchandise categories;

(g) Inventory that is not insured in compliance with the provisions of Section 6.076.02 hereof;

(h) Inventory that has been sold but not yet delivered or as to which a Borrower has accepted a deposit;

 

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(i) Inventory that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third party from which the Parent Borrower or any of its Restricted Subsidiaries has received notice of a dispute in respect of any such agreement; or

(j) Inventory acquired in an acquisition permitted under Section  7.037.04, unless (i) the acquired Inventory has an aggregate Cost of less than $2,000,000 and (ii) in the case of acquired Inventory with an aggregate Cost of greater than $2,000,000, the Administrative Agent has completed or received (A) an appraisal of such Inventory from appraisers satisfactory to the Administrative Agent, establishes an Inventory Advance Rate and Inventory Reserves (if applicable) therefor, and otherwise agrees that such Inventory shall be deemed Eligible Inventory, and (B) such other due diligence as the Administrative Agent may require, all of the results of the foregoing to be reasonably satisfactory to the Administrative Agent.

“Eligible Letter of Credit” means, as of any date of determination thereof, a Commercial Letter of Credit which supports the purchase of Inventory, (i) which Inventory does not constitute Eligible In-Transit Inventory and for which no documents of title have then been issued, (ii) which Inventory otherwise would constitute Eligible Inventory, (iii) which Commercial Letter of Credit has an expiry within sixty (60) days of the date of initial issuance of such Commercial Letter of Credit, (iv) which Commercial Letter of Credit provides that it may be drawn only after the Inventory is completed and after an Acceptable Document of Title has been issued for such Inventory reflecting a Borrower or the Administrative Agent as consignee of such Inventory and (v) which will constitute Eligible In-Transit Inventory upon satisfaction of the requirements of clause (iv) hereof; provided that the Administrative Agent may, in its reasonable discretion, exclude any particular Inventory from the definition of “Eligible Letter of Credit” in the event the Administrative Agent determines that such Inventory is subject to any Lien (other than Permitted Liens described in clauses (a), (db), (nl) and (w) of Section 7.017.02).

“Eligible Trade Receivables” means Accounts arising from the sale of a Borrower’s Inventory which arise in the ordinary course of business, which have been earned by performance. None of the following shall be deemed to be Eligible Trade Receivables:

(a) Accounts that are not evidenced by an invoice;

(b) Accounts that have been outstanding for more than sixty (60) days from the relevant invoice due date or ninety (90) days from invoice date;

(c) Accounts due from any account debtor with respect to which more than fifty

percent (50%) of the aggregate dollar amount of all outstanding invoices to such account debtor are accounts described in clause (b) above.

(d) Accounts to an account debtor whose total obligations owing to a Borrower exceed twenty percent (20%) in the aggregate of the Borrowers’ Eligible Trade Receivables;

(e) Accounts which are pre-billed or arise from progress billings;

(f) Accounts with respect to which a Borrower does not have good, valid and

marketable title thereto, free and clear of any Lien (other than Liens granted to the Administrative Agent, for its benefit and the benefit of the Secured Parties, pursuant to the Collateral Documents and Liens permitted by clause (wb) of Section  7.017.02);

 

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(g) Accounts which are disputed or with respect to which a claim, counterclaim, offset or chargeback has been asserted, but only to the extent of such dispute, counterclaim, offset or chargeback;

(h) Accounts which arise out of any sale made not in the ordinary course of business, made on a basis other than upon credit terms usual to the business of a Borrower or are not payable in Dollars;

(i) Accounts which are owed by any account debtor whose principal place of business is not within the continental United States;

(j) Accounts which are owed by any Affiliate, employee, officer or director of a Borrower;

(k) Accounts for which all consents, approvals or authorizations of, or registrations or declarations required to be obtained, effected or given in connection with the performance of such Account by the account debtor or in connection with the enforcement of such Account by the Administrative Agent have not been duly obtained, effected or given and are not in full force and effect;

