UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): June 24, 2020
WHOLE EARTH BRANDS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-38880 | 38-4101973 | ||
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
125 S. Wacker Drive
Suite 3150
Chicago, IL 60606
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (312) 840-6000
Act II Global Acquisition Corp.
745 5th Avenue
New York, NY 10151
(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)) |
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 Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company x
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. ¨
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, par value $0.0001 per share | FREE | The NASDAQ Stock Market LLC | ||
Warrants to purchase one-half of one share of common stock | FREEW | The NASDAQ Stock Market LLC |
Introductory Note
As previously disclosed, Act II Global Acquisition Corp., a Cayman Islands exempted company (“Act II”), entered into a Purchase Agreement, which was subsequently amended on each of February 12, 2020, May 8, 2020, and June 15, 2020 (as amended, the “Purchase Agreement”), with Flavors Holdings Inc., a Delaware corporation (“Flavors Holdings”), MW Holdings I LLC, a Delaware limited liability company (“MW Holdings I”), MW Holdings III LLC, a Delaware limited liability company (“MW Holdings III”), and Mafco Foreign Holdings, Inc., a Delaware corporation (“Mafco Foreign Holdings,” and together with Flavors Holdings, MW Holdings I, and MW Holdings II, the “Sellers”), and for the purposes of Amendments No. 2 and 3 to the Purchase Agreement, Project Taste Intermediate LLC, a Delaware limited liability company. The Purchase Agreement provided for, among other things, Act II’s (or its designee’s) purchase of all of the outstanding equity interests of Merisant Company, Merisant Luxembourg, Mafco Worldwide LLC, Mafco Shanghai LLC, EVD Holdings LLC, and Mafco Deutschland GmbH, in accordance with the terms and subject to the conditions of the Purchase Agreement (the transactions contemplated by the Purchase Agreement being collectively referred to herein as the “Business Combination”).
On June 24, 2020, following the approval of the Business Combination at the extraordinary general meeting of the shareholders of Act II (the “Shareholders Meeting”), and approval of the Warrant Amendment (as described below) at the special meeting of the public warrant holders of Act II, each held on June 24, 2020, Act II domesticated into a Delaware corporation (the “Domestication”), and on June 25, 2020, consummated the remainder of the transactions contemplated by the Business Combination. In connection with the Domestication, the registrant changed its name from “Act II Global Acquisition Corp.” to “Whole Earth Brands, Inc.” (the “Company” or “Whole Earth Brands”). Unless otherwise defined herein, capitalized terms used in this Current Report on Form 8-K have the same meaning as set forth in the final prospectus and definitive proxy statement (the “Proxy Statement/Prospectus”) filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2020, by Act II, and/or the supplement thereto (the “Supplement”) filed with the SEC on June 18, 2020, by Act II.
Item 1.01. | Entry into Material Definitive Agreement. |
Credit Agreement
In connection with the Business Combination, on June 25, 2020, the Company entered into a senior secured loan agreement (the “Credit Agreement”) with Toronto Dominion (Texas) LLC, as administrative agent, and certain lenders, consisting of the following credit facilities (the “Credit Facilities”): (x) a term loan facility of $140 million (the “Term Loan Facility”) and (y) a revolving loan facility of up to $50 million (the “Revolving Facility”). The Revolving Facility included (x) a borrowing capacity available for letters of credit up to $5 million and (z) a $10 million sublimit for swingline loans. Any issuance of letters of credit or swingline loan advances reduces the amount available under the Revolving Facility. Each of the Credit Facilities matures on June 25, 2025.
Loans outstanding under the Credit Facilities will accrue interest at a rate per annum equal to LIBOR, with a LIBOR floor of 1.00%, plus a margin between 3.00% and 3.75%, or, at Company’s option, a base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, LIBOR for a one-month interest period plus 1.00%, and 2.00%, in each case plus an applicable margin between 2.00% and 2.75%, with the margin in each case depending upon a total net leverage ratio, and undrawn amounts under the Revolving Facility will accrue a commitment fee at a rate per annum between ranging between 0.30% and 0.40% on the average daily undrawn portion of the commitments thereunder, with the applicable depending upon a total net leverage ratio.
