UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________________________________________________________________
FORM 8-K
__________________________________________________________________________
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 30, 2021
________________________________________________________________________
CURO GROUP HOLDINGS CORP.
(Exact Name of Registrant as Specified in Its Charter)
________________________________________________________________________
Delaware | 001-38315 | 90-0934597 |
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
3615 North Ridge Road, Wichita, Kansas | 67205 | |
(Address of Principal Executive Offices) | (Zip Code) |
(316) 772-3801
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common stock | CURO | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule12b-2of the Securities Exchange Act of 1934(§240.12b-2of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 2.03 of this report is incorporated herein by reference.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant
On July 30, 2021, CURO Group Holdings Corp. (the “Company”) entered into an indenture (the “Indenture”) with the guarantors party thereto and TMI Trust Company, as trustee and collateral agent, in connection with the Company’s previously announced offering of $750,000,000 aggregate principal amount of its 7.500% Senior Secured Notes due 2028 (the “Notes”).
The net proceeds from the issuance of the Notes, together with available cash will be used (i) to redeem the outstanding 8.250% Senior Secured Notes due 2025 (the “2025 Notes”), (ii) to pay fees, expenses, premiums and accrued interest in connection therewith and (iii) for general corporate purposes with remaining amounts (if any).
Pursuant to a redemption notice previously issued by the Company, the redemption in full of all of the outstanding 2025 Notes is scheduled to occur on August 12, 2021. Upon the deposit of the redemption price with the trustee of the 2025 Notes on July 30, 2021, the indenture governing the 2025 Notes, dated as of August 27, 2018, by and between the guarantors party thereto and TMI Trust Company as trustee and collateral agent, was satisfied and discharged.
The Notes are guaranteed by the Company and by each of its existing and future domestic restricted subsidiaries that are not receivables entities or immaterial subsidiaries. The Notes are secured by liens on substantially all of the Company’s and the guarantors’ assets (including a pledge of equity interests by the Company and the guarantors held in certain direct and indirect subsidiaries), pursuant to a security agreement (the “Security Agreement”) and a pledge agreement (the “Pledge Agreement”), each dated as of July 30, 2021, entered into by the Company and the guarantors in favor of TMI Trust Company, as collateral agent under the Indenture, subject to certain exceptions and permitted liens; provided, however, that, the liens securing the Notes are contractually subordinated to the liens that secure the indebtedness under the $50 million senior secured revolving loan facility entered into by CURO Financial Technologies Corp. and CURO Intermediate Holdings Corp., each a wholly owned subsidiary of the Company, and guaranteed by the Company and each of its subsidiaries that guarantee the Notes (the “Revolving Loan Agreement”), pursuant to the terms of an intercreditor agreement (the “Intercreditor Agreement”) between TMI Trust Company, as collateral agent under the Indenture, and the agent for the lenders under the Revolving Loan Agreement.
Prior to August 1, 2024, the Company may redeem up to 10% of the aggregate principal amount of the Notes during each 12-month period following July 30, 2021 at a redemption price of 103% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the applicable redemption date. Additionally, at any time prior to August 1, 2024, the Company may redeem (i) up to 40% of the aggregate principal amount of the Notes at a price equal to 107.500% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the applicable redemption date with the net proceeds of certain equity offerings; and (ii) some or all of the Notes at a make-whole price. On or after August 1, 2024, the Company may redeem some or all of the Notes at a premium that will decrease over time, plus accrued and unpaid interest, if any, to the applicable date of redemption. The redemption price for the Notes if redeemed during the 12 months beginning (i) August 1, 2024 is 103.750%, (ii) August 1, 2025 is 101.875% and (iii) August 1, 2026 and thereafter is 100.000%.
The offering of the Notes was not registered under the Securities Act of 1933, as amended (the “Securities Act”), and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Notes were sold to “qualified institutional buyers” as defined in Rule 144A under the Securities Act, and non-U.S. persons outside the United States under Regulation S under the Securities Act.
The foregoing descriptions of the Indenture, Security Agreement, Pledge Agreement and Intercreditor Agreement do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of such agreements, which are filed herewith as exhibits hereto and are incorporated by reference herein.
ITEM 9.01 Financial Statements and Exhibits
(d). Exhibits
The following exhibits are being filed with this Current Report on Form 8-K:
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 3rd day of August, 2021.
CURO Group Holdings Corp. | ||
By: | /s/Roger Dean | |
Roger Dean | ||
Executive Vice President, Chief Financial Officer and Acting Chief Accounting Officer |
EXHIBIT 4.1
EXECUTION VERSION |
CURO Group Holdings Corp.
as the Issuer
and the Guarantors party hereto
$750,000,000
aggregate principal amount of
7.500% SENIOR SECURED NOTES DUE 2028
INDENTURE
Dated as of July 30, 2021
TMI Trust Company
as Trustee and Collateral Agent
Table of Contents
Page
ARTICLE 1 Definitions and Incorporation by Reference | 1 |
Section 1.01 Definitions | 1 |
Section 1.02 Other Definitions | 33 |
Section 1.03 Incorporation by Reference of Trust Indenture Act | 34 |
Section 1.04 Rules of Construction | 34 |
ARTICLE 2 The Notes | 35 |
Section 2.01 Form and Dating | 35 |
Section 2.02 Execution and Authentication | 36 |
Section 2.03 Registrar and Paying Agent | 37 |
Section 2.04 Paying Agent to Hold Money in Trust | 37 |
Section 2.05 Holder Lists | 37 |
Section 2.06 Transfer and Exchange | 38 |
Section 2.07 Replacement Notes | 50 |
Section 2.08 Outstanding Notes | 50 |
Section 2.09 Treasury Notes | 50 |
Section 2.10 Temporary Notes | 51 |
Section 2.11 Cancellation | 51 |
Section 2.12 Defaulted Interest | 51 |
Section 2.13 CUSIP Numbers | 51 |
Section 2.14 Issuance of Additional Notes | 52 |
ARTICLE 3 Redemption and Prepayment | 52 |
Section 3.01 Notices to Trustee | 52 |
Section 3.02 Selection of Notes to be Redeemed | 52 |
Section 3.03 Notice of Redemption | 53 |
Section 3.04 Effect of Notice of Redemption | 54 |
Section 3.05 Deposit of Redemption Price | 54 |
Section 3.06 Notes Redeemed in Part | 55 |
Section 3.07 Optional Redemption | 55 |
Section 3.08 Mandatory Redemption | 56 |
Section 3.09 Offer to Purchase by Application of Excess Proceeds. | 56 |
Section 3.10 [Reserved] | 58 |
Section 3.11 Company May Acquire Notes | 58 |
ARTICLE 4 Satisfaction and Discharge | 58 |
Section 4.01 Satisfaction and Discharge | 58 |
Section 4.02 Application of Trust Money | 59 |
ARTICLE 5 Covenants | 59 |
Section 5.01 Payment of Notes | 59 |
Section 5.02 Maintenance of Office or Agency | 60 |
Section 5.03 Reports | 60 |
Section 5.04 Compliance Certificate | 61 |
i |
Table of Contents
(continued)
Page
Section 5.05 Taxes | 62 |
Section 5.06 Stay, Extension and Usury Laws | 62 |
Section 5.07 Restricted Payments | 62 |
Section 5.08 Dividend and Other Payment Restrictions Affecting Subsidiaries | 66 |
Section 5.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 68 |
Section 5.10 Asset Sales | 73 |
Section 5.11 Transactions with Affiliates | 76 |
Section 5.12 Liens | 77 |
Section 5.13 Corporate Existence; Maintenance of Property and Insurance | 77 |
Section 5.14 Offer to Repurchase Upon Change of Control | 78 |
Section 5.15 Designation of Restricted and Unrestricted Subsidiaries | 80 |
Section 5.16 [Reserved] | 80 |
Section 5.17 Additional Subsidiary Guarantees | 80 |
Section 5.18 Business Activities | 81 |
Section 5.19 [Reserved] | 81 |
Section 5.20 [Reserved] | 81 |
Section 5.21 Mortgages | 82 |
Section 5.22 Further Assurances | 82 |
Section 5.23 Limited Condition Transaction | 83 |
Section 5.24 Covenant Suspension | 83 |
ARTICLE 6 Successors | 85 |
Section 6.01 Merger, Consolidation or Sale of Assets | 85 |
Section 6.02 Successor Entity Substituted | 87 |
ARTICLE 7 Defaults and Remedies | 88 |
Section 7.01 Events of Default | 88 |
Section 7.02 Acceleration | 90 |
Section 7.03 Other Remedies | 90 |
Section 7.04 Waiver of Past Defaults | 91 |
Section 7.05 Control by Majority | 91 |
Section 7.06 Limitation on Suits | 91 |
Section 7.07 Rights of Holders To Receive Payment | 92 |
Section 7.08 Collection Suit By Trustee | 92 |
Section 7.09 Trustee May File Proofs of Claim | 92 |
Section 7.10 Priorities | 92 |
Section 7.11 Undertaking For Costs | 93 |
Section 7.12 Rights and Remedies Cumulative | 93 |
Section 7.13 Delay or Omission Not Waiver | 93 |
ARTICLE 8 Trustee | 94 |
Section 8.01 Duties of Trustee | 94 |
Section 8.02 Rights of Trustee | 95 |
ii |
Table of Contents
(continued)
Page
Section 8.03 Individual Rights of Trustee | 97 |
Section 8.04 Trustee’s Disclaimer | 97 |
Section 8.05 Notice of Defaults | 97 |
Section 8.06 Reports by Trustee to Holders | 97 |
Section 8.07 Compensation and Indemnity | 97 |
Section 8.08 Replacement of Trustee | 99 |
Section 8.09 Successor Trustee by Merger, Etc. | 100 |
Section 8.10 Eligibility, Disqualification | 100 |
Section 8.11 Preferential Collection of Claims Against Company | 100 |
ARTICLE 9 Legal Defeasance and Covenant Defeasance | 100 |
Section 9.01 Option to Effect Legal Defeasance or Covenant Defeasance | 100 |
Section 9.02 Legal Defeasance and Discharge | 100 |
Section 9.03 Covenant Defeasance | 101 |
Section 9.04 Conditions to Legal or Covenant Defeasance | 101 |
Section 9.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions | 102 |
Section 9.06 Repayment to Company | 103 |
Section 9.07 Reinstatement | 103 |
ARTICLE 10 Amendment, Supplement and Waiver | 104 |
Section 10.01 Without Consent of Holders | 104 |
Section 10.02 With Consent of Holders | 105 |
Section 10.03 Revocation and Effect of Consents | 106 |
Section 10.04 Notation On or Exchange of Notes | 107 |
Section 10.05 Trustee or Collateral Agent to Sign Amendments, Etc. | 107 |
ARTICLE 11 Guarantees | 107 |
Section 11.01 Guarantees | 107 |
Section 11.02 Additional Guarantors | 108 |
Section 11.03 Releases of Guarantees | 109 |
Section 11.04 Limitation on Guarantor Liability | 110 |
Section 11.05 “Trustee” to Include Paying Agent | 110 |
ARTICLE 12 Miscellaneous | 111 |
Section 12.01 Notices | 111 |
Section 12.02 Communication by Holders with Other Holders | 113 |
Section 12.03 Certificate and Opinion as to Conditions Precedent | 113 |
Section 12.04 Statements Required in Certificate or Opinion | 113 |
Section 12.05 Rules by Trustee and Agents | 114 |
Section 12.06 No Personal Liability of Directors, Officers, Employees and Stockholders | 114 |
Section 12.07 Governing Law | 114 |
Section 12.08 No Adverse Interpretation of Other Agreements | 114 |
Section 12.09 Successors | 114 |
iii |
Table of Contents
(continued)
Page
Section 12.10 Severability | 114 |
Section 12.11 Counterpart Originals | 115 |
Section 12.12 Table of Contents, Headings, Etc. | 115 |
Section 12.13 Intercreditor Agreement | 115 |
Section 12.14 Payments Due on Non-Business Days | 115 |
Section 12.15 Waiver of Jury Trial | 116 |
ARTICLE 13 Collateral and Security | 116 |
Section 13.01 Collateral Documents | 116 |
Section 13.02 Recording and Opinions | 116 |
Section 13.03 Release of Collateral | 117 |
Section 13.04 Specified Releases of Collateral | 117 |
Section 13.05 Release upon Satisfaction or Defeasance of all Outstanding Obligations | 118 |
Section 13.06 Form and Sufficiency of Release and Subordination | 118 |
Section 13.07 Purchaser Protected | 119 |
Section 13.08 Authorization of Actions to be Taken by the Collateral Agent Under the Collateral Documents | 119 |
Section 13.09 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents | 121 |
Section 13.10 Action by the Collateral Agent | 121 |
Section 13.11 Compensation and Indemnity | 122 |
Section 13.12 Co-Collateral Agent; Separate Collateral Agent | 123 |
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Certificate of Transfer
Exhibit C - Form of Certificate of Exchange
Exhibit D - Form of Certificate from Acquiring Accredited Investor
Exhibit E - Form of Supplemental Indenture
iv |
INDENTURE dated as of July 30, 2021, among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors (as defined herein) from time to time party hereto and TMI Trust Company, as trustee and collateral agent.
The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 7.500% Senior Secured Notes due 2028 (the “Notes”, including the $750,000,000 aggregate principal amount of Notes to be issued on the date hereof (the “Initial Notes”) and any Additional Notes (as defined herein) that may be issued from time to time):
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01 Definitions.
“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“Accession Agreement” means an accession agreement, if any, to the Collateral Documents, in substantially the form provided therein, entered into by the Company, the Guarantors, the agent, trustee or other representative for the holders of any Pari Passu Indebtedness and the Collateral Agent from time to time.
“Accredited Investor” means an “accredited investor” as defined in Rule 501(a) under the Securities Act, who is not also a QIB.
“Acquired Debt” means with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person was merged with or into or became a Subsidiary of such specified Person, including Indebtedness Incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person at the time such asset is acquired by such specified Person.
“Additional Notes” means any Notes issued after the Issue Date from time to time in accordance with the terms of this Indenture including the provisions of Sections 2.02, 2.14 and 5.09.
“Administrative Agent” means Bay Coast Bank, as the administrative agent under the Credit Agreement, or any successor thereto.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. No Person (other than the Company or any Subsidiary of the Company) in whom a Receivables Entity makes an Investment in connection with a Qualified Receivables Transaction will be deemed to be an Affiliate of the Company or any of its Subsidiaries solely by reason of such Investment.
“Agent” means any Registrar, Paying Agent, any co-Registrar or any additional Paying Agent.
“AI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Accredited Investors.
“Applicable Premium” means with respect to a Note at any redemption date, the greater of (i) 1.00% of the principal amount of such Note and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on August 1, 2024 (such redemption price being set forth in subsection (a) of Section 3.07 exclusive of any accrued interest) plus (2) all required remaining scheduled interest payments due on such Note through August 1, 2024 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate plus 0.50%, over (B) the principal amount of such Note on such redemption date.
“Applicable Procedures” means, with respect to any tender, redemption, payment, transfer or exchange of beneficial interests in a Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that are applicable to such tender, redemption, payment, transfer or exchange.
“Asset Sale” means:
(1) the sale, lease, transfer, conveyance or other disposition of any assets; provided that the sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole, or the Company and its Restricted Subsidiaries, taken as a whole, as applicable, will be governed by the provisions of Section 5.14 and/or the provisions of Section 6.01 and not by the provisions of Section 5.10;
(2) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company’s Restricted Subsidiaries; and
(3) an Event of Loss.
In the case of clause (1), (2) or (3), whether in a single transaction or a series of related transactions:
2 |
(A) that have a Fair Market Value in excess of the greater of (i) $10.0 million and (ii) 3.5% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended; or
(B) for Net Proceeds in excess of the greater of (i) $10.0 million and (ii) 3.5% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended.
Notwithstanding the foregoing, none of the following will be deemed to be an Asset Sale:
(1) a transfer of assets to the Company or any Restricted Subsidiary of the Company (other than a Receivables Entity);
(2) an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to a Restricted Subsidiary of the Company;
(3) for purposes of Section 5.10 only, a Restricted Payment that is permitted by Section 5.07 or a Permitted Investment;
(4) the Incurrence of Permitted Liens and the disposition of assets subject to such Liens by or on behalf of the Person holding such Liens;
(5) the sale, transfer or other disposition of accounts in accordance with industry practice in connection with the compromise or collection thereof;
(6) any disposition of cash or Cash Equivalents;
(7) the lease, assignment or sub-lease of any property in the ordinary course of business;
(8) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;
(9) sales of assets that have become worn out, obsolete or damaged or otherwise unsuitable for use in connection with the business of the Company or any of its Restricted Subsidiaries;
(10) the license of patents, trademarks, copyrights, software applications and know-how to Restricted Subsidiaries of the Company and to third Persons in the ordinary course of business;
(11) the sale, transfer or other disposition of precious metals in the ordinary course of business;
(12) dispositions of motor vehicles securing consumer loans made by the Company and its Restricted Subsidiaries in the ordinary course of business;
3 |
(13) sales of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity;
(14) transfers of loans receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” by a Receivables Entity in a Qualified Receivables Transaction; and
(15) any disposition of the equity of Katapult Holdings, Inc.
“Bankruptcy Law” means any of Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, any successors to such statutes and any other applicable bankruptcy, insolvency, winding-up, dissolution, restructuring, receivership, arrangement, liquidation, reorganization or similar law of any jurisdiction providing relief from or otherwise affecting the rights of creditors.
“Board of Directors” means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the board of directors or other governing body of the general partner of the partnership;
(3) with respect to a limited liability company, the board of directors, managers or other governing body, and in the absence of the same, the managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person or other individual or entity serving a similar function.
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York or in the city of the Corporate Trust Office of the Trustee are authorized or obligated by law or executive order to close.
“Capital Lease Obligation” of any Person means the obligations of such Person to pay rent or other amounts under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property which are required to be classified and accounted for as a capital lease or capitalized on a balance sheet of such Person determined in accordance with GAAP and the amount of such obligations shall be the capitalized amount thereof in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease or other arrangement prior to the first date upon which such lease or other arrangement may be terminated by the lessee without payment of a penalty; provided that any obligations of the Company and its Restricted Subsidiaries either existing on the Issue Date or created prior to the recharacterization described below (i) that were not included on the consolidated balance sheet of the Company as capital lease obligations and (ii)
4 |
that are subsequently recharacterized as capital lease obligations due to a change in accounting treatment or otherwise, shall for all purposes of this Indenture (including, without limitation, the calculation of Consolidated Net Income and Consolidated Cash Flow) not be treated as Capital Lease Obligations or Indebtedness.
“Capital Stock” means:
(1) in the case of a corporation, corporate stock or shares;
(2) in the case of an association or business entity other than a corporation, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) 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;
but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with such Capital Stock.
“Cash Equivalents” means:
(1) marketable direct obligations issued by, or unconditionally Guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition;
(2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or banker’s acceptances having maturities of one year or less from the date of acquisition issued by any lender to the Company or any of its Subsidiaries or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $250,000,000;
(3) commercial paper of an issuer rated at least A-1 by Standard & Poor’s Ratings Group (“S&P”) or P-1 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition;
(4) repurchase obligations of any financial institution satisfying the requirements of clause (2) of this definition, having a term of not more than 30 days, with respect to securities issued or fully Guaranteed or insured by the United States government;
(5) securities with maturities of one year or less from the date of acquisition issued or fully Guaranteed by any state of the United States, by any political subdivision or taxing authority of any such state or by any foreign government, the securities of which state,
5 |
political subdivision, taxing authority or foreign government (as the case may be) have one of the two highest rating obtainable from either S&P or Moody’s;
(6) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any financial institution satisfying the requirements of clause (2) of this definition;
(7) money market, mutual or similar funds that invest at least 95% of their assets in assets satisfying the requirements of clauses (1) through (6) of this definition;
(8) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $1,000,000,000; and
(9) with respect to Foreign Subsidiaries only, any Investments outside of the United States that are functional foreign equivalents in all material respects to the Cash Equivalents described in clauses (1) through (5) above.
“Cash Management Obligations” means, with respect to any Person, all obligations of such Person in respect of overdrafts and liabilities owed to any other Person that arise from treasury, depositary or cash management services, including in connection with any automated clearing house transfers of funds, or any similar transactions.
“CFC” means a controlled foreign corporation within the meaning of Section 957(a) of the Code and any entity that wholly owns the stock of a CFC and which is disregarded for United States federal income purposes as an entity that is separate from its owner.
“Change of Control” means the occurrence of any of the following:
(1) the direct or indirect sale, conveyance, transfer, lease or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) other than the Permitted Holders;
(2) the adoption of a plan relating to the liquidation or dissolution of the Company; or
(3) the consummation of any transaction (including any merger or consolidation) the result of which is that any “person” or “group” (as defined above) other than the Permitted Holders, becomes the “beneficial owner” (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (3) such “person” or “group” shall be deemed to have “beneficial ownership” of all shares that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the voting stock of the Company.
6 |
“Clearstream” means Clearstream Banking, societe anonyme, Luxembourg (or any successor thereto).
“Code” means the Internal Revenue Code of 1986.
“Collateral” means the collateral securing the Indenture Obligations.
“Collateral Agent” means TMI Trust Company, in its capacity as Collateral Agent under the Collateral Documents, together with its successors in such capacity.
“Collateral Documents” means the Security Agreement, the Pledge Agreement, the Mortgages and any other agreement, document or instrument pursuant to which a Lien is granted by the Company or a Guarantor to secure any Indenture Obligations and any Pari Passu Payment Lien Obligations or under which rights or remedies with respect to any such Lien are governed.
“Consolidated Cash Flow” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period plus:
(1) an amount equal to any extraordinary or non-recurring loss, to the extent that such losses were deducted in computing such Consolidated Net Income; plus
(2) an amount equal to any net loss realized in connection with an Asset Sale, the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness by such Person or its Restricted Subsidiaries, to the extent such losses were deducted in computing such Consolidated Net Income; plus
(3) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
(4) Consolidated Interest Expense of such Person and its Restricted Subsidiaries for such period; plus
(5) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) to the extent deducted in computing such Consolidated Net Income; plus
(6) without duplication of the application of clause (4) of the definition of Consolidated Net Income, write offs, write downs or impairment of goodwill or other intangible assets, unrealized mark-to-market losses, and other non-cash charges and expenses (excluding any such other non-cash charge or expense to the extent that it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent deducted in computing such Consolidated Net Income; plus
(7) any fees or expenses relating to a Qualified Receivables Transaction, to the extent such fees or expenses are deducted in computing Consolidated Net Income; plus
7 |
(8) any one-time, non-recurring expenses or charges related to any Equity Offering, Permitted Investment, acquisition, recapitalization or Indebtedness permitted to be incurred under this Indenture (including a refinancing thereof), whether or not successful, including (i) such fees, expenses or charges related to the offering of the Notes and the Credit Agreement and (ii) any amendment or other modification of this Indenture, in each case, deducted in computing Consolidated Net Income; plus
(9) the amount of any costs, charges, accruals, reserves or expenses attributable to the undertaking and/or implementation of cost savings initiatives, operating expense reductions, operating improvements and other synergies and similar initiatives during such period; plus
(10) the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies projected by the Company in good faith to be reasonably anticipated to be realizable or for which a plan for realization shall have been established within 18 months of the date thereof (which will be added to Consolidated Cash Flow as so projected until fully realized and calculated on a pro forma basis as though such cost savings, operating expense reductions, other operating improvements and initiatives and synergies had been realized on the first day of such period); provided that all or substantially all steps have been taken for realizing such cost savings and such cost savings are reasonably identifiable and factually supportable (in the good faith determination of the Company); provided further that the aggregate amount of addbacks made pursuant to clause (9) and this clause (10) in any four fiscal quarter period shall not exceed 20.0% of Consolidated Cash Flow (after giving effect to any such addbacks) for such four fiscal quarter period; minus
(11) all non-cash items to the extent that such non-cash items increased Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period and any items for which cash was received in a prior period).
Notwithstanding the foregoing, the provision for taxes based on income or profits of, and the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of a Person shall be added to Consolidated Net Income to compute Consolidated Cash Flow only to the extent (and in the same proportion) that the Net Income of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such Person.
“Consolidated Interest Expense” means, with respect to any Person for any period, the sum of, without duplication:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges Incurred in respect of letter of credit or bankers’ acceptance financings, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations); provided that the amortization or write-off of capitalized financing or debt issuance costs shall be excluded; plus
8 |
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person to the extent that such Indebtedness is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on the assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon).
“Consolidated Net Income” means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that:
(1) solely for the purpose of Section 5.07, the Net Income of any Person that is not a Restricted Subsidiary of such Person, or that is accounted for by the equity method of accounting shall be included, but only to the extent of the amount of dividends or distributions that have been distributed in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders, unless such restriction has been legally waived;
(3) the cumulative effect of a change in accounting principles shall be excluded;
(4) the effect of any non-cash impairment charges or write-ups, write-downs or write-offs of assets or liabilities of Foreign Subsidiaries resulting from the application of GAAP and the amortization of intangibles of Foreign Subsidiaries arising from the application of GAAP, including pursuant to ASC 805, Business Combinations, ASC 350, Intangibles-Goodwill and Other, or ASC 360, Property, Plant and Equipment, as applicable, shall be excluded; and
(5) Consolidated Net Income shall not be reduced by any fees and expenses paid or payable in respect of the offering contemplated hereby, the application of the use of proceeds therefrom and related transactions.
“Consolidated Tangible Assets” means with respect to the Company as of any date, the aggregate of the assets of the Company and its Restricted Subsidiaries, excluding goodwill and any other assets properly classified as intangible assets in accordance with GAAP, shown on the balance sheet for the most recently ended fiscal quarter for which financial statements are available, determined on a consolidated basis in accordance with GAAP.
“Consolidated Total Debt” means, as of any date of determination, an amount equal to the aggregate principal amount of Indebtedness of the Company and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with
9 |
GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with any acquisition permitted under this Indenture), with such pro forma adjustments as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of the term “Consolidated Total Leverage Ratio.”
“Consolidated Total Leverage Ratio” means, with respect to any specified Person, as of any date of determination, the ratio of (i) (x) the Consolidated Total Debt minus (y) the amount of cash and Cash Equivalents of the Company and its Restricted Subsidiaries (other than Receivables Entities) that is not Restricted, in each case, as of such date of determination, to (ii) Consolidated Cash Flow of such Person for the most recently ended four fiscal quarters for which internal financial statements are available. In the event that the Company or any of its Restricted Subsidiaries Incurs or redeems any Indebtedness (other than revolving credit borrowings) or issues or redeems Preferred Stock subsequent to the commencement of the period for which the Consolidated Total Leverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Consolidated Total Leverage Ratio is made (the “Calculation Date”), the Consolidated Total Leverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness, or such issuance or redemption of Preferred Stock (including the application of any proceeds therefrom), as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of making the computation referred to above:
(1) acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated to include the Consolidated Cash Flow of the acquired entities (adjusted to exclude (A) the cost of any compensation, remuneration or other benefit paid or provided to any employee, consultant, Affiliate or equity owner of the acquired entities to the extent such costs are eliminated and not replaced and (B) the amount of any reduction in general, administrative or overhead costs of the acquired entities, in each case, as determined in good faith by an officer of the Company);
(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded;
(3) any Person that is a Restricted Subsidiary of the Company on the Calculation Date will be deemed to have been a Restricted Subsidiary of the Company at all times during such four-quarter period;
(4) any Person that is not a Restricted Subsidiary of the Company on the Calculation Date will be deemed not to have been a Restricted Subsidiary of the Company at any time during such four-quarter period; and
10 |
(5) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).
“Corporate Trust Office of the Trustee” shall be the address of the Trustee specified in Section 12.01 or such other address as to which the Trustee may give notice to the Company.
“Credit Agreement” means the Revolving Loan Agreement, dated as of September 1, 2017, by and among CURO Financial Technologies Corp. and CURO Intermediate Holdings Corp., as borrowers, certain subsidiaries of CURO Intermediate Holdings Corp., as guarantors, the lenders from time to time parties thereto and the Administrative Agent, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, as amended or supplemented from time to time in accordance with its terms.
“Credit Facility” means one or more debt facilities, including the Credit Agreement, or other financing arrangements (including commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit, bankers acceptances or other indebtedness, including any notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case, as amended, extended, renewed, restated, supplemented, replaced (whether or not upon termination and whether with the original lenders, institutional investors or otherwise), refinanced (including through the issuance of debt securities), restructured or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any agreement (and related document) governing Indebtedness incurred to refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Facility or a successor Credit Facility, whether by the same or any other agent, lender or group of lenders (or institutional investors).
“CSO Obligations” means obligations to purchase, or other Guarantees of, consumer loans the making of which were facilitated by the Company or a Restricted Subsidiary of the Company acting as a credit services organization or other similar service provider.
“Default” means any event that is or with the passage of time or the giving of notice or both would be an Event of Default; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default shall be deemed to be cured if such previous Default is cured prior to becoming an Event of Default.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
11 |
“Depositary” means a clearing agency registered under the Exchange Act that is designated to act as Depositary for the Notes until a successor Depositary shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and, thereafter, “Depositary” shall mean or include such successor Depositary. The Depositary initially is DTC.
“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or any of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 5.10.
“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder) or upon the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Subsidiary of the Company; provided that any such conversion or exchange will be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable); or
(3) is redeemable at the option of the holder thereof, in whole or in part,
in the case of each of clauses (1), (2) and (3), on or prior to the 91st day after the Stated Maturity of the Notes; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring on or prior to the 91st day after the Stated Maturity of the Notes will not constitute Disqualified Stock if the terms of such Capital Stock provide that such Person may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company’s purchase of the Notes as are required to be purchased pursuant to Sections 5.10 and 5.14.
“Domestic Subsidiary” means any Restricted Subsidiary other than a Foreign Subsidiary.
“DTC” means The Depository Trust Company, a New York corporation.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for Capital Stock).
12 |
“Equity Offering” means a sale for cash of either common equity securities or units including or representing common equity securities of the Company (other than to a Subsidiary of the Company).
“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System (or any successor thereto).
“Event of Loss” means, with respect to any property or asset, any (i) loss or destruction of, or damage to, such property or asset or (ii) any condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset, or confiscation or requisition of the use of such property or asset.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Excluded Assets” means:
(1) the voting Capital Stock of any CFC in excess of 65% of all of the outstanding voting Capital Stock of such CFC;
(2) motor vehicles covered by certificates of title or ownership to the extent that a security interest cannot be perfected solely by filing a UCC-1 financing statement (or similar instrument);
(3) (x) real property owned by the Company or any of the Guarantors in fee simple that has a Fair Market Value of less than $20.0 million and (y) leasehold interests in real property with respect to which the Company or any Guarantor is a tenant or subtenant;
(4) rights under any contracts that contain a valid and enforceable prohibition on assignment of such rights (other than to the extent that any such prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code of any relevant jurisdiction or any other applicable law or principles of equity), but only for so long as such prohibition exists and is effective and valid;
(5) property and assets owned by the Company or any Guarantor that are the subject of Permitted Liens described in clause (7) of the definition thereof for so long as such Permitted Liens are in effect and the Indebtedness secured thereby otherwise prohibits any other Liens thereon, but only for so long as such prohibition exists and is effective and valid;
(6) deposit accounts of the Company or any Guarantor exclusively used for payroll, payroll taxes and other employee wage and benefit payments;
(7) property or assets owned by any Subsidiary of the Company that is not a Guarantor;
(8) any application for registration of a trademark filed with the United States Patent and Trademark Office on an intent-to-use basis until such time (if any) as a statement of use or amendment to allege use is accepted by such office, at which time such trademark shall
13 |
automatically become part of the Collateral and subject to the security interest of the Indenture Documents;
(9) letter of credit rights in favor of the Company or any Guarantor that do not secure the Company’s or such Guarantor’s obligations under any Credit Facility;
(10) Equity Interests in any joint venture only to the extent and for so long as a pledge thereof is not permitted by the terms of the joint venture or other agreement under which such joint venture is organized;
(11) any segregated deposits that constitute Permitted Liens under clauses (5), (6), (9), (11), (12) and (19) of the definition of Permitted Liens, in each case, that are prohibited from being subject to other Liens; and
(12) proceeds and products from any and all of the foregoing excluded assets described in clauses (1) through (11), unless such proceeds or products would otherwise constitute Collateral securing the Notes.
Notwithstanding the foregoing, to the extent that the Company or a Guarantor grants a Lien on any asset or right described in clause (1) through (12) above to secure any First Priority Claims or any Pari Passu Payment Lien Obligations, such asset or right shall not constitute “Excluded Assets.”
“Excluded Contributions” means the net cash proceeds and/or Cash Equivalents received by the Company after the Issue Date from:
(1) contributions to its common equity capital; and
(2) the sale (other than to the Company or to a Subsidiary of the Company or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Company or any Subsidiary of the Company) of Capital Stock (other than Disqualified Stock) of the Company;
in each case designated as Excluded Contributions pursuant to an Officer’s Certificate, the proceeds of which are excluded from the calculation set forth in Section 5.07(a)(iv)(C).
“Existing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries outstanding on the Issue Date (other than the Existing U.S. SPV Facility, the Existing Revolving Canada SPV Facility and the Existing Flexiti SPE Facility) until such Indebtedness is repaid.
“Existing Cash Money Revolving Credit Facility” means the Cash Money Revolving Credit Facility, dated as of July 3, 2011, by and among Cash Money Cheque Cashing, Inc., as borrower, and Royal Bank of Canada, as agent and lender, as amended or supplemented from time to time in accordance with its terms.
14 |
“Existing Flexiti SPE Facility” means the Non-Recourse U.S. SPE Facility, dated as of January 28, 2021, among Flexiti Financing SPE Corp., as borrower, Flexiti Financial Inc., as seller and servicer, Credit Suisse AG, New York Branch, as facility agent, TSX Trust Company, as collateral agent and verification agent, Credit Suisse AG, New York Branch, as syndication agent, documentation agent and the lead arranger and the lenders party thereto from time to time, as amended or supplemented from time to time in accordance with its terms.
“Existing Revolving Canada SPV Facility” means the Non-Recourse Canada SPV Facility, dated as of August 2, 2018, by and among CURO Canada Receivables Limited Partnership, by its general partner, CURO Canada Receivables GP Inc., as borrower, WF Marlie 2018-1, Ltd., as lender, the other lenders party thereto from time to time and Waterfall Asset Management, LLC, as administrative agent, as amended or supplemented from time to time in accordance with its terms.
“Existing U.S. SPV Facility” means the Non-Recourse U.S. SPV Facility, dated as of April 8, 2020, among CURO Receivables Finance II, LLC, Midtown Madison Management LLC, as administrative agent, and Atalaya Asset Income Fund VI LP, as initial lender, and the other lenders party thereto from time to time, as amended or supplemented from time to time in accordance with its terms.
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company, as applicable; provided, however, that with respect to any such value less than $15.0 million, only the good faith determination of the Company’s senior management shall be required.
“FFL Group” means (i) FFL Partners, LLC and its Affiliates and (ii) any investment vehicle that is managed (whether through ownership of securities having a majority of the voting power or through management of investments) by any Person listed in clause (i), but excluding any portfolio companies (other than the Company) of any such Person.
“First Priority Agent” means the agent designated as such under the Intercreditor Agreement and shall initially be the Administrative Agent, together with its successors and permitted assigns in such capacity.
“First Priority Cash Management Obligations” means any Cash Management Obligations secured by any Collateral under the First Priority Collateral Documents.
“First Priority Claims” means (a) Indebtedness under Credit Facilities permitted pursuant to clause (i) of the definition of the term “Permitted Debt,” (b) First Priority Cash Management Obligations and First Priority Hedging Obligations and (c) all other Obligations of the Company and the Guarantors under the documents relating to Indebtedness described in clauses (a) and (b) above.
“First Priority Collateral Documents” means the First Priority Security Agreement, the First Priority Pledge Agreement, the First Priority Mortgages and any other agreement, document or instrument pursuant to which a Lien is granted (or purported to be
15 |
granted) securing any First Priority Claims or under which rights or remedies with respect to such Liens are governed.
“First Priority Hedging Obligations” means any Hedging Obligations that are permitted to be incurred under clause (vii) of the definition of the term “Permitted Debt” and that are secured (or purported to be secured) by any collateral under the First Priority Collateral Documents.
“First Priority Mortgages” means a collective reference to each mortgage, deed of trust, deed to secure debt and any other document or instrument under which any Lien on real property owned by the Company or any Guarantor is granted to secure any First Priority Claims or under which rights or remedies with respect to any such Liens are governed.
“First Priority Pledge Agreement” means the Pledge Agreement, dated as of September 1, 2017, among CURO Financial Technologies Corp., CURO Intermediate Holdings Corp. and certain subsidiaries of CURO Intermediate Holdings Corp., as guarantors, in favor of the First Priority Agent, as amended or supplemented from time to time in accordance with its terms, and as supplemented by that certain Pledge Agreement Joinder, dated August 27, 2018, by CURO Credit, LLC and CURO Group Holdings Corp., in favor of the First Priority Agent.
“First Priority Security Agreement” means the Security Agreement, dated as of September 1, 2017, among CURO Financial Technologies Corp., CURO Intermediate Holdings Corp. and certain subsidiaries of CURO Intermediate Holdings Corp., as guarantors, in favor of the First Priority Agent, as amended or supplemented from time to time in accordance with its terms, and as supplemented by that certain Security Agreement Joinder, dated August 27, 2018, by CURO Credit, LLC and CURO Group Holdings Corp., in favor of the First Priority Agent.
“Foreign Subsidiary” means any Restricted Subsidiary incorporated or organized in a jurisdiction other than the United States or any state thereof or the District of Columbia and any Restricted Subsidiary that wholly owns the stock of a CFC and which is disregarded for United States federal income tax purposes as an entity that is separate from its owner.
“Founders” means each of (i) Doug Rippel, (ii) Chad Faulkner, (iii) Mike McKnight, (iv) Joseph Genova, (v) the J.P. Genova Family Trust and (vi) any (a) spouse or lineal descendent (whether natural or adopted) of any Person listed in clauses (i) through (v) or (b) trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding an 80% or more controlling interest of which consist of such Person and/or any of the Persons referred to in the immediately preceding clause (a).
“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time, including those set forth in:
(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;
(2) the statements and pronouncements of the Financial Accounting Standards Board; and
16 |
(3) such other statements by such other entity as have been approved by a significant segment of the accounting profession.
“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01, 2.06(b) or 2.06(d).
“Global Note Legend” means the legend set forth in Section 2.06(g)(2), which is required to be placed on all Global Notes issued under this Indenture.
“Guarantee” by any Person means any obligation, contingent or otherwise, of such Person guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person to:
(1) purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness;
(2) purchase property, securities or services for the purposes of assuring the holder of such Indebtedness of the payment of such Indebtedness; or
(3) maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness;
provided, however, that the Guarantee by any Person shall not include endorsements by such Person for collection or deposit, in either case, in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Guarantors” means each Domestic Subsidiary of the Company (other than any Receivables Entities or Immaterial Subsidiaries) and any other Restricted Subsidiary of the Company, in each case, that executes a Notes Guarantee in accordance with the provisions of this Indenture.
“Holder” means a Person in whose name a Note is registered.
“Immaterial Subsidiary” means any Restricted Subsidiary of the Company that (i) has tangible assets together with all other Immaterial Subsidiaries (as determined in accordance with GAAP) of less than 2.0% of the Company’s Consolidated Tangible Assets measured at the end of the most recent fiscal period for which internal financial statements are available and on a pro forma basis giving effect to any acquisitions or dispositions of companies, division or lines of business since such balance sheet date and on or prior to the date of acquisition of such Subsidiary and (ii) has gross revenue together with all other Immaterial Subsidiaries (as determined in accordance with GAAP) for the period of four consecutive fiscal quarters ending on such date of less than 2.0% of the consolidated revenue of the Company and its Restricted
17 |
Subsidiaries for such period (measured for the four quarters ended most recently for which internal financial statements are available and on a pro forma basis giving effect to any acquisitions or dispositions of companies, division or lines of business since the start of such four-quarter reference period); provided that (i) a Restricted Subsidiary of the Company that no longer meets the foregoing requirements of this definition shall no longer constitute an Immaterial Subsidiary and (ii) any Restricted Subsidiary that incurs or Guarantees Indebtedness incurred under a Credit Facility or any Pari Passu Payment Lien Document shall not constitute an Immaterial Subsidiary.
“Incur” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume (pursuant to a merger, consolidation, acquisition or other transaction), Guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and “Incurrence” and “Incurred” shall have meanings correlative to the foregoing); provided, however, that a change in GAAP that results in an obligation of such Person that exists at such time becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness. Indebtedness otherwise Incurred by a Person before it becomes a Subsidiary of the Company shall be deemed to have been Incurred at the time it becomes such a Subsidiary.