(l) Accounts due from an account debtor which is the subject of any bankruptcy or insolvency proceeding, has had a trustee or receiver appointed for all or a substantial part of its property, has made an assignment for the benefit of creditors or has suspended its business;

(m) Accounts due from any Governmental Authority except to the extent that the subject account debtor is the federal government of the United States of America and has complied with the Federal Assignment of Claims Act of 1940;

(n) Accounts (i) owing from any Person that is also a supplier to or creditor of the Parent Borrower or any of its Restricted Subsidiaries unless such Person has waived any right of setoff in a manner acceptable to the Administrative Agent or (ii) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling the Parent Borrower or any of its Restricted Subsidiaries to discounts on future purchase therefrom;

(o) Account arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, setoff or charge back; or

(p) Accounts which the Administrative Agent determines in its reasonable discretion to be unacceptable for borrowing.

“Environment” means ambient air,and indoor air, surface water, and groundwater, drinking (including potable water, navigable water and wetlands), the land surface andor subsurface strata, and natural resources such, as wetlands, flora and fauna.

“Environmental Laws” means any and all Federal, state, local, and foreign Laws, other legally enforceable agreements or governmental restrictions (including Environmental Permits)applicable laws (including common law), statutes, rules, regulations, codes, ordinances, orders, binding agreements and final, binding decrees or judgments, in each case, promulgated or entered into by or with any Governmental Authority, relating in any way to pollution and the protection of the

 

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Environment, preservation or the reclamation of natural resources, the generation, management, Release or threat ofthreatened Release of, or exposure to, any Hazardous Materials into Hazardous Material or to occupational health and safety matters (to the extent relating to the Environment, including those related to air emissions and discharges to waste or public systems or exposure to Hazardous Materials).

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities) directly or indirectly resulting from or based upon (a) violation of any Environmental Law or Environmental Permit, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the indoor or outdoor Environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed, retained or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, registration, exemption, identification number, license, franchise, concession, grant or other authorization pursuant to or required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination; provided that Equity Interests shall not include any debt securities that are convertible or exchangeable for any of the foregoing Equity Interests.

“Equity Investors” means the Sponsors, any member of management and any other equity holders of the outstanding Equity Interests of the Parent Borrower or its direct or indirect parent company on the Closing Date (and, in the case of any management equity holder, any such management equity holder after the Closing Date).

“ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and any final regulations promulgated and the rulings issued thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common controlthat, together with Holdings or any Loan Party within the meaning of its Subsidiaries, is treated as a single employer under Section 414(b) or (c) of the Code (or Sections 414(m) and (o) of the Code, solely for purposes of provisions relating toSection 302 of ERISA and Section 412 of the Code), is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) :

(a) a Reportable Event, or the requirements of Section 4043(b) of ERISA apply, with respect to a Pension Plan; (b)

 

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(b) a withdrawal by Holdings or any Loan Party orof its Subsidiaries or, to the knowledge of Holdings or the Parent Borrower, any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations by Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Parent Borrower, any ERISA Affiliate that is treated as such a withdrawaltermination under Section 4062(e) of ERISA; (c)

(c) a complete or partial withdrawal by Holdings or any Loan Party orof its Subsidiaries or, to the knowledge of Holdings or the Parent Borrower, any ERISA Affiliate from a Multiemployer Plan or, receipt of written notification by Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Parent Borrower, any ERISA Affiliate concerning the imposition of Withdrawal Liability or written notification that a Multiemployer Plan is in reorganization; (d) the filing, or is expected to be, insolvent within the meaning of Title IV of ERISA or endangered or in critical status within the meaning of Section 305 of ERISA;

(d) the provision by a Plan administrator or the PBGC of a notice of intent to terminate a Plan, to appoint a trustee to administer a Plan, the treatment of a Plan or Multiemployer Plan amendment as a termination under SectionSections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition

(e) the incurrence by Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the Parent Borrower, any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan, other than for the payment of plan contributions or PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (g) any person shall engage in a “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan; or (h) any failure to satisfy the;

(f) the application for a minimum funding standardwaiver under Section 412 of the Code and Section 302(c) of ERISA, whether or not waived, shall exist with respect to anya Plan or ;

(g) the failure to make any required contribution to a Multiemployer Plan, or any Lien in favor of the PBGC shall arise on the assets of any Loan Party or any ERISA Affiliate.imposition of a lien under Section 303(k) of ERISA with respect to any Plan; and

(h) a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA).