The obligations under the Credit Facilities are guaranteed by certain direct or indirect wholly-owned domestic subsidiaries of the Company, other than certain excluded subsidiaries, including, but not limited to, immaterial subsidiaries and foreign subsidiaries. The Credit Facilities are secured by substantially all of the personal property of the Company and the guarantor subsidiaries (in each case, subject to certain exclusions and qualifications).
The Credit Facilities require the Company to make certain mandatory prepayments, with (i) 100% of net cash proceeds of all non-ordinary course asset sales or other dispositions of property in excess of $5,000,000 in any fiscal year, subject to the ability to reinvest such proceeds and certain other exceptions, (ii) 100% of the net cash proceeds of any debt incurrence, other than debt permitted under the definitive agreements (but excluding debt incurred to refinance the Credit Facilities) and (iii) 50% of “Excess Cash Flow,” as defined in the Credit Agreement which is included as an exhibit to this Current Report on Form 8-K, with a reduction to 25% if the total net leverage ratio for the fiscal year is less than or equal to 2.50 to 1.00 but greater than 2.00:1.00, and a reduction to 0% if the total net leverage ratio for the fiscal year is less than or equal to 2.00 to 1.00. The Company also is required to make quarterly amortization payments equal to (i) 1.25% per annum of the original principal amount of the Term Loan Facility during the first, second and third years after the closing date of the Credit Facilities, commencing after the first full fiscal quarter after the closing date of the Credit Facilities, and (ii) 2.50% per annum of the original principal amount of the Term Loan Facility during the fourth and fifth years after the closing date of the Credit Facilities (subject to reductions by optional and mandatory prepayments of the loans). The Company may prepay the Credit Facilities at any time without premium or penalty, subject to payment of customary breakage costs.
The Credit Facilities contain financial covenants and a number of traditional negative covenants including negative covenants related to the following subjects: consolidations, mergers, and sales of assets; limitations on the incurrence of certain liens; limitations on certain indebtedness; limitations on the ability to pay dividends; and certain affiliate transaction.
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The Credit Facilities also contain certain customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, the lenders under the Credit Facilities are entitled to take various actions, including the acceleration of amounts due under the Credit Facilities and all actions permitted to be taken by a secured creditor.
The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by the text of the Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Amended and Restated Warrant Agreement
In connection with the Business Combination, warrant holders who held public warrants of Act II approved an amendment (the “Warrant Amendment”) to the terms of Act II’s Warrant Agreement. Upon the completion of the Business Combination, (i) each of Act II’s outstanding warrants, which entitled the holder thereof to purchase one Class A ordinary share of Act II at an exercise price of $11.50 per share, became exercisable for one-half of one share at an exercise price of $5.75 per one-half share ($11.50 per whole share) of Whole Earth Brands, Inc. common stock and (ii) each holder of a public warrant received, for each such warrant (in exchange for the reduction in the number of shares for which such warrants are exercisable), a cash payment of $0.75. Pursuant to the Warrant Amendment, a public warrant holder may not exercise its warrants for fractional shares of the Company’s common stock, and, therefore, only two warrants (or a number of warrants evenly divisible by two) may be exercised at any given time by the public warrant holder.
The material terms of the Warrant Amendment are discussed in the Proxy Statement/Prospectus under the section titled “Warrant Holder Proposal 1: The Warrant Amendment Proposal,” which is incorporated herein by reference.
This summary is qualified in its entirety by reference to the text of the Amended and Restated Warrant Agreement, which is attached hereto as Exhibit 4.2 and is incorporated herein by reference.