“Indebtedness” means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent:
(1) obligations of such Person in respect of principal for money borrowed;
(2) obligations of such Person in respect of principal evidenced by bonds, debentures, notes or other similar instruments;
(3) every reimbursement obligation of such Person with respect to letters of credit, banker’s acceptances or similar facilities issued for the account of such Person, other than obligations with respect to letters of credit securing obligations, other than obligations referred to in clauses (1), (2) and (5) of this definition, entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the 10th day following payment on the letter of credit;
(4) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade payables, credit on open account, provisional credit, accrued liabilities or similar terms arising in the ordinary course of business which are not overdue by more than 30 days or which are being contested in good faith);
(5) every Capital Lease Obligation of such Person;
(6) the maximum fixed redemption or repurchase price of Disqualified Stock of such Person at the time of determination plus accrued but unpaid dividends;
18 |
(7) every net payment obligation of such Person under interest rate swap, cap, collar or similar agreements or foreign currency hedge, exchange or similar agreements of such Person (collectively, “Hedging Obligations”); and
(8) every obligation of the type referred to in clauses (1) through (7) of this definition of another Person the payment of which, in either case, such Person has Guaranteed or is liable, directly or indirectly, as obligor, guarantor or otherwise, to the extent of such Guarantee or other liability.
Notwithstanding the foregoing, Indebtedness shall not include CSO Obligations. The term “Indebtedness” shall not include any lease, concession or license of property (or guarantee thereof) which would be considered an operating lease under GAAP as in effect on the Issue Date, any prepayments of deposits received from clients or customers in the ordinary course of business, or obligations under any license, permit or other approval (or guarantees given in respect of such obligations) incurred in the ordinary course of business.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indenture Documents” means the Notes, this Indenture, the Notes Guarantees, the Collateral Documents and the Intercreditor Agreement.
“Indenture Obligations” means all Obligations in respect of the Notes or arising under the Indenture Documents, including the fees and expenses (including, without limitation, fees, expenses and disbursements of agents, counsel and professional advisors) of the Trustee and Collateral Agent. Indenture Obligations shall include all interest accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.
“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant to Persons, in each case of nationally recognized standing that is, in the good faith determination of the Company, qualified to perform the task for which it has been engaged.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
“Initial Purchasers” means Jefferies LLC, Credit Suisse Securities (USA) LLC and Stephens Inc.
“Intercreditor Agreement” means the intercreditor agreement, dated as of the Issue Date, between the First Priority Agent and the Collateral Agent, as it may be amended, restated, supplemented and/or otherwise modified from time to time.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.
19 |
“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of direct or indirect loans (including Guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commissions, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that an acquisition of assets, Equity Interests or other securities by the Company or a Restricted Subsidiary of the Company for consideration consisting of common equity securities of the Company or such Restricted Subsidiary shall not be deemed to be an Investment. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that after giving effect to any such sale or disposition, such Person is no longer a direct or indirect Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Equity Interests of such Restricted Subsidiary not sold or disposed of. For purposes of the definition of “Unrestricted Subsidiary” and Section 5.07:
(1) Investments shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:
(a) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less
(b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary of the Company shall be valued at its Fair Market Value at the time of such transfer.
The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Company or a Restricted Subsidiary of the Company in respect of such Investment.
“Issue Date” means the date on which the Notes were initially issued.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, encumbrance or hypothecation of any kind in respect of that asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a
20 |
security interest in and any filing of any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
“Limited Condition Transaction” means (a) any acquisition by the Company or one or more of its Restricted Subsidiaries whose consummation is not conditioned on the availability of, or on obtaining, third party financing and/or (b) any redemption or repayment of Indebtedness requiring irrevocable notice in advance of such redemption or repayment.
“Mortgages” means a collective reference to each mortgage, deed of trust, deed to secure debt and any other document or instrument under which any Lien on real property owned by the Company or any Guarantor is granted to secure any Indenture Obligations or under which rights or remedies with respect to any such Liens are governed.
“Net Income” means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends, excluding, however, (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (A) any Asset Sale or (B) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries and (2) any extraordinary or nonrecurring gain (but not loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (but not loss).
“Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including legal, accounting and investment banking fees and sales commissions) and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness (other than any Credit Facility or Pari Passu Indebtedness) secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.
“Non-Recourse Debt” means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise; and
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary of the Company) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity.
“Non-U.S. Person” means a Person who is not a U.S. Person.
21 |
“Note Custodian” means the Trustee, as custodian for the Depositary with respect to the Notes in global form, or any successor entity thereto.
“Notes Guarantee” means, collectively, the Guarantees of the Guarantors set forth in Article 11.
“Notes Secured Parties” means, collectively, the Collateral Agent, the Trustee and the Holders.
“Obligations” means any principal, interest (including, with respect to the Notes, interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
“Offering Memorandum” means the Company’s offering memorandum, dated July 16, 2021, relating to the initial offering of the Notes.
“Officer” means, with respect to any Person, the chairman of the board, chief executive officer, chief financial officer, president, any executive vice president, senior vice president or vice president, the treasurer, principal accounting officer or the secretary of such Person.
“Officer’s Certificate” means a certificate signed by the Chairman of the Board of Directors, the President, a Vice President, the Chief Financial Officer, the Treasurer, Assistant Treasurer, Secretary or the Assistant Secretary of the Company and delivered to the Trustee.
“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.
“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.
“Pari Passu Indebtedness” means any Indebtedness (other than any Indebtedness evidenced by an a Additional Note or related Notes Guarantee) (1) that is permitted to be incurred under Section 5.09 and (2) that is secured on a pari passu basis with the Notes and the Notes Guarantees, as applicable, by a Permitted Lien described in clause (16) of the definition thereof; provided that (i) such Indebtedness is so designated as Pari Passu Indebtedness in an Officer’s Certificate delivered to the Collateral Agent and (ii) an authorized representative of the holders of such Indebtedness shall have executed and delivered a supplement to the Intercreditor Agreement and an Accession Agreement.
“Pari Passu Indebtedness Secured Parties” means, collectively, the agent, the trustee or other representative, if any, and the holders of Pari Passu Indebtedness identified in a supplement to the Intercreditor Agreement and an Accession Agreement.
22 |
“Pari Passu Payment Lien Documents” means any loan agreement, indenture or other instrument that evidences or governs any Pari Passu Indebtedness and all other related documents identified in a supplement to the Intercreditor Agreement.
“Pari Passu Payment Lien Obligations” means all Obligations (including interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case) outstanding under the Pari Passu Payment Lien Documents.
“Permitted Holders” means the Founders and the FFL Group.
“Permitted Investments” means:
(1) any Investment in the Company or a Restricted Subsidiary of the Company (other than a Receivables Entity);
(2) any Investment in cash or Cash Equivalents or the Notes;
(3) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (A) such Person becomes a Restricted Subsidiary of the Company (other than a Receivables Entity) or (B) such Person is merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company (other than a Receivables Entity);
(4) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(5) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 5.10;
(6) Hedging Obligations that are Incurred by the Company or any of its Restricted Subsidiaries for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) currency exchange risk in connection with existing financial obligations and not for purposes of speculation;
(7) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits;
(8) loans and advances to officers, directors and employees of the Company and its Restricted Subsidiaries in the ordinary course of business not to exceed $5.0 million in the aggregate at any one time outstanding;
(9) any Investment consisting of a Guarantee permitted by Section 5.09;
23 |
(10) Investments consisting of non-cash consideration received in the form of securities, notes or similar obligations in connection with dispositions of assets permitted pursuant to this Indenture;
(11) Investments received in settlement of bona fide disputes or as distributions in bankruptcy, insolvency, foreclosure or similar proceedings;
(12) advances to customers or suppliers in the ordinary course of business;
(13) Investments consisting of purchases and acquisitions of supplies, materials and equipment or purchases or contract rights or licenses of intellectual property, in each case in the ordinary course of business;
(14) receivables owing to the Company or any of its Restricted Subsidiaries if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
(15) CSO Obligations of the Company and its Restricted Subsidiaries;
(16) Investments consisting of obligations of officers and employees to the Company or its Restricted Subsidiaries in connection with such Officer’s and employees’ acquisition of Equity Interests in the Company (other than Disqualified Stock) so long as no cash is actually advanced by the Company or any of its Restricted Subsidiaries in connection with the acquisition of such obligations);
(17) Investments in a Receivables Entity, or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a purchase money note, contribution of additional receivables or an equity interest;
(18) [RESERVED];
(19) Investments in joint ventures and similar entities and Unrestricted Subsidiaries having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (19) that are at the time outstanding, not to exceed the greater of (i) $40.0 million and (ii) 13.75% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended;
(20) other Investments made after the Issue Date, so long as (i) no Default or Event of Default shall have occurred or be continuing or would result therefrom and (ii) after giving pro forma effect to the making of such Investment, the Consolidated Total Leverage Ratio, does not exceed 2.00 to 1.00; and
24 |
(21) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (21) that are at the time outstanding, not to exceed the greater of (i) $50.0 million and (ii) 17.0% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended.
“Permitted Liens” means:
(1) Liens securing First Priority Claims;
(2) Liens in favor of the Company or a Guarantor;
(3) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or a Restricted Subsidiary of the Company, provided that such Liens were not created in connection with, or in contemplation of, such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or a Restricted Subsidiary of the Company;
(4) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were not created in connection with, or in contemplation of, such acquisition;
(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds, workmen’s compensation or unemployment obligations or other obligations of a like nature, or to secure letters of credit issued with respect to such obligations, Incurred in the ordinary course of business;
(6) Liens consisting of deposits in connection with leases or other similar obligations, or securing letters of credit issued in lieu of such deposits, incurred in the ordinary course of business, and cash deposits in connection with acquisitions otherwise permitted under this Indenture;
(7) Liens securing Indebtedness (including Capital Lease Obligations) permitted by Section 5.09(b)(iii) covering only the assets acquired with such Indebtedness and directly related assets such as proceeds (including insurance proceeds), products, replacements, substitutions and accessions thereto;
(8) Liens existing on the Issue Date and replacement Liens that do not encumber additional assets, unless such encumbrance is otherwise permitted;
(9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
25 |
(10) Liens securing Permitted Refinancing Debt, provided that the obligor under such Indebtedness was permitted to Incur such Liens with respect to the Indebtedness so refinanced under this Indenture and:
(a) the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Debt; and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;
(11) statutory and common law Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business with respect to amounts that are not yet delinquent for more than 30 days or that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(12) Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;
(13) Liens arising from filings of Uniform Commercial Code financing statements or similar documents regarding leases or otherwise for precautionary purposes relating to arrangements not constituting Indebtedness;
(14) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Company or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(15) Liens securing Indenture Obligations;
(16) Liens securing Pari Passu Indebtedness; provided that the holders of such Pari Passu Indebtedness (or their designated representative or agent) shall have executed and delivered a supplement to the Intercreditor Agreement and an Accession Agreement to the Collateral Documents;
26 |
(17) Liens Incurred by the Company or any Restricted Subsidiary of the Company with respect to obligations in an aggregate principal amount that does not exceed the greater of (i) $60.0 million and (ii) 20.5% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended at any one time outstanding;
(18) encumbrances or exceptions expressly permitted pursuant to the Mortgages;
(19) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including Liens securing letters of credit issued in the ordinary course of business in connection therewith;
(20) pledges of Equity Interests of an Unrestricted Subsidiary of the Company securing Non-Recourse Debt of such Unrestricted Subsidiary;
(21) Liens securing Indebtedness of Foreign Subsidiaries to the extent such Indebtedness is permitted under Section 5.09(b)(xi); provided, however, that such Liens only extend to the assets of the Foreign Subsidiaries that are obligors with respect to such Indebtedness; and
(22) any Lien on loans receivable and related assets of the types specified in the definition of “Qualified Receivables Transaction” transferred to a Receivables Entity or on assets of a Receivables Entity, in each case, Incurred in connection with a Qualified Receivables Transaction.
For purposes of this definition, the term “Indebtedness” shall be deemed to include interest in connection with or in respect of any referenced Indebtedness.
“Permitted Refinancing Debt” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net cash proceeds of which are used to extend, refinance (including through the issuance of debt securities), renew, replace (whether or not upon termination and whether with the original lenders, institutional investors or otherwise), defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries, in whole or in part; provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Debt does not exceed the principal amount and premium, if any, plus accrued interest (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of any fees and expenses Incurred in connection therewith);
(2) such Permitted Refinancing Debt has a final scheduled maturity date later than the final scheduled maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
27 |
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Debt is subordinated in right of payment to, the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary of the Company that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or would otherwise be permitted to Incur such Indebtedness.
“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock corporation, trust, unincorporated organization or government or agency or political subdivision thereof or any other entity.
“Pledge Agreement” means the Pledge Agreement, dated as of the Issue Date, among the Company and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Preferred Stock” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“Private Placement Legend” means the legend set forth in Section 2.06(g)(1).
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Company or any of the Restricted Subsidiaries pursuant to which the Company or any of the Restricted Subsidiaries may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Company or any of the Restricted Subsidiaries); or
(2) any other Person (in the case of a transfer by a Receivables Entity),
or may grant a security interest in, any loans receivable (whether now existing or arising in the future) of the Company or any of the Restricted Subsidiaries, and any assets related thereto, including all collateral securing such loans receivable, all contracts and all Guarantees or other obligations in respect of such loans receivable, proceeds of such loans receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving loans receivable or refinancings thereof; provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the chief financial officer of the Company).
28 |
“Rating Agencies” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company which shall be substituted for Moody’s or S&P or both, as the case may be.
“Receivables Entity” means (a) a Wholly-Owned Subsidiary of the Company or (b) another Person engaging in a Qualified Receivables Transaction with the Company, in each case, that engages in no activities other than in connection with the financing of loans receivables and is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity, and in either of clause (a) or (b):
(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such entity:
(A) is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(B) is recourse to or obligates the Company or any Subsidiary of the Company in any way (other than pursuant to Standard Securitization Undertakings), or
(C) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than pursuant to Standard Securitization Undertakings);
(2) the entity is not an Affiliate of the Company or is an entity with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms that the Company reasonably believes to be not materially less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and
(3) is an entity to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.
Notwithstanding anything to the contrary contained herein, solely for purposes of the calculation of “Consolidated Interest Expense,” “Consolidated Tangible Assets” and “Consolidated Total Debt,” any Receivables Entity shall be deemed not to be a Restricted Subsidiary.
Each of CURO Receivables Finance I, LLC, CURO Receivables Holdings I, LLC, CURO Receivables Finance II, LLC, CURO Receivables Holdings II, LLC, CURO Canada Receivables GP, Inc., CURO Canada Receivables Limited Partnership, Flexiti Financing
29 |
Corp. and Flexiti Financing SPE Corp. is deemed to have been designated as a Receivables Entity as of the Issue Date.
“Reference Period” means the period of four consecutive fiscal quarters ending with the last full fiscal quarter immediately preceding the date of a proposed Incurrence, Restricted Payment or other transaction for which financial statements are available.
“Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities). “Refinanced” and “refinancing” shall have correlative meanings.
“Regulation S” means Regulation S promulgated under the Securities Act.
“Regulation S Global Note” means a Global Note in the form of Exhibit A bearing the Global Note Legend and the Restricted Security Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.
“Responsible Officer” when used with respect to the Trustee, means any officer or employee within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject, and who shall, in each case, have direct responsibility for the administration of this Indenture.
“Restricted” means, when referring to cash or Cash Equivalents of the Company or any of its Restricted Subsidiaries, that such cash or Cash Equivalents appear (or would be required to appear) as “restricted” on a consolidated balance sheet of the Company or such Restricted Subsidiary (unless such appearance is related to the Indenture Documents or, to the extent subject to an Intercreditor Agreement, other Credit Facilities permitted under the Indenture to be secured by a Lien on the Collateral).
“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.
30 |
“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person that is not an Unrestricted Subsidiary.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Rule 144A” means Rule 144A under the Securities Act.
“Rule 903” means Rule 903 promulgated under the Securities Act.
“Rule 904” means Rule 904 promulgated under the Securities Act.
“SEC” means the Securities and Exchange Commission, or any successor agency thereto.
“Secured Parties” means, collectively, the Notes Secured Parties and the Pari Passu Indebtedness Secured Parties, if any.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Security Agreement” means the Security Agreement, dated as of the Issue Date, among the Company and the Guarantors in favor of the Collateral Agent, as amended or supplemented from time to time in accordance with its terms.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.
“Similar Business” means any business conducted or proposed to be conducted by the Company and its Restricted Subsidiaries on the Issue Date or any business that is similar, reasonably related, incidental, complementary or ancillary thereto, or a reasonable extension or expansion thereof.
“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company that, taken as a whole, are customary in a loans receivable transaction.
“Start Date” means July 1, 2018.
“Stated Maturity” when used with respect to any security or any installment of interest thereon, means the date specified in such security as the fixed date on which the principal of such security or such installment of interest is due and payable.
“Subsidiary” means, with respect to any Person, (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person (or a combination thereof) and (2) any partnership (A) the sole general partner or the managing general partner of which is such
31 |
Person or a Subsidiary of such Person or (B) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof).
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C §§ 77aaa-77bbbb), as in force on the Issue Date; provided, however, that in the event that the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
“Treasury Rate” means, at any redemption date, the yield to maturity as of such redemption date of constant maturity United States Treasury securities (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to August 1, 2024; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to August 1, 2024, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
“Trustee” means TMI Trust Company, in its capacity as Trustee, until a successor or assign replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor or assign serving hereunder.
“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person that is designated by the Board of Directors of such Person as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors of such Person, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 5.11, is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
32 |
(4) has not guaranteed or otherwise directly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.
“U.S. Government Obligation” means:
(1) any security which is: a direct obligation of the United States of America the payment of which the full faith and credit of the United States of America is pledged or an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally Guaranteed as a full faith and credit obligation of the United States of America, which, in either case, is not callable or redeemable at the option of the issuer thereof; and
(2) any depository receipt issued by a bank (as defined in the Securities Act) as custodian with respect to any U.S. Government Obligation and held by such bank for the account of the holder of such depository receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depository receipt.
“U.S. Person” means a U.S. Person as defined in Rule 902(k) under the Securities Act.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such Indebtedness.
“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person all of the outstanding Capital Stock of which (other than directors’ qualifying shares and nominal amounts required to be held by local nationals) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person (or any combination thereof).
Section 1.02 Other Definitions.
Term | Defined in Section |
“Action” | 13.10 |
“Ad Astra” | 5.11 |
“Affiliate Transaction” | 5.11 |
“Asset Sale Offer” | 5.10 |
“Authentication Order” | 2.02 |
“Calculation Date” |
Definition of Consolidated
|
33 |
Total Leverage Ratio | |
“Change of Control Offer” | 5.14 |
“Change of Control Payment” | 5.14 |
“Change of Control Payment Date” | 5.14 |
“Company” | Recitals |
“Covenant Defeasance” | 9.03 |
“Custodian” | 7.01 |
“Event of Default” | 7.01 |
“Excess Proceeds” | 5.10 |
“Hedging Obligations” | Definition of Indebtedness |
“Initial Notes” | Recitals |
“Legal Defeasance” | 9.02 |
“Moody’s” | Definition of Cash Equivalents |
“New Guarantor” | 11.02 |
“Notes” | Recitals |
“Offer Amount” | 3.09 |
“Offer Period” | 3.09 |
“Paying Agent” | 2.03 |
“Payment Default” | 7.01 |
“Permitted Debt” | 5.09 |
“Premises” | 5.21 |
“Purchase Date” | 3.09 |
“Registrar” | 2.03 |
“Restricted Payments” | 5.07 |
“S&P” | Definition of Cash Equivalents |
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Except as expressly provided herein, the provisions of the TIA shall not apply hereto. All other terms used in this Indenture that are defined by the TIA, defined by the TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3) “or” is not exclusive;
34 |
(4) “including” means including without limitation;
(5) words in the singular include the plural, and in the plural include the singular;
(6) provisions apply to successive events and transactions;
(7) “will” shall be interpreted to express a command;
(8) references to sections of or rules under the Securities Act, Exchange Act or TIA shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;
(9) references to any statute, law or regulation shall be deemed to refer to the same as from time to time amended and in effect and to any successor statute, law or regulation;
(10) references to the date the Notes were originally issued shall refer to the Issue Date;
(11) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and
(12) all references to Articles, Sections or subdivisions refer to Articles, Sections or subdivisions of this Indenture unless otherwise indicated.
ARTICLE 2
The Notes
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Notes shall bear interest and be payable upon the terms as set forth in Exhibit A.
The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend
35 |
thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Global Note that are held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer of the Company must sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed by an Officer of the Company (an “Authentication Order”), authenticate Notes for original issue up to the aggregate principal amount of the Notes that may be validly issued under this Indenture including (i) Initial Notes for original issuance in an aggregate principal amount of $750,000,000 and (ii) subject to compliance with Sections 2.14 and 5.09, any Additional Notes for original issuance from time to time after the date hereof.
All Notes issued under this Indenture (including Additional Notes) shall be treated as a single class of securities under this Indenture, including for purposes of any vote, consent, waiver or other act of Holders.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company.
36 |
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. Until the Trustee receives notice of the Company’s appointment of another entity as Registrar or Paying Agent, the Trustee will act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the Company) will have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders and the Company will otherwise comply with TIA § 312(a).
37 |
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Any Global Note will be exchanged by the Company for Definitive Notes if:
(1) the Depositary (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Note or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, the Company fails to appoint a successor depositary within 90 days thereafter;
(2) the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes; or
(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes and the Depositary has requested that Definitive Notes be issued.
Upon the occurrence of any of the preceding events described in subparagraphs (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c).
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written
38 |
orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1), the transferor of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (i) above.
Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee will adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h).
(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a
39 |
certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial interest in the AI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) and the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to this clause (4) at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this clause (4).
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such
40 |
beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company will execute and the Trustee will, upon receipt of an Authentication Order, authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant
41 |
to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
(2) [Reserved].
(3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and only if the Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events described in paragraph (1), (2) or (3) of Section 2.06(a) and satisfaction of the conditions set forth in Section 2.06(b)(2), the Trustee will cause the aggregate principal amount of the applicable Unrestricted Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company will execute and the Trustee will, upon receipt of an Authentication Order, authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private Placement Legend.
42 |
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A
43 |
Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the AI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:
(A) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(B) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this clause (2), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to clause (2) above or this clause (3) at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to
44 |
such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:
(A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery
45 |
thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f) [Reserved]
(g) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO SUCH PURCHASER IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, OR (C) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES ACT AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 UNDER THE SECURITIES ACT, ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E)
46 |
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 UNDER THE SECURITIES ACT.”
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
47 |
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
(h) Cancellation or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrar’s request.
(2) No service charge will be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 5.10, 5.14, and 10.04).
(3) Neither the Trustee nor the Registrar will be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar, the Trustee nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 10 days before the day of any selection of Notes for redemption under Section 3.02 and ending at the close of business on the day of selection;
48 |
(B) to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any Note, the Trustee, the Registrar, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, the Registrar, any Agent or the Company will be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02.
(8) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
(9) The Trustee and the Registrar shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(10) Neither the Trustee nor any agent of the Trustee will have any responsibility for any actions taken or not taken by the Depositary.
(11) The Trustee will have no responsibility or obligation to any Participant or Indirect Participant or any other Person with respect to the accuracy of the books or records, or the acts or omissions, of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any Participant or Indirect Participant or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the Applicable Procedures. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its Participants or Indirect Participants.
49 |
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company or if the Trustee receives credible evidence of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s standard requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee determined for itself and the Company determined for itself to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned will be so disregarded. Upon request of the Trustee, the Company will furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons, and the Trustee will be entitled to accept and rely upon such Officer’s Certificate as conclusive evidence of the
50 |
facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any determination.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will, upon receipt of an Authentication Order, authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will dispose of canceled Notes in accordance with the Trustee’s standard procedures (subject to the record retention requirement of the Exchange Act). Certification of such disposal of all canceled Notes will be delivered to the Company upon request. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 5.01. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will send or cause to be sent to Holders a notice prepared by the Company that states the special record date, the related payment date and the amount of such interest to be paid.
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use CUSIP, ISIN or other numbers, if then generally in use, and thereafter the Company and the Trustee may use such numbers in any notice issued pursuant to this Indenture, including any notice of redemption, provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption or other notice and that
51 |
reliance may be placed only on the other identification numbers printed on the Notes, and any such notice or notice of redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP, ISIN or other numbers.
Section 2.14 Issuance of Additional Notes.
The Company will be entitled, from time to time, subject to its compliance with Section 5.09, without consent of the Holders, to issue Additional Notes under this Indenture with identical terms as the Initial Notes other than with respect to (i) the date of issuance, (ii) the issue price, (iii) the amount of interest payable on the first interest payment date and (iv) any adjustments in order to conform to and ensure compliance with the Securities Act (or other applicable securities laws) or to reflect differences with respect to original issue discount for U.S. federal income tax purposes.
With respect to any Additional Notes, the Company will set forth in an Officer’s Certificate pursuant to a resolution of the Board of Directors of the Company, copies of which shall be delivered to the Trustee, the following information:
(i) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
(ii) the issue price, the issue date and the CUSIP number of such Additional Notes and the date on which interest on such Additional Notes shall begin to accrue.
ARTICLE 3
Redemption and Prepayment
Section 3.01 Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officer’s Certificate setting forth (i) the subsection of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. If the redemption price is not known at the time such notice is to be given, the actual redemption price, calculated as described in this Indenture or the terms of the Notes to be redeemed, will be set forth in an additional Officer’s Certificate of the Company delivered to the Trustee no later than two Business Days prior to the redemption date.
Section 3.02 Selection of Notes to be Redeemed. If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot to the extent practicable or by such other method in accordance with the Applicable Procedures of the Depositary; provided that no Notes of $2,000 or less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 10 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.
52 |
The Trustee will promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in minimum amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. A new Note in principal amount equal to the unredeemed portion thereof shall be issued (or book-entry notation made) in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date, unless the Company defaults in the payment of the redemption price, interest shall cease to accrue on the principal amount of the Notes or portions thereof called for redemption and for which funds have been set aside for payment. Except as provided in this Section 3.02, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption. Subject to the provisions of Sections 3.09 and 5.14, at least 10 but not more than 60 days before the redemption date, the Company will send or caused to be sent, by first class mail or other electronic means reasonably satisfactory to the Trustee, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed or sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture.
The notice shall be prepared by the Company, shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(h) if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, such notice shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied or waived, and shall state that such redemption may
53 |
not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed; and
(i) the CUSIP number; provided that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company’s written request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company will have delivered to the Trustee, at least 20 days prior to the redemption date, an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph (or such shorter period reasonably acceptable to the Trustee).
If any of the Notes to be redeemed are in the form of a Global Note, then the Company may modify such notice to the extent necessary to comply with the Applicable Procedures of the Depositary.
Section 3.04 Effect of Notice of Redemption. Once notice of redemption is sent in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price unless such redemption is subject to the satisfaction of one or more conditions precedent as described in the immediately succeeding sentence. Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitute a Change of Control, may, in the Company’s discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control. In addition, the Company may provide in such notice that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person.
Section 3.05 Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on the redemption date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price and accrued interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal from the redemption date until such principal is paid, and to the extent lawful on
54 |
any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 5.01.
Section 3.06 Notes Redeemed in Part. If any Note is to be redeemed in part only, the notice of redemption sent pursuant to Section 3.03 that relates to such Note shall state the portion of the principal amount of that Note to be redeemed. Upon receipt of an Authentication Order, the Trustee will (i) cancel the original Note and (ii) authenticate for the Holder at the expense of the Company a new Note in principal amount equal to the unredeemed portion of the original Note in the name of the Holder thereof, or in the case of a Global Note make such notation on the schedule of exchanges to such Global Note.
Section 3.07 Optional Redemption. (a) On and after August 1, 2024, the Company may on one or more occasions redeem the Notes, in whole or in part, upon notice pursuant to Section 3.03, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on August 1 of each of the years set forth below.
Year | Percentage | |
2024 | 103.750% | |
2025 | 101.875% | |
2026 and thereafter | 100.000% |
(b) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 3.03, redeem up to 40% of the aggregate principal amount of the Notes (including Additional Notes) issued under this Indenture at a redemption price of 107.500% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date) if:
(1) such redemption is made with the proceeds of one or more Equity Offerings;
(2) at least 50% of the aggregate principal amount of the Notes (including Additional Notes) issued under this Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and
(3) the redemption occurs within 180 days of such Equity Offering.
(c) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 3.03, redeem up to 10% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture during each 12-month period following the Issue Date at a redemption price of 103% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date).
55 |
(d) Prior to August 1, 2024, the Company may redeem the Notes, in whole or in part, upon notice pursuant to Section 3.03, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).
(e) Notwithstanding the foregoing, in connection with any tender offer for the Notes, including a Change of Control Offer or an Asset Sale Offer, if Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in such tender offer and the Company, or any third party making such tender offer in lieu of the Company as described above, repurchases all of the Notes validly tendered and not withdrawn by such Holders, the Company or such third party will have the right, upon notice pursuant to Section 3.03 (provided that such notice is given not more than 30 days following such repurchase), to redeem all notes that remain outstanding following such purchase at a price equal to the price paid to each other Holder in such tender offer (which may be less than par) plus accrued and unpaid interest on the notes redeemed, to the applicable redemption date (subject to the rights of Holders of Notes on any relevant record date to receive interest due on the relevant interest payment date).
(f) Any redemption pursuant to this Section 3.07 or the last paragraph of Section 5.14 shall be made pursuant to the provisions of Section 3.01 through 3.06.
Section 3.08 Mandatory Redemption. Except as set forth in Sections 5.10 and 5.14, the Company will not be required to make mandatory redemption or sinking fund payments or offers to purchase with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In the event that, pursuant to Section 5.10, the Company will be required to commence an Asset Sale Offer, it shall follow the procedures specified in this Section 3.09.
The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will purchase the principal amount of Notes required to be purchased pursuant to Section 5.10 (the “Offer Amount”). Payment for any Notes so purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.
56 |
Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail or other electronic means reasonably satisfactory to the Trustee, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 5.10 and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have Notes in minimum denominations of $2,000, or integral multiples of $1,000 in excess thereof (unless such amount represents the entire principal amount of Notes held by such Holder), purchased;
(f) that Holders electing to have any Notes purchased pursuant to any Asset Sale Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent or the Depositary, as applicable, at the address specified in the notice prior to the close of business on the third Business Day preceding the Purchase Date, subject to the Applicable Procedures;
(g) that Holders shall be entitled to withdraw their election if the Paying Agent or the Depositary, as applicable, receives, not later than the close of business on the third Business Day preceding the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased, subject to the Applicable Procedures;
(h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Trustee will select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in minimum denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased), subject to the Applicable Procedures; and
(i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
57 |
If any of the Notes subject to the Asset Sale Offer are in the form of a Global Note, then the Company may modify such notice to the extent necessary to comply with the Applicable Procedures of the Depositary.
On or before the Purchase Date, subject to the Applicable Procedures, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer (and not withdrawn), or, if less than the Offer Amount has been validly tendered, all Notes tendered (and not withdrawn), and shall deliver to the Trustee an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Paying Agent shall promptly (but in any case not later than five Business Days after the Purchase Date) send or deliver to each tendering Holder an amount received from the Company equal to the purchase price of the Notes validly tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and send (or cause to be transferred by book-entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly sent (or caused to be transferred by book-entry) by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer promptly after the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06.
Section 3.10 [Reserved]
Section 3.11 Company May Acquire Notes. The Company or its Affiliates (or any Person acting on behalf of the Company or its Affiliates) may at any time and from time to time acquire the Notes by means other than redemption, including by tender offer, open market purchases, negotiated transactions or otherwise, so long as such acquisition is not prohibited by applicable securities laws or regulations or the terms of this Indenture. In accordance with, and subject to, Section 2.11, the Company may deliver such acquired Notes to the Trustee for cancellation.
ARTICLE 4
Satisfaction and Discharge
Section 4.01 Satisfaction and Discharge. This Indenture will be discharged and will cease to be of further effect as to all outstanding Notes issued hereunder (except Sections 2.06, 2.07, 2.08, 8.01, 8.02, 8.07, 12.07, 12.15 and 13.11), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture if:
(a) either:
(i) the Company will have paid or caused to be paid the principal of, premium, if any, and interest as and when the same shall have become due and payable;
58 |
(ii) all outstanding Notes (other than Notes which have been lost, stolen or destroyed and which have been replaced or paid as provided in Section 2.07) have been delivered to the Trustee for cancellation; or
(iii) all Notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable by reason of the sending of a notice of redemption or (ii) (A) shall become due and payable at their Stated Maturity within one (1) year or (B) are to be called for redemption within one (1) year under arrangements reasonably satisfactory to the Trustee, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in trust of cash in U.S. dollars, non-callable U.S. Government Obligations, or a combination thereof in an amount sufficient to pay and discharge the principal, premium, if any, and interest on the Notes to the date of Stated Maturity or such redemption, as the case may be;
(b) the Company has paid all other sums payable by it under the Indenture Documents; and
(c) the Company has delivered an Officer’s Certificate and an Opinion of Counsel stating that all conditions for the satisfaction and discharge have been met.
Section 4.02 Application of Trust Money. Subject to the provisions of the last paragraph of Section 9.05, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such funds need not be segregated from other funds except to the extent required by law.
ARTICLE 5
Covenants
Section 5.01 Payment of Notes. The Company will pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and installments of interest (without regard to any applicable grace period) at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful.
The Company will be responsible for making calculations called for under the Notes, including, but not limited to, determination of redemption price, premium, if any, and other amounts payable on the Notes, if any. The Company will make the calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders. The Company will provide a schedule of its calculations to the Trustee when applicable, and the
59 |
Trustee is entitled to rely conclusively on the accuracy of the Company’s calculations without independent verification.
Section 5.02 Maintenance of Office or Agency. The Company will maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company will fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee one such office or agency of the Company.
Section 5.03 Reports. So long as any Notes are outstanding, the Company will furnish to the Holders or cause the Trustee to furnish to the Holders:
(1) within 90 days after the end of each fiscal year of the Company, all annual financial statements of the Company for such fiscal year that would be required to be contained in a filing with the SEC on Form 10 K if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in Management’s Discussion and Analysis of Financial Condition and Results of Operations the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company) and a report on the annual financial statements by the Company’s certified independent accountants;
(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, all quarterly financial statements that would be required to be contained in a filing with the SEC on Form 10 Q if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in
60 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company); and
(3) within the time periods required for filing such current reports and form as specified in the SEC’s rules and regulations, all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.
Documents filed by the Company with the SEC via the EDGAR system will be deemed to be furnished to the registered holders at the time such documents are filed.
In addition, the Company agrees that, for so long as any Notes remain outstanding, it will use commercially reasonable efforts to hold and participate in quarterly conference calls with holders of Notes, beneficial owners of the Notes and securities analysts to discuss such financial information no later than ten business days after distribution of such financial information (it being understood that such quarterly conference calls may be the same conference calls as with the Company’s equity investors and analysts).
Furthermore, the Company agrees that, at any time it is not subject to Section 13 or Section 15(d) of the Exchange Act, for so long as any Notes remain outstanding, it will furnish to the holders of Notes, any beneficial owner of the Notes, securities analysts and prospective investors, upon their request, the information and reports described above and any other information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 5.04 Compliance Certificate. (a) The Company will deliver to the Trustee, within 120 days after the end of each fiscal year commencing with the fiscal year ending December 31, 2021, an Officer’s Certificate that need not comply with Section 12.03 or 12.04, one signer of which shall be the principal executive officer, principal financial officer, or principal accounting officer of the Company, stating that a review of the activities of the Company and its Affiliates during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company and the Guarantors have kept, observed, performed and fulfilled their obligations under the Indenture Documents, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge each of the Company and each Guarantor during the preceding fiscal year has kept, observed, performed and fulfilled each and every covenant contained in the Indenture Documents and is not in Default at the date of such certificate in the performance or observance of any of the terms, provisions and conditions of the Indenture Documents (or, if a Default or Event of Default shall have occurred and is continuing, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company or Guarantor is taking or proposes to take with respect thereto).
(b) The Company will, so long as any of the Notes are outstanding, deliver to the Trustee, within ten Business Days of any Officer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
61 |
Section 5.05 Taxes. The Company will pay, and will cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies, except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders.
Section 5.06 Stay, Extension and Usury Laws. Each of the Company and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.
Section 5.07 Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any other payment or distribution in respect of, its Equity Interests (including any dividend or distribution payable in connection with any merger or consolidation involving the Company) or similar payment to the direct or indirect holders thereof in their capacity as such (other than any dividends or distributions payable solely in its Equity Interests (other than Disqualified Stock) and dividends or distributions payable to the Company or any of its Restricted Subsidiaries (and, if such Restricted Subsidiary has stockholders other than the Company or other Restricted Subsidiaries, to its other stockholders on no more than a pro rata basis));
(ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company held by any Person or any Equity Interests of any Restricted Subsidiary of the Company held by any Affiliate of the Company (in each case other than held by the Company or a Restricted Subsidiary of the Company), including in connection with any merger or consolidation and including the exercise of any option to exchange any Equity Interests (other than into Equity Interests of the Company that are not Disqualified Stock);
(iii) make any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to the scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Indebtedness that is contractually subordinated in right of payment to the Notes or any Notes Guarantee thereof (other than the payment of interest and other than the purchase, repurchase or other acquisition of such Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase or other acquisition); or
(iv) make any Restricted Investment.
62 |
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”),
unless, at the time of and after giving effect to such Restricted Payment:
(A) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;
(B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Total Leverage Ratio test set forth in Section 5.09(a); and
(C) such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Start Date (excluding Restricted Payments permitted by clauses (ii) through (xii) of subsection (b) below), is, at the time of determination, less than the sum of:
(1) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) beginning on the Start Date and ending on the last day of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(2) 100% of the aggregate net cash proceeds received by the Company from a contribution to its common equity capital or from the issuance or sale of its Equity Interests (other than Disqualified Stock) subsequent to the Start Date (other than an issuance or sale to a Subsidiary of the Company) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Start Date, plus
(3) the amount by which the principal amount of any Indebtedness of the Company or a Restricted Subsidiary of the Company is reduced upon the conversion or exchange (other than by a Restricted Subsidiary of the Company) subsequent to the Start Date of any Indebtedness of the Company or a Restricted Subsidiary of the Company convertible or exchangeable for Equity Interests (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company or a Restricted Subsidiary of the Company upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the net cash proceeds received by the Company or any Restricted Subsidiary of the Company from the sale of such Indebtedness (excluding net cash proceeds from sales to a Restricted Subsidiary of the Company), plus
63 |
(4) the amount equal to the sum of (x) the net reduction in the Restricted Investments made by the Company or any Restricted Subsidiary of the Company in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale or other disposition of such Investment and proceeds representing the return of capital (excluding dividends and distributions to the extent included in Consolidated Net Income), in each case realized by the Company or any Restricted Subsidiary of the Company, and (y) in the event that any Unrestricted Subsidiary of the Company is re-designated as a Restricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary, that in each case have occurred subsequent to the Start Date; provided, however, that the foregoing sum will not exceed, in the case of any such Person, the amount of Restricted Investments previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary of the Company in such Person or Unrestricted Subsidiary, plus
(5) 100% of any dividends received by the Company or a Guarantor after the Start Date from an Unrestricted Subsidiary of the Company, to the extent such dividends were not otherwise included in the Consolidated Net Income of the Company for such period.