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

 

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“Eurodollar Rate” means the higher of:

(i) the LIBOR Floor;

(a) (ii) (a)for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for U.S. Dollars for a period equal in length to such Interest Period (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published on the applicable ReutersBloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b) (b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two BusinessLondon Banking Days prior to such date for U.S. Dollar deposits with a term of one month commencing that day; and

(c) if the Eurodollar Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement;

provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“Event of Default” has the meaning ascribed thereto in Section 8.01.

“Excess Availability” means, as of any date of determination thereof, the result of:

 

(a)

the Line Cap minus

 

(b)

the Total Revolving Extensions of Credit.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Contributions” means, as of any date, the aggregate amount of the net cash proceeds and Cash Equivalents, together with the aggregate fair market value (determined in good faith by a Responsible Officer of the Parent Borrower) of other assets that are used or useful in a business permitted under Section 7.08, received by the Borrowers after the Closing Date from:

 

(1)

contributions to its common equity capital; or

 

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(2) the sale of Capital Stock of any Borrower;

in each case, designated as Excluded Contributions pursuant to a certificate of a Responsible Officer of the Parent Borrower on the date such contribution is made or such Capital Stock is sold, less the aggregate amount of Investments made pursuant to Section 7.04(cc) in each case prior to such date; provided that the proceeds of Disqualified Stock and any net cash proceeds that are used prior to such date (A) to make Restricted Payments under Section 7.06(a) or Section 7.06(b)(ii) or (B) for Contribution Indebtedness, will not be treated as Excluded Contributions.

“Excluded Party” has the meaning assigned to such term in clause (c) of the definition of “Disqualified Institution”.

“Excluded Subsidiary” means any Subsidiary (if and to the extent such Subsidiary is not a borrower or guarantor under the Term Loan Credit Agreement) that is an:

(1) Immaterial Subsidiary;

(2) Subsidiary that is not a Wholly Owned Subsidiary of the Parent Borrower;

(3) Unrestricted Subsidiary;

(4) Foreign Subsidiary;

(5) Domestic Subsidiary of a Foreign Subsidiary;

(6) Subsidiary substantially all the assets of which are Equity Interests and, if any, indebtedness in one or more Foreign Subsidiaries;

(7) Subsidiary if acting as a Guarantor, or its Guarantee, would, and only so long as it would, (a) be prohibited by law or regulation or by any contractual obligation existing on the (but not incurred in anticipation of) Closing Date or on the date such subsidiary is acquired or organized (as long as, in the case of an acquisition of a subsidiary, such prohibition did not arise as part of such acquisition) or (b) require a governmental or third-party consent, approval, license or authorization (unless such consent, approval, license or authorization has been received); and

(8) any Subsidiary that is a Captive Insurance Company, not-for-profit Subsidiary or Subsidiary which is a special purpose entity for securitization transaction or like special purposes.

in each case, unless the Parent Borrower determines in its sole discretion, upon notice to the Administrative Agent, that any of the foregoing Persons (other than an Unrestricted Subsidiary or Subsidiary that is not a Wholly Owned Subsidiary of the Borrowers) should not be an Excluded Subsidiary until the date on which the Parent Borrower has informed the Administrative Agent that it elects to have such Person be an Excluded Subsidiary (provided that, if such election results in a reduction in the Borrowing Base in excess of $5,000,000, the Parent Borrower shall promptly deliver an updated Borrowing Base Certificate to the Administrative Agent); provided that the Guarantee and the security interest provided by such Person is full and unconditional and fully enforceable in the jurisdiction of organization of such Person.