Escrow Agreement
On June 25, 2020, pursuant to the terms and conditions of the Purchase Agreement, the Company, the Sponsor, and Continental Stock Transfer & Trust Company, as escrow agent, entered into an escrow agreement (the “Escrow Agreement”) that provides for, among other things, restricting the 3,000,000 shares of Whole Earth Brands, Inc. common stock in an escrow account until such time as the escrow shares are to be released by the escrow agent to the Sponsor upon the occurrence of the triggering events set forth in the Purchase Agreement. The Sponsor maintains its voting rights and other stockholder rights with respect to the escrow shares while such shares are held in the escrow account.
The Escrow Agreement will terminate upon the release of all escrowed sponsor shares.
The foregoing description of the Escrow Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Escrow Agreement, which is attached hereto as Exhibit 10.21 and is incorporated herein by reference.
Indemnity Agreements
On June 25, 2020, the Company entered into indemnity agreements with each of its directors and executive officers. Each indemnity agreement provides for indemnification and advancement by the Company of certain expenses and costs relating to claims, suits or proceedings arising from service to the Company or, at the Company’s request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
The foregoing description of the indemnity agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnity agreements, a form of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.
Item 2.01. | Completion of Acquisition or Disposition of Assets. |
The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.
Pursuant to the terms of the Purchase Agreement, the total consideration for the Business Combination and related transactions (the “Purchase Price”) was approximately $387.5 million. Adjusted for Merisant and MAFCO debt, excess transaction expenses, working capital adjustments, employee transaction bonuses and cash (in each case, estimated as of the Closing), net proceeds to Sellers were approximately $386.7 million. In connection with the Shareholders Meeting, holders of 3,573,331 Act II Class A ordinary shares, par value $0.0001 per share (“Act II Class A Shares”), exercised their right to redeem those shares for cash prior to the redemption deadline of June 22, 2020, at a price of approximately $10.18 per share, for an aggregate payment from Act II’s trust account of approximately $36.4 million. Upon the Closing, the Company’s units ceased trading, and the Company’s common stock and warrants began trading on The Nasdaq Stock Market under the symbols “FREE” and “FREEW,” respectively.
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The per share redemption price of approximately $10.18 for holders of Act II Class A Shares electing to redeem was paid out of Act II’s trust account which, after taking into account the aggregate payment in respect of the redemption, had a balance immediately prior to the Closing of approximately $269.0 million. Such balance in the trust account, together with approximately $132.0 million in net proceeds from the debt financing pursuant to the Credit Agreement and $75.0 million in proceeds from the PIPE Financing (as defined below), were used to pay transaction expenses, the payment to the warrant holders in connection with the Warrant Amendment as described below, certain transaction bonuses and other payments to Merisant and MAFCO employees, and the Purchase Price of approximately $386.7 million.
FORM 10 INFORMATION
Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as Act II was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the Company, as the successor registrant to Act II, is providing the information below that would be included in a Form 10 if the Company were to file a Form 10. Please note that the information provided below relates to the Company as the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding the Company’s industry and market sizes, future opportunities for the Company and the Company’s estimated future results. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
The factors previously disclosed in prior reports filed with the SEC, including the Proxy Statement/Prospectus, the Supplement and those identified elsewhere in this Current Report on Form 8-K among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about the Company or the date of such information in the case of information from persons other than the Company, and we disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this Current Report on Form 8-K. Forecasts and estimates regarding the Company’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Business
The business of the Company is described in the Proxy Statement/Prospectus in the sections titled “Information About Act II,” “Information About Merisant,” and “Information About MAFCO Worldwide,” and that information is incorporated herein by reference.
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Risk Factors
The risks associated with the Company are described in the Proxy Statement/Prospectus in the section titled “Risk Factors,” and in the Supplement in the section titled “Update to Risk Factors,” each of which is incorporated herein by reference. In addition, the following risk factors have been updated since the filing of the Supplement:
Our substantial indebtedness could adversely affect our financial condition.