(b) The foregoing provisions will not prohibit:
(i) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the irrevocable redemption notice, if at said date of declaration or notice, such payment would have complied with the provisions of this Indenture;
(ii) any Restricted Payment made in exchange for, or with the net cash proceeds from, the substantially concurrent sale of Equity Interests of the Company (other than any Disqualified Stock and other than Equity Interests issued or sold to a Subsidiary of the Company) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided that the net cash proceeds from such sale or such cash capital contribution (to the extent so used for such Restricted Payment) shall be excluded from clause (C)(2) of subsection (a) above;
(iii) the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness of the Company or any Guarantor that is contractually subordinated in right of payment to the Notes or to any Notes Guarantee in exchange for, or with the net cash proceeds from, an Incurrence of Permitted Refinancing Debt;
(iv) the redemption, repurchase, retirement or other acquisition for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held
64 |
by employees, former employees, directors, former directors, consultants or former consultants of the Company (or any of its Subsidiaries); provided that the aggregate amount of such repurchases and other acquisitions (excluding amounts representing cancellation of Indebtedness) shall not exceed the greater of (i) $10.0 million and (ii) 3.5% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years; provided that the aggregate amount of such repurchases and other acquisitions (excluding amounts representing cancellation of Indebtedness) shall not exceed the greater of (i) $15.0 million and (ii) 5.25% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended in any fiscal year) (plus the amount of net cash and proceeds received by the Company and its Restricted Subsidiaries (a) in respect of “key man” life insurance and (b) from the issuance of Equity Interests by the Company to members of management of the Company and its Subsidiaries, to the extent that those amounts did not provide the basis for any previous Restricted Payment);
(v) payments of dividends on Disqualified Stock issued pursuant to Section 5.09;
(vi) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options;
(vii) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 5.07;
(viii) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (v) of Section 5.09(b);
(ix) the repurchase, redemption or other acquisition or retirement for value of any Indebtedness of the Company or any Guarantor that is contractually subordinated in right of payment to the Notes or to any Notes Guarantee (i) pursuant to provisions similar to those set forth in Section 5.14; provided that all Notes tendered by holders in connection with a Change of Control Offer have been repurchased, redeemed or acquired for value and (ii) pursuant to provisions similar to those set forth in Section 5.10; provided that all Notes tendered by holders in connection with an Asset Sale Offer have been repurchased, redeemed or acquired for value;
(x) Restricted Payments that are made with Excluded Contributions;
(xi) the making of any Restricted Payment so long as the Consolidated Total Leverage Ratio is less than or equal to 1.50 to 1.00 after giving pro forma effect to such Restricted Payment; or
65 |
(xii) Restricted Payments in an amount that, when taken together with all Restricted Payments previously made pursuant to this clause (xii) and then outstanding, does not exceed the greater of (i) $40.0 million and (ii) 13.75% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended.
The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the assets proposed to be transferred by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
As of the Issue Date, all of the Subsidiaries of the Company will be Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary of the Company to become a Restricted Subsidiary of the Company except pursuant to the last sentence of the second paragraph under Section 5.15. For purposes of designating any Restricted Subsidiary of the Company as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investment.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time pursuant to Section 5.07 or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Section 5.08 Dividend and Other Payment Restrictions Affecting Subsidiaries. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary of the Company to:
(i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries with respect to its Capital Stock or any other interest or participation in, or measured by, its profits;
(ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(iii) make any loans or advances to the Company or any of its Restricted Subsidiaries; or
(iv) sell, lease or transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.
(b) However, the foregoing restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(i) any agreements in effect or entered into on the Issue Date, including agreements governing Existing Indebtedness as in effect on the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such
66 |
replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced), in whole or in part; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the agreements governing such Indebtedness as in effect on the Issue Date;
(ii) the Credit Agreement and the Existing Cash Money Revolving Credit Facility, in each case, in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof (in each case, regardless of whether such replacement or refinancing is consummated at the same time or later than the termination or repayment of the Indebtedness being refinanced or replaced) and any additional Credit Facilities permitted under this Indenture; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements, refinancings or additional facilities are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the Credit Agreement as in effect on the Issue Date;
(iii) the Indenture Documents;
(iv) applicable law and any applicable rule, regulation or order;
(v) customary non-assignment provisions in leases, licenses or other agreements entered into in the ordinary course of business;
(vi) purchase money obligations and Capital Lease Obligations that impose restrictions of the nature described in clause (iv) of Section 5.08(a) on the property so acquired;
(vii) any agreement for the sale or other disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary of the Company that restricts distributions by that Restricted Subsidiary pending its sale or other disposition thereof;
(viii) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary of the Company in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;
(ix) Liens that limit the right of the Company or any of its Restricted Subsidiaries to dispose of the asset or assets subject to such Lien;
(x) customary provisions limiting the disposition or distribution of assets or property in partnership, joint venture, asset sale agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements;
67 |
(xi) Permitted Refinancing Debt, provided that the restrictions contained in the agreements governing such Permitted Refinancing Debt are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;
(xii) any such encumbrance or restriction with respect to any Foreign Subsidiary of the Company pursuant to an agreement governing Indebtedness incurred by such Foreign Subsidiary, (a) if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially more restrictive to the holders of the Notes than the encumbrances and restrictions contained in the agreements described in clauses (i) and (ii) above (as determined in good faith by the Company), or (b) if such encumbrance or restriction is not materially more restrictive to the holders of the Notes than is customary in comparable financings (as determined in good faith by the Company) and either (x) the Company determines in good faith that such encumbrance or restriction will not materially affect the Company’s ability to make the principal or interest payments on the Notes or (y) such encumbrance or restriction applies only if a default occurs in respect of a payment or financial covenant relating to such Indebtedness;
(xiii) any encumbrance or restriction existing under or by reason of contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided that such restrictions apply only to such Receivables Entity; and
(xiv) restrictions on cash or other deposits or net worth imposed by landlords, suppliers and customers under contracts entered into in the ordinary course of business.
Section 5.09 Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Debt) and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Company and any Restricted Subsidiary (other than a Receivables Entity) may Incur Indebtedness (including Acquired Debt) and the Company may issue shares of Disqualified Stock, if the Consolidated Total Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock is issued would have been no greater than 4.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net cash proceeds therefrom, including the effect of acquisitions or repayments or redemptions of Indebtedness to be funded by such proceeds), as if the additional Indebtedness had been Incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided that Restricted Subsidiaries (other than Receivables Entities) that are not Guarantors may only incur Indebtedness or issue any Disqualified Stock or Preferred Stock to the extent such Indebtedness, Disqualified Stock or Preferred Stock incurred and outstanding under this paragraph by such Restricted Subsidiaries (other than Receivables Entities) that are not Guarantors does not exceed (when taken together with Indebtedness incurred and outstanding by such Restricted Subsidiaries (other than Receivables Entities) that are not Guarantors under clause (xv) below), in the aggregate at any time outstanding, the greater of (i) $100.0 million and
68 |
(ii) 34.0% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended.
(b) The foregoing provisions will not prohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(i) the Incurrence by the Company or any Guarantor (including any Guarantees thereof) of Indebtedness pursuant to Credit Facilities in an aggregate principal amount not to exceed as of any date of Incurrence the sum of (A) the greater of (i) $75.0 million and (ii) 25.75% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended, plus (B) in the event of any refinancing of any such Indebtedness, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes (other than Additional Notes) and the related Notes Guarantees;
(iii) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (including Capital Lease Obligations, mortgage financings or purchase money obligations) for the purpose of financing (or refinancing) all or any part of the purchase price or cost of construction or improvement of property (real or personal), plant or equipment used in the business of the Company or such Restricted Subsidiary that, added to all other Indebtedness Incurred pursuant to this clause (iii) and then outstanding, will not exceed the greater of (i) $20.0 million and (ii) 7.0% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended;
(iv) the Incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Debt in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), in whole or in part, Indebtedness that was Incurred pursuant to subsection (a) above or pursuant to clauses (ii), (iv), (viii) or (xv) of this Section 5.09(b);
(v) the Incurrence of (a) intercompany Indebtedness of the Company, a Guarantor or any Restricted Subsidiary of the Company (other than a Receivables Entity) for so long as such Indebtedness is held by the Company or a Guarantor; provided that (i) such Indebtedness shall be unsecured and if owing by the Company or any Guarantor, contractually subordinated in all respects (other than with respect to the maturity thereof) to the obligations of the Company under the Notes or such Guarantor under its Notes Guarantee, as the case may be and (ii) if as of any date any Person other than the Company or a Guarantor owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Permitted Liens of the type described in clause (1) of the definition thereof that secure First Priority Claims that are permitted under this Indenture or a Permitted Lien of the type described in clause (15) of the definition thereof), such
69 |
date shall be deemed the incurrence of Indebtedness not permitted under this clause (v) by the issuer of such Indebtedness and (b) intercompany Indebtedness of the Company, any Guarantor or any Foreign Subsidiary of the Company for so long as such Indebtedness is held by a Foreign Subsidiary of the Company; provided that (i) if such Indebtedness is owing by the Company or any Guarantor, such Indebtedness shall be unsecured and contractually subordinated in all respects (other than with respect to the maturity thereof) to the obligations of the Company under the Notes or such Guarantor under its Notes Guarantee, as the case may be and (ii) if as of any date any Person other than such other Foreign Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness (other than Permitted Liens of the type described in clause (20) of the definition thereof), such date shall be deemed the incurrence of Indebtedness not constituting Indebtedness permitted under this clause (v) by the issuer of such Indebtedness;
(vi) Guarantees by the Company or any Restricted Subsidiary of the Company of Indebtedness of the Company or any Restricted Subsidiary of the Company (other than a Receivables Entity) otherwise permitted hereunder so long as the Person giving such Guarantee could have Incurred the Indebtedness that is being Guaranteed; provided that if the Indebtedness being guaranteed (x) is subordinated to the Notes or a Notes Guarantee, then the Guarantee must be subordinated to the same extent as the Indebtedness being guaranteed or (y) is owed by any Restricted Subsidiary of the Company that is not a Guarantor, such Guarantee shall be subordinated to the prior payment in full of the Notes in the case of the Company or the Notes Guarantees in the case of a Guarantor;
(vii) the Incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are Incurred for the purpose of fixing or hedging (A) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) currency exchange risk in connection with existing financial obligations in the ordinary course of business and not for purposes of speculation;
(viii) the Incurrence of Existing Indebtedness (other than Indebtedness described in clauses (i), (ii) or (v) of this Section 5.09(b));
(ix) the Incurrence of obligations in respect of letters of credit, bank guarantees, performance, bid and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(x) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within four Business Days of its Incurrence;
(xi) Indebtedness of Foreign Subsidiaries that, when added together with any other Indebtedness incurred under this clause (xi) and then outstanding, will not exceed the greater of (i) $40.0 million and (ii) 13.75% of Consolidated Cash Flow of the
70 |
Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended;
(xii) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of the financing of insurance premiums in the ordinary course of business;
(xiii) Indebtedness consisting of promissory notes or similar Indebtedness issued by the Company or any Restricted Subsidiary of the Company to current, future or former officers, directors and employees thereof, or to their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or a Restricted Subsidiary of the Company to the extent described in clause (iv) of Section 5.07(b);
(xiv) Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(xv) the Incurrence by the Company or any of its Restricted Subsidiaries of (i) Acquired Debt outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by, or merged into, the Company or any Restricted Subsidiary or (ii) Indebtedness to finance all or a portion of any such transaction; provided, however, with respect to this clause (xv), that at the time of the acquisition or other transaction pursuant to which such Indebtedness was deemed to be Incurred either (x) the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the Consolidated Total Leverage Ratio test set forth in Section 5.09(a) after giving pro forma effect to such acquisition or merger and the Incurrence of such Indebtedness pursuant to this clause (xv) or (y) the Consolidated Total Leverage Ratio of the Company would not be greater than it was immediately prior to giving pro forma effect to such acquisition or merger and the Incurrence of such Indebtedness pursuant to this clause (xv);
(xvi) Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction; and
(xvii) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness, or issuance of Disqualified Stock by the Company (in addition to Indebtedness or Disqualified Stock permitted by any other clause of this paragraph) in an aggregate principal amount (or accreted value, as applicable) that, when added to all other Indebtedness Incurred pursuant to this clause (xvii) and then outstanding, will not exceed the greater of (i) $60.0 million and (ii) 20.5% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended.
71 |
(c) For purposes of determining compliance with this Section 5.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (i) through (xvii) of paragraph (b) above or under paragraph (a) above, the Company will, in its sole discretion, divide and classify such item of Indebtedness in any manner that complies with this Section 5.09 and will only be required to include the amount and type of such Indebtedness in one of such clauses or pursuant to Section 5.09(a), and may re-classify any such item of Indebtedness from time to time among such clauses or Section 5.09(a), so long as such item meets the applicable criteria for such category. For the avoidance of doubt, Indebtedness may be classified as Incurred in part pursuant to one of the clauses (i) through (xvii) above, and in part under one or more other clauses or under Section 5.09(a). Indebtedness outstanding on the Issue Date under the Credit Agreement shall be treated as Incurred pursuant to clause (i) of paragraph (b) above. Indebtedness outstanding on the Issue Date under the Existing Cash Money Facility Agreement shall be treated as Incurred pursuant to clause (xi) of paragraph (b) above. Indebtedness outstanding on the Issue Date under each of the Existing U.S. SPV Facility, the Existing Revolving Canada SPV Facility and the Existing Flexiti SPE Facility shall be treated as Incurred pursuant to clause (xvi) of paragraph (b) above.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
(e) The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
(f) Accrual of interest and dividends, accretion of accreted value, issuance of securities paid-in-kind, amortization of original issue discount, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 5.09.
(g) The Company will not incur, and will not permit any other Guarantor to incur, any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or such other Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Notes Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be
72 |
contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured on junior Lien or priority basis.
(h) For purposes of calculating the Consolidated Total Leverage Ratio in connection with the incurrence of any Indebtedness pursuant to the first paragraph above or the creation or incurrence of any Lien pursuant to the definition of “Permitted Liens,” the Company may elect, at its option, to treat all or any portion of the committed amount of any Indebtedness (and the issuance and creation of letters of credit and bankers’ acceptances thereunder) which is to be incurred (or any commitment in respect thereof) or secured by such Lien, as the case may be (any such committed amount elected until revoked as described below, the “Reserved Indebtedness Amount”), as being incurred as of such election date, and, if such Consolidated Total Leverage Ratio is satisfied with respect thereto on such election date, any subsequent borrowing or reborrowing thereunder (and the issuance and creation of letters of credit and bankers’ acceptances thereunder) will be deemed to be permitted under this covenant or the definition of “Permitted Liens,” as applicable, whether or not such ratio, at the actual time of any subsequent borrowing or reborrowing (or issuance or creation of letters of credit or bankers’ acceptances thereunder) is met; provided that for purposes of subsequent calculations of such ratios, the Reserved Indebtedness Amount shall be deemed to be outstanding, whether or not such amount is actually outstanding, for so long as such commitments are outstanding or until the Company revokes an election of a Reserved Indebtedness Amount.
(i) With respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Indenture that does not require compliance with a financial ratio or test (including, without limitation, the Consolidated Total Leverage Ratio) (any such amounts (but excluding any amounts incurred under any revolving facility unless such Indebtedness has been permanently repaid and has not been replaced), the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Indenture that requires compliance with a financial ratio or test (including a test based on the Consolidated Total Leverage Ratio) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that (i) the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence-Based Amounts, and (ii) except as provided in clause (i), pro forma effect shall be given to all applicable and related transactions (including the use of proceeds of all applicable Indebtedness incurred and any repayments, repurchases and redemptions of Indebtedness) and all other adjustments as to which pro forma effect may be given under this Indenture.
Section 5.10 Asset Sales. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Sale (except with respect to an Event of Loss) unless:
(i) the Company or the Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and
(ii) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents;
73 |
provided that the amount of:
(1) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet) of the Company or any Restricted Subsidiary of the Company (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Notes Guarantee thereof) that are assumed by the transferee of any such assets and with respect to which the Company or such Restricted Subsidiary is unconditionally released from further liability;
(2) (A) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted within 90 days by the Company or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received in that conversion) and (B) accounts receivable of a business retained by the Company or any of its Restricted Subsidiaries, as the case may be, following the sale of such business that (i) are not past due more than 30 days and (ii) do not have a payment date greater than 90 days from the date of the invoices creating such accounts receivable; and
(3) any Designated Non-Cash Consideration received by the Company or any such Restricted Subsidiary in such Asset Sale; provided that at the time of receipt of such Designated Non-Cash Consideration, the aggregate Fair Market Value of all Designated Non-Cash Consideration (with the Fair Market Value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value), less the amount of Net Proceeds previously realized in cash or Cash Equivalents from the sale of previously received Designated Non-Cash Consideration is less than the greater of (i) $40.0 million and (ii) 13.75% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the applicable Reference Period then most recently ended at the time of such Asset Sale,
will be deemed to be cash for purposes of this Section 5.10.
(b) Within 365 days after the receipt of any Net Proceeds from an Asset Sale by the Company or a Restricted Subsidiary of the Company, the Company or such Restricted Subsidiary may apply such Net Proceeds at its option:
(i) to permanently reduce Indebtedness under the Credit Facilities (and to correspondingly reduce commitments with respect thereto);
(ii) with respect to Asset Sales of assets of a Restricted Subsidiary of the Company that is not a Guarantor, to permanently reduce Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (and to correspondingly reduce commitments with respect thereto), other than Indebtedness owed to the Company or another Subsidiary of the Company;
(iii) to the extent the Asset Sale constituted the sale of consumer loans, or other loans generated through the conduct of Similar Businesses, to the making of advances and the extension of credit to customers in the ordinary course of business consistent with past practice that are either (A) recorded as accounts receivable or consumer loans on the
74 |
consolidated balance sheet of the Company or (B) consumer loans the making of which are facilitated by the Company or a Restricted Subsidiary acting as a credit services organization or similar services provider in an amount no greater than the cash used to cash collateralize or repurchase such loans; and/or
(iv) to the making of a capital expenditure or the acquisition of a controlling interest in another business or other assets, in each case, that are used or useful in a Similar Business or that replace the assets that are the subject of such Asset Sale;
provided, however, that if the Company or any Restricted Subsidiary contractually commits within such 365-day period to apply such Net Proceeds within 180 days of such contractual commitment in accordance with any of the above clauses (i) through (iv), and such Net Proceeds are subsequently applied as contemplated in such contractual commitment, then the requirement for application of Net Proceeds set forth in this clause (b) shall be considered satisfied.
(c) Pending the final application of any such Net Proceeds, the Company or a Restricted Subsidiary of the Company may temporarily reduce Indebtedness under the Credit Facilities or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied or invested (by election or as a result of the passage of time) as provided in the first sentence of the preceding paragraph will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $20.0 million, the Company will be required to make an offer (an “Asset Sale Offer”) to all holders of Notes and all holders of Pari Passu Indebtedness evidenced or governed by Pari Passu Payment Lien Documents containing provisions similar to those set forth in this Indenture to purchase from such holders on a ratable basis the maximum principal amount of Notes and such Pari Passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price for such Asset Sale Offer shall be an amount in cash equal to 100% of the principal amount of the Notes and such Pari Passu Indebtedness (or, in the case of Pari Passu Indebtedness issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this Indenture. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company and its Restricted Subsidiaries may use any remaining Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by holders thereof exceeds the amount of the Excess Proceeds, the Trustee will select the Notes and the applicable agent or representative of the holders of such Pari Passu Indebtedness or the Company will select such Pari Passu Indebtedness to be purchased on a pro rata basis based upon the principal amount of Notes tendered and the principal amount or accreted value, as applicable, of such Pari Passu Indebtedness tendered (subject to adjustments so that no Notes in an unauthorized denomination are repurchased in part). Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. Notes (or portions thereof) purchased pursuant to an Asset Sale Offer will be cancelled and may not be reissued.
75 |
(e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act and any other securities laws and regulations thereunder in connection with the repurchase of the Notes as a result of an Asset Sale. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture (including Section 3.09), the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue of its compliance with such securities laws or regulations.
Section 5.11 Transactions with Affiliates. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, exchange, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $15.0 million, unless:
(a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction at the time in an arm’s-length transaction with a person who was not an Affiliate; and
(b) if such Affiliate Transaction involves an amount in excess of $30.0 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Company disinterested with respect to such Affiliate Transaction has determined in good faith that the criteria set forth in clause (a) of this Section 5.11 are satisfied and has approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors of the Company set forth in an Officer’s Certificate.
The foregoing provisions will not apply to the following:
(i) any employment agreement or compensation plan or arrangement and other benefits (including retirement, health, stock option and other benefit plans) entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business of the Company or such Restricted Subsidiary;
(ii) transactions exclusively between or among the Company and/or its Restricted Subsidiaries (other than a Receivables Entity); provided that such transactions are not otherwise prohibited by this Indenture;
(iii) any agreement existing on the Issue Date, as in effect on the Issue Date, or as modified, amended or amended and restated by any modification, amendment or amendment and restatement (x) that, taken as a whole, is not more disadvantageous to the holders of the Notes in any material respect than such agreement as it was in effect on the Issue Date or (y) made in compliance with the applicable provisions of clauses (a) and (b) of this Section 5.11;
76 |
(iv) reasonable compensation of, and indemnity arrangements in favor of, directors of the Company and its Subsidiaries;
(v) the issuance or sale of any Equity Interests (other than Disqualified Stock) of the Company and any contribution to the common equity of the Company;
(vi) transactions in which the Company or any of its Restricted Subsidiaries, as the case may be, deliver to the Trustee a letter from an Independent Financial Advisor stating that such transaction (i) is fair to the Company or such Restricted Subsidiary from a financial point of view or (ii) meets the requirements of Section 5.11(a);
(vii) transactions with Unrestricted Subsidiaries, customers, clients, lessors, landlords, suppliers, contractors, or purchasers or sellers of goods or services that are Affiliates, in each case, in the ordinary course of business and otherwise in compliance with the terms of this Indenture that are fair to the Company and its Restricted Subsidiaries, in the reasonable determination of the Board of Directors of the Company;
(viii) sales or other transfers or dispositions of accounts receivable and other related assets customarily transferred in an asset securitization transaction involving accounts receivable to a Receivables Entity in a Qualified Receivables Transaction, and acquisitions of Permitted Investments in connection with, and any other customary transactions effected as a part of, a Qualified Receivables Transaction; and
(ix) Restricted Payments that are permitted by Section 5.07 and Permitted Investments.
Section 5.12 Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired, except Permitted Liens.
Section 5.13 Corporate Existence; Maintenance of Property and Insurance. Subject to Section 5.10, Article 6 and Article 11, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the Company and each of its Restricted Subsidiaries; provided, however, that the Company will not be required to preserve any such material right, license or franchise, or the corporate, partnership or other existence of a Restricted Subsidiary of the Company, if the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders.
77 |
The Company will, and will cause each of its Restricted Subsidiaries to, keep all property material to the operation of the business of the Company and its Restricted Subsidiaries, taken as a whole, in good working order and condition in all material respects, ordinary wear and tear and casualty loss excepted; provided, that the Company will not be obligated to comply with this paragraph to the extent that the failure to do so is not adverse in any material respect to the Holders.
The Company will, and will cause each of its Restricted Subsidiaries to, maintain with one or more insurance companies of national standing insurance on all property material to the operation of the business of the Company and its Restricted Subsidiaries, taken as a whole, in at least such amounts and against at least such risks as are determined by the Company in good faith to be reasonable and prudent, taking into account the risks that are usually insured against in the same general area by companies engaged in the same or a similar business (in each case, after giving effect to any self-insurance determined by the Company to be reasonable and prudent, taking into account the practices of similarly situated Persons engaged in the same or similar businesses as the Company and the Company’s Restricted Subsidiaries).
Section 5.14 Offer to Repurchase Upon Change of Control. (a) Upon the occurrence of a Change of Control, unless the Company has previously or concurrently sent a redemption notice with respect to all of the outstanding Notes as provided by Section 3.07, each Holder shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes pursuant to the offer described below at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest to the date of purchase (the “Change of Control Payment”). Within 30 days following any Change of Control, unless the Company has previously or concurrently sent a redemption notice with respect to all of the outstanding Notes as provided by Section 3.07, the Company will send a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:
(i) that a Change of Control has occurred and that such holder has the right to require the Company to purchase such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date);
(ii) the circumstances and relevant facts regarding such Change of Control;
(iii) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent);
(iv) that any Notes not tendered or accepted for payment shall continue to accrue interest;
(v) that, unless the Company defaults in making the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;
78 |
(vi) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, to the Paying Agent or Depositary, as applicable, at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date, subject to the Applicable Procedures;
(vii) that Holders shall be entitled to withdraw their election if the Paying Agent or Depositary, as applicable, receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have the Notes purchased, subject to the Applicable Procedures;
(viii) that Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer), which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof; and
(ix) the instructions, as determined by the Company, consistent with this Section 5.14, that a Holder must follow in order to have its Notes purchased.
(b) On a date that is at least 30 but no more than 60 days from the date on which the Company sends notice of the Change of Control (the “Change of Control Payment Date”), the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered, and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly send to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will, upon receipt of an Authentication Order, promptly authenticate and send (or cause to be transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Notes (or portions thereof) purchased pursuant to a Change of Control Offer will be cancelled and may not be reissued. A Change of Control Offer may be made at the same time as consents are solicited with respect to an amendment, supplement or waiver of the provisions of this Indenture, the Notes and/or the Guarantees; provided that such Change of Control Offer shall not include the delivery of such consents as a condition precedent.
(c) The Company will not be required to make a Change of Control Offer upon a Change of Control if a third-party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.
79 |
A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control occurring, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.
The Company will comply, to the extent applicable, with the requirements of Section 14(e) of, and Rule 14e-1 under, the Exchange Act and any other securities laws and regulations thereunder in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue of its compliance with such securities laws or regulations.
Section 5.15 Designation of Restricted and Unrestricted Subsidiaries. The Board of Directors of the Company may designate any Restricted Subsidiary of the Company to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary of the Company is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 5.07 or under one or more clauses of the definition of Permitted Investments, as determined by the Company. That designation will only be permitted if the Restricted Payment or Investment would be permitted at that time and if the Restricted Subsidiary of the Company otherwise meets the definition of an Unrestricted Subsidiary.
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors of the Company giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 5.07. If, at any time, any Unrestricted Subsidiary of the Company fails to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 5.09, the Company will be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 5.09, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.
Section 5.16 [Reserved].
Section 5.17 Additional Subsidiary Guarantees. If (i) the Company or any of its Restricted Subsidiaries shall acquire or create another Domestic Subsidiary after the Issue Date (other than an Immaterial Subsidiary or a Subsidiary that has been designated as an Unrestricted
80 |
Subsidiary or a Receivables Entity) or (ii) any Foreign Subsidiary or Immaterial Subsidiary of the Company Guarantees (or otherwise becomes liable for) Indebtedness of the Company or a Guarantor, then the Company will cause such Restricted Subsidiary to become a Guarantor and:
(1) execute a supplemental indenture substantially in the form of Exhibit E attached hereto, in accordance with the terms of this Indenture, pursuant to which such Restricted Subsidiary shall unconditionally guarantee, on a senior secured basis, all of the Company’s Obligations under the Indenture Documents on the terms set forth in this Indenture;
(2) execute and deliver to the Collateral Agent such amendments or supplements to the Collateral Documents necessary in order to grant to the Collateral Agent, for the benefit of the Notes Secured Parties, a perfected security interest in the Equity Interests of such Restricted Subsidiary, subject to Permitted Liens and the Intercreditor Agreement, which are owned by the Company or a Guarantor and are required to be pledged pursuant to the Collateral Documents;
(3) take such actions as are necessary to grant to the Collateral Agent for the benefit of the Notes Secured Parties a perfected security interest in the assets of such Restricted Subsidiary, other than Excluded Assets and subject to Permitted Liens and the Intercreditor Agreement, including the filing of Uniform Commercial Code financing statements, in each case as may be required by the Collateral Documents;
(4) take such further action and execute and deliver such other documents specified in the Indenture Documents or as otherwise may be reasonably requested by the Trustee or Collateral Agent to give effect to the foregoing; and
(5) deliver to the Trustee and the Collateral Agent an Opinion of Counsel that (i) such supplemental indenture and any other documents required to be delivered have been duly authorized, executed and delivered by such Restricted Subsidiary and constitute legal, valid, binding and enforceable obligations of such Restricted Subsidiary and (ii) the Collateral Documents to which such Restricted Subsidiary is a party create a valid perfected Lien on the Collateral covered thereby.
Section 5.18 Business Activities. The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Similar Businesses, except to such extent as would not be material to the Company and its Restricted Subsidiaries taken as a whole.
Section 5.19 [Reserved].
Section 5.20 [Reserved].
81 |
Section 5.21 Mortgages. With respect to any fee interest in any real property that is acquired by the Company or a Guarantor after the Issue Date that does not constitute an Excluded Asset set forth in clause (3) of the definition thereof (such real property referred to individually and collectively as the “Premises”), within 90 days of such acquisition, the Company will or will cause the applicable Guarantor, as the case may be, to:
(1) deliver to the Collateral Agent, as mortgagee, for the benefit of the Notes Secured Parties, fully executed Mortgages, duly executed by the Company or the applicable Guarantor, as the case may be, together with evidence of the completion (or satisfactory arrangements for the completion), or all recordings and filings of such Mortgage as may be necessary to create a valid, perfected Lien, subject to Permitted Liens and the Intercreditor Agreement, against the Premises purported to be covered thereby;
(2) deliver to the Collateral Agent, a mortgagee’s title insurance policy in favor of the Collateral Agent in an amount equal to 100% of the Fair Market Value of the Premises purported to be covered by the related Mortgage, insuring that the interests created by the Mortgage constitute valid Liens thereon free and clear of all Liens, defects and encumbrances other than Permitted Liens and any other exceptions disclosed in such policy, and such policy shall also include, to the extent available and issued at ordinary rates, customary endorsements and shall be accompanied by evidence of the payment in full (or satisfactory arrangements for the payment) of all premiums thereon;
(3) deliver to the Collateral Agent, the most recent survey of such Premises, together with either (i) an updated survey certification in favor of the Collateral Agent from the applicable surveyor stating that, based on a visual inspection of the property and the knowledge of the surveyor, there has been no change in the facts depicted in the survey or (ii) an affidavit and/or indemnity from the Company or the applicable Guarantor, as the case may be, stating that to its knowledge there has been no change in the facts depicted in the survey, other than, in each case, changes that do not materially adversely affect the use by the Company or Guarantor, as applicable, of such Premises for the Company or such Guarantor’s business as so conducted, or intended to be conducted, at such Premises and in each case, in form sufficient for the title insurer issuing the title policy to remove the standard survey exception from such policy and issue a survey endorsement to such policy; and
(4) deliver an Opinion of Counsel to the Collateral Agent that such Mortgage has been duly authorized, executed and delivered by the Company or such Guarantor, constitutes a legal, valid, binding and enforceable obligation of the Company or such Guarantor and creates a valid perfected Lien in the Premises purported to be covered thereby.
Section 5.22 Further Assurances. The Company will, and will cause each Guarantor to, at their sole cost and expense, (i) execute and deliver all such agreements and instruments as may be necessary and as the Collateral Agent shall reasonably request to more fully or accurately describe the property intended to be Collateral or the obligations intended to be secured by the Collateral Documents and (ii) file any such notice filings or other agreements or instruments as may be reasonably necessary under applicable law to perfect (and maintain the perfection and priority of) the Liens created by the Collateral Documents, subject to Permitted
82 |
Liens, at such times and at such places as the Collateral Agent may reasonably request, in each case subject to the terms of the Collateral Documents.
Section 5.23 Limited Condition Transaction. In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of determining compliance with any provision of this Indenture which is subject to a Default or an Devent of Default qualifier or requires the calculation of any financial ratio or test, in each case, at the option of the Company (the Company’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted under this Indenture (or any such requirement or condition therefor is complied with or satisfied (including as to the absence of any continuing Default or Event of Default (other than with respect to any Event of Default described in clause (a), (b) or (i) in the definition thereof)) will be deemed to be the date the definitive agreements or the date of delivery of the notice of redemption, as the case may be, for such Limited Condition Transaction are entered into or delivered, as the case may be (the “LCT Test Date”), and if, after giving pro forma effect to the Limited Condition Transaction (and the other transactions to be entered into in connection therewith), the Company or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in compliance with such ratio or test (and any related requirements and conditions), such ratio or test (and any related requirements and conditions) will be deemed to have been complied with (or satisfied). Upon making an LCT Election, the Company will deliver an Officer’s Certificate to the Trustee demonstrating compliance on a pro forma basis after giving effect to such Limited Condition Transaction on such LCT Test Date with any relevant ratios or tests. For the avoidance of doubt, if the Company has made an LCT Election and any of the ratios or tests for which compliance was determined or tested as of the LCT Test Date would have failed to have been complied with as a result of fluctuations in any such ratio or test, at or prior to the consummation of the relevant Limited Condition Transaction, such tests or ratios will not be deemed to have failed to have been complied with as a result of such fluctuations. If the Company has made an LCT Election for any Limited Condition Transaction, then in connection with any calculation of any ratio or test with respect to the incurrence of Indebtedness or Liens, the making of Restricted Payments, the making of any Permitted Investment, the making of any Asset Sale, or the designation of an Unrestricted Subsidiary (each, a “Subsequent Transaction”) following the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or irrevocable notice for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, for purposes of determining whether such Subsequent Transaction is permitted under this Indenture, any such ratio or test shall be required to be satisfied on a pro forma basis (i) assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and (ii) in the case of a Restricted Payment, assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have not been consummated.
Section 5.24 Covenant Suspension. If on any date following the Issue Date (i) the Notes have Investment Grade Ratings from both Rating Agencies and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “Covenant Suspension Event”),
83 |
the Company and its Restricted Subsidiaries will not be subject to the following covenants (collectively, the “Suspended Covenants”):
(1) | Section 5.07; |
(2) | Section 5.08; |
(3) | Section 5.09; |
(4) | Section 5.10; |
(5) | Section 5.11; |
(6) | Section 5.13 (except as such Section relates to the Company maintaining its corporate existence); |
(7) | Section 5.14; |
(8) | Section 5.17; |
(9) | Section 5.18; |
(10) | Section 5.21; |
(11) | Section 5.22; and |
(12) | clause (a)(iii) of Section 6.01 |
In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “Reversion Date”) both of the Rating Agencies (a) withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating and/or (b) the Company or any of its Affiliates enter into an agreement to effect a transaction that would result in a Change of Control and one or more of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related recapitalization or refinancing transactions) would cause such Rating Agency to withdraw its Investment Grade Rating or downgrade the ratings assigned to the Notes below an Investment Grade Rating, then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events, including, without limitation, a proposed transaction described in clause (b) above.
The period of time between the occurrence of a Covenant Suspension Event and the Reversion Date is referred to in this description as the “Suspension Period.” Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Cash Proceeds shall be reset at zero. In the event of any such reinstatement, no action taken or omitted to be taken by the Company or any of its Restricted Subsidiaries prior to such reinstatement will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided that (1) with respect to Restricted Payments made after any such
84 |
reinstatement, the amount of Restricted Payments made will be calculated as though the provisions of Section 5.07 had been in effect prior to, but not during the Suspension Period, provided that any Subsidiaries designated as Unrestricted Subsidiaries during the Suspension Period shall automatically become Restricted Subsidiaries on the Reversion Date (subject to the Company’s right to subsequently designate them as Unrestricted Subsidiaries in compliance with the covenants set forth under Article 5) and (2) all Indebtedness incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been incurred or issued pursuant to Section 5.09(b)(8).
The Company shall provide a written notice to the Trustee upon the occurrence of a Covenant Suspension Event or a Reversion Date.
There can be no assurance that the Notes will ever achieve or maintain Investment Grade Ratings.
ARTICLE 6
Successors
Section 6.01 Merger, Consolidation or Sale of Assets.
(a) The Company. The Company may not, in any transaction or series of related transactions, consolidate or amalgamate with or merge with or into (whether or not the Company survives), or sell, assign, convey, transfer, lease or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of its property and assets whether as an entirety or substantially as an entirety, to any Person, unless:
(i) either:
(A) if the transaction or series of transactions is a consolidation of the Company with or a merger of the Company with or into any other Person, the Company will be the surviving Person of such merger or consolidation; or
(B) the Person formed by any consolidation or merger with or into the Company or to which all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries, taken as a whole, are sold, assigned, conveyed, transferred, leased or otherwise disposed of shall be a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, and such Person shall expressly assume by (i) a supplemental indenture executed and delivered to the Trustee, all of the obligations of the Company under the Notes and this Indenture, and this Indenture, as so supplemented, shall remain in full force and effect and (ii) an amendment, supplement or other instrument, executed and delivered to the Trustee, all obligations of the Company under the Collateral Documents, and in connection therewith will cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Documents on the Collateral owned by or transferred to the surviving entity;
85 |
(ii) immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (including any Indebtedness Incurred or anticipated to be Incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing; and
(iii) at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable period (but without giving effect to the costs and expenses of such transaction), the Company or the successor entity to the Company, either (x) would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Total Leverage Ratio test set forth in Section 5.09(a) or (y) would have a Consolidated Total Leverage Ratio that is less than or equal to the Consolidated Total Leverage Ratio calculated immediately prior to such transaction.
The foregoing requirements shall not apply to any transaction or series of transactions involving the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets by any Subsidiary of the Company to the Company or any Guarantor, the consolidation or merger of any Subsidiary of the Company with or into any Guarantor or the Company or, for the avoidance of doubt, the consolidation or merger of any Subsidiary of the Company that is not a Guarantor with or into any other Subsidiary of the Company that is not a Guarantor.
In connection with any consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition contemplated by the foregoing provisions, the Company will deliver, or cause to be delivered, to the Trustee an Officer’s Certificate stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition and the supplemental indenture in respect thereof comply with the requirements of this Indenture and an Opinion of Counsel. Each such Officer’s Certificate shall set forth the manner of determination of the Company’s compliance with clause (iii) of this subsection (a).
(b) The Guarantors. Subject to Section 11.03, each Restricted Subsidiary of the Company that is a Guarantor will not, in any transaction or series of related transactions merge or consolidate or amalgamate with or into (whether or not such Guarantor survives), or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any Person, unless either:
(i) either:
(A) if the transaction or series of transactions is a consolidation of such Guarantor with or a merger of such Guarantor with or into any other Person, such Guarantor shall be the surviving Person of such consolidation or merger; or
(B) the Person formed by any consolidation or merger with or into such Guarantor, or to which all or substantially all of the properties and assets of such Guarantor and its Subsidiaries, taken as a whole, as the case may be, are sold, assigned, conveyed, transferred, leased or otherwise disposed of shall be a corporation, partnership, limited liability company or trust organized and existing
86 |
under the laws of the United States, any state thereof or the District of Columbia, and shall expressly assume by (i) a supplemental indenture executed and delivered to the Trustee, all of the obligations of such Guarantor under its Notes Guarantee and this Indenture, and this Indenture, as so supplemented, shall remain in full force and effect and (ii) an amendment, supplement or other instrument, executed and delivered to the Trustee, all obligations of such Guarantor under the Collateral Documents, and in connection therewith will cause such instruments to be filed and recorded in such jurisdictions and take such other actions as may be required by applicable law to perfect or continue the perfection of the Lien created under the Collateral Documents on the Collateral owned by or transferred to the surviving entity; or
(ii) the transaction is made in compliance with Section 5.10.
The foregoing requirements shall not apply to any transaction or series of transactions involving the sale, assignment, conveyance, transfer, lease or other disposition of any properties or assets by any Subsidiary of the Company to the Company or any Guarantor, or the consolidation or merger of any Subsidiary of the Company with or into the Company or any Guarantor, or, for the avoidance of doubt, the consolidation or merger of any Subsidiary of the Company that is not a Guarantor with or into any other Subsidiary of the Company that is not a Guarantor.
In connection with any consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition contemplated by Section 6.01(b)(i), such Guarantor shall deliver, or cause to be delivered, to the Trustee an Officer’s Certificate stating that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposition and the supplemental indenture in respect thereof comply with the requirements of this Indenture and an Opinion of Counsel.
Section 6.02 Successor Entity Substituted. Upon any consolidation or merger of the Company or any Guarantor, or any sale, assignment, conveyance, transfer or other disposition of all or substantially all of the assets of the Company or such Guarantor in accordance with the foregoing, in which the Company or such Guarantor is not the continuing obligor under the Notes or its Notes Guarantee, the surviving entity formed by such consolidation or into which the Company or such Guarantor is merged or to which the sale, assignment, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or such Guarantor under the Indenture Documents with the same effect as if such surviving entity had been named herein and therein as the Company or such Guarantor and, except in the case of a lease, the Company or such Guarantor, as the case may be, shall be released from the obligation to pay the principal of, premium, if any, and interest on the Notes or in respect of its Notes Guarantee, as the case may be, and all of the Company’s or such Guarantor’s other obligations and covenants under the Indenture Documents, if applicable.