 

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“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to any “keepwell, support or other agreement” for the benefit of such Guarantor and any and all guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Guarantor, or a grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Loan Party under any Loan Document, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes (including taxes on overall gross receipts) imposed on it (in lieu of net income taxes), by a jurisdiction (or any political subdivision thereof) as a result of such recipient being organized or having its principal office or applicable Lending Office located in such jurisdiction or as a result of a present or former connection between such recipient and the jurisdiction (other than a connection arising from such recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, a Loan Document), (b) any branch profits taxes imposed by the United States or any political subdivision thereof, or any similar tax imposed by any other jurisdiction described in clause (a), (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 11.13), any United States federal withholding tax that is imposed on amounts payable to such Foreign Lender pursuant to any Laws in effect at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office), except to the extent that such Foreign Lender (or in the case of a Foreign Lender that becomes a Lender as a result of an assignment, its assignor) was entitled, immediately prior to the designation of a new Lending Office (or assignment), to receive additional amounts from any Loan Party with respect to such withholding tax pursuant to Section 3.01(a), (d) any withholding tax attributable to a Lender’s failure to comply with Section 3.01(e) that would establish exemption from all withholding taxes; (e) any U.S. federal withholding tax imposed pursuant to FATCA; and (f) any interest, additions to tax or penalties incurred with respect to any of the foregoing.

“Executive Order” has the meaning set forth in Section  5.255.19(c)(i).

“Existing Credit Agreement”has the meaning ascribed thereto in the recitals.

“Existing Holdco Senior Notes” means all outstanding senior notes of Holdings due 2019 issued pursuant tomeans that certain Note Exchange Agreementcredit agreement, dated as of November 30, 2010, by and among Holdings and the other parties thereto, as amended and supplemented prior to the Amendment No. 1 Effective Date, which shall be repaid in full on the Amendment No. 1 Effective Date.

“Existing Senior Notes” means the 10.5% Senior Notes of the Parent Borrower due 2018, issued pursuant to that certain Note Exchange Agreement, dated as of November 30, 2010, by and among the Parent Borrower and the other parties thereto, as amended and supplemented prior to the Amendment No. 1 Effective Date, which shall be repaid in full on the Amendment No. 1 Effective Date.

 

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“Existing Term Facility” means the Credit Agreement, dated as of October 16, 2012, by and among the Parent Borrower,Holdings and Bank of America, as Administrative Agentadministrative agent and the other lenders from time to time party thereto, relating to senior secured term loans borrowed by the Parent Borrower on the date thereof, which shall be repaid in full on the Amendment No. 1 Effective Date.

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

“FCPA”haashas the meaning set forth in Section  5.255.19(b).

“Federal Funds Rate” means, for any day, the rate per annum equal tocalculated by the weighted average of the rates on overnight FederalFederal Reserve Bank of New York based on such day’s federal funds transactions with members ofby depository institutions (as determined in such manner as the Federal Reserve System, asBank of New York shall set forth on its public website from time to time) and published by the Federal Reserve Bank of New York on the Business Day next succeeding such dayBusiness Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate foras so determined would be less than zero, such dayrate shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agentdeemed to be zero for purposes of this Agreement.

“Financial Officer” means, with respect to any Person, the chief financial officer, president, principal accounting officer, director of financial services, treasurer, assistant treasurer or controller of such Person.

“Financial Performance Covenant” shall mean the covenant of the Parent Borrower set forth in Section 7.197.14.

“First Priority” means, with respect to any Lien purported to be created on any Collateral pursuant to any Collateral Document, that such Lien is the most senior Lien to which such Collateral is subject (subject to Permitted Liens).

“Fiscal Month” means any fiscal month of any Fiscal Year.

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

“Fiscal Year” means any period of twelve consecutive months ending on the Saturday closest to September 30 of any calendar year

“Fixed Amounts” has the meaning ascribed thereto in Section 1.08(b).