In connection with the Business Combination, on June 25, 2020, Whole Earth Brands, Inc. entered to into a senior secured credit facility consisting of (x) a term loan facility of up to $140,000,000 and (y) a revolving loan facility of up to $50,000,000, each maturing in five years. Loans outstanding under these credit facilities are expected to accrue interest at a rate per annum equal to LIBOR, with a LIOBR floor of 1.00%, plus a margin ranging from 3.00% to 3.75%, or, at Company’s option, a base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, LIBOR for a one-month interest period plus 1.00%, and 2.00%, in each case plus an applicable margin between 2.00% and 2.75%, with the margin in each case depending on the achievement of certain leverage ratios, and undrawn amounts under the first lien revolving loan facility are expected to accrue a commitment fee at a rate per annum of 0.40% on the average daily undrawn portion of the commitments thereunder, with a step down to 0.30% upon achievement of certain leverage ratios. Principal payments on the first lien term loan facility will be due quarterly, in amounts expected to be equal to (i) 1.25% per annum of the original principal amount of the first lien term loan facility during the first, second and third years after the closing date of the credit facilities and (ii) 2.50% per annum of the original principal amount of the first lien term loan facility during the fourth and fifth years after the closing date of the credit facilities. For additional information, refer to "Item 1.01. Entry into Material Definitive Agreement—Credit Agreement" of this Current Report on Form 8-K.
Our substantial indebtedness could:
· | require us to dedicate a substantial portion of cash flow from operations to payments in respect of our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, potential acquisition opportunities, a level of marketing necessary to maintain the current level of sales and other general corporate purposes; |
· | increase the amount of interest that we have to pay, because some of our borrowings are at variable rates of interest, which will result in higher interest payments if interest rates increase, and, if and when we are required to refinance any of our indebtedness, an increase in interest rates would also result in higher interest costs; |
· | increase our vulnerability to adverse general economic or industry conditions; |
· | require refinancing, which we may not be able to do on reasonable terms; |
· | limit our flexibility in planning for, or reacting to, competition and/or changes in our business or the industry in which we operate; |
· | limit our ability to borrow additional funds; |
· | restrict us from making strategic acquisitions or necessary divestitures, introducing new brands and/or products or exploiting business opportunities; and |
· | place us at a competitive disadvantage compared to our competitors that have less debt and/or more financial resources. |
We may not be able to generate sufficient cash to service all of our indebtedness, and we may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful.
Our ability to pay principal and interest on our debt obligations will depend upon, among other things, (a) our future financial and operating performance (including the realization of any cost savings described herein), which will be affected by prevailing economic, industry and competitive conditions and financial, business, legislative, regulatory and other factors, many of which are beyond our control; and (b) our future ability to borrow under our revolving credit facility, the availability of which depends on, among other things, our complying with the covenants in the credit agreement governing such facility.
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We cannot assure you that our business will generate cash flow from operations, or that we will be able to draw under our revolving credit facility or otherwise, in an amount sufficient to fund our liquidity needs, including the payment of principal and interest on our debt. If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, the terms of existing or future debt agreements may restrict us from adopting some of these alternatives. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, could have a material adverse effect on our business, results of operations, and financial condition, and could negatively impact our ability to satisfy our debt obligations.
Whole Earth Brands, Inc.’s indebtedness could adversely affect its financial condition and ability to conduct its operations, and Whole Earth Brands, Inc. may incur additional debt
The total indebtedness under the new credit facility may be equal to $190,000,000 (including an undrawn revolving credit facility of $50,000,000 at the date of closing). Whole Earth Brands Inc.’s debt level and the terms of its financing arrangements could adversely affect its financial condition and limit its ability to successfully implement its growth strategies. In addition, under its credit facilities, certain of Whole Earth Brands, Inc.’s direct subsidiaries granted the lenders a security interest in substantially all of their assets. Whole Earth Brands, Inc. is permitted under the terms of its credit facilities to incur additional indebtedness, both under its credit facilities and otherwise. If such additional indebtedness is incurred, it may exacerbate the risks of Whole Earth Brands, Inc.’s indebtedness described herein.