87 |
ARTICLE 7
Defaults and Remedies
Section 7.01 Events of Default. Each of the following shall be an “Event of Default”:
(a) default for 30 days in the payment when due of interest on the Notes;
(b) default in payment when due of the principal, or premium, if any, of any Note when due at maturity, upon optional redemption, upon required purchase, upon acceleration or otherwise;
(c) (i) failure by the Company or any of its Restricted Subsidiaries to comply with its obligations under Section 5.10, 5.14 or Article 6;
(d) failure to perform any other covenant or agreement of the Company or any of its Restricted Subsidiaries under the Indenture Documents for 60 days after written notice to the Company by the Trustee or the Holders of at least 30% in aggregate principal amount of the Notes then outstanding voting as a single class;
(e) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (A) is caused by a failure to pay principal at final stated maturity (after giving effect to all applicable grace periods provided in such Indebtedness) (a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its final stated maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million (or its foreign currency equivalent);
(f) failure by the Company or any of its Restricted Subsidiaries to pay final judgments which are non-appealable aggregating in excess of $20.0 million (or its foreign currency equivalent) (not covered by independent third-party insurance as to which liability has not been denied by such insurance carrier), which judgments are not paid, discharged or stayed for a period of 60 days following such judgment becoming final, and in the event such judgment is covered by insurance, any enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed;
(g) (i) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of this Indenture or the Collateral Documents) or (ii) the breach or repudiation by the Company or any of its Restricted Subsidiaries of any of their obligations under any Collateral Document; provided that, in the case of clauses (i) and (ii), such cessation, breach or repudiation, individually or in the
88 |
aggregate, results in Collateral having a Fair Market Value in excess of $20.0 million not being subject to a valid, perfected security interest;
(h) except as permitted by this Indenture, any Notes Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Notes Guarantee;
(i) the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it or for all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors; and
(j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, in an involuntary case;
(ii) appoints a Custodian of the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company, or for all or substantially all of the property of the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company; or
(iii) orders the liquidation of the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company;
and the order or decree remains unstayed and in effect for 60 consecutive days.
The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
89 |
In the event of any Event of Default specified under subsection (e) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of Notes, if within 20 days after such Event of Default arose the Company delivers an Officer’s Certificate to the Trustee stating that:
(a) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(b) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default;
(c) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and
(d) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
Section 7.02 Acceleration. If any Event of Default (other than an Event of Default specified in subsection (i) or (j) of Section 7.01) occurs and is continuing and has not been waived by the Holders, the Trustee or the Holders of at least 30% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in subsection (i) or (j) of Section 7.01 occurs, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived and all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel have been paid or deposited with the Trustee or provision therefor satisfactory to the Trustee has been made.
Section 7.03 Other Remedies. If an Event of Default occurs and is continuing, if directed pursuant to Section 7.05, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Indenture Documents.
If directed pursuant to Section 7.05, the Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
90 |
Section 7.04 Waiver of Past Defaults. The Holders of at least a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive (including in connection with a purchase of, or tender offer or exchange offer for, Notes) any existing Default or Event of Default and its consequences under this Indenture (including any acceleration of the Notes), except a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on the Notes (including in connection with an offer to purchase); provided, however, that the Holders of at least a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 7.05 Control by Majority. Holders of at least a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of other Holders (it being understood that the Trustee will have no duty to ascertain whether such actions or forbearances are unduly prejudicial to such other Holders) or that would involve the Trustee in personal liability. The Trustee will be entitled to indemnification satisfactory to it prior to taking any action. The Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Section 7.06 Limitation on Suits. A Holder may pursue a remedy with respect to this Indenture or the Notes only if:
(a) the Holder gives to the Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 30% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of security or indemnity; and
(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does
91 |
not have an affirmative duty to ascertain whether or not any uses are unduly prejudicial to such Holders) or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. The Trustee will send to all Holders any notice it receives from Holders under this Section 7.06.
Section 7.07 Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the contractual right of any Holder to receive payment of principal, premium, if any, or interest on any Note, on or after the respective due dates expressed in any such Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 7.08 Collection Suit By Trustee. If an Event of Default specified in Section 7.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, or interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 7.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company or any of the Guarantors (or any other obligor upon the Notes) or their respective creditors or property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee will consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 7.10 Priorities. Subject to the terms of the Intercreditor Agreement, any money collected by the Trustee pursuant to this Article 7 or by the Collateral Agent pursuant to
92 |
the Collateral Documents, or any money or other property distributable in respect of the Company’s or the Guarantors’ obligations under the Indenture Documents after an Event of Default, shall be applied in the following order:
First: to the Trustee, the Collateral Agent and their respective agents, reasonably retained professional advisors, and attorneys for amounts due or reasonably anticipated to become due under Section 8.07, including payment of all reasonable compensation, expense and liabilities incurred, and all advances made, by the Trustee and the Collateral Agent and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest;
Third: to Holders for amounts due and unpaid on the Notes for principal and premium, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and premium, respectively; and
Fourth: to the Company or to such party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 7.10.
Section 7.11 Undertaking For Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07 or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
Section 7.12 Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy are, to the extent permitted by law, cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 7.13 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
93 |
ARTICLE 8
Trustee
Section 8.01 Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.
(b) Prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Defaults that may have occurred:
(i) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they are in a form that conforms to the requirements of this Indenture (but need not confirm or investigate, and may rely exclusively upon, the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of subsection (b) of this Section 8.01;
(ii) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee will not be liable, in any event, with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05, or a direction from the Holders of a majority in principal amount of the outstanding Notes concerning the exercise of any right, trust or power conferred upon the Trustee; and
(iv) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b), and (c) of this Section 8.01.
94 |
(e) The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request or direction of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) The Trustee is hereby authorized and directed to execute and deliver each Indenture Document or Collateral Document to which it is a party.
Section 8.02 Rights of Trustee. (a) In the absence of bad faith on its part, the Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of, or information obtained from, any accountant, appraiser or other expert or adviser, whether retained or employed by the Company or by the Trustee, in relation to any matter arising in the administration of the trusts hereof.
(c) The Trustee may employ or retain such counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties hereunder and shall not be responsible for any misconduct on the part of any of them. The Trustee may act through its attorneys and agents and shall not be responsible for the acts or omissions of any agent or attorney appointed with due care, and the Trustee will not be responsible for the supervision of officers and employees of such agents or attorneys or the application of any money by any Agent other than the Trustee.
(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.
(f) The rights, privileges, protections, immunities and benefits given to the Trustee, including, its right to be compensated, reimbursed, provided security and indemnified, and its right to resign, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder or in any Indenture Document or Collateral Document, including but not
95 |
limited to its capacities as Collateral Agent, Note Custodian, Paying Agent and Registrar, and to each agent, custodian and other Person employed to act hereunder or in any Indenture Document or Collateral Document.
(g) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee will use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
(h) The Trustee will not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee with responsibility over matters concerning the Notes and this Indenture has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture and is provided by the Company or any Holder of the Notes.
(i) The Trustee need not investigate any fact or matter stated in any document delivered to it, but the Trustee, in its discretion or if directed to do so, may make such further inquiry or investigation into such facts or matters, and, if the Trustee will determine in good faith or if directed to do so to make such further inquiry or investigation, it shall be entitled upon reasonable notice during normal business hours to examine the books, records and premises of the Company and the Guarantors, personally or by agent or attorney at the sole cost of the Company and the Guarantors and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.
(j) In no event shall the Trustee be responsible or liable for special, indirect, exemplary, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(k) The Trustee may, from time to time, request that the Company and the Guarantors deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to the Indenture Documents, which Officer’s Certificate may be signed by any Person authorized to sign an Officer’s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(l) No permissive or discretionary power or authority available to the Trustee will be construed to be a duty of the Trustee.
(m) The Company will provide prompt written notice to the Trustee of any change to its fiscal year.
96 |
Section 8.03 Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee and nothing in this Indenture shall deprive the Trustee of any rights as a holder or pledge of Notes. However, in the event that the Trustee acquires any conflicting interest as defined by the TIA it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 8.10 and 8.11.
Section 8.04 Trustee’s Disclaimer. The Trustee will not be responsible for and makes no representation as to the validity or adequacy of any of the Indenture Documents or the Collateral. The Trustee will not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 8.05 Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee will send to Holders, with a copy to the Company, a notice of the Default or Event of Default within 90 days after it occurs or if known to the Trustee later than 90 days after it occurs, as soon as practicable, unless such Default or Event of Default shall have been cured or waived before the giving of such notice. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interests of the Holders.
Section 8.06 Reports by Trustee to Holders. Within 60 days after each August 1 beginning August 1, 2022, and for so long as Notes remain outstanding, the Trustee will send to the Holders a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The Trustee will also transmit by send all reports as required by TIA § 313(c).
A copy of each report at the time of its sending to the Holders shall be sent to the Company and filed with each stock exchange on which the Notes are listed. The Company will promptly notify the Trustee, in writing, each time the Notes are listed on any stock exchange.
Section 8.07 Compensation and Indemnity. The Company will pay to the Trustee from time to time compensation for its acceptance of this Indenture and services hereunder as the Trustee and the Company will have agreed in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and out-of-pocket expenses incurred or made by it in connection with the Trustee’s duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee’s agents, reasonably retained professional advisors, and counsel,
97 |
except any disbursement, advance or expenses as may be attributable to the Trustee’s willful misconduct, bad faith or gross negligence.
The Company will indemnify and hold harmless the Trustee against any and all claims, demands, causes of action, losses, liabilities, damages, fines, penalties, costs, fees, charges or expenses including taxes (other than taxes based upon, measured by or determined by income of the Trustee) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 8.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company of its obligations hereunder, except to the extent the Company is materially prejudiced thereby. The Company will defend the claim and the Trustee will cooperate in the defense. In the event the Trustee is advised by counsel that a conflict of interest exists, the Trustee may have its own separate counsel, which, so long as no Default or Event of Default has occurred, shall be reasonably satisfactory to the Company, and the Company will pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary herein, the Company need not reimburse the Trustee for any cost or expense or indemnify it against any loss or liability incurred by the Trustee through its own gross negligence or willful misconduct.
The obligations of the Company under this Section 8.07 shall survive the satisfaction and discharge of the Notes, the termination for any reason of this Indenture and the resignation or removal of the Trustee.
To secure the Company’s payment obligations in this Section, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 7.01(i) or (j) occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.
At all times, there shall be only one Trustee hereunder.
The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its rights to be secured and indemnified, are extended to, and shall
98 |
be enforceable by, the Trustee in each of its capacities hereunder and under the Indenture Documents and each agent, custodian or other Person employed to act hereunder.
Section 8.08 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company in writing no later than 30 days prior to the date of the proposed resignation. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of at least a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 8.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture other than those designated as continuing notwithstanding the Trustee’s resignation or removal and those that otherwise are personal to the Trustee in its individual capacity. The successor Trustee will send a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 8.07. Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Company’s obligations and the Trustee’s rights and remedies under Section 8.07 shall continue for the benefit of the retiring Trustee.
99 |
Section 8.09 Successor Trustee by Merger, Etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another entity, the successor entity without any further act or filings of any papers shall be the successor Trustee; provided such successor entity shall be otherwise qualified and eligible under this Article 8.
Section 8.10 Eligibility, Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has trust assets under administration of not less than $100,000,000.
This Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1),(2) and (5). The Trustee is subject to TIA § 310(b).
No provision of this Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee will be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, to receive or obtain any such interest in property or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Trustee will be construed to be a duty.
Section 8.11 Preferential Collection of Claims Against Company. The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
ARTICLE 9
Legal Defeasance and Covenant Defeasance
Section 9.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at its option, elect to have either Section 9.02 or 9.03 be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 9.
Section 9.02 Legal Defeasance and Discharge. Upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.02, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 9.04, be deemed to have been discharged from their respective obligations under the Indenture Documents with respect to all outstanding Notes on and after the date all the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 and the other Sections of this Indenture referred to in subsections (a) and (b) of this Section 9.02 below, and the Company and the Guarantors to have satisfied all their other obligations under such Notes and the Indenture Documents (and the Trustee, on demand of and
100 |
at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 9.04, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due;
(b) the Company’s obligations with respect to such Notes under Article 2;
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company’s obligations in connection therewith; and
(d) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03.
Section 9.03 Covenant Defeasance. Upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.03, the Company and the Company’s Restricted Subsidiaries shall, subject to the satisfaction of the conditions set forth in Section 9.04, be released from the obligations under the covenants contained in Sections 5.03, 5.04, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13 (except as such Section relates to the Company preserving its corporate existence), 5.14, 5.15, 5.17, 5.18, 5.21 and 5.22 with respect to the outstanding Notes on and after the date all the conditions set forth in Section 9.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and its Restricted Subsidiaries may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 7.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company’s exercise under Section 9.01 of the option applicable to this Section 9.03, subject to the satisfaction of the conditions set forth in Section 9.04, Sections 7.01(c) through Section 7.01(h) shall not constitute Events of Default.
Section 9.04 Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 9.02 or 9.03 to the outstanding Notes:
101 |
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent certified public accountants, to pay the principal of, premium, if any, and interest on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to Stated Maturity or to a particular redemption date.
(b) in the case of an election under Section 9.02, the Company will have delivered to the Trustee an Opinion of Counsel confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 9.03, the Company will have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such Covenant Defeasance and will be subject to United States federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the granting of Liens with respect thereto);
(e) such deposit, defeasance and discharge or deposit and defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
(f) the Company will have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of the Notes over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and
(g) the Company will have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent contained in this Indenture relating to the Legal Defeasance or the Covenant Defeasance have been satisfied.
Section 9.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 9.06, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other
102 |
qualifying trustee, collectively for purposes of this Section 9.05, the “Trustee”) pursuant to Section 9.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 9.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the Trustee will deliver or pay to the Company from time to time upon the written request of the Company and within five Business Days following the receipt of such request any money or non-callable U.S. Government Obligations held by it as provided in Section 9.04 which, in the opinion of a nationally recognized firm of independent certified public accountants selected by the Trustee expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 9.04(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 9.06 Repayment to Company. Subject to Section 8.07, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times or The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Company or as required by applicable abandoned property law.
Section 9.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable U.S. Government Obligations in accordance with Section 9.02 or 9.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under the Indenture Documents shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 or 9.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 9.02 or 9.03, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its
103 |
obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 10
Amendment, Supplement and Waiver
Section 10.01 Without Consent of Holders. Notwithstanding Section 10.02, the Company, the Trustee and the Collateral Agent may amend, supplement or waive any provision of the Indenture Documents without the consent of any Holder to:
(a) cure any ambiguity, defect, mistake or inconsistency or to make a modification of a formal, minor or technical nature or to correct a manifest error;
(b) provide for uncertificated Notes in addition to or in place of certificated Notes;
(c) comply with Article 6;
(d) provide for the assumption of the Company’s or any Guarantor’s obligations to Holders in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets;
(e) add Guarantees with respect to the Notes or to secure the Notes;
(f) add to the covenants of the Company or any Guarantor for the benefit of the holders of the Notes or surrender any right or power conferred upon the Company or any Guarantor;
(g) make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture Documents of any such Holder;
(h) if it becomes necessary to qualify this Indenture under the TIA, comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;
(i) (i) enter into additional or supplemental Collateral Documents, (ii) release Collateral or Guarantors in accordance with the terms of this Indenture and the Collateral Documents or (iii) enter into any replacement intercreditor agreement substantially in the form of the Intercreditor Agreement entered into on the Issue Date;
(j) evidence and provide for the acceptance and appointment under this Indenture of a successor trustee pursuant to the requirements hereof;
(k) make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including to facilitate the issuance and administration of the Notes or to comply with the rules of any applicable securities depository; provided, however, that (i) compliance with this Indenture as so amended would not
104 |
result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;
(l) conform the text of the Indenture Documents to any provision of the “Description of Notes” section of the Offering Memorandum to the extent that such provision of the “Description of Notes” was intended to be a verbatim recitation of a provision of the Indenture Documents, which intent shall be evidenced by an Officer’s Certificate of the Company to that effect;
(m) provide for or confirm the issuance of Additional Notes in accordance with the terms of this Indenture; or
(n) subject the security interests in the Collateral in respect of Pari Passu Payment Lien Obligations to the terms of the Collateral Documents and Intercreditor Agreement, to the extent the incurrence of such Pari Passu Indebtedness and the grant of all Liens on Collateral held for the benefit of such Pari Passu Indebtedness was permitted under this Indenture.
After an amendment, supplement or waiver under this Section 10.01 becomes effective, the Company will send to Holders a notice briefly describing such amendment, supplement or waiver. However, the failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of the amendment, supplement or waiver.
Section 10.02 With Consent of Holders. Except as provided below in this Section 10.02, the Indenture Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture Documents may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with purchase of, or tender offer or exchange offer for, the Notes), in each case without notice to any other Holder, but subject to Section 5.20.
It shall not be necessary for the consent of the Holders under this Section 10.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 10.02 becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 7.04 and 7.07, the Holders of at least a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Company and the Company’s Subsidiaries with any provision of any Indenture Document. However, without the consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) of each Holder affected, an
105 |
amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of, premium, if any, or extend the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than the provisions of Sections 3.09, 5.10 and 5.14 prior to the time at which an obligation to make such an offer has arisen);
(c) reduce the rate of or extend the time for payment of interest, including default interest, on any Note;
(d) waive a Default in the payment of principal of, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, premium, if any, or interest on the Notes;
(g) release any Guarantor from any of its obligations under its Notes Guarantee or this Indenture, except in accordance with the terms of this Indenture; or
(h) make any change to Sections 10.01 or 10.02.
No amendment, supplement or waiver shall, without the consent of Holders of not less than 66 2/3% in aggregate principal amount of the then outstanding Notes issued under this Indenture, release (or have the effect of releasing) all or substantially all of the Collateral from the Liens securing the Indenture Obligations.
Section 10.03 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee and the Company receive written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver, which record date shall be, at the Company’s election, either (a) at least 30 days prior to the first solicitation of such consent or (b) the date of the most recent list furnished to the Trustee under
106 |
Section 2.05. If a record date is fixed, then notwithstanding the second to last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.
A consent to any amendment, supplement or waiver under any Indenture Document by any Holder given in connection with a purchase of, or tender offer or exchange offer for, such Holder’s Notes shall not be rendered invalid by such purchase, tender or exchange.
After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in Section 10.02 which cannot be made without the consent of each Holder affected, in which case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and every subsequent Holder or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of, premium, if any, and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.
Section 10.04 Notation On or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee will authenticate new Notes that reflect any amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
Section 10.05 Trustee or Collateral Agent to Sign Amendments, Etc.. The Trustee or the Collateral Agent, as the case may be, shall sign any amendment, supplement or waiver authorized pursuant to this Article 10 if the amendment, supplement or waiver does not affect the rights, duties, liabilities, indemnities or immunities of the Trustee or the Collateral Agent, as the case may be. The Company may not sign an amendment or supplemental indenture until its Board of Directors approves it. In executing any amendment, supplement or waiver, the Trustee and the Collateral Agent shall be entitled to receive and (subject to Section 8.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof.
ARTICLE 11
Guarantees
Section 11.01 Guarantees. Subject to the limitations set forth in Section 11.04, the Guarantors hereby, jointly and severally, unconditionally Guarantee to each Holder of Notes
107 |
and to the Trustee and their respective successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Company hereunder or thereunder, that: (a) the principal of, premium, if any, and interest on the Notes shall be promptly paid in full when due, subject to any applicable grace period, whether at Stated Maturity, by acceleration, redemption, required purchase or repurchase or otherwise, and interest on the overdue principal of and interest on premium, if any, and interest, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at Stated Maturity, by acceleration, redemption, required purchase or repurchase or otherwise. In the event the Company fails to make payment when due, subject to any applicable grace period, of any amount so Guaranteed or any performance so Guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company or any Guarantor, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than the payment in full of the amounts Guaranteed). Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or another Guarantor, protest, notice and all demands whatsoever and covenant that the Notes Guarantees shall not be discharged except by complete performance of the obligations contained in the Indenture Documents. If any Holder or the Trustee is required by any court or otherwise to return to the Company or any of the Guarantors, or any Custodian or other similar official acting in relation to either the Company or any of the Guarantors, any amount paid either to the Trustee or to such Holder, the Notes Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations Guaranteed hereby until payment in full of all obligations Guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations Guaranteed hereby may be accelerated as provided in Article 7 for the purposes of the Notes Guarantees, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations Guaranteed hereby and (y) in the event of any declaration of acceleration of such obligations as provided in Article 7, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of the Notes Guarantees. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Trustee or the Holders under the Notes Guarantees.
Section 11.02 Additional Guarantors. To the extent not a party to this Indenture on the date hereof, each Guarantor shall execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit E hereto, pursuant to which it shall become a Guarantor under this Article 11 (a “New Guarantor”) and shall Guarantee the obligations of the Company under this Indenture and the Notes. Concurrently with the execution and delivery of
108 |
such supplemental indenture, such New Guarantor shall deliver to the Trustee an Opinion of Counsel that the foregoing have been duly authorized, executed and delivered by such New Guarantor and that such New Guarantor’s Guarantee is a valid and legally binding obligation of such New Guarantor, enforceable against such New Guarantor in accordance with its terms, subject to customary limitations, qualifications, exceptions and assumptions.
The Notes Guarantee of any Guarantor shall be evidenced solely by its execution and delivery of this Indenture (or, in the case of any New Guarantor, a supplemental indenture thereto) and not by an endorsement on, or attachment to, any Note of any Notes Guarantee or notation thereof.
Each Guarantor hereby agrees that its Notes Guarantee set forth in Section 11.01 shall be and remain in full force and effect notwithstanding any failure to endorse on any Note a notation of such Notes Guarantee.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Notes Guarantees set forth in this Indenture on behalf of each of the Guarantors.
If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Notes Guarantee shall be valid nevertheless.
Section 11.03 Releases of Guarantees. In the event of:
(a) the Company exercising its Legal Defeasance or Covenant Defeasance option with respect to the Notes in accordance with Article 9 or the satisfaction and discharge of this Indenture in accordance with Section 4.01;
(b) a sale or other disposition of all or substantially all of the assets of a Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale or other disposition complies with Section 5.10;
(c) a sale, issuance or other disposition of Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if the sale, issuance or other disposition complies with Section 5.10 and the Guarantor ceases to be a Restricted Subsidiary of the Company as a result of such sale, issuance or other disposition;
(d) the designation by the Company of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture; or
(e) a Guarantor that was required to become a Guarantor pursuant to clause (ii) of Section 5.17 ceasing to Guarantee (or otherwise be liable for) any Indebtedness of the Company or any other Guarantor (other than as a result of such Guarantor making a payment on such Guarantee);
109 |
such Guarantor (and any of its Subsidiaries that are Guarantors) shall be automatically and unconditionally released and relieved of any obligations under its Notes Guarantee and the Indenture Documents. Upon delivery by the Company to the Trustee of an Officer’s Certificate and an Opinion of Counsel to the effect that (i) in the case of clauses (a) through (d) above, such defeasance, discharge, sale, issuance, disposition or designation was made by the Company in accordance with the provisions of this Indenture, including, in the case of clauses (b) and (c), Section 5.10 or (ii) in the case of clause (e) above, such Guarantor has ceased to Guarantee (or otherwise be liable for) any Indebtedness of the Company or any other Guarantor (other than as a result of such Guarantor making a payment on such Guarantee), then in each case, the Trustee or the Collateral Agent, as applicable, shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Notes Guarantee and the Indenture Documents.
Any Guarantor not released from its obligations under its Notes Guarantee shall remain liable for the full amount of principal of, premium, if any, and interest on the Notes and for the other obligations of any Guarantor under the Indenture Documents as provided in this Article 11.
Section 11.04 Limitation on Guarantor Liability. For purposes hereof, each Guarantor’s liability shall be that amount from time to time equal to the aggregate liability of such Guarantor under its Notes Guarantee, but shall be limited to the lesser of (a) the aggregate amount of the obligations of the Company under the Indenture Documents and (b) the amount, if any, which would not have (A) rendered such Guarantor “insolvent” (as such term is defined in the federal Bankruptcy Law and in the Debtor and Creditor Law of the State of New York), (B) left it with unreasonably small capital at the time its Notes Guarantee was entered into, or at the time such Guarantor Incurred liability thereunder, after giving effect to the Incurrence of Existing Indebtedness immediately prior to such time or (C) left such Guarantor with debts beyond such Guarantor’s ability to pay as such debts mature; provided that, it shall be a presumption in any lawsuit or other proceeding in which such Guarantor is a party that the amount Guaranteed pursuant to its Notes Guarantee is the amount set forth in subsection (a) above unless any creditor, or representative of creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise proves in such a lawsuit or other proceeding that the aggregate liability of such Guarantor is limited to the amount set forth in subsection (b). In making any determination as to the solvency or sufficiency of capital of a Guarantor in accordance with the previous sentence, the right of such Guarantor to contribution from other Guarantors and any other rights such Guarantor may have, contractual or otherwise, shall be taken into account.
Section 11.05 “Trustee” to Include Paying Agent. In case at any time any Paying Agent other than the Trustee will have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article 11 shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article 11 in place of the Trustee.
110 |
ARTICLE 12
Miscellaneous
Section 12.01 Notices. Any notice or communication by the Company, the Trustee or the Collateral Agent to the others is duly given if in writing and delivered in person or sent by first class mail (registered or certified, return receipt requested), telex, telecopier, overnight air courier guaranteeing next day delivery or other electronic means, to the others’ addresses:
If to the Company:
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Fax: (316) 722-7751
Attn: Vin Thomas, Chief Legal Officer
With a copy to (which shall not constitute notice):
King & Spalding LLP
1180 Peachtree Street, NE, Suite 1600
Atlanta, Georgia 30309
Attn: Cal Smith
If to the Trustee:
TMI Trust Company
1100 Abernathy Road NE, Suite 480
Atlanta, Georgia 30328
Phone: (678) 221-5898
Attn: Debra Schachel, Vice President
If to the Collateral Agent:
TMI Trust Company
1100 Abernathy Road NE, Suite 480
Atlanta, Georgia 30328
Phone: (678) 221-5898
Attn: Debra Schachel, Vice President
The Company, the Trustee or the Collateral Agent, by notice to the others may designate additional or different addresses for subsequent notices or communications.
111 |
Any notice to any Guarantor may be sent to the Guarantor in care of the Company as set forth above.
All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; and at the time sent, if sent by e-mail, provided that notice to the Trustee will be effective only upon receipt.
Any notice or communication to a Holder shall be sent by first class mail, certified or registered, return receipt requested, by overnight air courier guaranteeing next day delivery or other electronic means reasonably satisfactory to the Trustee to its address shown on the register kept by the Registrar. Any notice or communication shall also be so sent to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, provided that notice to the Trustee will be effective only upon receipt.
If the Company sends a notice or communication to Holders, it shall send a copy to the Trustee and each Agent at the same time.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
The Trustee will have the right, but shall not be required, to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods by persons believed by the Trustee to be authorized to give instructions and directions on behalf of the Company or any Person. The Trustee will have no duty or obligation to verify or confirm that the Person who sent such instructions or directions is, in fact, a Person authorized to give instructions or directions on behalf of the Company or Guarantors; and the Trustee will have no liability for any losses, liabilities, costs or expenses incurred or sustained by the Company or Guarantors as a result of such reliance upon or compliance with such instructions or directions. The Company or Guarantors agree to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.
Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the Depositary for such Note (or its
112 |
designee), pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.
Section 12.02 Communication by Holders with Other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Guarantors, the Trustee, the Collateral Agent, the Registrar and anyone else shall have the protection of TIA § 312(c).
Section 12.03 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or any Guarantor to the Trustee or the Collateral Agent, as the case may be, to take any action under the Indenture Documents, the Company will furnish to the Trustee:
(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be, (which shall include the statements set forth in Section 12.04) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as the case may be, (which shall include the statements set forth in Section 12.04) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.
Section 12.04 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters
113 |
and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of any Person may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation by, counsel or any Opinion of Counsel may be based, insofar as it relates to factual matters, upon certificates of public officials or upon a certificate or opinion of, or representations by, an officer or officers of the Company or any Guarantor (including an Officer’s Certificate) stating that the information with respect to such factual matters is in the possession of the Company or such Guarantor unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 12.05 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 12.06 No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Indenture Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the United States federal securities laws or other corporate laws, and it is the view of the SEC that such a waiver is against public policy.
Section 12.07 Governing Law. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE.
Section 12.08 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or the Company’s Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture and the Notes Guarantees.
Section 12.09 Successors. All agreements of the Company and each Guarantor in the Indenture Documents shall bind its successors. All agreements of the Trustee and the Collateral Agent in this Indenture shall bind their respective successors.
Section 12.10 Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
114 |
Section 12.11 Counterpart Originals. The parties may sign any number of copies of this Indenture (including by electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement. Facsimile, documents executed, scanned and transmitted electronically and electronic signatures, including those created or transmitted through a software platform or application, shall be deemed original signatures for purposes of this Indenture and all matters and agreements related thereto, with such facsimile, scanned and electronic signatures having the same legal effect as original signatures. The parties agree that this Indenture or any instrument, agreement or document necessary for the consummation of the transactions contemplated by this Indenture or related hereto or thereto (including, without limitation, addendums, amendments, notices, instructions, communications with respect to the delivery of securities or the wire transfer of funds or other communications) (the “Executed Documentation”) may be accepted, executed or agreed to through the use of an electronic signature in accordance with applicable laws, rules and regulations in effect from time to time applicable to the effectiveness and enforceability of electronic signatures. Any Executed Documentation accepted, executed or agreed to in conformity with such laws, rules and regulations will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any third party electronic signature capture service providers as may be reasonably chosen by a signatory hereto or thereto. When the Trustee acts on any Executed Documentation sent by electronic transmission, the Trustee will not be responsible or liable for any losses, costs or expenses arising directly or indirectly from its reliance upon and compliance with such Executed Documentation, notwithstanding that such Executed Documentation (a) may not be an authorized or authentic communication of the party involved or in the form such party sent or intended to send (whether due to fraud, distortion or otherwise) or (b) may conflict with, or be inconsistent with, a subsequent written instruction or communication; it being understood and agreed that the Trustee shall conclusively presume that Executed Documentation that purports to have been sent by an authorized officer of a Person has been sent by an authorized officer of such Person. The party providing Executed Documentation through electronic transmission or otherwise with electronic signatures agrees to assume all risks arising out of such electronic methods, including, without limitation, the risk of the Trustee acting on unauthorized instructions and the risk of interception and misuse by third parties.
Section 12.12 Table of Contents, Headings, Etc.. The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
Section 12.13 Intercreditor Agreement. Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to the Indenture Documents and the exercise of any right or remedy thereunder are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and the other Indenture Documents, the terms of the Intercreditor Agreement shall govern and control. If any conflict or inconsistency exists between this Indenture and any Collateral Document (other than the Intercreditor Agreement), this Indenture shall govern.
Section 12.14 Payments Due on Non-Business Days. In any case where any interest payment date, redemption date, Purchase Date, Stated Maturity of the Notes or any other date upon which any payment is due on the Notes shall not be a Business Day, then
115 |
(notwithstanding any other provision of this Indenture or of the Notes) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the interest payment date, redemption date, Purchase Date, at the Stated Maturity or any other date upon which any payment is due on the Notes, provided that no interest will accrue for the period from and after such interest payment date, redemption date, Purchase Date, Stated Maturity or other payment date, as the case may be.
Section 12.15 Waiver of Jury Trial. THE COMPANY, EACH GUARANTOR, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
ARTICLE 13
Collateral and Security
Section 13.01 Collateral Documents. The due and punctual payment of the principal of, premium, if any, and interest on the Notes and amounts due hereunder and under the Notes Guarantees when and as the same shall be due and payable, subject to any applicable grace period, whether on an interest payment date, by acceleration, purchase, repurchase, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest to the extent permitted by law, on the Notes and the performance of all other Obligations of the Company and the Guarantors to the Holders, the Collateral Agent or the Trustee under the Indenture Documents are and shall be secured by the Collateral Documents. The Collateral Documents shall provide for the grant by the Company and the Guarantors party thereto to the Collateral Agent of security interests in the Collateral subject to Permitted Liens and the terms of the Intercreditor Agreement.
Section 13.02 Recording and Opinions.
(a) The Company will, and will cause each of the Guarantors to, at their sole cost and expense, take or cause to be taken such actions as may be required by the Collateral Documents, to perfect, maintain (with the priority required under the Collateral Documents and Intercreditor Agreement), preserve and protect the valid and enforceable, perfected (except as expressly provided to the contrary herein or therein) security interests in and on all the Collateral granted by the Collateral Documents in favor of the Collateral Agent as security for the Obligations contained in this Indenture, the Notes, the Notes Guarantees and the Collateral Documents, superior to and prior to the rights of all third Persons (other than as set forth in the Intercreditor Agreement), and subject to no other Liens (other than Permitted Liens), including, without limitation, (i) the preparation and filing of financing statements, amendments and continuation statements, collateral assignments and any instruments of further assurance, in such manner and in such places as may be required by law to preserve and protect fully the rights of the Holders, the Collateral Agent, and the Trustee under this Indenture and the Collateral Documents to all property comprising the Collateral, and (ii) subject to the Intercreditor Agreement, the delivery of the certificates evidencing the securities pledged under the Collateral
116 |
Documents, duly endorsed in blank or accompanied by undated stock powers or other instruments of transfer executed in blank, it being understood that concurrently with the execution of this Indenture, the Company and the Guarantors have submitted duly prepared financing statements to a reputable filing service for prompt filing in the appropriate filing offices. The Company will from time to time promptly pay all financing and continuation statement recording and/or filing fees, charges and recording, stamp, intangibles and similar taxes relating to this Indenture, the Collateral Documents and any amendments hereto or thereto and any other instruments of further assurance required pursuant hereto or thereto.
(b) The Company will furnish to the Trustee and the Collateral Agent (if other than the Trustee), upon or promptly after the execution and delivery of this Indenture, an Opinion of Counsel in compliance with TIA §314(b)(1), and on or within one month following August 1 of each year, commencing August 1, 2022, an Opinion of Counsel in compliance with TIA §314(b)(2).
Section 13.03 Release of Collateral.
(a) The Collateral Agent shall not at any time release all or any portion of the Collateral from the Liens created by the Collateral Documents unless such release is in accordance with the provisions of this Indenture and the applicable Collateral Documents.
(b) The release of any Collateral from the Liens created by the Collateral Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to this Indenture and the Collateral Documents.
Section 13.04 Specified Releases of Collateral.
(a) Collateral shall be released from the Liens created by the Collateral Documents at any time or from time to time in accordance with the provisions of the Collateral Documents or as provided in this Indenture. The Liens securing the Collateral shall be automatically released without the need for any further action by any Person under any one or more of the following circumstances:
(i) to enable the Company or a Guarantor to consummate asset dispositions permitted or not prohibited under Section 5.10;
(ii) if any Guarantor is released from its Notes Guarantee in accordance with the terms of this Indenture (including by virtue of such Guarantor ceasing to be a Restricted Subsidiary of the Company), that Guarantor’s assets will also be released from the Liens securing its Notes Guarantee and the other Indenture Obligations;
(iii) if required in accordance with the terms of the Intercreditor Agreement;
(iv) as described under Section 13.05; or
(v) with the consent of the Holders of the Notes in accordance with Section 10.02.
117 |
(b) Upon the written request of the Company accompanied by an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents and Intercreditor Agreement have been met, and any necessary or proper instruments of termination, satisfaction or release prepared by the Company or the Guarantors, as the case may be, the Collateral Agent, without the consent of any Holder or the Trustee and at the expense of the Company or the Guarantors, shall execute, deliver or acknowledge such instruments or releases to evidence the release from the Liens created by the Collateral Documents of any Collateral permitted to be released pursuant to this Indenture or the Collateral Documents.
Section 13.05 Release upon Satisfaction or Defeasance of all Outstanding Obligations.
(a) The Liens on all Collateral that secure the Notes and the Notes Guarantees shall be automatically terminated and released without the need for further action by any Person:
(i) if the Company exercise Legal Defeasance or Covenant Defeasance as described under Article 9;
(ii) upon satisfaction and discharge of this Indenture as described under Section 4.01; or
(iii) upon payment in full in immediately available funds of the principal of, premium, if any, and accrued and unpaid interest on the Notes and all other Obligations under this Indenture and the Collateral Documents that are then due and payable (other than contingent indemnification obligations for which no claim has been asserted).
(b) Upon receipt of an Officer’s Certificate and Opinion of Counsel confirming that all conditions precedent hereunder and under the Collateral Documents have been satisfied and any necessary or proper instruments of termination, satisfaction or release prepared by the Company or the Guarantors, as the case may be, the Collateral Agent, without the consent of any Holder or the Trustee and at the expense of the Company or the Guarantors, shall execute, deliver or acknowledge such instruments or releases to evidence the release from the Liens created by the Collateral Documents of any Collateral permitted to be released pursuant to this Indenture and the Collateral Documents.
Section 13.06 Form and Sufficiency of Release and Subordination. In the event that the Company or any Guarantor has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that may be sold, exchanged or otherwise disposed of by the Company or such Guarantor to any Person other than the Company or a Guarantor, and the Company or such Guarantor requests that the Trustee or Collateral Agent furnish a written disclaimer, release or quit-claim of any interest in such property under this Indenture and the Collateral Documents, or, to the extent applicable to such Collateral, take all action that is necessary or reasonably requested by the Company (in each case at the expense of the Company) to release and reconvey to the Company or such Guarantor, without recourse, such Collateral or deliver such Collateral in its possession to the Company or such Guarantor, the Trustee and the Collateral Agent, as applicable, shall execute, acknowledge
118 |
(without any recourse, representation and warranty) and deliver to the Company or such Guarantor (in the form prepared by the Company at the Company’s sole expense) such an instrument promptly or take such other action so requested after satisfaction of the conditions set forth herein for delivery of any such release. Notwithstanding the preceding sentence, all purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Trustee or the Collateral Agent, as applicable, as sufficient for the purpose of this Indenture and as constituting a good and valid release of the property therein described from the Lien of this Indenture or of the Collateral Documents but shall have no recourse or claims against the Trustee or the Collateral Agent in respect of any such release. In addition to the foregoing, in the event that the Company or any Guarantor has any Collateral or intends to have any Collateral subject to a Permitted Lien of the type described in clause (7) of the definition thereof, and the Company or such Guarantor requests that the Trustee or Collateral Agent enter into a subordination agreement with the holder of such Permitted Lien in order to subordinate the Lien of the Collateral Agent in such Collateral to the Lien of such holder in such Collateral, the Trustee and the Collateral Agent, as applicable, shall execute, acknowledge and deliver to the Company or such Guarantor or the holder of such Permitted Lien such an instrument (in the form prepared by the Company, or the holder of such Permitted Lien, at the Company’s sole expense) promptly after such request.
Section 13.07 Purchaser Protected. No purchaser or grantee of any property or rights purported to have been released from the Lien of this Indenture or of the Collateral Documents shall be bound to ascertain the authority of the Trustee or the Collateral Agent, as applicable, to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority; nor shall any purchaser or grantee of any property or rights permitted by this Indenture to be sold or otherwise disposed of by the Company be under any obligation to ascertain or inquire into the authority of the Company to make such sale or other disposition.
Section 13.08 Authorization of Actions to be Taken by the Collateral Agent Under the Collateral Documents.
(a) Each Holder, by acceptance of the Notes, consents to the terms of, directs and agrees that the Collateral Agent shall execute and deliver the Intercreditor Agreement and Collateral Documents to which it is a party, and all agreements, documents and instruments incidental thereto, and act in accordance with the terms thereof. For the avoidance of doubt, the Collateral Agent shall have no discretion under this Indenture, the Intercreditor Agreement or the Collateral Documents and shall not be required to make or give any determination, consent, approval, request or direction without the written direction of the Holders of a majority in aggregate principal amount of the then outstanding Notes, the Trustee or the Company, as applicable. The provisions of this Section 13.08 are solely for the benefit of the Collateral Agent and none of the Trustee, any of the Holders nor the Company or any of the Guarantors shall have any rights as a third party beneficiary of any of the provisions contained herein other than as expressly provided herein. Each Holder agrees that any action taken by the Collateral Agent in accordance with the provision of this Indenture, the Intercreditor Agreement and the Collateral Documents, and the exercise by the Collateral Agent of any rights or remedies set forth herein and therein shall be authorized and binding upon all Holders. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Collateral Documents and the Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein and in the other documents to which the Collateral Agent is a party, nor shall the Collateral Agent have or be deemed to have any trust or other fiduciary relationship with the Trustee, any Holder, the Company or any Guarantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Collateral Documents and the
119 |
Intercreditor Agreement or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(b) So long as an Event of Default is not continuing, the Company may direct the Collateral Agent in connection with any action required or permitted by this Indenture, the Collateral Documents or the Intercreditor Agreement. During the continuance of an Event of Default, the Trustee may direct the Collateral Agent in connection with any action required or permitted by this Indenture, the Collateral Documents or the Intercreditor Agreement.
(c) No provision of this Indenture, the Intercreditor Agreement or any Collateral Document shall require the Collateral Agent (or the Trustee) to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or thereunder or exercise any of its rights and powers at the request or direction of Holders (or the Trustee in the case of the Collateral Agent) if it shall not have received security or indemnity satisfactory to the Collateral Agent against potential costs and liabilities incurred by the Collateral Agent relating thereto. Notwithstanding anything to the contrary contained in this Indenture, the Intercreditor Agreement or the Collateral Documents, in the event the Collateral Agent is entitled or required to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Collateral Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under the mortgages or take any such other action if the Collateral Agent has determined that the Collateral Agent may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, of any hazardous substances unless the Collateral Agent has received security or indemnity from the Holders in an amount and in a form all satisfactory to the Collateral Agent in its sole discretion, protecting the Collateral Agent from all such liability. The Collateral Agent shall at any time be entitled to cease taking any action described above if it no longer reasonably deems any indemnity, security or undertaking from the Company or the Holders to be sufficient.