“Foreign Lender” means any Lender that is not a “United States Person,” as defined in Section 7701(a)(30) of the Code.

 

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“FRB” means the Board of Governors of the Federal Reserve System of the United StatesForeign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board andof the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other principlesstatements by such other entity as may be approved by a significant segment of the accounting profession in(but excluding the United States, that arepolicies, rules and regulations of the SEC applicable only to the circumstances as of the date of determination, consistently appliedpublic companies).

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whetherany federal, state or, local, and any or foreign court or governmental agency, authority, instrumentality, or 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)or legislative body.

“Guarantee”means, as toof or by any Person, (athe “guarantor”) means:

(a) any obligation, contingent or otherwise, of such Personthe guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Personthe guarantor, direct or indirect, (i) :

(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take or pay or otherwise) or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligations;

(ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respectowner of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) thereof;

(iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) ;

 

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(iv) entered into for the purpose of assuring in any other manner the obligee in respectholders of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligeeholders against loss in respect thereof (in whole or in part), or (b) ; or

(v) as an account party in respect of any letter of credit, bank guarantee or other letter of credit guaranty issued to support such Indebtedness or other obligation; or

(b) any Lien on any assets of such Personthe guarantor securing any Indebtedness or other obligation(or any existing right, contingent or otherwise, of the holder of Indebtedness to be secured by such a Lien) of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lienthe guarantor;

provided, that the term “Guarantee” will not include endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted by this Agreement (other than such obligations with respect to Indebtedness).

The amount of any Guarantee shallwill be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof,Indebtedness in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by the guaranteeingsuch Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantee and Collateral Agreement” means the Guarantee and Collateral Agreement to be executed and delivered by Holdings, the Borrowers and each other Guarantor, substantially in the form of Exhibit F, as the same may be amended, supplemented or otherwise modified from time to time.

“Guarantors” means, collectively, Holdings, the Subsidiaries of the Parent Borrower Borrowers listed on Schedule 6.12 annexed to Amendment No. 4 and each other Subsidiary of the Parent BorrowerBorrowers that shall be required to execute and deliver a supplement to the Guarantee and Collateral Agreement pursuant to Section 6.126.10.

“Guaranty” means, collectively, the Guaranty made by Holdings under Article X in favor of the Secured Parties and the Guaranty made by the other Guarantors in favor of the Secured Parties pursuant to the Guarantee and Collateral Agreement, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.126.10.

 

“Hazardous Materials” means all pollutants, contaminants, wastes, chemicals, materials, substances and constituents, including explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, includingpetroleum or petroleum byproducts or petroleum distillates, friable asbestos or friable asbestos-containing materials, polychlorinated biphenyls, or radon gas, toxic molds, infectious or medical wastes and all other substances or wastes of any naturein each case, that are regulated pursuant to, or which couldwould reasonably be expected to give rise to liability under, any Environmental Law.

 

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“Hedge Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar 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, in each case, not entered into for speculative purposes; 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 Holdings or any of its Subsidiaries will be a Hedge Agreement.

“Holdings” has the meaning ascribed thereto in the introductory paragraph hereto and shall include any successor Person as permitted by Section 7.04.

“Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary that (i) did not, as of the last day of the most recent fiscal quarter of the Borrowers for which Required Financial Statements have been delivered (or were required to be delivered), have assets with a value in excess of 2.50% of the Consolidated Total Assets or revenues representing in excess of 2.50% of total revenues of the Borrowers and the Restricted Subsidiaries for the period of four consecutive fiscal quarters for which Required Financial Statements have been delivered (or were required to be delivered), calculated on a consolidated basis in accordance with GAAP; and (ii) taken together with all Immaterial Subsidiaries as of the last day of the most recent fiscal quarter of the Borrowers for which Required Financial Statements have been delivered (or were required to be delivered), did not have assets with a value in excess of 5.00% of Consolidated Total Assets or revenues representing in excess of 5.00% of total revenues of the Borrowers and the Restricted Subsidiaries on a consolidated basis for such four-quarter period.