(d) The Collateral Agent (i) shall not be liable for any action taken or omitted to be taken by it in connection with this Indenture, the Intercreditor Agreement and the Collateral Documents or instrument referred to herein or therein, except to the extent that any of the foregoing result from its own gross negligence, bad faith or willful misconduct, (ii) shall not be liable for interest on any money received by it except as the Collateral Agent may agree in writing with the Company (and money held in trust by the Collateral Agent need not be segregated from other funds except to the extent required by law) and (iii) may consult with counsel of its selection and the advice or opinion of such counsel as to matters of law shall be
120 |
full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it in good faith and in accordance with the advice or opinion of such counsel. The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act.
(e) The Collateral Agent may perform any of its duties under this Indenture, the Collateral Documents or the Intercreditor Agreement by or through receivers, agents, employees, attorneys-in-fact or through its affiliates and shall be entitled to advice of counsel concerning all matters pertaining to such duties, and shall be entitled to act upon, and shall be fully protected in taking action in reliance upon any advice or opinion given by legal counsel. The Collateral Agent shall not be responsible for the negligence or willful misconduct of any receiver, agent, employee, attorney-in-fact or affiliates that it selects as long as such selection was made in good faith and with due care.
Section 13.09 Authorization of Receipt of Funds by the Trustee Under the Collateral Documents.
The Collateral Agent is authorized to receive any funds for the benefit of itself, the Trustee and the Holders distributed under the Collateral Documents or the Intercreditor Agreement and, to the extent not prohibited under the Intercreditor Agreement, to make further distributions of such funds to itself, the Trustee and the Holders in accordance with the provisions of Section 7.10 and the other provisions of this Indenture. Such funds shall be held on deposit by the Trustee without investment, and the Trustee will have no liability for interest or other compensation thereon.
Section 13.10 Action by the Collateral Agent.
In each case that the Collateral Agent may or is required hereunder or under any Collateral Document to take any action (an “Action”), including to make any determination, to give consents, to exercise rights, powers or remedies, to release or sell Collateral or otherwise to act hereunder or under any Collateral Document, the Collateral Agent may seek direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes; provided that all Actions so taken shall, at all times, be in compliance with the requirements of the Intercreditor Agreement. The Collateral Agent shall not be liable with respect to any Action taken or omitted to be taken by it in accordance with the direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes. If the Collateral Agent shall request direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes with respect to any Action, the Collateral Agent shall be entitled to refrain from such Action unless and until the Collateral Agent shall have received direction from the Holders of a majority in aggregate principal amount of the then outstanding Notes and security or an indemnification satisfactory to the Collateral Agent, and the Collateral Agent shall not incur liability to any Person by reason of so refraining.
Notwithstanding anything to the contrary in this Indenture or any Collateral Document, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Indenture or the Collateral
121 |
Documents (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of any of the Collateral Documents or the security interests or Liens intended to be created thereby.
Section 13.11 Compensation and Indemnity.
(a) The Company will pay to the Collateral Agent from time to time compensation as shall be agreed to in writing by the Company and the Collateral Agent for its acceptance of this Indenture, the Intercreditor Agreement, the Collateral Documents and services hereunder. The Company will reimburse the Collateral Agent promptly upon request for all reasonable disbursements, advances and out-of-pocket expenses incurred or made by it in connection with the Collateral Agent’s duties under the Indenture Documents, including the reasonable compensation, disbursements and expenses of the Collateral Agent’s agents, reasonably retained professional advisors, and counsel, except any disbursement, advance or expense as may be attributable to the Collateral Agent’s willful misconduct, bad faith or gross negligence.
(b) The Company and the Guarantors shall, jointly and severally, indemnify the Collateral Agent against any and all claims, demands, causes of action, losses, liabilities, damages, fines, penalties, costs, fees, charges or expenses including taxes (other than taxes based on, measured by or determined by income of the Collateral Agent) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, the Intercreditor Agreement and the Collateral Documents, including (i) any claim relating to the grant to the Collateral Agent of any Lien in any property or assets of the Company or the Guarantors and (ii) the costs and expenses of enforcing this Indenture, the Intercreditor Agreement and the Collateral Documents against the Company and the Guarantors (including this Section 13.11) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder or thereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, willful misconduct or bad faith. The Collateral Agent shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Collateral Agent to so notify the Company will not relieve the Company or the Guarantors of their obligations hereunder, except to the extent the Company is materially prejudiced thereby. The Company or such Guarantor shall defend such claim and the Collateral Agent shall cooperate in the defense. In the event the Collateral Agent is advised by counsel that a conflict of interest exists, the Collateral Agent may have its own separate counsel, which, so long as no Default or Event of Default has occurred, shall be reasonably satisfactory to the Company, and the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary herein, the Company need not reimburse the Collateral Agent for any cost or expense or indemnify it against any loss or liability incurred by the Collateral Agent through its own gross negligence, bad faith or willful misconduct.
122 |
(c) The obligations of the Company and the Guarantors under this Section 13.11 shall survive the satisfaction and discharge of this Indenture and the resignation, removal or replacement of the Collateral Agent.
Section 13.12 Co-Collateral Agent; Separate Collateral Agent.
(a) If at any time or times it shall be necessary in order to conform to any applicable law of any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of applicable law or imposition on the Collateral Agent of taxes by such jurisdiction not otherwise imposed on the Collateral Agent, or the Collateral Agent shall be advised by counsel, satisfactory to it, that it is necessary in the interests of the Notes Secured Parties, or the Collateral Agent shall deem it desirable for its own protection in the performance of its duties hereunder or under any Collateral Document, the Collateral Agent and the Company and the Guarantors may (and in the case of conforming to any applicable law or avoiding the violation of any applicable law, shall) execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons approved by the Collateral Agent and the Company, either to act as co-collateral agent or co-collateral agents of all or any of the Collateral under this Indenture or under any of the Collateral Documents, jointly with the Collateral Agent originally named herein or therein or any successor Collateral Agent, or to act as separate agent or agents of any of the Collateral. If (x) the Company and the Guarantors shall not have joined in the execution of such instruments and agreements within 10 days after they receive a written request from the Collateral Agent to do so, and (y) the execution of such instruments and agreements is being undertaken in order to conform to any applicable law of any jurisdiction in which any of the Collateral shall be located, or to avoid any violation of applicable law, then the Collateral Agent acting as directed by a majority of Holders shall act under the foregoing provisions of this Section 13.12 without the concurrence of the Company and the Guarantors and execute and deliver such instruments and agreements on behalf of the Company and the Guarantors and any such act shall be binding on the Company and the Guarantors as if executed by the Company and the Guarantors. Each of the Company and each Guarantor hereby appoint the Collateral Agent as its agent and attorney to act for it under the foregoing provisions of this Section 13.12 in either of such contingencies.
(b) Every separate collateral agent and every co-collateral agent, other than any successor Collateral Agent appointed pursuant to this Article, shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions:
(1) all rights, powers, duties and obligations conferred upon the Collateral Agent in respect of the custody, control and management of moneys, papers or securities shall be exercised solely by the Collateral Agent or any agent appointed by the Collateral Agent;
(2) all rights, powers, duties and obligations conferred or imposed upon the Collateral Agent hereunder and under the relevant Collateral Documents shall be conferred or imposed and exercised or performed by the Collateral Agent and such separate collateral agent or separate collateral agents or co-collateral agent or co-collateral agents, jointly, as shall be provided in the instrument appointing such separate collateral agents or co-collateral agent or co-collateral
123 |
agents, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Collateral Agent shall be incompetent or unqualified to perform such act or acts, or unless the performance of such act or acts would result in the imposition of any tax on the Collateral Agent which would not be imposed absent such joint act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed by such separate collateral agent or collateral agents or co-collateral agent or co-collateral agents;
(3) no power given hereby or by the relevant Collateral Documents to, or which it is provided herein or therein may be exercised by, any such co-collateral agent or co-collateral agents or separate collateral agent or collateral agents shall be exercised hereunder or thereunder by such co-collateral agent or co-collateral agents or separate collateral agent or collateral agents except jointly with, or with the consent in writing of, the Collateral Agent, anything contained herein to the contrary notwithstanding; and
(4) no collateral agent hereunder shall be personally liable by reason of any act or omission of any other collateral agent hereunder.
[Signatures on following pages]
124 |
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.
CURO GROUP HOLDINGS CORP. |
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
GUARANTORS: | ||
A SPEEDY CASH CAR TITLE LOANS, LLC AD ASTRA RECOVERY SERVICES, INC. ADVANCE GROUP, INC. ATTAIN FINANCE, LLC AVIO CREDIT, INC. CASH COLORADO, LLC CONCORD FINANCE, INC. CURO COLLATERAL SUB, LLC CURO CREDIT, LLC CURO FINANCIAL TECHNOLOGIES CORP. CURO INTERMEDIATE HOLDINGS CORP. CURO MANAGEMENT LLC ENNOBLE FINANCE, LLC EVERGREEN FINANCIAL INVESTMENTS, INC. FMMR INVESTMENTS, INC. GALT VENTURES, LLC PRINCIPAL INVESTMENTS, INC. SC AURUM, LLC SC TEXAS MB, INC. SCIL, INC. SCIL TEXAS, LLC SPEEDY CASH SPEEDY CASH ILLINOIS, INC. THE MONEY STORE, L.P. TODD CAR TITLE, INC. TODD FINANCIAL, INC. |
|
|||
By: | /s/ Donald F. Gayhardt Jr. | ||
Name: Donald F. Gayhardt Jr. | |||
Title: Chief Executive Officer and President |
TMI TRUST COMPANY, AS TRUSTEE AND COLLATERAL AGENT |
||
By: | /s/ Debra Schachel | |
Name: Debra Schachel | ||
Title: Vice President |
EXHIBIT A
[Form of Face of Note]
[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]
A-1 |
CURO group Holdings CORP.
7.500% SENIOR SECURED NOTE DUE 2028
CUSIP [__________] | |
No. [__________] | $[__________] |
CURO Group Holdings Corp., a Delaware corporation (the “Company,” which term includes any successor entity), for value received promises to pay to [_______________] or its registered assigns, the principal sum of [_____________________] (or such principal amount as may be set forth in the records of the Trustee hereinafter referred to in accordance with the Indenture) on August 1, 2028, and to pay interest thereon as hereinafter set forth.
Interest Payment Dates: February 1 and August 1, commencing [_________]
Record Dates: January 15 and July 15
Dated: [_________]
Reference is made to the further provisions of this Note contained on the reverse side of this Note, which shall for all purposes have the same effect as if set forth at this place.
A-2 |
IN WITNESS HEREOF, the Company has caused this instrument to be duly executed.
CURO GROUP HOLDINGS CORP. | ||
By: | ||
Name: | ||
Title: |
A-3 |
Trustee Certificate of Authentication
This Note is one of the 7.500% Senior Secured Notes due 2028 referred to in the within-mentioned Indenture.
TMI TRUST COMPANY, AS Trustee
|
||
By: | ||
Name: | ||
Title: |
Dated: ___________
A-4 |
[Form of Back
of Note]
7.500% Senior Secured Notes due 2028
Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
1. Interest. CURO Group Holdings Corp., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7.500% per annum from [___________] until maturity. The Company will pay interest semi-annually in arrears every February 1 and August 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day and no interest shall accrue for the intervening period (each, an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided, that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be [___________]. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at such increased rate to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders at the close of business on January 15 or July 15 (whether or not a Business Day), as the case may be, immediately preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose, or, at the option of the Company, by check mailed to the Holders at their respective addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, premium, if any, and interest on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Holders must surrender the Notes to the Company, the Registrar or the Paying Agent to collect payments of principal on the Notes.
3. Paying Agent and Registrar. Initially, TMI Trust Company, as the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated as of July 30, 2021 (as amended, supplemented or otherwise modified from time to time, the “Indenture”),
A-5 |
among the Company, the Guarantors, the Trustee and the Collateral Agent. This Note is one of a duly authorized issue of notes of the Company designated as its 7.500% Senior Secured Notes due 2028. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by express reference to the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb) (the “TIA”). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
5. Optional Redemption.
(a) On and after August 1, 2024, the Company may on one or more occasions redeem the Notes, in whole or in part, upon notice pursuant to Section 7, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period beginning on August 1 of each of the years set forth below.
Year | Percentage | |
2024 | 103.750% | |
2025 | 101.875% | |
2026 and thereafter | 100.000% |
(b) Prior to August 1, 2024, the Company may, upon notice pursuant to Section 7, redeem up to 40% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture at a redemption price of 107.500% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date) if:
(1) such redemption is made with the proceeds of one or more Equity Offerings;
(2) at least 50% of the aggregate principal amount of the Notes (including any Additional Notes) issued under the Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or any of its Subsidiaries); and
(3) the redemption occurs within 180 days of such Equity Offering.
(c) Prior to August 1, 2024, upon notice pursuant to Section 7, the Company may redeem up to 10% of the aggregate principal amount of the Notes (including Additional Notes) issued under the Indenture during each 12-month period following the Issue Date at a redemption price of 103% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to the redemption date (subject to the right of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date).
A-6 |
(d) Prior to August 1, 2024, the Company may redeem the Notes, in whole or in part, upon notice pursuant to Section 7, at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).
(e) Notwithstanding the foregoing, in connection with any tender offer for the Notes, including a Change of Control Offer or an Asset Sale Offer, if holders of not less than 90% in aggregate principal amount of the then outstanding Notes validly tender and do not withdraw such Notes in such tender offer and the Company (or any third party making such tender offer in lieu of the Company as described above) purchases all of the Notes held by such holders, the Company will have the right, upon not less than 10 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the tender offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to the price paid to each other holder in such tender offer (which may be less than par) plus accrued and unpaid interest, if any, on the Notes that remain outstanding, to the applicable date of redemption, subject to the rights of holders on the relevant regular record date to receive interest due on the relevant interest payment date that is on or prior to the applicable redemption date.
(f) Any redemption pursuant to this Section 5 shall be made pursuant to the provisions of Section 3.01 through 3.06 of the Indenture.
6. Mandatory Redemption. Except as set forth in Sections 5.10 and 5.14 of the Indenture, the Company is not required to make mandatory redemption or sinking fund payments or offers to purchase with respect to the Notes.
7. Notice of Redemption. Notice of redemption will be sent by first-class mail or other electronic means reasonably satisfactory to the Trustee at least 10 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 in excess thereof, unless all of the Notes held by a Holder are to be redeemed. Notice of any redemption upon any Equity Offering or other securities offering or financing, or in connection with a transaction (or series of related transactions) that constitute a Change of Control, may, in the Company’s discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering, securities offering, financing or Change of Control. If such redemption is so subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, such notice shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied or waived, and shall state that such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date so delayed. In addition, the Company may provide in such notice that payment of the redemption price and performance of the Company’s obligations with respect to such redemption may be performed by another Person.
A-7 |
On and after the redemption date, unless the Company defaults in the payment of the redemption price, interest will cease to accrue on the principal amount of the Notes or portions thereof called for redemption, and for which funds have been set aside for payment.
8. Offer to Purchase. Sections 5.10 and 5.14 of the Indenture provide that after certain Asset Sales or upon the occurrence of a Change of Control, subject to further limitations contained therein, the Company will make an offer to purchase Notes in accordance with the procedures set forth in the Indenture.
9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. None of the Trustee, the Registrar or the Company is required to transfer or exchange any Note selected for redemption, except for the unredeemed portion of the Note being redeemed in part. Also, none of the Registrar, the Trustee or the Company is required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes. Only registered Holders shall have rights under the Indenture, the Intercreditor Agreement and the Collateral Documents.
11. Unclaimed Money. If any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its request or, if then held by the Company, will be discharged from such trust. After any such payment, any Holder of a Note entitled to the money must look, as an unsecured creditor, only to the Company and not the Trustee or Paying Agent for payment, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease.
12. Discharge and Defeasance. Subject to the conditions set forth in the Indenture, the Company and the Guarantors at any time shall be entitled to terminate some or all of their obligations under the Indenture and the Notes or the Notes Guarantees, as applicable, if the Company deposits with the Trustee cash in U.S. dollars or non-callable U.S. Government Obligations for the payment of the principal of, premium, if any, and interest on the Notes to redemption or Stated Maturity, as the case may be.
13. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture Documents may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with
A-8 |
the purchase of, or tender offer or exchange offer for, the Notes), in each case without notice to any other Holder, but subject to Section 5.20 of the Indenture. Without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder): (1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (2) reduce the principal of, premium, if any, or extend the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than the provisions of Sections 3.09, 5.10 and 5.14 of the Indenture prior to the time at which an obligation to make such an offer has arisen); (3) reduce the rate of or extend the time for payment of interest, including default interest, on any Note; (4) waive a Default in the payment of principal of, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); (5) make any Note payable in money other than that stated in the Notes; (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, premium, if any, or interest on the Notes; (7) release any Guarantor from any of its obligations under its Notes Guarantee or the Indenture, except in accordance with the terms of the Indenture; or (8) make any change to Sections 10.01 or 10.02 of the Indenture. No amendment, supplement or waiver shall, without the consent of Holders of not less than 66 2/3% in aggregate principal amount of the then outstanding Notes issued under the Indenture, release (or have the effect of releasing) all or substantially all of the Collateral from the Liens securing the Indenture Obligations. Notwithstanding the foregoing, without the consent of any Holder, the Company, the Trustee and the Collateral Agent may amend, supplement or waive any provision of the Indenture Documents to: (1) cure any ambiguity, defect, mistake or inconsistency or to make a modification of a formal, minor or technical nature or to correct a manifest error, (2) provide for uncertificated Notes in addition to or in place of certificated Notes, (3) comply with the covenant relating to mergers, consolidations and sales of assets; (4) provide for the assumption of the Company’s or any Guarantor’s obligations to Holders in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, (5) add Guarantees with respect to the Notes or to secure the Notes, (6) add to the covenants of the Company or any Guarantor for the benefit of the Holders or surrender any right or power conferred upon the Company or any Guarantor, (7) make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture Documents of any such Holder, (8) if it becomes necessary to qualify the Indenture under the TIA, comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, (9) (i) enter into additional or supplemental Collateral Documents, (ii) release Collateral or Guarantors in accordance with the terms of the Indenture and the Collateral Documents or (iii) enter into any replacement intercreditor agreement substantially in the form of the Intercreditor Agreement entered into on the Issue Date, (10) evidence and provide for the acceptance and appointment under the Indenture of a successor trustee pursuant to the requirements thereof, (11) make any amendment to the provisions of the Indenture relating to the transfer and legending of Notes as permitted by the Indenture, including to facilitate the issuance and administration of the Notes or to comply with the rules of any applicable securities depository; provided, however, that (i) compliance with the Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of Holders to transfer Notes, (12) conform the text of
A-9 |
the Indenture Documents to any provision of the “Description of Notes” section of the Offering Memorandum to the extent that such provision of the “Description of Notes” was intended to be a verbatim recitation of a provision of the Indenture Documents, which intent shall be evidenced by an Officer’s Certificate of the Company to that effect, (13) provide for or confirm the issuance of Additional Notes in accordance with the terms of the Indenture or (14) subject the security interests in the Collateral in respect of Pari Passu Payment Lien Obligations to the terms of the Collateral Documents and Intercreditor Agreement, to the extent the incurrence of such Pari Passu Indebtedness and the grant of all Liens on Collateral held for the benefit of such Pari Passu Indebtedness was permitted under the Indenture. The consent of Holders is not necessary under the Indenture to approve the particular form of any proposed amendment, supplement or waiver. It is sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under the Indenture becomes effective, the Company is required to send to Holders a notice briefly describing such amendment, supplement or waiver. However, the failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of the amendment, supplement or waiver.
14. Defaults and Remedies.
(a) Under the Indenture, “Events of Default” include: (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of the principal, or premium, if any, of any Note when due at maturity, upon optional redemption, upon required purchase, upon acceleration or otherwise; (iii) failure by the Company or any of its Restricted Subsidiaries to comply with its obligations under Section 5.10, 5.14 or Article 6 of the Indenture; (iv) failure to perform any other covenant or agreement of the Company or any of its Restricted Subsidiaries under the Indenture Documents for 60 days after written notice to the Company by the Trustee or the Holders of at least 30% in aggregate principal amount of the Notes then outstanding voting as a single class; (v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default (A) is caused by a failure to pay principal at final stated maturity (after giving effect to all applicable grace periods provided in such Indebtedness) (a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its final stated maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $20.0 million (or its foreign currency equivalent); (vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments which are non-appealable aggregating in excess of $20.0 million (or its foreign currency equivalent) (not covered by independent third-party insurance as to which liability has not been denied by such insurance carrier), which judgments are not paid, discharged or stayed for a period of 60 days following such judgment becoming final, and in the event such judgment is covered by insurance, any enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed; (vii) (A) any security interest created by any Collateral Document ceases to be in full force and effect (except as permitted by the terms of the Indenture or the Collateral Documents) or (B) the breach or repudiation by the Company or any of its Restricted Subsidiaries of any of their obligations under any Collateral Document;
A-10 |
provided that, in the case of clauses (A) and (B), such cessation, breach or repudiation, individually or in the aggregate, results in Collateral having a Fair Market Value in excess of $20.0 million not being subject to a valid, perfected security interest; (viii) except as permitted by the Indenture, any Notes Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Notes Guarantee; and (ix) certain events of bankruptcy or insolvency with respect to the Company, or any Significant Subsidiary of the Company or any group of Restricted Subsidiaries of the Company that, taken as a whole, would constitute a Significant Subsidiary of the Company.
(b) If any Event of Default (other than an Event of Default specified in subsection (i) or (j) of Section 7.01 of the Indenture occurs and is continuing and has not been waived by the Holders, the Trustee or the Holders of at least 30% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in subsection (i) or (j) of Section 7.01 of the Indenture occurs, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of at least a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration) have been cured or waived and all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel have been paid or deposited with the Trustee or provision therefor reasonably satisfactory to the Trustee has been made. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of at least a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest.
(c) The Holders of at least a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal, premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration).
A-11 |
(d) In the event of any Event of Default specified in clause (a)(v) above, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose the Company delivers an Officer’s Certificate to the Trustee stating that:
(i) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or
(ii) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default;
(iii) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and
(iv) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
(e) The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.
15. No Recourse Against Others. No past, present or future director, officer, employee or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Indenture Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the United States federal securities laws or other corporate laws, and it is the view of the SEC that such a waiver is against public policy.
16. Authentication. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.
17. Trustee Dealings with the Company. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest as defined by the TIA it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 8.10 and 8.11 of the Indenture.
18. Governing Law. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE AND THE INDENTURE.
A-12 |
19. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
20. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the correctness or accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
21. Guarantees. The payment of the principal of, premium, if any, and interest on the Notes, is unconditionally guaranteed, jointly and severally, by the Guarantors to the extent set forth in and subject to the provisions of the Indenture.
22. Security. Subject to the terms of the Intercreditor Agreement, the Obligations of the Company and the Guarantors under the Notes and the Notes Guarantees are secured by Liens on the Collateral pursuant to the terms of the Collateral Documents. The actions of the Trustee, the Collateral Agent and the Holders and the application of proceeds from the enforcement of any remedies with respect to such Collateral are limited pursuant to the terms of the Collateral Documents and the Intercreditor Agreement.
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture, the Collateral Documents and the Intercreditor Agreement. Requests may be made to the Company at the following address:
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Attention: Chief Legal Officer
A-13 |
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: _____________________________________________
(Insert assignee’s legal name)
(Insert assignee’s soc. sec. or tax I.D. no.)
(Print or type assignee’s name, address and zip code)
and irrevocably appoint ____________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute another to act for it.
Date: ____________________ | ||
Your Signature: | ||
(Sign exactly as your name appears on the face of this Note) |
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
A-14 |
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to Section 5.10 or 5.14 of the Indenture, check the appropriate box below:
☐ Section 5.10 ☐ Section 5.14
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 5.10 or 5.14 of the Indenture, state the amount you elect to have purchased:
$ |
Date: ____________________ | ||
Your Signature: | ||
(Sign exactly as your name appears on the face of this Note) | ||
Tax Identification No. |
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).
A-15 |
Schedule of Exchanges of Interests
in the Global Note*
The initial outstanding principal amount of this Global Note is $____________. The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Date of Exchange |
Amount of Decrease in Principal Amount of this Global Note |
Amount of Increase in Principal Amount of this Global Note |
Principal Amount of this Global Note Following such Decrease or Increase |
Signature of Authorized Signatory of Trustee or Custodian |
* This schedule should be included only if the Note is issued in global form.
A-16 |
EXHIBIT B
Form of Certificate of Transfer
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Attention: Chief Legal Officer
TMI Trust Company, as Trustee and Registrar
1100 Abernathy Road NE, Suite 480
Atlanta, GA 30328
Attention: Debra Schachel
Telephone No.: 678.221.5898
Re: 7.500% Senior Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of July 30, 2021 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and TMI Trust Company, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
___________________ (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $_________ in such Note[s] or interests (the “Transfer”), to _________________ (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. ☐ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
B-1 |
2. ☐ Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed Transfer is being made prior to the expiration of the Restricted Period, the Transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.
3. ☐ Check and complete if Transferee will take delivery of a beneficial interest in the AI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):
(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
(b) ☐ such Transfer is being effected to the Company or a Subsidiary thereof;
or
(c) ☐ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;
or
(d) ☐ such Transfer is being effected to an Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other
B-2 |
than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the AI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.
4. ☐ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) ☐ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) ☐ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) ☐ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture,
B-3 |
the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.
B-4 |
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
[Insert Name of Transferor]
By: | ||
Name: | ||
Title: |
Dated: _________________
B-5 |
Annex A to Certificate of Transfer
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) ☐ a beneficial interest in the:
(i) ☐ 144A Global Note (CUSIP _________), or
(ii) ☐ Regulation S Global Note (CUSIP _________), or
(iii) ☐ AI Global Note (CUSIP _________); or
(b) ☐ a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) ☐ a beneficial interest in the:
(i) ☐ 144A Global Note (CUSIP _________), or
(ii) ☐ Regulation S Global Note (CUSIP _________), or
(iii) ☐ AI Global Note (CUSIP _________), or
(iv) ☐ Unrestricted Global Note (CUSIP _________); or
(b) ☐ Restricted Definitive Note; or
(c) ☐ an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
Form of Certificate of Exchange
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Attention: Chief Legal Officer
TMI Trust Company, as Trustee and Registrar
1100 Abernathy Road NE, Suite 480
Atlanta, GA 30328
Attention: Debra Schachel
Telephone No.: 678.221.5898
Re: 7.500% Senior Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of July 30, 2021 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and TMI Trust Company, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
________________ (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $_________ in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:
1. ☐ Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(b) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own
C-1 |
account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(c) ☐ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
(d) ☐ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.
2. ☐ Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes
(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) ☐ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ☐144A Global Note, ☐Regulation S Global Note, ☐AI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the
C-2 |
Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
[Insert Name of Owner]
By: | ||
Name: | ||
Title: |
Dated: _______________
C-3 |
EXHIBIT D
Form
of Certificate From
Acquiring Accredited Investor
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Attention: Chief Legal Officer
TMI Trust Company, as Trustee and Registrar
1100 Abernathy Road NE, Suite 480
Atlanta, GA 30328
Attention: Debra Schachel
Telephone No.: 678.221.5898
Re: 7.500% Senior Secured Notes due 2028
Reference is hereby made to the Indenture, dated as of July 30, 2021 (the “Indenture”), among CURO Group Holdings Corp., a Delaware corporation (the “Company”), the Guarantors and TMI Trust Company, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $_______________ aggregate principal amount of:
(a) ☐ a beneficial interest in a Global Note, or
(b) ☐ a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).
2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably
D-1 |
acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an “accredited investor”) as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:____________________________________
Name:
Title:
Dated:_____________
D-2 |
EXHIBIT E
[Form of Supplemental Indenture]
SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [_________], among CURO Group Holdings Corp. (the “Company”), [_________] (the “New Guarantor”) and TMI Trust Company, as Trustee (the “Trustee”).
W I T N E S E T H
WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of July 30, 2021, providing for the issuance of 7.500% Senior Secured Notes due 2028 (the “Notes”).
WHEREAS, Section 5.17 of the Indenture provides that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Company’s obligations under the Indenture Documents pursuant to a Notes Guarantee on the terms and conditions set forth herein;
WHEREAS, Section 10.01(e) of the Indenture provides, among other things, that the Company and the Trustee may amend or supplement the Indenture Documents without the consent of any Holder to add Guarantees with respect to the Notes; and
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the New Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to Guarantee the Company’s obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in Article 11 of the Indenture and to be bound by all other applicable provisions of the Indenture.
3. EFFECTIVENESS. This Supplemental Indenture shall be effective upon execution by the parties hereto.
4. RECITALS. The recitals contained herein shall be taken as the statements of the Company and the New Guarantor and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.
E-1 |
5. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
6. COUNTERPART ORIGINALS. The parties may sign any number of copies of this Supplemental Indenture (including by electronic transmission). Each signed copy shall be an original, but all of them together represent the same agreement.
7. EFFECT OF HEADINGS. The section headings in this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
E-2 |
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first written above.
CURO
GROUP HOLDINGS CORP.
|
|
|
By: | ||
Name: | ||
Title: |
[NEW GUARANTOR]
|
||
By: | ||
Name: | ||
Title: |
TMI TRUST COMPANY, as Trustee
|
||
By: | ||
Name: | ||
Title: |
EXHIBIT 10.1
EXECUTION VERSION
PLEDGE AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
TMI TRUST COMPANY,
as COLLATERAL AGENT
Dated as of July 30, 2021
Table of Contents
Page
1. SECURITY FOR OBLIGATIONS. | 2 |
2. DEFINITIONS. | 2 |
3. PLEDGE OF SECURITIES, ETC. | 5 |
3.1 Pledge | 5 |
3.2 Procedures | 8 |
3.3 Subsequently Acquired Collateral | 10 |
3.4 Transfer Taxes | 10 |
3.5 Certain Representations and Warranties Regarding the Collateral | 11 |
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC | 11 |
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT | 11 |
6. DIVIDENDS AND OTHER DISTRIBUTIONS | 11 |
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT | 12 |
8. REMEDIES, CUMULATIVE, ETC. | 13 |
9. APPLICATION OF PROCEEDS. | 14 |
10. PURCHASERS OF COLLATERAL | 14 |
11. INDEMNITY | 14 |
12. COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER | 14 |
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY | 15 |
14. THE COLLATERAL AGENT | 16 |
15. TRANSFER BY THE PLEDGORS | 16 |
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS | 16 |
17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; LOCATION; FEDERAL EMPLOYER IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. | 18 |
18. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. | 19 |
19. SALE OF COLLATERAL WITHOUT REGISTRATION | 20 |
20. TERMINATION; RELEASE | 20 |
21. NOTICES, ETC. | 21 |
22. WAIVER; AMENDMENT | 21 |
23. SUCCESSORS AND ASSIGNS | 21 |
24. HEADINGS DESCRIPTIVE | 22 |
i |
25. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL | 22 |
26. PLEDGOR’S DUTIES | 23 |
27. COUNTERPARTS | 23 |
28. SEVERABILITY | 23 |
29. RECOURSE | 23 |
30. ADDITIONAL PLEDGORS | 23 |
31. LIMITED OBLIGATIONS | 23 |
32. RELEASE OF PLEDGORS | 24 |
33. RIGHTS AND OBLIGATIONS SUBJECT TO INTERCREDITOR AGREEMENT | 24 |
ANNEX A | - | SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION), JURISDICTION OF ORGANIZATION, LOCATION AND FEDERAL EMPLOYER IDENTIFICATION NUMBERS |
ANNEX B | - | SCHEDULE OF SUBSIDIARIES |
ANNEX C | - | SCHEDULE OF STOCK |
ANNEX D | - | SCHEDULE OF NOTES |
ANNEX E | - | SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS |
ANNEX F | - | SCHEDULE OF PARTNERSHIP INTERESTS |
ANNEX G | - | SCHEDULE OF CHIEF EXECUTIVE OFFICES |
ANNEX H | - | FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS |
ANNEX I | - | FORM OF PLEDGE AGREEMENT JOINDER |
ii |
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified, restated and/or supplemented from time to time, this “Agreement”), dated as of July 30, 2021, among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and TMI Trust Company, as collateral agent (together with any successor collateral agent or assign and co-collateral agents, in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties (as defined below). Except as otherwise defined herein, all capitalized terms used herein and defined in the Security Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, CURO Group Holdings Corp. (the “Company”), the guarantors from time to time party thereto (the “Guarantors”), the Collateral Agent and TMI Trust Company, as trustee, have entered into an Indenture, dated as of July 30, 2021 (as amended, modified, restated and/or supplemented from time to time, the “Indenture”) for the benefit of each other and for the equal and ratable benefit of the Holders (as defined in the Indenture) of the 7.500% Senior Secured Notes due 2028 (including any Additional Notes, the “Senior Secured Notes”);
WHEREAS, pursuant to the Indenture, each Guarantor has jointly and severally guaranteed to the Trustee, the Collateral Agent and the Holders (collectively, the “Notes Secured Parties” and together with the Pari Passu Indebtedness Secured Parties, the “Secured Parties”) the payment when due of all Indenture Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) each Holder to hold the Senior Secured Notes, (ii) any future Pari Passu Indebtedness Secured Party to make extensions of credit to one or more of the Pledgors and (iii) the Collateral Agent to act as trustee and as collateral agent, the Pledgors have agreed to grant to the Collateral Agent a continuing security interest in and to the Collateral (as defined that certain Security Agreement, dated of even date herewith (as may be amended, restated, modified or supplemented from time to time, the “Security Agreement”)) in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations;
WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Notes Secured Parties, the Pari Passu Indebtedness Secured Parties and the First Lien Lenders in respect of all of the Collateral; and
WHEREAS, the Pledgors will obtain benefits from the issuance of the Senior Secured Notes under the Indenture and the incurrence or Pari Passu Indebtedness, if any, and, accordingly, the Pledgors desire to create a security interest in favor of and pledge of the pledged Collateral to the Collateral Agent for its benefit and for the benefit of the Secured Parties under the terms and conditions set forth herein.
WHEREAS, the Pledgors will obtain benefits from the future extensions of credit by Pari Passu Indebtedness Secured Parties under future Pari Passu Payment Lien Documents, the Pledgors desire to create a security interest in favor of and pledge of the pledged Collateral to the
1 |
Collateral Agent for its benefit and for the benefit of such Pari Passu Indebtedness Secured Parties under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Parties as follows:
1. SECURITY FOR OBLIGATIONS.
(a) This Agreement is made by each Pledgor for the benefit of the Secured Parties to secure the Secured Obligations, it being acknowledged and agreed that the “Secured Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.
(b) Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Indenture and this Agreement relating to the duties of the Collateral Agent the provisions of the Indenture shall govern and control.
2. DEFINITIONS.
(a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Indenture shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa.
(b) The following capitalized terms used herein shall have the definitions specified below:
“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1) of the UCC.
“Agreement” shall have the meaning set forth in the first paragraph hereof.
“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.
“Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5) of the UCC.
“Collateral” shall have the meaning set forth in Section 3.1 hereof.
2 |
“Collateral Accounts” shall mean any and all accounts established and maintained by the Collateral Agent in the name of any Pledgor to which Collateral may be credited.
“Company” shall have the meaning set forth in the recitals hereto.
“Default” shall mean a “Default” or similar term as such term is defined in the Indenture or any Pari Passu Lien Document, so long as any such agreement is in effect.
“Domestic Corporation” shall have the meaning set forth in the definition of “Stock”.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Indenture or any Pari Passu Lien Document, so long as any such agreement is in effect.
“Exempted Foreign Entity” shall mean any Foreign Corporation and any limited liability company organized under the laws of a jurisdiction other than the United States or any State thereof or the District of Columbia that, in any such case, is treated as a corporation or an association taxable as a corporation for U.S. federal income tax purposes.
“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.
“First Lien Lenders” shall have the meaning provided in the Intercreditor Agreement.
“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.
“Governmental Authority” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Holders” shall have the meaning set forth in the recitals hereto.
“Indenture” shall have the meaning set forth in the recitals hereto.
“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.
“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.
“Legal Requirements” shall mean, as to any Person, the Organizational Documents of such Person, and any treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, Order, writ, decree or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration
3 |
thereof, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor or represented by any Limited Liability Company Interest.
“Limited Liability Company Interests” shall mean the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company.
“Location” of any Pledgor has the meaning given such term in Section 9-307 of the UCC.
“Non-Voting Equity Interests” shall mean all Equity Interests of any Person that are not Voting Equity Interests.
“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.
“Notes Secured Parties” shall have the meaning set forth in the recitals hereto.
“Organizational Documents” shall mean, with respect to any Person, (i) in the case of any corporation, the certificate of incorporation or deed of incorporation and by-laws (or similar documents) of such Person, (ii) in the case of any limited liability company, the certificate or articles of formation or organization and operating agreement or memorandum and articles of association (or similar constitutive documents) of such Person, (iii) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar constitutive documents) of such Person (and, where applicable, the equityholders or shareholders registry of such Person), (iv) in the case of any general partnership, the partnership agreement (or similar constitutive document) of such Person, (v) in any other case, the functional equivalent of the foregoing, and (vi) any shareholder, voting trust or similar agreement between or among any holders of Equity Interests of such Person.
“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor or represented by any Partnership Interest.
“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.
“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.
“Pledgor” shall have the meaning set forth in the first paragraph hereof.
4 |
“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.
“Registered Organization” shall have the meaning given such term in Section 9-102(a)(70) of the UCC.
“Securities Intermediary” shall have the meaning given such term in Section 8-102(14) of the UCC.
“Security” and “Securities” shall have the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes.
“Security Agreement” shall have the meaning given such term in the Recitals.
“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.
“Senior Secured Notes” shall have the meaning set forth in the recitals hereto.
“Stock” shall mean (x) with respect to corporations incorporated under the laws of the United States or any State thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock of any Foreign Corporation at any time owned by any Pledgor.
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or subsections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.
“Uncertificated Security” shall have the meaning given such term in Section 8-102(a)(18) of the UCC.
“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 Pledge. To secure the Secured Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Collateral Agent for the benefit of the Secured Parties, and does hereby create a continuing security interest in favor of the Collateral Agent for the benefit of the Secured Parties in and a lien on, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”):
(a) each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the Security Agreement), including any and all assets of whatever type or
5 |
kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Secured Documents to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;
(b) all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;
(c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full
6 |
power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
(d) all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;
(B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or
7 |
evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;
(e) all Financial Assets and Investment Property owned by such Pledgor from time to time;
(f) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and
(g) all Proceeds of any and all of the foregoing;
provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65% of the total combined voting power of all classes of Voting Equity Interests of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).
Notwithstanding anything to the contrary contained in this Section 3.1 or elsewhere in this Agreement, each Pledgor and the Collateral Agent (on behalf of the Secured Parties) acknowledges and agrees that:
(x) the security interest granted pursuant to this Agreement (including pursuant to this Section 3.1) to the Collateral Agent for the benefit of the Secured Parties in the Collateral shall be subordinated and subject to the security interest granted to the First Lien Agent for the benefit of the First Lien Lenders on the terms and conditions set forth in the Intercreditor Agreement and all other rights and benefits afforded hereunder to the Secured Parties are expressly subject to the terms and conditions of the Intercreditor Agreement; and
(y) the First Lien Lenders’ security interests in the Collateral constitute security interests separate and apart (and of a different class and claim) from the Secured Parties’ security interests in the Collateral.
3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement, subject to the provisions of the Intercreditor Agreement, and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Collateral Agent and the other Secured Parties:
(i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Collateral Agent, endorsed in blank;
8 |
(ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to either (A) issue to such Pledgor a Certificated Security in lieu of such Uncertificated Security and follow the procedure set forth in Section 3.2(a)(i) hereof or (B) duly authorize, execute, and deliver to the Collateral Agent, an agreement for the benefit of the Collateral Agent and the other Secured Parties substantially in the form of Annex H hereto pursuant to which such issuer agrees to comply with any and all instructions originated by the Collateral Agent without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction (it being understood that the Collateral Agent only will give such instructions to any issuer upon the occurrence and during the continuance of an Event of Default);
(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Collateral Agent thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Collateral Agent under applicable law (including, in any event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as shall be necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, such Pledgor shall follow the procedure set forth in Section 3.2(a)(ii) hereof;
(v) with respect to any Note, physical delivery of such Note to the Collateral Agent, endorsed in blank; and
(vi) with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof, (i) establishment by the Collateral Agent of a cash account (unless such an account is already in existence) in the name of such Pledgor over which the Collateral Agent shall have “control” within the meaning of the UCC and at any time any Default or Event of Default is in existence no withdrawals or transfers may be made therefrom by any Person except with the prior written
9 |
consent of the Collateral Agent (acting on the instructions of the Instructing Group) and (ii) deposit of such cash in such cash account.
(b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral:
(i) with respect to all Collateral of such Pledgor whereby or with respect to which the Collateral Agent may obtain “control” thereof within the meaning of Section 8- 106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions as may be reasonably necessary or as reasonably requested from time to time by the Collateral Agent so that “control” of such Collateral is obtained and at all times held by the Collateral Agent; and
(ii) each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code as in effect in the various relevant States, covering all Collateral hereunder, to be filed in the relevant filing offices so that at all times the Collateral Agent’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC) is so perfected.
3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to time after the date hereof, (i) such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Collateral Agent (i) a certificate executed by an authorized officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Collateral Agent for the benefit of the Secured Parties hereunder and (ii) supplements to Annexes A through G hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder the Equity Interests of any Exempted Foreign Entity at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) no Pledgor shall be required at any time to pledge hereunder more than 65% of the total combined voting power of all classes of Voting Equity Interests of any direct Exempted Foreign Entity and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each direct Exempted Foreign Entity at any time and from time to time acquired by such Pledgor.
3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.
10 |
3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex B hereto; (ii) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex C hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex C hereto; (iv) the Notes held by such Pledgor consist of the promissory notes described in Annex D hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex E hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex F hereto; (viii) each such Partnership Interest referenced in clause (vii) of this paragraph constitutes that percentage or portion of the entire Partnership Interest of the partnership as set forth in Annex F hereto; (ix) the exact address of each chief executive office of such Pledgor is listed on Annex G hereto; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes C through F hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited Liability Company Interests or Partnership Interests other than those listed in Annexes C through F hereof.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Collateral Agent shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held in the name of the relevant Pledgor, endorsed or assigned in blank.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate, result in a breach of any covenant contained in, or be inconsistent with any of the terms of any Secured Document, or which could reasonably be expected to have the effect of impairing the value of the Collateral or any part thereof or the position or interests of the Collateral Agent or any other Secured Party in the Collateral, unless expressly permitted by the terms of the Secured Documents. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Collateral Agent shall be entitled to receive directly, and to retain as part of the Collateral:
11 |
(a) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property paid or distributed by way of dividend or otherwise in respect of the Collateral;
(b) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default then exists)) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and
(c) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default then exists)) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the Collateral Agent’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Collateral Agent as Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, subject to the provisions of the Intercreditor Agreement the Collateral Agent shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Document or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Collateral Agent shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor;
(ii) to transfer all or any part of the Collateral into the Collateral Agent’s name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);
(iv) to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the
12 |
Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Collateral Agent the proxy and attorney-in- fact of such Pledgor, with full power of substitution to do so);
(v) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Collateral Agent in its absolute discretion may determine, provided at least 10 days’ written notice of the time and place of any such sale shall be given to the respective Pledgor. The Collateral Agent shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Secured Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Collateral Agent on behalf of the Secured Parties may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Collateral Agent nor any other Secured Party shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and
(vi) to set off any and all Collateral against any and all Secured Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Secured Obligations.
8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Collateral Agent provided for in this Agreement or in any other Secured Document, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Collateral Agent or any other Secured Party of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Collateral Agent or any other Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of the Collateral Agent or any other Secured Party to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent or any other Secured Party to any other or further action in any circumstances without notice or demand. The Secured Parties agree that this Agreement may be enforced only by the action of the Collateral Agent, in each case, acting upon the instructions of the Trustee, and that no other
13 |
Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement and the Security Agreement.
9. APPLICATION OF PROCEEDS.
(a) Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Sections 7.01(i) and (j) of the Indenture, shall be applied (1) first, to any amounts owed to the Collateral Agent hereunder and (2) second, to the holders of the Indenture Obligations and the holders of any Pari Passu Payment Lien Obligations, in each case, that are then due, on a pro rata basis. Such monies and other property and assets shall be applied (x) in the case of Indenture Obligations, in the manner provided in the Section 7.10 of the Indenture and (y) in the case of Pari Passu Payment Lien Obligations, in accordance with the relevant Pari Passu Payment Lien Documents that evidence or govern such Pari Passu Payment Lien Obligations.
(b) It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Secured Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Secured Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Collateral Agent hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Collateral Agent or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication or non-application thereof.
11. INDEMNITY. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the full payment of all the Senior Secured Notes issued under the Indenture and the payment of all other Secured Obligations and notwithstanding the discharge thereof. Section 13.11 of the Indenture (Compensation and Indemnity) is hereby incorporated by reference as if fully set forth herein mutatis mutandis.
12. COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Collateral Agent or any other Secured Party liable as a member of any limited liability company or as a partner of any partnership and neither the Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the
14 |
absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Secured Party, any Pledgor and/or any other Person.
(b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Collateral Agent, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Collateral Agent shall have only those powers set forth herein and the Secured Parties shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12.
(c) The Collateral Agent and the other Secured Parties shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected.
(d) The acceptance by the Collateral Agent of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Collateral Agent or any other Secured Party to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Collateral Agent in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in such offices as shall be reasonably necessary or as the Collateral Agent (acting on the instructions of the Instructing Group) may reasonably request and wherever required or permitted by law in order to perfect and preserve the Collateral Agent’s security interest in the Collateral hereunder and hereby authorizes the Collateral Agent to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Collateral Agent such additional conveyances, assignments, agreements and instruments as the Collateral Agent (acting on the instructions of the Instructing Group) may reasonably request to carry into effect the purposes of this Agreement or to further assure and confirm unto the Collateral Agent its rights, powers and remedies hereunder or thereunder.
(b) Each Pledgor hereby constitutes and appoints the Collateral Agent its true and lawful attorney-in-fact, irrevocably, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of an Event of Default, to act, require, demand, receive and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument
15 |
which the Collateral Agent (acting on the instructions of the Instructing Group) may request to accomplish the purposes of this Agreement, which appointment as attorney is coupled with an interest.
14. THE COLLATERAL AGENT. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Secured Party that by accepting the benefits of this Agreement each such Secured Party acknowledges and agrees that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement, the other Secured Documents and the Indenture. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the other Secured Documents and the Indenture. The provisions of Article 13 of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Pledgors and all Secured Parties, in connection with this Agreement and the other Collateral Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Collateral Documents that the Collateral Agent is required in writing to exercise by the Instructing Group. Notwithstanding anything to the contrary in this Agreement, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby.
15. TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Secured Obligations have been paid in full and (ii) thereafter, pursuant to the other Secured Documents, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein.
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants as to itself and each of its Subsidiaries that:
(i) it is the legal, beneficial and record owner of, and has good and marketable title to, all of its Collateral consisting of one or more Securities, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement and those created by the First Priority Collateral Documents);
16 |
(ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Collateral Agent’s security interest in such Pledgor’s Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Collateral Agent of any of its rights or remedies provided herein;
(v) neither the execution, delivery or performance by such Pledgor of this Agreement or any other Secured Document to which it is a party, nor compliance by it with the terms and provisions hereof and thereof nor the consummation of the transactions contemplated therein: (i) will contravene any provision of any applicable Legal Requirement or Governmental Authority, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Collateral Documents and, subject to the terms of the Intercreditor Agreement and the First Priority Claims) upon any of the properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject; or (iii) will violate any provision of the Organizational Documents of such Pledgor or any of its Subsidiaries;
(vi) all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests) has been duly and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights;
17 |
(vii) each of such Pledgor’s Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);
(viii) the pledge, collateral assignment and delivery to the Collateral Agent of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities (other than, subject to the terms of the Intercreditor Agreement, the Liens securing First Priority Claims) and the Collateral Agent is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and
(ix) “control” (as defined in Section 8-106 of the UCC) has been obtained by the Collateral Agent over all of such Pledgor’s Collateral consisting of Securities (including, without limitation, Notes which are Securities) with respect to which such “control” may be obtained pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the applicable Pledgor to provide the Collateral Agent with “control” of such Collateral has not yet arisen under this Agreement; provided that in the case of the Collateral Agent obtaining “control” over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Collateral Agent obtains “control” over such Security Entitlement.
(b) Each Pledgor covenants and agrees that it will defend the Collateral Agent’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Collateral Agent by such Pledgor as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Collateral Agent and the other Secured Parties.
(c) Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Document.
17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; LOCATION; FEDERAL EMPLOYER IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, the Location of such Pledgor and the Federal Employer Identification Number (if any) of such Pledgor is listed
18 |
on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its Federal Employer Identification Number (if any) except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute the same or (y) any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 days’ prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective change or changes, it shall have taken all action reasonably necessary or as reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.
18. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 hereof), including, without limitation:
(i) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Secured Document (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms);
(iii) any furnishing of any additional security to the Collateral Agent or its assignee or any acceptance thereof or any release of any security by the Collateral Agent or its assignee;
(iv) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.
19 |
19. SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the Collateral Agent shall (acting on the instructions of the Instructing Group) exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Collateral Agent may sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Collateral Agent may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Collateral Agent (acting on the instructions of the Instructing Group) (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid.
20. TERMINATION; RELEASE. (a) On the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination) and the Collateral Agent, at the written request and sole expense of such Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments (including UCC termination statements) acknowledging the satisfaction and termination of this Agreement (including, without limitation, UCC termination statements and instruments of satisfaction, discharge and/or reconveyance), and will duly release from the security interest created hereby and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Collateral Agent or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2).
(b) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Secured Party) at any time prior to the Termination Date, in connection with a sale or disposition permitted by (i) Section 6.01 of the Indenture or is otherwise released at the direction of the requisite Holders and (ii) the comparable provisions of the Pari Passu Payment Lien Documents or is otherwise released at the direction of the requisite holders of such Pari Passu Payment Lien Obligations, and the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of each of the Indenture and such Pari Passu Payment Lien Documents, as the case may be, to the extent required to be so applied, the Collateral Agent, at the written request and sole expense of such Pledgor, will duly release from the security interest
20 |
created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent (or, in the case of Collateral held by any sub-agent designated pursuant to Section 4 hereof, such sub-agent) and has not theretofore been released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be released as provided in the foregoing Section 20(a) or (b), it shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated pursuant to Section 4 hereof) a certificate signed by an authorized officer of such Pledgor certifying that the release of the respective Collateral is permitted pursuant to the Secured Documents, including Section 20(a) or (b) hereof.
(d) The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in good faith believes to be in accordance with) this Section 20.
21. NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Pledgor shall not be effective until received by the Collateral Agent or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows:
(a) if to any Pledgor, at its address set forth in the Security Agreement;
(b) if to the Collateral Agent, at its address set forth in the Security Agreement,
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
22. WAIVER; AMENDMENT. Except as provided in Sections 30 and 32 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the Security Agreement.
23. SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20 hereof, (ii) be binding upon each Pledgor, its successors and assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (acting on the instructions of the Instructing Group) or as may otherwise be permitted by the Secured Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Parties and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each
21 |
Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of this Agreement and the other Secured Documents regardless of any investigation made by the Secured Parties or on their behalf.
24. HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
25. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURED DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURED DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PARTY. EACH PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 21 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER SECURED DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN, HOWEVER, SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED PARTY, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SECURED DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
22 |
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER SECURED DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
26. PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral.
27. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Pledgor and the Collateral Agent.
28. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
29. RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Secured Documents and otherwise in writing in connection herewith or therewith.
30. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Company that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Indenture or any other Secured Document, shall become a Pledgor hereunder by (x) executing a joinder agreement in the form of Annex I hereto and delivering same to the Collateral Agent, (y) delivering supplements to Annexes A through G, hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken.
31. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Secured Parties that this Agreement shall be enforced against each Pledgor to the fullest extent
23 |
permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Pledgor constituting a Guarantor have been limited as provided in the Indenture.
32. RELEASE OF PLEDGORS. If at any time all of the Equity Interests of any Pledgor owned by the Company or any of its Subsidiaries are sold (to a Person other than a Secured Party) in a transaction permitted pursuant to the Indenture and any Pari Passu Payment Lien Document (and which does not violate the terms of any other Secured Document then in effect), then, such Pledgor shall be released as a Pledgor pursuant to this Agreement without any further action hereunder (it being understood that the sale of all of the Equity Interests in any Person that owns, directly or indirectly, all of the Equity Interests in any Pledgor shall be deemed to be a sale of all of the Equity Interests in such Pledgor for purposes of this Section), and the Collateral Agent is authorized and directed, at the sole expense of the Company, to execute and deliver such instruments of release as may be reasonably requested in writing by the Company. At any time that the Company desires that a Pledgor be released from this Agreement as provided in this Section 32, the Company shall deliver to the Collateral Agent a certificate signed by an authorized officer of the Company stating that the release of such Pledgor is permitted pursuant to this Section 32. The Collateral Agent shall have no liability whatsoever to any other Secured Party as a result of the release of any Pledgor by it in accordance with, or which it believes in good faith to be in accordance with, this Section 32.
33. RIGHTS AND OBLIGATIONS SUBJECT TO INTERCREDITOR AGREEMENT. Without limiting the generality of Section 1(b): (a) the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement; and (b) notwithstanding anything to the contrary herein, any provision hereof that requires (or any representation or warranty hereunder to the extent that it would have the effect of requiring) any Pledgor to (i) deliver any Collateral to the Collateral Agent, or (ii) provide that the Collateral Agent have control over such Collateral, (or, in the case of any representation or warranty hereunder, shall be deemed to be true) by (A) with respect to sub-clause (i) hereof, the delivery of such Collateral by such Pledgor to the First Lien Agent for the benefit of the secured parties under the First Priority Collateral Documents and the Secured Parties pursuant to Section 4.7 of the Intercreditor Agreement, and (B) with respect to sub-clause (ii) hereof, providing that the First Lien Agent be provided with control with respect to such Collateral of such Pledgor for the benefit of the secured parties under the First Priority Collateral Documents and the Secured Parties pursuant to Section 4.7 of the Intercreditor Agreement.
* * * *
24 |
IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first written above.
CURO GROUP HOLDINGS CORP., as Pledgor |
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
A SPEEDY CASH CAR TITLE LOANS, LLC AD ASTRA RECOVERY SERVICES, INC. ADVANCE GROUP, INC. ATTAIN FINANCE, LLC AVIO CREDIT, INC. CASH COLORADO, LLC CONCORD FINANCE, INC. CURO COLLATERAL SUB, LLC CURO CREDIT, LLC CURO FINANCIAL TECHNOLOGIES CORP. CURO INTERMEDIATE HOLDINGS CORP. CURO MANAGEMENT LLC ENNOBLE FINANCE, LLC EVERGREEN FINANCIAL INVESTMENTS, INC. FMMR INVESTMENTS, INC. GALT VENTURES, LLC PRINCIPAL INVESTMENTS, INC. SC AURUM, LLC SC TEXAS MB, INC. SCIL, INC. SCIL TEXAS, LLC SPEEDY CASH SPEEDY CASH ILLINOIS, INC. THE MONEY STORE, L.P. TODD CAR TITLE, INC. TODD FINANCIAL, INC. |
Each as a Pledgor
|
||
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
[Signature Page to Pledge Agreement]
|
Accepted and Agreed to:
TMI TRUST COMPANY,
as Collateral Agent
By: | /s/ Debra Schachel |
Name: Debra Schachel | |
Title: Vice President |
[Signature Page to Pledge Agreement]
Exhibit 10.2
EXECUTION VERSION
SECURITY AGREEMENT
among
CURO GROUP HOLDINGS CORP.,
CERTAIN SUBSIDIARIES OF CURO GROUP HOLDINGS CORP.
and
TMI TRUST COMPANY,
as COLLATERAL AGENT
Dated as of July 30, 2021
TABLE OF CONTENTS
Page
i |
ii |
ANNEX A | Schedule of Chief Executive Offices Address(es) of Chief Executive Office | |
ANNEX B | Schedule of Inventory and Equipment Locations | |
ANNEX C | Schedule of Legal Names, Type of Organization (and Whether a Registered Organization), Jurisdiction of Organization, Location and Federal Employer Identification Numbers | |
ANNEX D | Schedule of Trade and Fictitious Names | |
ANNEX E | Description of Certain Significant Transactions Occurring Within One Year Prior to the Date of the Security Agreement | |
ANNEX F | Schedule of Concentration Accounts | |
ANNEX G | Form of Control Agreement Regarding Deposit Accounts | |
ANNEX H | Schedule of Commercial Tort Claims | |
ANNEX I | Schedule of Marks and Applications; Internet Domain Name Registrations | |
ANNEX J | Schedule of Patents | |
ANNEX K | Schedule of Copyrights | |
ANNEX L | Trademark Security Agreement | |
ANNEX M | Grant of Security Interest in United States Patents | |
ANNEX N | Grant of Security Interest in United States Copyrights | |
ANNEX O | Form of Security Agreement Joinder | |
ANNEX P | Form of Accession Agreement |
iii |
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 30, 2021, made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of TMI Trust Company, as collateral agent (together with any successor collateral agent or assign and any co-collateral agents, in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties (as defined below). Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Indenture (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, CURO Group Holdings Corp. (the “Company”), the guarantors from time to time party thereto (the “Guarantors”), and the Collateral Agent and Trustee, have entered into an Indenture, dated as of July 30, 2021 (as amended, modified, restated and/or supplemented from time to time, the “Indenture”) for the benefit of each other and for the equal and ratable benefit of the Holders of the 7.500% Senior Secured Notes due 2028, together with any Additional Notes (the “Senior Secured Notes”);
WHEREAS, pursuant to the Indenture, each Guarantor has jointly and severally guaranteed to the Trustee, the Collateral Agent and the Holders (collectively, the “Notes Secured Parties” and, together with the Pari Passu Indebtedness Secured Parties (the “Secured Parties”) the payment when due of all Indenture Obligations as described (and defined) therein;
WHEREAS, in order to induce (i) each Holder to hold the Notes, (ii) any future Pari Passu Indebtedness Secured Party to make extensions of credit to one or more of the Assignors and (iii) the Collateral Agent to act as trustee and as collateral agent, the Assignors have agreed to grant to the Collateral Agent a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, their respective Secured Obligations (as defined herein);
WHEREAS, the Intercreditor Agreement governs the relative rights and priorities of the Secured Parties (as defined herein), the Pari Passu Indebtedness Secured Parties and the First Lien Lenders in respect of all of the Collateral; and
WHEREAS, the Assignors will obtain benefits from the issuance of the Notes under the Indenture and the incurrence of Pari Passu Indebtedness, if any, and, accordingly, the Assignors desire to grant a security interest in the Collateral to the Collateral Agent for its benefit and for the benefit of the Secured Parties under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Parties and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Parties as follows:
1 |
Article I.
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Secured Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in and a lien on all of the right, title and interest of such Assignor in, to and under all of the following personal property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired:
(i) | each and every Account; |
(ii) | all cash; |
(iii) | the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account; |
(iv) | all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper); |
(v) | all Commercial Tort Claims; |
(vi) | all computer programs of such Assignor and all intellectual property rights therein and all other proprietary information of such Assignor, including but not limited to Domain Names and Trade Secret Rights; |
(vii) | all Contracts, together with all Contract Rights arising thereunder; |
(viii) | all Copyrights; |
(ix) | all Equipment; |
(x) | all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing; |
(xi) | all Documents; |
(xii) | all General Intangibles; |
(xiii) | all Goods; |
(xiv) | all Instruments; |
(xv) | all Inventory; |
2 |
(xvi) | all Investment Property; |
(xvii) | all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing); |
(xviii) | all Marks, together with the registrations and right to all renewals thereof, the goodwill of the business of such Assignor symbolized by the Marks and all causes of action arising prior to or after the date hereof for infringement of any of the Marks or unfair competition regarding the same; |
(xix) | all Patents, together with all causes of action arising prior to or after the date hereof for infringement of any of the Patents or unfair competition regarding the same; |
(xx) | all Permits; |
(xxi) | all Software and all Software licensing rights, all writings, plans, specifications and schematics, all engineering drawings, customer lists, goodwill and licenses, and all recorded data of any kind or nature, regardless of the medium of recording; |
(xxii) | all Supporting Obligations; and |
(xxiii) | all Proceeds and products of any and all of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignors from time to time with respect to any of the foregoing |
(all of the above, the “Collateral”).
(b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement. Notwithstanding anything to the contrary contained herein, the term “Collateral” shall not include, and the security interest granted under this Agreement shall not attach to any Excluded Asset.
Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement at any time the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect. In the event of any conflict or inconsistency between the provisions of the Indenture and this Agreement relating to the duties of the Collateral Agent the provisions of the Indenture shall govern and control.
3 |
1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which is or may be reasonably necessary to protect the interests of the Secured Parties, which appointment as attorney is coupled with an interest.
Article II.
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:
2.1 Necessary Filings. All filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been (or, within 15 days after the date hereof (or 90 days after the date hereof in the case of Deposit Accounts, as such date may be extended in accordance with Section 3.9 hereof), will be) accomplished and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC as in effect on the date hereof in the State of New York), by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective form attached hereto in the United States Patent and Trademark Office or in the United States Copyright Office.
2.2 No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of, or has rights in, all Collateral free from any Lien or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.
2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.
4 |
2.4 Chief Executive Office, Record Locations. The chief executive office of such Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Assignor. During the period of the four calendar months preceding the date of this Agreement, the chief executive office of such Assignor has not been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Assignor.
2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the date hereof, or held at any time during the four calendar months prior to the date hereof, by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor.
2.6 Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of Organization; Location; Federal Employer Identification Number; Changes Thereto; etc. The exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, such Assignor’s Location, the Location of such Assignor and the Federal Employer Identification Number (if any), is listed on Annex C hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its jurisdiction of organization, its Location or its Federal Employer Identification Number (if any) from that used on Annex C hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Documents and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 5 days’ prior written notice of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for such Assignor, and (ii) in connection with each change or changes, it shall have taken all action reasonably necessary to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, such Assignor shall take all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.
2.7 Trade Names; Etc. Such Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, no trade names, fictitious names or other names except its legal name as specified in Annex C and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. Such Assignor shall not assume or operate in any jurisdiction under any new trade, fictitious or other name until (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of its intention to do so, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all actions reasonably necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.
5 |
2.8 Certain Significant Transactions. During the one year period preceding the date of this Agreement, no Person shall have merged, amalgamated or consolidated with or into any Assignor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex E hereto. With respect to any transactions so described in Annex E hereto, the respective Assignor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into, amalgamated with or consolidated with such Assignor, or was liquidated into or transferred all or substantially all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the date hereof with respect to any Person described above (or the assets transferred to the respective Assignor by such Person), including without limitation pursuant to Section 9-316(a)(3) of the UCC.
2.9 Non-UCC Property. The aggregate fair market value (as determined by the Assignors in good faith) of all property of the Assignors of the types described in clauses (1), (2) and (3) of Section 9-311(a) of the UCC and constituting Collateral does not exceed $1,000,000. If the aggregate value of all such property at any time owned by all Assignors and constituting Collateral exceeds $1,000,000, the Assignors shall provide prompt written notice thereof to the Collateral Agent and the Assignors shall promptly (and in any event within 30 days after acquiring knowledge thereof) take such actions (at their own cost and expense) as may be required under the respective United States, State or other laws referenced in Section 9-311(a) of the UCC to perfect the security interests granted herein in any Collateral where the filing of a financing statement does not perfect the security interest in such property in accordance with the provisions of Section 9-311(a) of the UCC.
2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions reasonably necessary to perfect the security interest of the Collateral Agent therein.
2.11 Collateral in the Possession of a Bailee. If any Inventory or other Goods are at any time in the possession of a bailee, such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its commercially reasonable efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.
2.12 Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of
6 |
such Assignor contained herein, in the Secured Documents and otherwise in writing in connection herewith or therewith.
Article III.
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1 Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all of Assignor’s records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale, lease, assignment or other disposition and delivery of the property listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.
3.2 Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense accurate records of its Accounts and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times, but not more than two (2) such inspections per calendar year, upon prior notice to such Assignor. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture), such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.
3.3 Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture) any Assignor, such Assignor agrees (x) to cause all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, but has no obligation to, directly notify the obligors with respect to any Accounts and/or under any Contracts
7 |
to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Secured Obligations in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses of collection (including reasonable attorneys’ fees), whether incurred by an Assignor or the Collateral Agent, shall be borne solely by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 7.01(i) or (j) of the Indenture has occurred and is continuing.
3.4 Modification of Terms; etc. Except in accordance with such Assignor’s ordinary course of business and consistent with reasonable business judgment or as permitted by Section 3.5 hereof, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein, without the prior written consent of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture). No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne solely by the relevant Assignor.
3.6 Instruments. If any Assignor owns or acquires any Instrument in excess of $500,000 constituting Collateral (other than (x) checks and other payment instruments received and collected in the ordinary course of business and (y) any Instrument subject to pledge pursuant to the Pledge Agreement), such Assignor will within 30 days notify the Collateral Agent thereof
8 |
in writing, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.
3.7 Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.8 Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.
3.9 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time after the date of this Agreement shall establish or maintain, any demand, time, savings, passbook or similar account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States. Annex F hereto accurately sets forth, as of the date of this Agreement, for each Assignor, each Deposit Account that is a Concentration Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account. For each Deposit Account that is a Concentration Account (other than any Concentration Account maintained with the Collateral Agent), the respective Assignor shall cause the bank with which such Deposit Account is maintained to execute and deliver to the Collateral Agent, within 90 days after the date of this Agreement (as such date may be extended by the First Lien Agent (as defined in the Intercreditor Agreement) in its sole discretion) or, if later, at the time of the establishment of the respective Deposit Account, a “control agreement” in the form of Annex G hereto (appropriately completed), with such changes thereto,
9 |
or in such other form, as may be reasonably satisfactory to the First Lien Agent. If any bank with which a Deposit Account that is a Concentration Account is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 90 days after the date of this Agreement (as such date may be extended by the First Lien Agent in its sole discretion) or, if later, 90 days after the establishment of such account) or in such other form, as may be reasonably satisfactory to the First Lien Agent close the respective Deposit Account and transfer all balances therein to the Cash Collateral Account or another Concentration Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account that is a Concentration Account is maintained refuses to subordinate its claims with respect to such Deposit Account to the Collateral Agent’s security interest therein on reasonably satisfactory terms, then the respective Assignor shall terminate such Deposit Account and transfer all balances therein to the Cash Collateral Account or another Concentration Account in accordance with the immediately preceding sentence.
(b) After the date of this Agreement, no Assignor shall establish any new demand, time, savings, passbook or similar account, except for (x) Deposit Accounts that are established and maintained with banks and meeting the requirements of preceding clause (a) and (y) Excluded Accounts. At the time any such Deposit Account that is a Concentration Account is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral Agent a supplement to Annex F hereto containing the relevant information with respect to the respective Deposit Account and the bank with which same is established.
(c) Notwithstanding anything to the contrary herein, no Assignor shall be required to take any action to cause the Collateral Agent to obtain control (“Control”) in accordance with Section 9¬ 104 or 9-106(c), as the case may be, of the UCC with respect to (i) any Deposit Account or Securities Account of such Assignor, that when taken together with all of the other Deposit Accounts (other than any Excluded Deposit Account) and Securities Accounts of such Assignor and all other Assignors, has an average five day closing balance that does not exceed $5,000,000 or (ii) any Excluded Deposit Account; provided, that if such Assignor shall cause the First Lien Agent to have Control over any such Deposit Account or Securities Account, such Assignor will ensure that the security interest granted by it in favor of the Collateral Agent hereunder to secure the Secured Obligations is also perfected by Control as contemplated by Section 4.7 of the Intercreditor Agreement.
3.10 Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and such Assignor shall, pursuant to an agreement, use its commercially reasonable efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default.
3.11 Commercial Tort Claims. All Commercial Tort Claims of each Assignor asserted in a judicial proceeding in existence on the date of this Agreement are described in Annex H hereto.
10 |
If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim asserted in a judicial proceeding in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
3.12 Chattel Paper. Upon the request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel Paper with a face amount in excess of $1,000,000 in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 30 days) following any reasonable request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent.
3.13 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be reasonably necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require, to the extent otherwise required herein, and not otherwise inconsistent with the provisions of Section 1.1(b).
Article IV.
SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
4.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks and Domain Names listed in Annex I hereto for such Assignor and that said listed Marks and Domain Names include all United States marks and applications for United States marks registered in the United States Patent and Trademark Office and all Domain Names that such Assignor owns or uses in connection with its business as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks and Domain Names that it uses. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications and Domain Name registrations listed in Annex I hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default,
11 |
any document which may be required by the United States Patent and Trademark Office or similar registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.
4.2 Licenses and Assignments. Except as otherwise permitted by the Indenture Documents, each Assignor hereby agrees not to divest itself of any right under any Mark or Domain Name absent prior written approval of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture).
4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark or Domain Name material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect.
4.4 Preservation of Marks and Domain Names. Each Assignor agrees to use its Marks and Domain Names which are material to such Assignor’s business in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).
4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents reasonably required to maintain all Mark and/or Domain Name registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture) (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).
4.6 Future Registered Marks and Domain Names. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or any Domain Name is registered by Assignor, within 30 days after receipt of such certificate or similar indicia of ownership, such Assignor shall deliver to the Collateral Agent a copy of such registration certificate or similar indicia of ownership, and a grant of a security interest in such Mark and/or Domain Name, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark and/or Domain Name to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex L hereto.
12 |
4.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Parties, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Parties, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.
Article V.
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in Annex J hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex K hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent of any other Person or such Assignor has misappropriated any Trade Secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.
5.2 Licenses and Assignments. Except as otherwise permitted by the Indenture Documents, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright absent prior written approval of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture).
5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice of
13 |
any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, absent direction of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture) to the contrary, to diligently prosecute, in accordance with its reasonable business judgment, any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture) to the contrary (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).
5.5 Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications for (i) United States Patents listed in Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business), absent written consent of the Collateral Agent (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture).
5.6 Other Patents and Copyrights. Within 30 days after the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration of, or application therefor, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the sole expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex M or N hereto, as appropriate.
5.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Parties, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Parties, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm
14 |
this and, to the extent permitted by applicable law, to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Parties.
Article VI.
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Collateral Agent’s Security. Except as otherwise permitted by the Secured Documents, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Secured Documents. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Secured Documents, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Parties, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Secured Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.
6.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).
6.3 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent; provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the requisite holders of the Notes.
6.4 Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which are or may be necessary to perfect, preserve or protect its security interest in the Collateral to the extent otherwise required herein and not otherwise inconsistent with the provisions of Section 1.1(b); provided, however, that the Collateral Agent shall have no duty to so request unless directed to do so by the requisite holders of the Notes.
15 |
6.5 Financing Statements. Each Assignor agrees to execute and deliver to the Collateral Agent such financing statements as the Collateral Agent may from time to time reasonably request or as are reasonably necessary to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor); provided, however, that the Collateral Agent shall have no duty to make any such filings unless directed to do so by the requisite holders of the Notes.
Article VII.
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture):
(i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;
(iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities and instruments held by such depositary bank to the Cash Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any
16 |
reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;
(vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall determine (acting on the instructions of the requisite percentage of Holders in accordance with the Indenture);
(vii) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and
(viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607(a) of the UCC;
it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Collateral Document, the Secured Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the requisite percentage of Holders in accordance with the Indenture and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement and the other Collateral Documents.
7.2 Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as are commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor. Any such sale, lease or other
17 |
disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Secured Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.
7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);
(ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant
18 |
Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.
7.4 Application of Proceeds. (a) Subject to the terms of the Intercreditor Agreement, all monies and other property and assets collected or received by the Collateral Agent or any other Secured Party upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies and other property and assets collected or received by the Collateral Agent hereunder or upon any distribution of (or on account of) Collateral (whether or not characterized as such) in connection with any case, proceeding or other action of the type described in Sections 7.01(i) and (j) of the Indenture, shall be applied (1) first, to any amounts owed to the Collateral Agent hereunder and (2) second, to the holders of the Indenture Obligations and the holders of any Pari Passu Payment Lien Obligations, in each case, that are then due, on a pro rata basis. Such monies and other property and assets shall be applied (x) in the case of Indenture Obligations, in the manner provided in the Section 7.10 of the Indenture and (y) in the case of Pari Passu Payment Lien Obligations, in accordance with the relevant Pari Passu Payment Lien Documents that evidence or govern such Pari Passu Payment Lien Obligations.
(b) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.
(c) If any Secured Party collects or receives any distribution to which it is not entitled under Section 7.4(a) hereof, Secured Party shall hold the same in trust for the Secured Parties and shall forthwith deliver the same to the Trustee or the Collateral Agent, for the account of the Secured Parties, to be applied in accordance with Section 7.4(a) hereof.
7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Secured Documents or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Secured Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.
19 |
7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Secured Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.
Article VIII.
INDEMNITY
8.1 Indemnity.
Section 13.11 of the Indenture (Compensation and Indemnity) is hereby incorporated by reference as if fully set forth herein mutatis mutandis.
8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Collateral Agent or any co-collateral agent as to which such Collateral Agent or any co-collateral agent has the right to reimbursement shall constitute Secured Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Secured Obligations and notwithstanding the full payment of all the Notes issued pursuant to the Indenture and the payment of all other Secured Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.
Article IX.
DEFINITIONS
The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.
“Accession Agreement” means an accession agreement, if any, to this Agreement, in substantially the form of Annex P hereto, entered into by the Assignors, the trustee, agent, or other representative for the holders of any Pari Passu Indebtedness and the Collateral Agent from time to time.
“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit
20 |
of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State.
“Agreement” shall mean this Security Agreement, as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.
“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Assignor” shall have the meaning provided in the first paragraph of this Agreement.
“Cash Collateral Account” shall mean a non-interest bearing cash collateral account established following the occurrence of an Event of Default and maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Parties.
“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.
“Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Concentration Account” shall mean each of those accounts listed on Annex F hereto and designated as a “Concentration Account” thereon, along with any replacement accounts in respect thereof established in accordance with the terms of Section 3.9 hereof.
“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.
“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).
“Copyrights” shall mean any United States or foreign copyright now or hereafter owned by any Assignor, including any registrations of any copyrights in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.
“Default” shall mean a “Default” or similar term as such defined in the Indenture or any Pari Passu Lien Document, so long as any such agreement is in effect.
21 |
“Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Distribution” shall have the meaning provided in Section 7.4(a) of this Agreement.
“Documents” shall mean “documents” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Domain Names” shall mean all Internet domain names and associated URL addresses in or to which any Assignor now or hereafter has any right, title or interest.
“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.
“Event of Default” shall mean an “Event of Default” or similar term as such term is defined in the Indenture or any Pari Passu Lien Document, so long as any such agreement is in effect.
“Excluded Deposit Accounts” shall mean any Deposit Account that is an Excluded Asset described in clause (6) of the definition the term of Excluded Assets.
“First Lien Lenders” shall have the meaning provided in the Intercreditor Agreement.
“General Intangibles” shall mean “general intangibles” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Instructing Group” shall mean the holders of the majority in aggregate principal amount of the then outstanding Indenture Obligations and the Pari Passu Payment Lien Obligations, if any; provided that that any Notes held by the Company or an Affiliate of the Company and any Pari Passu Indebtedness held by the Company or an Affiliate of the Company shall be deemed not to be outstanding for purposes of determining the Instructing Group, except that in determining whether the Collateral Agent shall be protected in relying upon such direction, only those Notes and Pari Passu Indebtedness that the Collateral Agent actually knows to be so held shall be so disregarded.
“Instrument” shall mean “instruments” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
22 |
“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.
“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.
“Marks” shall mean all right, title and interest in and to any trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now held or hereafter acquired by any Assignor, which are registered or filed in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks used by an Assignor and any trade dress including logos, designs, fictitious business names and other business identifiers used by any Assignor.
“Material Adverse Effect” shall mean (i) a material adverse effect on the business, operations, property, assets, liabilities, condition (financial or otherwise) or operating results of Company and its Restricted Subsidiaries taken as a whole, or (ii) a material adverse effect (x) on the rights or remedies of the Collateral Agent hereunder or under any other Secured Document, (y) on the ability of any Assignor to perform its obligations to the Collateral Agent hereunder or under any other Secured Document or (z) the legality, validity, binding effect or enforceability of this Agreement or any of the other Secured Documents.
“Other Hedging Agreements” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices.
“Patents” shall mean any patent in or to which any Assignor now or hereafter has any right, title or interest therein, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a patent now or hereafter made by any Assignor.
23 |
“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.
“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.
“Secured Documents” shall mean, collectively, the Indenture Documents and the Pari Passu Payment Lien Documents, if any.
“Secured Obligations” shall mean, collectively, the Indenture Obligations and any Pari Passu Payment Lien Obligations, if any.
“Securities Accounts” shall mean all “securities accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.
“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
“Termination Date” shall mean the date upon which (i) (A) a Legal Defeasance or Covenant Defeasance shall have been consummated pursuant to Sections 9.02 or 9.03, respectively, of the Indenture or (B) the Indenture shall have been discharged pursuant to Article 4 thereof, and (ii) if any Pari Passu Payment Lien Obligations are then outstanding, such Pari Passu Payment Lien Obligations shall have been paid in full in accordance with the Pari Passu Payment Lien Documents evidencing or governing such Pari Passu Payment Lien Obligations.
“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.
24 |
“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it holds.
“Trade Secrets” shall mean any secretly held existing engineering or other data, information, production procedures and other know-how relating to the design manufacture, assembly, installation, use, operation, marketing, sale and/or servicing of any products or business of an Assignor worldwide whether written or not.
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
Article X.
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, c/o:
CURO Group Holdings Corp.
3527 North Ridge Road
Wichita, Kansas 67205
Telecopier No.: 316.722.7751
Attention: Vin Thomas, Chief Legal Officer
(b) if to the Collateral Agent, at:
TMI Trust Company, as Trustee
1100 Abernathy Road NE, Suite 480
Atlanta, Georgia 30328
Phone: (678) 221-5898
Attn: Debra Schachel, Vice President
or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.
10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12 hereof (or as provided in the other Collateral Documents), none of the terms and conditions of this Agreement or any other Collateral Document may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly affected thereby (it being
25 |
understood that the addition or release of any Assignor hereunder shall not constitute a change, waiver, discharge or termination affecting any Assignor other than the Assignor so added or released) and the Collateral Agent (with the written consent of the requisite percentage of Holders in accordance with the Indenture).
10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Indenture Document; or (c) any amendment to or modification of any Secured Document or any security for any of the Secured Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing.
10.4 Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8 hereof, (ii) be binding upon each Assignor, its successors and assigns; provided, however, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the requisite percentage of Holders in accordance with the Indenture) or as otherwise permitted by the Secured Documents, and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Parties and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of this Agreement and the other Secured Documents regardless of any investigation made by the Secured Parties or on their behalf.
10.5 Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURED DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SECURED DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL
26 |
JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER SECURED DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN, HOWEVER, SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED PARTY, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER SECURED DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.7 Assignor’s Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation in Section 8.1 hereof, shall survive such termination) and the Collateral Agent, at the written request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement.
27 |
(b) The Liens securing the Collateral may be released from time to time in accordance with Article 13 of the Indenture. Furthermore, upon the release of any Guarantor from its Notes Guarantee in accordance with the provisions of the Indenture, such Assignor (and the Collateral at such time assigned by the respective Assignor pursuant hereto) shall be released from this Agreement.
(c) The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in good faith believes to be in accordance with) this Section 10.8.
10.9 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Company and the Collateral Agent.
10.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
10.11 The Collateral Agent and the other Secured Parties. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in the Indenture. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the Indenture. The provisions of Article 13 of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Assignors and all Secured Parties, in connection with this Agreement and the other Collateral Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing and (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Collateral Documents that the Collateral Agent is required in writing to exercise by the Instructing Group. Notwithstanding anything to the contrary in this Agreement, in no event shall the Collateral Agent be responsible for, or have any duty or obligation with respect to, the recording, filing registering, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including the preparation, filing or continuation of any Uniform Commercial Code financing or continuation statements or similar documents or instruments), nor shall the Collateral Agent be responsible for, and the Collateral Agent makes no representation regarding, the validity, enforceability, effectiveness or priority of this Agreement or the security interests or Liens intended to be created hereby.
10.12 Additional Assignors. It is understood and agreed that any Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after
28 |
the date hereof pursuant to the requirements of the Indenture or any other Indenture Document or Pari Passu Payment Lien Document, shall become an Assignor hereunder by (x) executing a joinder agreement in the form of Annex O hereto and delivering same to the Collateral Agent, in each case as may be requested by (and in form and substance reasonably satisfactory to) the Collateral Agent, (y) delivering supplements to Annexes A through F, inclusive, and H through K, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken.