“Impacted Loans” has the meaning assigned to such term in Section 3.03(a).

“Incremental Amendment” has the meaning ascribed thereto in Section 2.08(d).

“Incremental Facility Closing DateIncurrence Based Amounts” has the meaning ascribed thereto in Section 2.081.08(d b).

“Indebtedness” means, aswith respect to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and ;

(b) all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial letters of credit), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c) netall obligations of such Person under Swap Contractsconditional sale or title retention agreements relating to property or assets purchased by such Person;

 

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(d) all obligations of such Person to pay the deferred purchase price of property or services (other than deferred compensation and trade accounts payable in the ordinary course of business which are being disputed in good faith by appropriate proceedings or which are not past due for more than 120 days after the date on which such trade account was created);issued or assumed as the deferred purchase price of property or services, to the extent the same would be required to be shown as a long-term liability on a balance sheet prepared in accordance with GAAP;

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse (but limited, in the case of indebtedness of others, to the lesser of the fair market value of such property and the outstanding principal amount of such indebtedness);

(e) (f)  all Attributable Indebtedness in respect of Capitalized Leases and SyntheticCapital Lease Obligations of such Person and ;

(f) all Synthetic Debt ofnet payments that such Person would have to make in the event of an early termination, on the date Indebtedness of such Person is being determined, in respect of outstanding Hedge Agreements;

(g) the principal component of all obligations, contingent or otherwise, of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in as an account party in respect of letters of credit and bank guarantees;

(h) the principal component of all obligations of such Person in respect of bankers’ acceptances;

 

(i) all Guarantees by such Person of Indebtedness described in clauses (1) through (8) above; and

(j) the caseamount of a redeemable preferred interest, at the greater of its voluntary or involuntaryall obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (excluding accrued dividends that have not increased the liquidation preference plus accrued and unpaid dividends; andof such Disqualified Stock);

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the

provided that Indebtedness will not include:

(a) trade payables, accrued expenses and intercompany liabilities arising in the ordinary course of business;

(b) prepaid or deferred revenue arising in the ordinary course of business;

 

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(c) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase prices of an asset to satisfy unperformed obligations of the seller of such asset; or

(d) earn-out obligations until such obligations become a liability on the balance sheet of such Person in accordance with GAAP.

The Indebtedness of any Person shallwill include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless, other than to the extent that the instrument or agreement evidencing such Indebtedness is non-recourse toexpressly limits the liability of such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of outstanding Indebtedness as of any date shall be the principal amount or accreted value thereof at such date in respect thereof.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning ascribed thereto in Section 11.04(b).

“Information” has the meaning ascribed thereto in Section 11.07.

“Intellectual Property” means all present and future: trade secrets, know-how and other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations which have heretofore been or may hereafter be issued thereon throughout the world and all business goodwill associated therewith; copyrights and copyright applications (including copyrights in computer programs), unpatented inventions (whether or not patentable), patents and patent applications, industrial design applications and registered industrial designs, rights arising under computer software, whether in source or object code format, and any related databases; and any other intellectual property wherever recognized in the world Rights” has the meaning ascribed thereto in Section 5.20(a).

“Intercreditor Agreement” means that certain Amended and Restated Intercreditor Agreement, dated as of the Amendment No. 1 Effective DateAugust 16, 2016, by and among the Administrative Agent and the Term Loan Administrative Agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance therewith.

“Interest Coverage Ratio” means, as of any date, the ratio of (1) Consolidated EBITDA for the most recently ended Measurement Period prior to such daterecent period of four consecutive fiscal quarters for which Required Financial Statements have been delivered, calculated on a Pro Forma Basis, to (2) the sum of (a) the ConsolidatedRatio Interest Expense for such period, calculated on a Pro Forma Basis, and (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Capital Stock of the Parent Borrower or preferred stock of any of the Restricted Subsidiaries, in each case, made during such period.

 

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