10.13 Intercreditor Agreement. Without limiting the generality of the final paragraph of Section 1.1(b): (a) the Liens granted hereunder in favor of the Collateral Agent for the benefit of the Secured Parties in respect of the Collateral and the exercise of any right related thereto thereby shall be subject, in each case, to the terms of the Intercreditor Agreement; and (b) notwithstanding anything to the contrary herein, any provision hereof that requires (or any representation or warranty hereunder to the extent that it would have the effect of requiring) any Assignor to (i) deliver any Collateral to the Collateral Agent, or (ii) provide that the Collateral Agent have control over such Collateral (or, in the case of any representation or warranty hereunder, shall be deemed to be true) by (A) with respect to subclause (i) hereof, the delivery of such Collateral by such Assignor to the First Lien Agent for the benefit of the secured parties under the First Lien Loan Agreement (as defined in the Intercreditor Agreement) and the Secured Parties pursuant to Section 4.6 of the Intercreditor Agreement, and (B) with respect to subclause (ii) hereof, providing that the First Lien Agent be provided with control with respect to such Collateral of such Assignor for the benefit of the secured parties under the First Lien Loan Agreements and the Secured Parties pursuant to Section 4.7 of the Intercreditor Agreement.
10.14 Pari Passu Payment Lien Obligations. (a) If any Assignor incurs any Pari Passu Indebtedness, the agent, trustee or other representative of the holders of such Pari Passu Payment Lien Obligations shall enter into a supplement to the Intercreditor Agreement and an Accession Agreement.
(b) By accepting the benefits of this Agreement and the other Secured Documents, each holder of Secured Obligations hereby agrees that notwithstanding anything to the contrary in this Agreement or any other Security Documents:
(i) notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens on the Collateral securing the Indenture Obligations and the Pari Passu Payment Lien Obligations, the Liens securing all such Indebtedness shall be of equal priority;
(ii) the Indenture Obligations and the Pari Passu Payment Lien Obligations may be increased, extended, renewed, replaced, restated, supplemented, restructured, refunded, refinanced or otherwise amended from time to time, in each case, to the extent permitted by the Secured Documents; and
29 |
(iii) (A) as between the Holders of the Notes and the holders of Pari Passu Indebtedness, only the Instructing Group shall have the right to direct the Collateral Agent in conducting foreclosures and in taking other actions with respect to the Collateral, and the authorized agents, trustees or other representatives of other Indebtedness shall not have any right to take any actions with respect to the Collateral;
(B) the Instructing Group will have the sole right to instruct the Collateral Agent to act or refrain from acting with respect to the Collateral, and the Collateral Agent shall not follow any instructions with respect to such Collateral from any other Person; and
(C) no authorized representative of any Indebtedness (other than the Instructing Group) will instruct the Collateral Agent to commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interests in or realize upon, or take any other action available to it in respect of, the Collateral.
[Remainder of this page intentionally left blank; signature pages follow]
30 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first written above.
CURO GROUP HOLDINGS CORP., |
||
as an Assignor |
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
A SPEEDY CASH CAR TITLE LOANS, LLC AD ASTRA RECOVERY SERVICES, INC. ADVANCE GROUP, INC. ATTAIN FINANCE, LLC AVIO CREDIT, INC. CASH COLORADO, LLC CONCORD FINANCE, INC. CURO COLLATERAL SUB, LLC CURO CREDIT, LLC CURO FINANCIAL TECHNOLOGIES CORP. CURO INTERMEDIATE HOLDINGS CORP. CURO MANAGEMENT LLC ENNOBLE FINANCE, LLC EVERGREEN FINANCIAL INVESTMENTS, INC. FMMR INVESTMENTS, INC. GALT VENTURES, LLC PRINCIPAL INVESTMENTS, INC. SC AURUM, LLC SC TEXAS MB, INC. SCIL, INC. SCIL TEXAS, LLC SPEEDY CASH SPEEDY CASH ILLINOIS, INC. THE MONEY STORE, L.P. TODD CAR TITLE, INC. TODD FINANCIAL, INC. |
Each as a Assignor
|
||
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
[Signature Page to Security Agreement]
Accepted and Agreed to:
TMI TRUST COMPANY,
as Collateral Agent
By: | /s/ Debra Schachel |
Name: Debra Schachel | |
Title: Vice President |
[Signature Page to Security Agreement]
EXHIBIT 10.3
EXECUTION VERSION
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this “Intercreditor Agreement”), dated as of July 30, 2021, is by and among BAY COAST BANK, as agent for the First Lien Lenders (as hereinafter defined) (in such capacity, “First Lien Agent” as hereinafter further defined), and TMI TRUST COMPANY, as collateral agent under (i) the Indenture (as hereinafter defined) for the other Notes Secured Parties (as hereinafter defined) and (ii) each Accession Agreement (as hereinafter defined) entered into after the date hereof for the Pari Passu Indebtedness Secured Parties (as hereinafter defined) identified therein and related Supplement (as hereinafter defined) hereto (together with its successors and assigns, in such capacity, “Second Lien Agent” as hereinafter further defined).
RECITALS:
A. First Lien Agent and the other First Lien Lenders have entered into one or more financing arrangements with Borrower (as hereinafter defined), pursuant to which the First Lien Lenders have made and may, upon certain terms and conditions, continue to make loans and provide other financial accommodations to Borrower secured by liens on and security interests in substantially all of the assets and properties of Borrower and the other Obligors (as defined herein).
B. The Issuer (as hereinafter defined), the other Obligors named therein and TMI Trust Company, as trustee and collateral agent, have entered into the Indenture, pursuant to which Issuer has issued, and the Noteholders have purchased, the Notes (as hereinafter defined), which Notes are secured by liens on and security interests in substantially all of the assets and properties of the Issuer and the other Obligors.
C. The First Lien Agent, the Borrower and the other Obligors have entered into the First Lien Credit Agreement (as hereinafter defined).
D. First Lien Agent, on behalf of itself and the other First Lien Lenders, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, enter into this Intercreditor Agreement to (i) confirm the relative priorities of the Liens (as defined herein) of First Lien Agent, on behalf of itself and the First Lien Lenders, and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, in the assets and properties of Borrower and the other Obligors, and (ii) provide for the orderly sharing among them, in accordance with such priorities, of the proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.
In consideration of the mutual benefits accruing to First Lien Agent, the First Lien Lenders, Second Lien Agent and the other Second Lien Creditors hereunder and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
1. DEFINITIONS
As used above and in this Intercreditor Agreement, the following terms shall have the meanings ascribed to them below:
1.1 “Agreements” shall mean, collectively, the First Lien Loan Agreements and the Second Lien Documents.
1.2 “Accession Agreement” shall mean an accession agreement, if any, to the Second Lien Documents, entered into by the Issuer, the other Obligors, the agent, trustee or other representative for the holders of any Pari Passu Indebtedness and the Second Lien Agent from time to time.
1.3 “Banking Services” shall mean each and any of the following bank services provided to Borrower or any other Obligor by any Cash Management Creditor: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, netting and interstate depository network services).
1.4 “Banking Services Obligations” of Borrower and the other Obligors shall mean any and all obligations of Borrower or the other Obligors, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.
1.5 “Bankruptcy Law” means any of the U.S. Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and the Winding-Up and Restructuring Act (Canada), each as now and hereafter in effect, any successors to such statutes and any other applicable bankruptcy, insolvency, winding-up, dissolution, restructuring, receivership, arrangement, liquidation, reorganization or similar law of any jurisdiction providing relief from or otherwise affecting the rights of creditors.
1.6 “Borrower” shall collectively mean CURO Financial Technologies Corp., a Delaware corporation, and CURO Intermediate Holdings Corp., a Delaware corporation, jointly and severally, and their successors and assigns, including, without limitation, any receiver, trustee or debtor-in-possession on their behalf or on behalf of any of their successors or assigns.
1.7 “Cash Management Creditor” shall mean any First Lien Lender party to the First Lien Credit Agreement or any Affiliate (as defined in the First Lien Credit Agreement) thereof that provides Banking Services to Borrower or any other Obligor.
1.8 “Collateral” shall mean all assets and properties of any kind whatsoever, real or personal, tangible or intangible and wherever located, whether now owned or hereafter acquired, of Borrower or any other Obligor in which a security interest is granted (or purported to be granted) under any of the Agreements.
1.9 “Creditors” shall mean, collectively, First Lien Agent, the First Lien Lenders, Second Lien Agent, Trustee and the other Second Lien Creditors, and their respective successors and assigns, being sometimes referred to herein individually as a “Creditor.”
1.10 “Default” shall mean a “Default” or an “Event of Default” or similar term, as such terms are defined in the First Lien Credit Agreement, and a “Default” or an “Event of Default” or similar term, as such terms are defined in the Indenture or any Pari Passu Payment Lien Document, so long as any such Agreement is in effect.
2 |
1.11 “Enforcement Action” shall mean the exercise of any rights and remedies in respect of Collateral securing the First Lien Obligations or the Second Lien Obligations by the applicable Creditor or Creditors including, without limitation, (a) any action by any Creditor to foreclose on the Lien of such Person in any Collateral, (b) any action by any Creditor to take possession of, sell or otherwise realize (judicially or nonjudicially) upon any Collateral (including, without limitation, by setoff or notification of account debtors), and/or (c) the commencement by any Creditor of any legal proceedings against Borrower or any other Obligor or with respect to any Collateral to facilitate the actions described in clauses (a) and (b) above.
1.12 “First Lien Agent” shall mean, initially, Bay Coast Bank, in its capacity as agent for the First Lien Lenders under the First Lien Credit Agreement, and its successors and assigns acting in a similar capacity under the First Lien Credit Agreement, and shall include any successor “First Lien Agent” designated pursuant to Section 4.3(a).
1.13 “First Lien Credit Agreement” shall mean, initially, the Revolving Loan Agreement, dated as of September 1, 2017, by and among the Borrower, First Lien Agent and certain other First Lien Lenders party thereto, as amended by that certain First Amendment to Revolving Loan Agreement, dated February 26, 2018, that certain Second Amendment to Revolving Loan Agreement, dated August 27, 2018, that certain Third Amendment to Revolving Loan Agreement, dated November 9, 2018, that certain Fourth Amendment to Revolving Loan Agreement, dated June 30, 2019, that certain Fifth Amendment to Revolving Loan Agreement, dated April 30, 2020, that certain Sixth Amendment to Revolving Loan Agreement, dated January 29, 2021, that certain Seventh Amendment to Revolving Loan Agreement, dated June 30, 2021, and that certain Eighth Amendment to Revolving Loan Agreement, dated on or before August 10, 2021, and as the same may be further amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities) from time to time in accordance with the terms of this Intercreditor Agreement, and shall include any new “First Lien Credit Agreement” designated pursuant to Section 4.3(a).
1.14 “First Lien Default” shall mean a Default under the First Lien Credit Agreement.
1.15 “First Lien Lenders” shall mean, collectively, (i) First Lien Agent, (ii) Bay Coast Bank, in its capacity as a lender under the First Lien Credit Agreement and each of the other lenders now or hereafter party to the First Lien Credit Agreement from time to time, (iii) all Hedging Creditors, (iv) all Cash Management Creditors, and (v) in each case in respect of preceding clauses (i) through (iv), their respective successors and assigns , and shall include any new “First Lien Lenders” designated pursuant to Section 4.3(a).
1.16 “First Lien Loan Agreements” shall mean, collectively, (i) the First Lien Credit Agreement, (ii) all agreements, confirmations and other documents entered into or evidencing any Hedging Transaction, (iii) all agreements and other documents entered into or evidencing any Banking Services and (iv) all other agreements, documents, notes, guaranties, collateral documents and instruments at any time executed and/or delivered by Borrower or any other Obligor with, to or in favor of First Lien Agent and/or the First Lien Lenders in connection therewith or related thereto, including all “Facility Documents” or any similar term as defined in the First Lien Credit Agreement, as all of the foregoing now exist or may hereafter be amended, modified,
3 |
supplemented, extended, replaced, renewed, refinanced or restated from time to time (in each case, whether or not upon termination and whether with the original lenders, institutional investors or otherwise, including through the issuance of debt securities), and shall include any new “First Lien Loan Agreement” designated pursuant to Section 4.3(a).
1.17 “First Lien Obligations” shall mean any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any other Obligor (including, without limitation, Hedging Obligations and Banking Services Obligations) to First Lien Agent and the First Lien Lenders evidenced by or arising under any of the First Lien Loan Agreements, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including (without limitation) principal, premium, interest, reimbursement, obligations, charges, fees, obligations to post cash collateral, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of any of the First Lien Loan Agreements or after the commencement of any Insolvency Proceeding with respect to Borrower or any other Obligor (and including, without limitation, the payment of interest, fees and expenses which would accrue and become due but for the commencement of such Insolvency Proceeding at the applicable rate provided for in the respective First Lien Loan Agreements, whether or not such interest, fees or expenses is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding, provided that, for purposes of this Intercreditor Agreement, the term “First Lien Obligations” shall not include the principal amount of loans, the face amount of letter of credit accommodations, Hedging Obligations and Banking Services Obligations in excess of the Maximum First Lien Obligations. The foregoing limitation shall not apply to, and the term “First Lien Obligations” shall include, obligations consisting of interest and fees, costs or expenses (except for that portion of interest and fees attributable to the portion of the First Lien Obligations that exceeds the Maximum First Lien Obligations), in each case whether or not charged by First Lien Agent and/or the other First Lien Lenders to any loan account of Borrower maintained by First Lien Agent pursuant to the First Lien Credit Agreement.
1.18 “First Priority Claims” shall have the meaning set forth in the Indenture.
1.19 “Hedging Creditor” shall mean any First Lien Lender party to the First Lien Credit Agreement or any Affiliate (as defined in the First Lien Credit Agreement) thereof, including any First Lien Lender party to the First Lien Credit Agreement or any Affiliate thereof at the time that the respective Hedging Transaction was entered into (even if the respective First Lien Lender subsequently ceases to be a First Lien Lender under the First Lien Credit Agreement for any reason).
1.20 “Hedging Obligations” of Borrower or any other Obligor shall mean any and all obligations of such Obligor, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Hedging Transactions, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions.
4 |
1.21 “Hedging Transaction” shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered by Borrower or any other Obligor with a Hedging Creditor which is an interest rate protection agreement, interest rate, swap, cap, collar or floor agreement, foreign currency exchange agreements or other interest rate or currency management device used to manage interest rate risk or exchange rate risk.
1.22 “Indenture” shall mean the Indenture, dated as of July 30, 2021, among the Issuer, the other Obligors named therein, the Second Lien Agent and Trustee, as the same now exists or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement.
1.23 “Indenture Documents” shall mean the Indenture, the Notes and all agreements, documents, collateral documents, guaranties and instruments at any time executed and/or delivered by the Issuer or any other Obligor with, to or in favor of the Second Lien Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise).
1.24 “Indenture Obligations” shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by the Issuer or any other Obligor to the Notes Secured Creditors (as defined in the Indenture) evidenced by or arising under the Indenture Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including, without limitation, principal, interest, premium, if any, charges, fees, costs, indemnities and expenses (including, without limitation, attorneys’ and consultant fees and expenses), however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Indenture Documents or after the commencement of any Insolvency Proceeding with respect to the Issuer or any other Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding.
1.25 “Insolvency Proceeding” shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect (including any Bankruptcy Laws), or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of with respect to any Person or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, (b) any liquidation, dissolution, reorganization or winding up of such Person whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (c) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors undertaken under any law.
5 |
1.26 “Issuer” shall mean CURO Group Holdings Corp., a Delaware corporation, and its successors and assigns, including, without limitation, any receiver, trustee or debtor-in-possession on its behalf or on behalf of any of its successors or assigns.
1.27 “Lien” shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
1.28 “Maximum First Lien Obligations” shall mean the aggregate outstanding principal amount of Indebtedness under Credit Facilities (each as defined in the Indenture (as in effect on the date hereof)) incurred pursuant to the First Lien Credit Agreement not to exceed the amount permitted to be incurred pursuant to clause (i) of the definition of “Permitted Debt” contained in the Indenture (as in effect on the date hereof).
plus (A) the aggregate amount of exposure that the First Lien Lenders have in respect of Banking Services Obligations then provided or outstanding that constitute First Priority Claims,
plus (B) the Swap Termination Value of any Hedging Obligations that constitute First Priority Claims.
1.29 “Noteholders” shall mean holders of the Notes at any time and from time to time and their respective successors and assigns (including any other creditor or group of creditors that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the Second Lien Obligations under the Indenture Documents at any time from time to time (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise)).
1.30 “Notes” shall mean the Issuer’s 7.500% Senior Secured Notes due 2028, issued pursuant to the Indenture, as the same may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated in accordance with the terms of this Intercreditor Agreement (in each case, whether or not upon termination and whether with the original holders, institutional investors or otherwise).
1.31 “Notes Guarantees” shall mean, collectively, the guarantees of the Obligors (other than the Issuer) under the Notes and the Indenture.
1.32 “Notes Secured Parties” shall mean, collectively, the Second Lien Agent, the Trustee and the holders of the Notes, and their successors and assigns.
1.33 “Obligors” shall mean, individually and collectively, any Person liable on or in respect of the Second Lien Obligations or the First Lien Obligations, and each of their successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession on behalf of such person or on behalf of any such successor or assign.
6 |
1.34 “Official Body” shall mean any national, Federal, state, local or other government or political subdivision or any agency, authority, board, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
1.35 “Order of Payment” shall mean, in connection with the application, payment or distribution of proceeds of any Collateral pursuant to all applicable terms hereof (including, without limitation, any proceeds of any Collateral pursuant to any Enforcement Action, together with all other proceeds received by any Creditor (including all funds received in respect of post-petition interest or fees and expenses) as a result of any such Enforcement Action or as a result of any distribution of or in respect of any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Borrower or any other Obligor, or the application of any Collateral (or proceeds thereof) to the payment thereof or any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Borrower or any other Obligor), the following order for such application: (i) first, ratably to pay all First Lien Obligations in such order as specified in the relevant First Lien Loan Agreements until all First Lien Obligations have been paid in full in cash (including amounts paid to be held by First Lien Agent and/or the First Lien Lenders as cash collateral in such amounts as First Lien Agent determines is reasonably necessary to secure the First Lien Lenders in connection with (x) any issued and outstanding letters of credit under the First Lien Credit Agreement but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such letters of credit constituting First Lien Obligations, and (y) any Hedging Obligations and Banking Services Obligations); (ii) second, ratably to pay any obligations in respect of any expense reimbursements and indemnities then due and payable to Trustee and Second Lien Agent in respect of the Second Lien Obligations, until paid in full; (iii) third, ratably to pay interest and fees due and payable in respect of the Second Lien Obligations, until paid in full; (iv) fourth, ratably to pay principal and premium, if any, of the Second Lien Obligations, until paid in full; (v) fifth, to the ratable payment of all other obligations, liabilities and indebtedness in respect of the First Lien Loan Agreements and the Obligations (as defined in the First Lien Credit Agreement) then due and payable; and (vi) sixth, to the ratable payment of all other obligations, liabilities and indebtedness in respect of the Second Lien Documents and the Second Lien Obligations then due and payable.
1.36 “Pari Passu Indebtedness” shall mean any Indebtedness (as defined in the Indenture) (other than any Indebtedness evidenced by an a Additional Note (as defined in the Indenture) or related Notes Guarantee) (1) that is permitted to be incurred under (x) Section 5.09 of the Indenture (as in effect on the date hereof) and (y) the First Lien Credit Agreement and (2) that is secured on a pari passu basis with the Notes and the Notes Guarantees, as applicable, by a Permitted Lien (as defined in the Indenture (as in effect on the date hereof)) described in clause (16) of the definition thereof; provided that (i) such Indebtedness is so designated as Pari Passu Indebtedness in an officers’ certificate delivered to the First Lien Agent and the Second Lien Agent and (ii) an authorized representative of the holders of such Indebtedness shall have executed and delivered a Supplement and an Accession Agreement.
1.37 “Pari Passu Indebtedness Secured Parties” shall mean, collectively, the agent, the trustee or other representative, if any (and their respective successors and assigns), and the holders of Pari Passu Indebtedness identified in a Supplement and an Accession Agreement.
7 |
1.38 “Pari Passu Payment Lien Documents” shall mean any loan agreement, indenture or other instrument that evidences or governs any Pari Passu Indebtedness and all other related documents identified in a Supplement and an Accession Agreement.
1.39 “Pari Passu Payment Lien Obligations” shall mean all obligations (including interest that accrues after the commencement of an insolvency or bankruptcy case, regardless of whether such interest is an allowed claim under such case) outstanding under the Pari Passu Payment Lien Documents.
1.40 “Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof.
1.41 “Release Event” shall mean (i) prior to the occurrence of an Insolvency Proceeding by or against Borrower or any other Obligor, upon the occurrence and during the continuance of an Event of Default under the First Lien Loan Agreements, the taking of any Enforcement Action with respect to all or any portion of the Collateral or (ii) after the occurrence of an Insolvency Proceeding by or against Borrower or any other Obligor, the taking of any Enforcement Action described in clauses (a) and (b) of the definition of such term by any Creditor or the entry of an order of a Bankruptcy Court pursuant to Section 362 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, vacating the automatic stay and authorizing any Creditor to take any Enforcement Action.
1.42 “Required Lenders” shall mean the “Required Lenders” or any similar term as defined in the First Lien Credit Agreement.
1.43 “Second Lien Agent” shall mean TMI Trust Company, in its capacity as collateral agent for itself and the other Second Lien Creditors under the Indenture, and its successors and assigns and each other Person acting in a similar capacity under any Indenture and each Accession Agreement and related Supplement.
1.44 “Second Lien Creditors” shall mean, collectively, the Notes Secured Parties and the Pari Passu Indebtedness Secured Parties.
1.45 “Second Lien Default” shall mean a Default under the Indenture or any Pari Passu Payment Lien Document.
1.46 “Second Lien Documents” shall mean, collectively, the Indenture Documents and the Pari Passu Payment Lien Documents, if any.
1.47 “Second Lien Obligations” shall mean, collectively, the Indenture Obligations and the Pari Passu Payment Lien Obligations.
1.48 “Standstill Period” shall have the meaning specified in Section 2.10 hereof.
1.49 “Supplement” shall have the meaning specified in Section 4.6 hereof.
8 |
1.50 “Swap Termination Value” shall mean, as of any date of determination, in respect of any one or more Hedging Transactions, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Transactions, (a) for any date on or after the date such Hedging Transactions have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount determined as the mark to market value for such Hedging Transaction, as determined pursuant to the terms of the documents governing such Hedging Transaction, or if none is specified, then based upon one or more readily available quotations provided by a dealer in Hedging Transactions (which may include First Lien Agent or any First Lien Lender) .
1.51 “Trustee” shall mean TMI Trust Company, in its capacity as Trustee under the Indenture and its successors and assigns including each other Person acting in a similar capacity under any Indenture.
1.52 “UCC” shall mean the Uniform Commercial Code, as amended and in effect in any applicable jurisdiction.
1.53 “U.S. Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, any successor statute.
1.54 All terms defined in the UCC as in effect in the State of New York, unless otherwise defined herein shall have the meanings set forth therein. All references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural.
2. PAYMENTS; SECURITY INTERESTS; PRIORITIES; REMEDIES
2.1 First Lien Agent and the First Lien Lenders hereby acknowledge that Second Lien Agent, for its own benefit and for the benefit of the other Second Lien Creditors, has been granted Liens upon all of the Collateral pursuant to the Second Lien Documents to secure the Second Lien Obligations. Second Lien Agent on behalf of itself and the other Second Lien Creditors hereby acknowledges that First Lien Agent, for the benefit of the First Lien Lenders, has been granted Liens upon all of the Collateral pursuant to the First Lien Loan Agreements to secure the First Lien Obligations.
2.2 (a) Notwithstanding the date, order or time of attachment, or the date, order, time or manner of perfection, or the date, order or time of filing or recordation of any document or instrument, or other method of perfecting a Lien in favor of each Creditor in any Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Agreements and notwithstanding any provision of the UCC or any other applicable law or any other circumstance whatsoever (including any non-perfection or non-validity or unenforceability of any Lien purporting to secure the First Lien Obligations or the Second Lien Obligations), any Lien securing First Lien Obligations now or hereafter held by or on behalf First Lien Agent or First Lien Lender or any agent or trustee therefore, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, will have priority over and be senior in all respects to the Liens securing the Second Lien Obligations (and the Liens securing the Second Lien Obligations will be junior and subordinate to the Liens securing the First Lien Obligations). All Liens on the Collateral securing any First Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Second Lien Obligations for all
9 |
purposes, whether or not such Lien securing any First Lien Obligations are subordinated to any Lien securing any other obligation of any Obligor or any other Person. The parties hereto acknowledge and agree that it is their intent that the First Lien Obligations (and the security therefor) constitute a separate and distinct class (and separate and distinct claims) from the Second Lien Obligations (and the security therefor).
(b) Each of First Lien Agent, for itself and on behalf of the other First Lien Lenders, and Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, agrees that it will not, and hereby waives any right to, contest or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, perfection, validity or enforceability of any Lien in the Collateral of First Lien Agent or Second Lien Agent, as the case may be; provided that nothing in this Intercreditor Agreement shall be construed to prevent or impair the rights of First Lien Agent or any other First Lien Lender to enforce this Intercreditor Agreement.
(c) The parties hereto agree that, so long as the First Lien Obligations have not been paid in full in cash, none of Borrower nor any other Obligor shall, nor shall any such Person permit any of its subsidiaries to, (i) unless waived in writing by First Lien Agent, grant or permit any additional Liens on any asset to secure the Second Lien Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the First Lien Obligations or (ii) unless waived in writing by Second Lien Agent or otherwise permitted by the Indenture, grant or permit any additional Liens on any asset to secure any First Lien Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the Second Lien Obligations, with each such Lien to be subject to the provisions of this Intercreditor Agreement. To the extent that the provisions of this paragraph (c) are not complied with for any reason, without limiting any other right or remedy available to First Lien Agent or the other First Lien Lenders or the Second Lien Creditors, Second Lien Agent agrees, for itself and on behalf of the other Second Lien Creditors, that any amounts received by or distributed to any Second Lien Creditors pursuant to or as a result of any Lien granted in contravention of this Section 2.2(c) shall be subject to Section 2.4 hereof.
(d) The parties hereto acknowledge and agree that it is their intention that the Collateral securing the First Lien Obligations and the Second Lien Obligations be identical. In furtherance of the foregoing, the parties hereto agree:
(i) to cooperate in good faith in order to determine, upon any reasonable request by First Lien Agent or Second Lien Agent, the specific assets included in the Collateral, the steps required to be taken to perfect the Liens of First Lien Agent or Second Lien Agent thereon and the identity of the respective parties obligated under the First Lien Loan Agreements and the Second Lien Documents in respect of the First Lien Obligations and the Second Lien Obligations, respectively;
(ii) that, except to the extent otherwise agreed to by First Lien Agent, the documents, agreements and instruments creating or evidencing the Collateral securing the Second Lien Obligations and the Liens of Second Lien Agent shall be in all respects in the same form as the documents, agreements and instruments creating or evidencing the Collateral securing the First Lien Obligations and the Liens of First Lien Agent, other than with respect to the first priority and second priority nature of the Liens created or evidenced thereunder, the identity of the secured
10 |
parties that are parties thereto or secured thereby and other matters contemplated by this Intercreditor Agreement; and
(iii) that it will not obtain “control” (as defined in the UCC in effect in the State of New York) of any deposit account or securities account maintained by Borrower or any other Obligor (other than a deposit account maintained with First Lien Agent) or file any UCC financing statement against Borrower or any other Obligor after the date hereof without giving Second Lien Agent or First Lien Agent, as the case may be, prior written notice of its intention to do so.
2.3 The priorities of the Liens provided in Section 2.2 hereof shall not be altered or otherwise affected by (a) any amendment, modification, supplement, extension, renewal, restatement, replacement or refinancing of the First Lien Obligations or the Second Lien Obligations, nor (b) any action or inaction which any of the Creditors may take or fail to take in respect of the Collateral.
2.4 Subject to Section 2.2 hereof and Section 2.9 hereof, prior to the payment in full in cash of the First Lien Obligations, all Collateral and all proceeds of the Collateral received by the Second Lien Agent or any of the other Second Lien Creditors (including, without limitation, any proceeds of any Collateral pursuant to any Enforcement Action, together with all other proceeds received by any Creditor (including all funds received in respect of post-petition interest or fees and expenses) as a result of any such Enforcement Action or as a result of any distribution of or in respect of any Collateral (whether or not expressly characterized as such) upon or in any Insolvency Proceeding with respect to Borrower or any other Obligor, or the application of any Collateral (or proceeds thereof) to the payment thereof or any distribution of Collateral (or proceeds thereof) upon the liquidation or dissolution of Borrower or any other Obligor) shall be segregated from the other funds and property of Second Lien Agent or such Second Lien Creditor, as the case may be, and received and held in trust by Second Lien Agent or such Second Lien Creditor, as the case may be, as trustee, and shall be forthwith paid over, in the funds and currency received, to First Lien Agent for application to the First Lien Obligations; the foregoing turnover provision shall apply to all Collateral and all proceeds of Collateral (including all cash removed from any Obligor’s premises or accounts) received by or on behalf of Second Lien Agent or any other Second Lien Creditor in connection with any Enforcement Action taken by Second Lien Agent or any other Second Lien Creditor following the expiration of the Standstill Period notwithstanding anything to the contrary in Section 2.2 hereof. All proceeds of the Collateral received by First Lien Agent or the First Lien Lenders after the First Lien Obligations have been paid in full in cash shall be forthwith paid over, in the funds and currency received, to Second Lien Agent for application to the Second Lien Obligations (unless otherwise required by law).
2.5 The foregoing provisions of this Intercreditor Agreement are intended solely to govern the respective Lien priorities as between the Creditors and shall not impose on any Creditor any obligations in respect of the disposition of proceeds of any Collateral which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or governmental authority or any applicable law.
2.6 In the event that First Lien Agent, the First Lien Lenders, Second Lien Agent or the other Second Lien Creditors shall, in the exercise of their rights under their Agreements or otherwise, receive possession or control of any books and records of Borrower or any other Obligor which
11 |
contain information identifying or pertaining to any Collateral in which First Lien Agent, the First Lien Lenders, Second Lien Agent or the other Second Lien Creditors (as the case may be) has been granted a Lien, such Person shall notify such other Person that they have received such books and records and shall, as promptly as practicable thereafter, make available to such other Person (at the expense of Borrower and the other Obligors) such books and records for inspection and duplication.
2.7 Subject to the terms and conditions set forth in this Intercreditor Agreement, First Lien Agent and the First Lien Lenders shall have the exclusive right to manage, perform and enforce the terms of the First Lien Loan Agreements with respect to the Collateral, to exercise and enforce all privileges and rights thereunder according to their discretion and the exercise of their business judgment, including, without limitation, the exclusive right to take or retake control or possession of such Collateral and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate such Collateral and to appoint an agent in connection with the foregoing, and to incur expenses in connection with such sale, lease or other disposition and to exercise all of the rights and remedies of a secured creditor under the UCC of any applicable jurisdiction or other applicable law (including, without limitation, any Bankruptcy Law). In exercising rights and remedies with respect to the Collateral, First Lien Agent and the other First Lien Lender may enforce the provisions of the First Lien Loan Agreements and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their discretion. In furtherance of the foregoing, Second Lien Agent, for itself and on behalf of the Second Lien Creditors, agrees that, subject to the terms and conditions of this Intercreditor Agreement (including, without limitation, Section 2.10 hereof), neither Second Lien Agent nor any other Second Lien Creditor will (i) enforce or exercise, or seek to enforce or exercise, any rights or remedies with respect to any Collateral (including, without limitation, the exercise of any right of set-off or under any lockbox agreement, control account agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which Second Lien Agent or any Second Lien Creditor is a party) or institute or commence, or join with any Person in commencing, any action or proceeding with respect to such rights or remedies (including any action of foreclosure, enforcement, collection or execution and any Insolvency Proceeding), (ii) contest, protest or object to any foreclosure action or proceeding brought by First Lien Agent or any other enforcement or exercise by any First Lien Lender of any rights or remedies relating to the Collateral so long as Liens of the Second Lien Creditors attach to the proceeds thereof, subject to the relative priorities provided for in this Intercreditor Agreement, or (iii) object to the forbearance by any First Lien Lender from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies. In connection with taking any Enforcement Action against the Collateral (including without limitation any public or private sale under the UCC), First Lien Agent shall give Second Lien Agent such reasonable notice of such sale as may be required under the applicable UCC; provided, however, that, subject to Section 3.5 hereof, 10 days’ notice shall be deemed in all respects to be commercially reasonable notice.
2.8 Notwithstanding anything to the contrary contained in any of the Agreements, but subject to Section 2.9 below and Section 2.10 below, prior to the time when First Lien Agent and the First Lien Lenders shall have received payment in full of all First Lien Obligations in cash, whether or not an Insolvency Proceeding has been commenced by or against Borrower or any other Obligor, during the continuance of a Release Event, only the First Lien Lenders shall have the right to restrict or permit, or approve or disapprove, the sale, transfer or other disposition of, or otherwise
12 |
deal with, the Collateral or to take and continue any Enforcement Action with respect to the Collateral.
2.9 (a) Prior to the existence of a Release Event, upon any release, sale or disposition of Collateral permitted pursuant to the terms of the First Lien Loan Agreements and the Second Lien Documents that results in the release of the Lien of First Lien Agent and the First Lien Lenders in any Collateral, the Liens of Second Lien Agent and the other Second Lien Creditors shall be automatically and unconditionally released with no further consent or action of any Person. Second Lien Agent shall, at the expense of the Obligors, promptly execute and deliver such release documents as First Lien Agent may upon written request reasonably require in connection with any such release, sale or disposition of Collateral.
(b) Second Lien Agent shall, at any time during the continuance of a Release Event, at the expense of the Obligors:
(i) upon the written request of First Lien Agent with respect to the Collateral identified in such request as set forth below (which request shall specify the proposed terms of the sale and the type and amount of consideration to be received in connection therewith), subject to clause (ii) below, release or otherwise terminate its Liens on such Collateral, to the extent such Collateral is to be sold or otherwise disposed of either by First Lien Agent or its agents;
(ii) deliver such release documents as First Lien Agent may reasonably require in connection therewith; provided, that,
(A) First Lien Agent shall promptly apply any such proceeds as specified in the Order of Payment until the First Lien Obligations have been paid in full in cash,
(B) if any such sale or disposition results in a surplus after application of the proceeds in the Order of Payment to the First Lien Obligations, such surplus shall be paid to Second Lien Agent for the prompt application to the Second Lien Obligations as specified in the Order of Payment until the Second Lien Obligations have been paid in full in cash;
(C) if any surplus shall remain after the application to the Second Lien Obligations pursuant to preceding clause (B), such surplus shall be applied to the remaining obligations, liabilities and indebtedness in the Order of Payment as provided in clauses (v) and (vi) of the definition thereof; and
(D) if the closing of the sale or disposition of such Collateral is not consummated, First Lien Agent shall promptly return all release documents to the Second Lien Agent for the benefit of the Second Lien Creditors.
(c) Second Lien Agent and the other Second Lien Creditors shall be deemed, in all cases, to have consented under the Agreements to which such Second Lien Agent and the other Second Lien Creditors are a party to such sale or other disposition of Collateral described in Sections 2.9(a) and (b) above. In furtherance of the foregoing, Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, hereby irrevocably constitutes and appoints First Lien Agent and any officer or agent of First Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Second Lien Agent or
13 |
such other Second Lien Creditor or in First Lien Agent’s own name, from time to time in First Lien Agent’s discretion, for the purpose of carrying out the terms of this clause (c) and clauses (b)(i) and (ii) above, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of such clauses, including any endorsements or other instruments of transfer or release.
2.10 Except as specifically provided in Section 2.11 below, notwithstanding any rights or remedies available to Second Lien Agent or the other Second Lien Creditors under any of the Second Lien Documents, applicable law or otherwise, prior to the time that First Lien Agent and the First Lien Lenders shall have received the payment in full of all First Lien Obligations in cash, neither Second Lien Agent nor any of the other Second Lien Creditors shall, directly or indirectly, take any Enforcement Action with respect to any of the Collateral; provided, however, commencing on the 151st day after receipt by First Lien Agent of Second Lien Agent’s written declaration of a Second Lien Default which constitutes an “Event of Default” and written demand by Second Lien Agent to Issuer for the accelerated payment of all Second Lien Obligations (unless Issuer or any other Obligor is subject to an Insolvency Proceeding by reason of which such declaration and the making of such demand is stayed, in which case, commencing on the date of the commencement of such Insolvency Proceeding) (the “Standstill Period”), then Second Lien Agent or the other Second Lien Creditors may take action to enforce their Liens on the Collateral, but only so long as First Lien Agent and/or the First Lien Lenders are not pursuing in a commercially reasonable manner the exercise of their enforcement rights or remedies against, or diligently attempting to vacate (in a commercially reasonable manner) any stay of enforcement of their Liens on, all or a material portion of the Collateral (including, without limitation, commencement of any action to foreclose its Liens on all or any material portion of the Collateral, notification of account debtors to make payments to First Lien Agent, any action to take possession of all or any material portion of the Collateral or commencement of any legal proceedings or actions against or with respect to all or any material portion of the Collateral) and with any determination of which Collateral to proceed against, and in what order, to be made by First Lien Agent or such First Lien Lenders in their reasonable judgment); provided further that (x) any Collateral or any proceeds of Collateral received by Second Lien Agent or such other Second Lien Creditor, as the case may be, in connection with the enforcement of such Lien shall be applied in accordance with the Order of Payment and (y) First Lien Agent or any other First Lien Lenders may at any time take over such enforcement proceedings from Second Lien Agent or the other Second Lien Creditors so long as First Lien Agent or such the First Lien Lenders, as the case may be, pursue enforcement proceedings with respect to all or a material portion of the Collateral in a commercially reasonable manner, with any determination of which Collateral to proceed against, and in what order, to be made by First Lien Agent or such First Lien Lenders in their reasonable judgment, and provided further that Second Lien Agent or the other Second Lien Creditors, as the case may be, shall only be able to recoup (from amounts realized by First Lien Agent or any First Lien Lender(s) in any enforcement proceeding with respect to the Collateral (whether initiated by First Lien Agent or First Lien Lender(s) or taken over by them as contemplated above) any expenses incurred by them in accordance with the priorities set forth in the Order of Payment. In any sale or other disposition of any of the Collateral by Second Lien Agent and/or the other Second Lien Creditors, Second Lien Agent and/or the other Second Lien Creditors shall conduct such sale or disposition in a commercially reasonable manner. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all rights and
14 |
remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under the Bankruptcy Law of any applicable jurisdiction.
2.11 Section 2.10 above shall not be construed to in any way limit or impair the right of: (a) any First Lien Lender to bid for or purchase Collateral at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (b) any Second Lien Creditor to cash bid for or purchase for cash Collateral, in an amount sufficient to pay the First Lien Obligations in full, at any private or judicial foreclosure upon such Collateral initiated by any other Creditor, (c) to join (but not control) any foreclosure or other judicial lien enforcement proceeding with respect to the Collateral initiated by First Lien Agent, so long as it does not delay or interfere in any material respect with the exercise by First Lien Agent or the First Lien Lenders of their rights as provided in this Intercreditor Agreement, and (d) the Second Lien Creditors’ right to receive any remaining proceeds of Collateral after satisfaction and payment in full in cash of all First Lien Obligations.
2.12 If the First Lien Lenders should honor a request by Borrower for a loan, advance or other financial accommodation under the First Lien Loan Agreements, whether or not the First Lien Lenders have knowledge that the honoring of such request would result in an event of default, or act, condition or event which with notice or passage of time or both would constitute an event of default under the Second Lien Documents, in no event shall First Lien Agent or the First Lien Lenders have any liability to Second Lien Agent or the other Second Lien Creditors as a result of such breach, and without limiting the generality of the foregoing, Second Lien Agent and the other Second Lien Creditors agree that neither First Lien Agent nor the First Lien Lenders shall have any liability for tortious interference with contractual relations or for inducement by First Lien Agent or the First Lien Lenders of Borrower to breach of contract or otherwise, provided, that, the First Lien Lenders agree that the aggregate principal amount of the First Lien Obligations outstanding at any one time (but not interest, costs, expenses or other charges payable by Borrower or any other Obligor to First Lien Agent and/or the First Lien Lenders or charged by First Lien Agent and/or the First Lien Lenders to any loan account of Borrower or any other Obligor maintained by First Lien Agent and/or the First Lien Lenders pursuant to the terms of the First Lien Credit Agreement) shall not exceed the Maximum First Lien Obligations. Nothing contained in this Section 2.12 shall limit or waive any right that Second Lien Agent or the other Second Lien Creditors have to enforce any of the provisions (other than with respect to the matters covered by this Intercreditor Agreement) of the Second Lien Documents against Borrower or any other Obligor.
2.13 (a) First Lien Agent and the First Lien Lenders shall not:
(i) make any amendment to the maturity date of any portion of the First Lien Obligations under the First Lien Credit Agreement to a date later than the latest maturity date of any portion of the Second Lien Obligations as extended from time to time pursuant to the terms of the Second Lien Documents; or
(ii) add to the Collateral securing the First Lien Obligations except as permitted by this Intercreditor Agreement.
(b) Second Lien Agent and the other Second Lien Creditors shall not agree to:
15 |
(i) make any amendment of the Second Lien Documents that would shorten the due dates of any principal or interest payments of the Second Lien Obligations;
(ii) make any amendment of the Second Lien Documents to the extent such amendment adds or modifies any representation, warranty, or covenant under the Second Lien Documents to be more restrictive on Borrower, any other Obligor or any of their respective subsidiaries, or adds or modifies any default or event of default under the Second Lien Documents to be more restrictive on Borrower, any other Obligor or any of their respective Subsidiaries; further, in no event shall any financial covenant maintenance tests (whether stated as a covenant, a default or otherwise) be added to the Second Lien Documents;
(iii) increase the interest rate under the Second Lien Documents by more than 300 basis points (excluding increases resulting from the accrual of interest at the default rate or interest paid-in-kind); or
(iv) add to the Collateral securing the Second Lien Obligations except as permitted by this Intercreditor Agreement.
(c) In the event First Lien Agent or the First Lien Lenders and the relevant Obligor(s) enter into any amendment, waiver or consent in respect of any of the First Lien Loan Agreements that are security or collateral documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of any such First Lien Loan Agreement or changing in any manner the rights of First Lien Agent, the First Lien Lenders, Borrower or any other Obligor thereunder, then such amendment, waiver or consent shall apply automatically to any comparable provision of the Second Lien Documents without the consent of Second Lien Agent or the other Second Lien Creditors and without any action by Second Lien Agent, Borrower or any other Obligor, provided, that (A) no such amendment, waiver or consent shall have the effect of (i) removing assets subject to the Lien of the Second Lien Documents, except to the extent that a release of such Lien is permitted by this Intercreditor Agreement or the Second Lien Documents, (ii) adversely affecting the rights or duties of Second Lien Agent without its consent, or (iii) permitting other liens on the Collateral not permitted under the terms of the Second Lien Documents or Section 4.5 hereof and (B) notice of such amendment, waiver or consent shall have been given to Second Lien Agent (although the failure to give any such notice shall in no way affect the effectiveness of any such amendment, waiver or consent).
2.14 Each Creditor shall give to the other Creditors concurrently with the giving thereof to Borrower or Issuer, as the case may be, (i) a copy of any written notice by such Creditor of an event of default under its respective Agreements with Borrower or Issuer, as the case may be, or written notice of demand of payment from Borrower or Issuer, as the case may be, and (ii) a copy of any written notice sent by such Creditor to Borrower or Issuer, as the case may be, at any time a Default under such Creditor’s Agreements with Borrower or Issuer, as the case may be, exists stating such Creditor’s intention to exercise any of its enforcement rights or remedies, including written notice pertaining to any foreclosure on any of the Collateral or other judicial or nonjudicial remedy in respect thereof to the extent permitted hereunder, and any legal process served or filed in connection therewith; provided, that, the failure of any party to give notice as required hereby shall not affect the relative priorities of Creditor’s respective Liens as provided herein or the validity or effectiveness of any such notice as against Borrower or any other Obligor. Second Lien
16 |
Agent shall provide a copy of any notice received pursuant to this Section to the Noteholders in accordance with its obligations under the Indenture.
2.15 In the event that any Second Lien Default shall have occurred solely as a result of a First Lien Default, and if such First Lien Default shall have been cured by Borrower or any other Obligor or waived by First Lien Agent or the First Lien Lenders (as applicable), then (i) such Second Lien Default shall be deemed to be automatically cured by Borrower or such other Obligor or waived by Second Lien Agent and the other Second Lien Creditors, as the case may be, and (ii) and any period under Section 2.10 hereof commenced and then existence shall terminate for all purposes hereunder and Second Lien Agent and the other Second Lien Creditors shall cease any remedial actions commenced and then continuing in connection with such Second Lien Default.
3. SECOND LIEN CREDITOR PURCHASE OPTION
3.1 Following the occurrence of (i) written notice by First Lien Agent or the First Lien Lenders of their intent to accelerate the payment of the First Lien Obligations or to commence any Enforcement Action with respect to any Collateral (or acceleration or the actual commencement of any such Enforcement Action), (ii) the commencement of any Insolvency Proceeding, or (iii) a payment default under the First Lien Loan Agreements which has not been cured or waived by the applicable creditors within 30 days after the occurrence thereof, any Second Lien Creditor shall have the option at any time within 90 days after such occurrence upon five (5) business days’ prior written notice from Second Lien Agent (on behalf of any such Second Lien Creditors) to First Lien Agent to purchase all (but not less than all) of the First Lien Obligations (including any unfunded commitments thereunder and participations in letters of credit) from the First Lien Lenders. Such notice from Second Lien Agent (on behalf of any such Second Lien Creditors) to First Lien Agent shall be irrevocable. In order to effectuate the foregoing, First Lien Agent shall estimate, upon the written request of Second Lien Creditors upon the exercise of such election, the amount in cash that would be necessary to so purchase such First Lien Obligations (assuming the date of the purchase is the date the election was made). The First Lien Obligations shall be purchased among the Second Lien Creditors (other than the Trustee and the Second Lien Agent) giving notice to Second Lien Agent of their intent (which notice shall be irrevocable) to exercise the purchase option hereunder based on the amounts specified therein.
3.2 On the date specified by Second Lien Creditors in such notice (which shall not be less than five (5) business days, nor more than thirty (30) days, after the receipt by First Lien Agent of the notice from Second Lien Agent of certain Second Lien Creditors election to exercise such option), the First Lien Lenders shall sell to such Second Lien Creditors electing to purchase, and the Second Lien Creditors electing to purchase shall purchase from the First Lien Lenders, the First Lien Obligations all in accordance with the terms and conditions to be agreed upon directly among the First Lien Agent and such Second Lien Creditors that have elected to purchase the First Lien Obligations . The First Lien Lenders hereby represent and warrant that, as of the date hereof, no approval of any court or other regulatory or governmental authority is required for such sale.
3.3 Upon the date of such purchase and sale, the Second Lien Creditors exercising the purchase option in this Section 3 shall (i) pay to the First Lien Lenders as the purchase price therefor the full amount of all the First Lien Obligations then outstanding and unpaid (including principal, premium, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses but
17 |
excluding any early termination fee payable pursuant to the First Lien Credit Agreement, which amount may be different from the estimate calculated in Section 3.1 above), (ii) furnish cash collateral or back-stop letters of credit to the First Lien Lenders in such amounts as the First Lien Lenders determine is reasonably necessary to secure the First Lien Lenders in connection with (A) any issued and outstanding letters of credit constituting First Lien Obligations provided by First Lien Agent or the First Lien Lenders (or letters of credit that First Lien Agent or the First Lien Lenders have arranged to be provided by third parties pursuant to the financing arrangements of the First Lien Lenders with Borrower or any other Obligor constituting First Lien Obligations) to Borrower or any other Obligor (but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such letters of credit), and (B) Hedging Obligations and Banking Services Obligations in an amount not to exceed 100% of the Swap Termination Value or Banking Services Obligations, as applicable, and (iii) agree to reimburse First Lien Agent and the First Lien Lenders for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit constituting First Lien Obligations as described above and any checks or other payments provisionally credited to the First Lien Obligations, and/or as to which First Lien Agent or the First Lien Lenders have not yet received final payment. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of First Lien Agent (on behalf of the First Lien Lenders) as First Lien Agent may designate in writing to such Second Lien Creditors for such purpose. Interest shall be calculated to but excluding the business day on which such purchase and sale shall occur if the amounts so paid by such Second Lien Creditors to the bank account designated by First Lien Agent are received in such bank account prior to 12:00 Noon, New York City time, and interest shall be calculated to and including such business day if the amounts so paid by such Second Lien Creditors to the bank account designated by First Lien Agent are received in such bank account later than 12:00 Noon, New York City time.
3.4 Such purchase shall be expressly made without representation or warranty of any kind by the First Lien Lenders as to the First Lien Obligations or otherwise and without recourse to the First Lien Lenders, except that the First Lien Lenders shall represent and warrant: (i) the amount of the First Lien Obligations being purchased, (ii) that the First Lien Lenders own the First Lien Obligations free and clear of any Liens or encumbrances and (iii) the First Lien Lenders have the right to assign the First Lien Obligations and the assignment is duly authorized. All purchase or assignment documentation (including any cash collateral arrangements and back-stop letters of credit) in connection with the exercise of the Second Lien Creditors rights under this Section 3 shall be in form and substance reasonably satisfactory to First Lien Agent.
3.5 In the event that any one or more of the Second Lien Creditors exercises the purchase option set forth in this Section 3, First Lien Agent shall take such action with respect to the Collateral (including in an Insolvency Proceeding) as may be reasonably requested in good faith and in writing by such Second Lien Creditors until the closing of such purchase. Notwithstanding anything to the contrary provided herein, the First Lien Lenders may take any Enforcement Actions they deem reasonable unless and until the Second Lien Creditors have notified First Lien Agent of their irrevocable option to purchase the First Lien Obligations.
18 |
4. MISCELLANEOUS
4.1 Representations.
(a) Second Lien Agent on behalf of itself and each other Second Lien Creditor represents and warrants to First Lien Agent and the First Lien Lenders that the execution, delivery and performance of this Intercreditor Agreement by Second Lien Agent on behalf of the other Second Lien Creditors are within the powers of Second Lien Agent and have been duly authorized by Second Lien Agent pursuant to the terms of the Indenture and all other Second Lien Documents.
(b) First Lien Agent on behalf of itself and each other First Lien Lender represents and warrants to Second Lien Agent and the other Second Lien Creditors that the execution, delivery and performance of this Intercreditor Agreement by First Lien Agent on behalf of the First Lien Lenders are within the powers of First Lien Agent and have been duly authorized by First Lien Agent pursuant to the terms of the First Lien Credit Agreement.
(c) Second Lien Agent and First Lien Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other First Lien Loan Agreement or any other Second Lien Document. Except as otherwise provided in this Intercreditor Agreement First Lien Agent will be entitled to manage and supervise its extensions of credit to any Obligor in accordance with law and their usual practices, modified from time to time as it deems appropriate.
4.2 Amendments. Any waiver, permit, consent or approval by any Creditor of or under any provision, condition or covenant to this Intercreditor Agreement must be in writing and shall be effective only to the extent it is set forth in writing and as to the specific facts or circumstances covered thereby. Any amendment of this Intercreditor Agreement must be in writing and signed by First Lien Agent and Second Lien Agent.
4.3 Successors and Assigns.
(a) This Intercreditor Agreement is a continuing agreement and shall (i) remain in full force and effect until the earlier of (A) repayment in full in cash of all First Lien Obligations (but, for this purpose, determined without giving effect to the proviso to the first sentence of the definition of “First Lien Obligations” contained herein) or (B) the repayment in full of all Second Lien Obligations, (ii) be binding upon the parties and their successors and assigns, and (iii) inure to the benefit of and be enforceable by the parties and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Creditor may assign or otherwise transfer all or any portion of the First Lien Obligations or the Second Lien Obligations, as applicable, to any other Person in the manner contemplated in the First Lien Loan Agreements and the Second Lien Documents, and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to such person herein or otherwise. In addition and without limiting the generality of the foregoing, if at any time in connection with or after the payment in full in cash of the First Lien Obligations and the termination of the loan commitments under the First Lien Loan Agreements, any of the Obligors enters into any Credit Facilities (as defined in the Indenture) constituting First Priority Claims (whether upon or after termination of the previous First Lien Obligations and whether with the original lenders, institutional investors
19 |
or otherwise, including through the issuance of debt securities) secured by all or a portion of the Collateral on a first-priority basis, then (i) no such prior payment in full in cash of the First Lien Obligations shall be deemed to have occurred for all purposes of this Intercreditor Agreement, the First Lien Credit Agreement and the Second Lien Documents and (ii) for all purposes of this Intercreditor Agreement, including for purposes of the Lien priority and rights in respect of the Collateral (or such portion thereof) set forth herein, the credit agreement or other principal document in respect of such new Credit Facilities (as defined in the Indenture) shall become and be deemed designated the “First Lien Credit Agreement”, (iii) the administrative agent, trustee or similar representative (or, if no such entity exists, the lender or investor) under such new First Lien Credit Agreement shall become and be deemed designated the “First Lien Agent”, (iv) the lenders, Cash Management Creditors, Hedging Creditors and other creditors under such new First Lien Credit Agreement shall become and be deemed designated the “First Lien Lenders” and (v) the obligations under such new First Lien Credit Agreement and the associated First Lien Loan Agreements shall automatically be treated as First Lien Obligations.
(b) To the extent provided in their respective Agreements, each of the Creditors reserves the right to grant participations in, or otherwise sell, assign, transfer or negotiate all or any part of, or any interest in, the First Lien Obligations or the Second Lien Obligations, as the case may be; provided, that, no Creditor shall be obligated to give any notices to or otherwise in any manner deal directly with any participant in the First Lien Obligations or the Second Lien Obligations, as the case may be, and no participant shall be entitled to any rights or benefits under this Intercreditor Agreement except through the Creditor with which it is a participant and any sale of a participation in the First Lien Obligations shall be expressly made subject to the provisions of this Intercreditor Agreement (including, without limitation, Section 3).
(c) This Intercreditor Agreement is the Intercreditor Agreement referred to in the Second Lien Documents and the First Lien Loan Agreements. If this Intercreditor Agreement or all or any portion of any party’s rights or obligations hereunder are assigned or otherwise transferred to any other Person or if the First Lien Loan Agreements or the Second Lien Documents are otherwise refinanced or replaced with another Person, both such other Person and the other existing parties shall execute and deliver an agreement containing terms substantially identical to those contained in this Intercreditor Agreement.
4.4 Insolvency. This Intercreditor Agreement shall be applicable both before and after the filing of any petition by or against Borrower or any other Obligor under any Bankruptcy Law or in any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to Borrower or any other Obligor shall be deemed to apply to the trustee (or similar Person) for Borrower or any other Obligor and Borrower or any other Obligor as debtor-in-possession (or any other similar designation). The relative rights of the First Lien Lenders and the Second Lien Creditors in or to any distributions from or in respect of any Collateral or proceeds of Collateral, shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, Borrower or any other Obligor as debtor-in-possession (or any other similar designation). Without limiting the generality of the foregoing, this Intercreditor Agreement is intended to constitute and shall be deemed to constitute a “subordination agreement” within the meaning of Section 510(a) of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law,
20 |
and is intended to be and shall be interpreted to be enforceable to the maximum extent permitted pursuant to applicable non-bankruptcy law.
4.5 Bankruptcy Financing and Other Matters.
(a) If Borrower or any other Obligor shall become subject to a case under the U.S. Bankruptcy Code or any other Bankruptcy Law and if as debtor(s)-in-possession move for approval of financing (a “DIP Financing”) to be provided in good faith by one or more lenders (the “DIP Lender”) under Section 364 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, or the use of cash collateral with the consent of First Lien Agent or the Required Lenders under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, Second Lien Agent and the other Second Lien Creditors agree that no objection nor any request for adequate protection or any other relief in connection therewith (except as otherwise permitted below) will be raised by Second Lien Agent or the other Second Lien Creditors to any such financing or use of cash collateral (nor will Second Lien Agent or any Second Lien Creditor join with or support any third Person opposing, objecting to or contesting any such financing or use of cash collateral) and, to the extent the Liens securing the First Lien Obligations are subordinated to or pari passu with such financing, the Liens of Second Lien Agent and the other Second Lien Creditors on the Collateral shall be deemed to be subordinated without any further action on the part of any Person, to the Liens securing such financing (and all obligations relating thereto), and the Liens securing the Second Lien Obligations shall have the same priority with respect to the Collateral relative to the Liens securing the First Lien Obligations as if such financing had not occurred, so long as (i) First Lien Agent or the Required Lenders do not oppose or object to such use of cash collateral or such financing, (ii) Second Lien Agent and the other Second Lien Creditors retain (solely as adequate protection (or its equivalent) for the interests of the Second Lien Creditors) a Lien on the Collateral (including proceeds thereof arising after the commencement of such proceeding) which will be subordinated to the Liens securing such financing (and all obligations relating thereto), and such Lien shall have the same priority with respect to the Collateral relative to the Liens securing the First Lien Obligations as if such financing had not occurred, (iii) if First Lien Agent and the other First Lien Lenders receive a replacement Lien on post-petition assets of any Obligor, Second Lien Agent and the other Second Lien Creditors may request a replacement Lien on the same post-petition assets which will be subordinated to the Liens securing such financing (and all obligations relating thereto), and such Lien shall have the same priority with respect to the Collateral relative to the Liens securing the First Lien Obligations as if such financing had not occurred, (iv) the aggregate principal amount of loans and letter of credit accommodations, Hedging Obligations and Banking Services Obligations outstanding under such post-petition financing, together with the aggregate principal amount of the pre-petition First Lien Obligations, shall not exceed an amount equal to the Maximum First Lien Obligations, and (v) Second Lien Agent and the other Second Lien Creditors may oppose or object to such use of cash collateral or such financing on the same basis as an unsecured creditor, so long as such opposition or objection is not based on Second Lien Agent and the other Second Lien Creditors’ status as secured creditors and Second Lien Agent and the other Second Lien Creditors have acknowledged such unsecured status and that a portion of their Second Lien Obligations claim is unsecured.
(b) Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, agrees that, in the event of any Insolvency Proceeding, neither Second Lien Agent nor the other Second Lien
21 |
Creditors will oppose or object to any sale or other disposition of any Collateral free and clear of the Liens securing the Second Lien Obligations or other claims under Section 363 of the U.S. Bankruptcy Code, or the comparable provisions of other applicable Bankruptcy Law, if the First Lien Lenders (or the requisite percentage thereof), or a representative authorized by the First Lien Lenders, shall consent to such disposition; provided, however, that the proceeds of such disposition to be applied to the First Lien Obligations or the Second Lien Obligations are applied in accordance with the Order of Payment and Second Lien Agent, on behalf of itself and the other Second Lien Creditors, may raise any objections to any such disposition of Collateral that could be raised by any creditor of Borrower or any other Obligor whose claims were not secured by any Liens on the Collateral and such objections are not based on the Second Lien Creditors’ status as secured creditors, and Second Lien Agent and the other Second Lien Creditors have acknowledged that such objections are not being made by them as secured creditors and that a portion of their Second Lien Obligations claim is unsecured.
(c) Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, agrees that no Second Lien Creditor shall contest, or support any other person in contesting, (i) any request by First Lien Agent or any other First Lien Lender for adequate protection or (ii) any objection, based on a claim of a lack of adequate protection, by First Lien Agent or any other First Lien Lender to any motion, relief, action or proceeding. Notwithstanding the immediately preceding sentence, if, in connection with any DIP Financing or use of cash collateral, (A) any First Lien Lender is granted adequate protection in the form of a Lien on additional collateral, Second Lien Agent may, for itself and on behalf of the other Second Lien Creditors, seek or request adequate protection in the form of a Lien on such additional collateral, which Lien will be subordinated to the Liens of First Lien Agent and the First Lien Lenders and Liens of the DIP Lender on the same basis as the other Liens of Second Lien Agent and the other Second Lien Creditors are subordinated to the Liens of First Lien Agent and the First Lien Lenders under this Intercreditor Agreement, (B) any First Lien Lender is granted adequate protection in the form of a 507(b) claim, Second Lien Agent may, for itself and on behalf of the other Second Lien Creditors, seek or request adequate protection in the form of a 507(b) claim that is junior in priority to the First Lien Lenders’ administrative claim on at least the same basis as the Liens of Second Lien Agent and the other Second Lien Creditors are subordinated to the Liens of First Lien Agent and the First Lien Lenders under this Intercreditor Agreement, or (C) any Second Lien Creditor is granted adequate protection in the form of a Lien on additional collateral, First Lien Agent shall, for itself and on behalf of the other First Lien Lenders, be granted adequate protection in the form of a Lien on such additional collateral that is senior to such Lien of the Second Lien Creditors as security for the First Lien Obligations.
(d) Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, agrees that until the First Lien Obligations have been paid in full in cash, no Second Lien Creditor shall, without the prior written consent of First Lien Agent, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency Proceeding in respect of any part of the Collateral, any proceeds thereof or any Lien of the Second Lien Creditors.
(e) Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, agrees that no Second Lien Creditor shall oppose or seek to challenge any claim by First Lien Agent or any other First Lien Lender for allowance in any Insolvency Proceeding of First Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Liens of the First Lien Lenders (it being understood and agreed that such value shall be determined without regard to the
22 |
existence of the Liens of the Second Lien Creditors on the Collateral). Regardless of whether any such claim for post-petition interest, fees or expenses is allowed or allowable, and without limiting the generality of the other provisions of this Intercreditor Agreement, this Intercreditor Agreement expressly is intended to include and does include the “rule of explicitness” in that this Intercreditor Agreement expressly entitles the First Lien Lenders, and is intended to provide the First Lien Lenders with the right, to receive payment of all post-petition interest, fees or expenses through distributions made pursuant to the provisions of this Intercreditor Agreement even though such interest, fees and expenses are not allowed or allowable against the bankruptcy estate of Borrower or any other Obligor under Section 502(b)(2) or Section 506(b) of the U.S. Bankruptcy Code or under any other provision of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law.
(f) Second Lien Agent, for itself and on behalf of the other Second Lien Creditors, waives any claim any Second Lien Creditor may hereafter have against any First Lien Lender arising out of (i) the election by any First Lien Lender of the application of Section 1111(b)(2) of the U.S. Bankruptcy Code or the comparable provisions of other applicable Bankruptcy Law, or (ii) any use of cash collateral or financing arrangement, or any grant of a security interest in the Collateral, in any Insolvency Proceeding so long as such action is otherwise permitted under this Intercreditor Agreement.
(g) Each of First Lien Agent, on behalf of the First Lien Lenders, and Second Lien Agent, on behalf of the Second Lien Creditors, agrees that, without the written consent of the other, it will not seek to vote with the other as a single class in connection with any plan of reorganization in any Insolvency Proceeding
(h) Nothing contained herein shall prohibit or in any way limit First Lien Agent or any First Lien Lender from objecting on any basis in any Insolvency Proceeding or otherwise to any action taken by Second Lien Agent or any other Second Lien Creditor, including the seeking by Second Lien Agent or any other Second Lien Creditor of adequate protection or the assertion by Second Lien Agent or any other Second Lien Creditors of any of its rights and remedies under the Second Lien Documents or otherwise, except to the extent explicitly permitted hereunder.
(i) If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of First Lien Obligations and on account of Second Lien Obligations, then, to the extent the debt obligations distributed on account of the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the provisions of this Intercreditor Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
(j) If First Lien Agent or any First Lien Lender is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of Borrower or any other Obligor any amount (a “Recovery”), then the First Lien Obligations shall be reinstated to the extent of such Recovery and First Lien Agent and the First Lien Lenders shall be entitled to a reinstatement of First Lien Obligations with respect to all such recovered amounts. If this Intercreditor Agreement shall have been terminated prior to such Recovery, this Intercreditor Agreement shall be reinstated in full
23 |
force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. Any amounts received by Second Lien Agent or any Second Lien Creditor on account of the Second Lien Obligations after the termination of this Intercreditor Agreement shall, in the event of a reinstatement of this Intercreditor Agreement pursuant to this clause (j), be held in trust for and paid over to First Lien Agent for the benefit of the First Lien Lenders, for application to the reinstated First Lien Obligations. This clause (j) shall survive termination of this Intercreditor Agreement.
4.6 Pari Passu Payment Lien Obligations. As a condition to the Issuer or any other Obligor incurring any Pari Passu Indebtedness, (i) a supplement to the Intercreditor Agreement substantially in the form of Annex A hereto (a “Supplement”) pursuant to this Section 4.6, identifying the proposed Pari Passu Indebtedness, the agent or other representative, if any, and the lenders or holders providing such Pari Passu Indebtedness and the documents in connection with such Indebtedness, shall be executed and delivered to each of the First Lien Agent and the Second Lien Agent and (ii) an authorized representative of the lenders or holders of such proposed Pari Passu Indebtedness shall enter into an Accession Agreement, pursuant to which such authorized representative shall agree to be bound by the terms and conditions of this Intercreditor Agreement and the Second Lien Documents.
4.7 Bailee for Perfection. Each Creditor hereby appoints the other Creditor as agent for the purposes of perfecting the other Creditor’s Liens in and on any of the Collateral in the possession or under the control of such Creditor or its representatives, including, without limitation, Liens on Borrower’s and the other Obligors’ deposit accounts maintained by First Lien Agent and investment property and instruments in the possession or under the control of the First Lien Agent; provided, that, the Creditor in the possession or control of any Collateral shall not have any duty or liability to protect or preserve any rights pertaining to any of the Collateral and, except for gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction, the non-possessing or non-controlling Creditor hereby waives and releases the other Creditor from, all claims and liabilities arising pursuant to the possessing or controlling Creditor’s role as bailee with respect to the Collateral, so long as the possessing or controlling Creditor shall use the same degree of care with respect thereto as the possessing or controlling Creditor uses for similar property pledged to the possessing or controlling Creditor as collateral for indebtedness of others to the possessing or controlling Creditor. Prior to the date on which First Lien Agent and the First Lien Lenders shall have received final payment in full in cash of all of the First Lien Obligations and the First Lien Loan Agreements have been terminated, any Collateral in the possession or under the control of Second Lien Agent or the Second Lien Creditor shall be forthwith delivered to First Lien Agent, except as otherwise may be required by applicable law or court order. After First Lien Agent and the First Lien Lenders shall have received final payment in full in cash of all of the First Lien Obligations and the loan commitments under the First Lien Loan Agreements have been terminated, First Lien Agent shall deliver (i) the remainder of the Collateral, if any in their possession to Second Lien Agent, except as may otherwise be required by applicable law or court order and (ii) a written notice prepared by Second Lien Agent (at Issuer’s expense) to each landlord that has executed a landlord’s waiver and each bailee that has executed a bailee waiver stating that Second Lien Agent is entitled to exercise the rights and take the actions set forth in such landlord’s waiver or bailee waiver.
24 |
4.8 Notices. All notices, requests and demands to or upon the respective parties hereto shall be in writing and shall be deemed duly given, made or received: if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next business day, one (1) business day after sending; and if mailed by certified mail, return receipt requested five (5) days after mailing to the parties at their addresses set forth below (or to such other addresses as the parties may designate in accordance with the provisions of this Section):
To First Lien Agent or the First Lien Lenders:
|
Bay Coast Bank 330 Swansea Mall Drive Swansea, MA 02777 Telephone: (508) 675-4377 Facsimile: (508) 675-4470 Attention: Carl W. Taber
with a copy (for informational purposes only) to:
Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 Telephone: (617) 570-1480 Facsimile: (617) 801-8829 Attention: E. Matson Sibble, Esq
and |
|
To Second Lien Agent or the other Second Lien Creditors: |
TMT Trust Company 1100 Abernathy Road NE, Suite 480 Atlanta, Georgia 30328 Attention: Kathy Knapp, Vice President Facsimile No.: (678) 221-5917 Telephone No.: (678) 221-5917 |
Either of the above Creditors may change the address(es) to which all notices, requests and other communications are to be sent by giving written notice of such address change to the other Creditor in conformity with this Section 4.8, but such change shall not be effective until notice of such change has been received by the other Creditor.
4.9 Counterparts. This Intercreditor Agreement may be executed in any number of counterparts, each of which shall be an original with the same force and effect as if the signatures thereto and hereto were upon the same instrument.
25 |
4.10 Governing Law. The validity, construction and effect of this Intercreditor Agreement shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law).
4.11 Consent to Jurisdiction; Waiver of Jury Trial. EACH PARTY HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN THE STATE OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS INTERCREDITOR AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH CREDITOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS INTERCREDITOR AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS INTERCREDITOR AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
4.12 Complete Agreement. This written Intercreditor Agreement is intended by the parties as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement with respect to the subject matter hereof.
4.13 No Third Parties Benefited. Except as expressly provided in Sections 4.2 and 4.3 hereof and consents which are deemed to have been given under Section 2.9 hereof, this Intercreditor Agreement is solely for the benefit of the Creditors and their respective successors, participants and assigns, and no other person shall have any right, benefit, priority or interest under, or because of the existence of, this Intercreditor Agreement.
4.14 Disclosures; Non-Reliance. Each Creditor (other than the Second Lien Agent) has the means to, and shall in the future remain, fully informed as to the financial condition and other affairs of Borrower and the other Obligors and no Creditor shall have any obligation or duty to disclose any such information to any other Creditor. Except as expressly set forth in this Intercreditor Agreement, the parties hereto have not otherwise made to each other nor do they hereby make to each other any warranties, express or implied, nor do they assume any liability to each other with respect to: (a) the enforceability, validity, value or collectability of any of the Second Lien Obligations or the First Lien Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) Borrower’s or any other Obligors’ title to or right to transfer any of the Collateral, or (c) any other matter except as expressly set forth in this Intercreditor Agreement.
4.15 Term. This Intercreditor Agreement is a continuing agreement and shall remain in full force and effect until the satisfaction in full of all First Lien Obligations and Second Lien Obligations and the termination of the financing arrangements between First Lien Agent, the First Lien Lenders, Second Lien Agent, the other Second Lien Creditors, Borrower and the other
26 |
Obligors. Notwithstanding the foregoing if, in any Insolvency Proceeding or otherwise, all or part of any payment with respect to the First Lien Obligations previously made shall be rescinded for any reason whatsoever, then the First Lien Obligations shall be reinstated to the extent of the amount so rescinded and, if theretofore terminated, this Intercreditor Agreement shall be reinstated in full force and effect and such prior termination shall not diminish, release, discharge, impair or otherwise affect the Lien priorities and the relative rights and obligations of the First Lien Lenders and the Second Lien Creditors provided for herein.
4.16 Lien Subordination. Except as otherwise provided in this Intercreditor Agreement, nothing in this Intercreditor Agreement shall prohibit the receipt by Second Lien Agent or any other Second Lien Creditor of the required payments of principal, premium, interest, fees and other amounts due under the Second Lien Documents so long as such receipt is not the direct or indirect result of the enforcement or exercise by Second Lien Agent or any other Second Lien Creditor of rights or remedies as a secured creditor or enforcement in contravention of this Intercreditor Agreement. In the event Second Lien Agent or any other Second Lien Creditor becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated to the Liens securing First Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated to such First Lien Obligations under this Intercreditor Agreement. Nothing in this Intercreditor Agreement impairs or otherwise adversely affects any rights or remedies First Lien Agent or the other First Lien Lenders may have with respect to the Collateral.
4.17 Legend. Each of First Lien Agent on behalf of the First Lien Lenders and Second Lien Agent on behalf of the Second Lien Creditors agrees that each First Lien Loan Agreement and each Second Lien Document, as applicable, constituting a collateral or security document, shall include the following language (or language to similar effect approved by both First Lien Agent and Second Lien Agent):
“Notwithstanding anything herein to the contrary, the lien and security interest granted pursuant to this Agreement and the exercise of any right or remedy hereunder are subject to the provisions of the Intercreditor Agreement dated as of July 30, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Bay Coast Bank, in its capacity as agent for, and acting on behalf of, the First Lien Lenders identified therein and TMI Trust Company, in its capacity as collateral agent for, and acting on behalf of, itself and the other Second Lien Creditors identified therein, at any time that the Intercreditor Agreement is in effect. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control at any time the Intercreditor Agreement is in effect.”
4.18 Rights as Unsecured Creditors. Notwithstanding anything to the contrary contained herein, the Second Lien Creditors may, in accordance with the Second Lien Documents and applicable law, enforce rights and exercise remedies against Borrower and any other Obligor as unsecured creditors unless any such action is otherwise expressly or impliedly inconsistent with the terms of this Intercreditor Agreement. Notwithstanding the foregoing, nothing herein shall prevent any Second Lien Creditor from raising any objection to any sale pursuant to Section 363 of the Bankruptcy Code which could be raised solely by, or on behalf of, an unsecured creditor as
27 |
permitted by Section 4.5(b) hereof, it being understood that the Second Lien Creditors agree that they will be deemed to have consented, pursuant to Section 363 (f)(2) of the Bankruptcy Code, to any sale supported by any of the First Lien Lenders, and no Second Lien Creditor shall raise any objection pursuant to Section 363 (f)(3) of the Bankruptcy Code to any such sale.
4.19 Conflicts. In the event of any conflict between the provisions of this Intercreditor Agreement and the provisions of any Second Lien Document or any First Lien Loan Agreement, the provisions of this Intercreditor Agreement shall govern. With respect to Second Lien Agent and the other Second Lien Creditors and the obligations of Second Lien Agent under the Second Lien Documents only, in the event of a conflict between this Intercreditor Agreement and the Second Lien Documents, the terms of the applicable Second Lien Documents shall govern and control.
[signature pages follow]
28 |
IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to be duly executed as of the day and year first above written.
FIRST LIEN AGENT:
|
|
BAY COAST BANK, For itself as First Lien Agent and as Collateral Agent for the First Lien Lenders |
By: | /s/ Carl W. Taber | |
Name: Carl W. Taber | ||
Title: Executive Vice President |
SECOND LIEN AGENT:
|
|
TMI TRUST COMPANY, as Collateral Agent under the Indenture, for itself and the other Second Lien Creditors |
By: | /s/ Debra Schachel | |
Name: Debra Schachel | ||
Title: Vice President |
Each of the undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By its signature below, each of the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.
Each of the undersigned agrees that any Creditor holding or otherwise controlling Collateral (the “Controlling Creditor”) does so as bailee (under the UCC) for and on behalf of the other Creditors which have a Lien on such Collateral, and each Controlling Creditor is hereby authorized to and may turn over to Second Lien Agent (if First Lien Agent or any First Lien Lender is the Controlling Creditor) or to First Lien Agent (if Second Lien Agent or any Second Lien Creditor is the Controlling Creditor) any such Collateral upon request therefore, after all obligations and indebtedness of the undersigned to such Controlling Creditor shall have been fully paid and performed.
Each of the undersigned acknowledges and agrees that (i) although it may sign this Intercreditor Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Intercreditor Agreement (except for a consent which is deemed to have been given by the Second Lien Creditors under Section 2.9), and (ii) it will execute and deliver such additional documents and take such additional action as may be necessary or desirable in the reasonable opinion of any of the Creditors to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.
CURO GROUP HOLDINGS CORP. A SPEEDY CASH CAR TITLE LOANS, LLC AD ASTRA RECOVERY SERVICES, INC. ADVANCE GROUP, INC. ATTAIN FINANCE, LLC AVIO CREDIT, INC. CASH COLORADO, LLC CONCORD FINANCE, INC. CURO COLLATERAL SUB, LLC CURO CREDIT, LLC CURO FINANCIAL TECHNOLOGIES CORP. CURO INTERMEDIATE HOLDINGS CORP. CURO MANAGEMENT LLC ENNOBLE FINANCE, LLC EVERGREEN FINANCIAL INVESTMENTS, INC. FMMR INVESTMENTS, INC. GALT VENTURES, LLC PRINCIPAL INVESTMENTS, INC. SC AURUM, LLC SC TEXAS MB, INC. SCIL, INC. SCIL TEXAS, LLC SPEEDY CASH SPEEDY CASH ILLINOIS, INC. THE MONEY STORE, L.P. TODD CAR TITLE, INC. TODD FINANCIAL, INC. |
By: | /s/ Donald F. Gayhardt Jr. | |
Name: Donald F. Gayhardt Jr. | ||
Title: Chief Executive Officer and President |
ANNEX A
FORM OF SUPPLEMENT TO THE INTERCREDITOR AGREEMENT
This SUPPLEMENT TO THE INTERCREDITOR AGREEMENT (this “Supplement”) is made on ___, 20___ by and among: (i) CURO Group Holdings Corp. (the “Issuer”), (ii) [___________] (the “Obligors”) and (iii) [__________] (the “Pari Passu Lender(s)”).
Reference is hereby made to that certain Intercreditor Agreement, dated as of July 30, 2021 (the “Intercreditor Agreement”) between (i) Bay Coast Bank, in its capacity as agent for the benefit of the holders from time to time of the First Lien Obligations, including its successors and assigns from time to time (in such capacity, the “First Lien Agent”) and (ii) TMI Trust Company, in its capacity as collateral agent for the benefit of holders from time to time of the Indenture Obligations and the Pari Passu Payment Lien Obligations, including its successors and assigns from time to time (in such capacity, the “Second Lien Agent”).
WITNESSETH
WHEREAS, the Issuer and the Obligors have acknowledged and agreed to be bound by the terms and provisions of the Intercreditor Agreement; and
WHEREAS, the Issuer and the Obligors have entered into the Pari Passu Payment Lien Documents and it is a condition under the terms of the Intercreditor Agreement to the incurrence of New Indebtedness identified below that this Supplement be executed and delivered to the First Lien Agent and the Second Lien Agent.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. Definitions. All capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Intercreditor Agreement. As used in this Agreement, the following terms shall have the following definitions:
“Accession Agreement” means the Accession Agreement, dated the date hereof, a copy of which is attached hereto as Exhibit B.
“Agent” means any Person acting as agent on behalf of the Pari Passu Lender(s).
“Borrowing Date” means the date on which the Pari Passu Payment Lien Documents are executed and delivered.
“New Indebtedness” means any principal and interest payable to the Pari Passu Lenders under the Pari Passu Payment Lien Documents and any other obligations arising under Pari Passu Payment Lien Documents.
“Pari Passu Payment Lien Documents” means the [______________], dated as of [_________] and any other documents executed and delivered in connection therewith.
SECTION 2. Supplement. This Supplement is supplemental to the Intercreditor Agreement and is the supplement to be delivered pursuant to Section 4.6 of the Intercreditor Agreement in connection with the New Indebtedness. The Pari Passu Lender(s) hereby agree(s) to the terms of the Intercreditor Agreement as if they were a party thereto.
SECTION 3. Pari Passu Indebtedness. The Issuer hereby confirms that the Pari Passu Lender(s), the First Lien Agent, the Second Lien Agent and any other Second Lien Creditors may conclusively rely on the representations set forth in the officer’s certificate attached hereto as Exhibit A certifying that the New Indebtedness complies with the requirements of the definition of “Pari Passu Indebtedness” under the Intercreditor Agreement. Each of the Issuer and the Obligors hereby confirm that following the execution and delivery of the Accession Agreement by all the parties thereto, the New Indebtedness identified in this Supplement shall constitute “Pari Passu Indebtedness” under the Intercreditor Agreement.
SECTION 4. Effectiveness; Ratification. This Supplement shall become effective upon the later of (a) the receipt of this Agreement by the First Lien Agent and the Second Lien Agent and (b) the Borrowing Date, and from and after the date hereof, the Pari Passu Lenders and the Agent shall constitute “Pari Passu Indebtedness Secured Parties” and “Second Lien Creditors” under the Intercreditor Agreement.
Any and all references to the “Intercreditor Agreement” in the First Lien Loan Agreements and the Second Lien Documents shall mean the Intercreditor Agreement, as supplemented hereby. Except as supplemented by this Supplement, the Intercreditor Agreement remains unmodified and in full force and effect and is hereby ratified, approved and confirmed as of the date hereof.
SECTION 5. Appointment of Collateral Agent. The Pari Passu Lender(s), by [its/their] execution and delivery hereof, authorize(s) and appoint(s) TMI Trust Company as the Second Lien Agent, and direct(s) the Second Lien Agent to enter into the Intercreditor Agreement and to perform its obligations and exercise its rights thereunder in accordance therewith.
SECTION 6. Governing Law. This Supplement shall in all respects be governed by the law of the State of New York.
SECTION 7. Third Party Beneficiary. The First Lien Lenders, the Notes Secured Parties and the other Second Lien Creditors are intended third party beneficiaries of this Supplement.
SECTION 8. Disclaimer. The First Lien Agent shall not be responsible for the validity or sufficiency of this Supplement nor of the recitals hereto. The Second Lien Agent shall not be responsible for the validity or sufficiency of this Supplement nor of the recitals hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Supplement as of the date first written above.
CURO GROUP HOLDINGS CORP., as Issuer |
By: | ||
Name: | ||
Title: |
, | |||
as Obligor |
By: | ||
Name: | ||
Title: |
, | |||
as Pari Passu Lender |
By: | ||
Name: | ||
Title: |
Acknowledged and Agreed:
FIRST LIEN AGENT:
BAY COAST BANK,
as First Lien Agent
By: | |
Name: | |
Title: | |
Date: |
SECOND LIEN AGENT:
TMI TRUST COMPANY,
as Second Lien Agent
By: | |
Name: | |
Title: | |
Date: |