Whole Earth Brands, Inc.’s ability to meet its debt service obligations will depend on Whole Earth Brands, Inc.’s future performance, which will be affected by the other risk factors described herein. If Whole Earth Brands, Inc. does not generate enough cash flow to pay its debt service obligations, it may be required to refinance all or part of its existing debt, sell assets, borrow more money or raise equity. Whole Earth Brands, Inc. may not be able to take any of these actions on a timely basis, on satisfactory terms, or at all.
Whole Earth Brands, Inc.’s credit facilities will contain financial and other covenants. The failure to comply with such covenants could have an adverse effect.
Whole Earth Brands, Inc.’s credit facilities contemplated by the credit facilities documents contain certain financial and other covenants, including a maximum consolidated total net leverage ratio equal to or less than 4.00:1.00 and a minimum fixed charge coverage ratio equal to or greater than 1.25:1.00, and limitations on Whole Earth Brands, Inc.’s and its subsidiaries’ abilities to, among other things, incur additional indebtedness and make guarantees; incur liens on assets; engage in mergers or consolidations, dissolutions or other fundamental changes; sell assets; pay dividends and distributions or other restricted payments or repurchase stock; make investments, loans and advances, including acquisitions; amend organizational documents or other material agreements; enter into certain agreements that would restrict the ability of the Borrower and its subsidiaries to pay dividends; repay certain junior, unsecured or subordinated indebtedness; issue certain equity; engage in certain activities; and engage in certain transactions with affiliates, in each case, subject to customary exceptions materially consistent with credit facilities of such type and size. Any failure to comply with the restrictions of Whole Earth Brands, Inc.’s credit facilities may result in an event of default under the credit facilities. Whole Earth Brands, Inc.’s contemplated credit facilities bear interest at variable rates. If market interest rates increase, variable rate debt will create higher debt service requirements, which could adversely affect Whole Earth Brands, Inc.’s cash flow.
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Financial Information
Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Selected Historical Financial Information of Act II,” “Selected Historical Financial Information of Merisant and MAFCO,” “Act II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Merisant and MAFCO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the Supplement in the appendices titled “Act II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended March 31, 2020 and 2019,” “Merisant and MAFCO’s Management’s Discussion and Analysis for the Three Months Ended March 31, 2020 and 2019,” each of which are incorporated herein by reference.
Properties
The facilities of the Company are described in the Proxy Statement/Prospectus in the section titled “Information About Merisant — Facilities and Locations,” and “Information About MAFCO Worldwide — Facilities and Locations,” each of which is incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial ownership of shares of the Company’s common stock upon the completion of the Business Combination by:
· | each person known to the Company to be the beneficial owner of more than 5% of the shares of any class of the Company’s common stock; |
· | each named executive officer or director of the Company; and |
· | all officers and directors of the Company as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.
The beneficial ownership of shares of the Company’s common stock immediately following completion of the Business Combination is based on the following: (i) an aggregate of 38,426,669 ordinary shares of Act II issued and outstanding immediately prior to the completion of the Business Combination, which ordinary shares converted into shares of common stock of the Company upon completion of the Domestication, and which number reflects (x) the valid redemption of 3,573,331 Act II Class A Shares by public shareholders of Act II and (y) the forfeiture of 3,000,000 Act II Class B Shares at Closing (see the disclosure in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 1: The Business Combination Proposal—Related Agreements—Sponsor Support Agreement,” and in the Supplement in the section titled “Supplemental Information to Proposal No. 1 — Business Combination Proposal — Update to Sponsor Support Agreement”).
The following table does not reflect, after giving effect to the Warrant Amendment, (i) 7,500,000 shares of Whole Earth Brands, Inc. common stock issuable upon the exercise of the public warrants, each exercisable for one half of one share of Whole Earth Brands, Inc. common stock at $5.75 per share, and (ii) 2,631,750 million shares of Whole Earth Brands, Inc. common stock issuable upon the exercise of the private placement warrants, each exercisable to purchase one half of one share of Whole Earth Brands, Inc. common stock at $5.75 per share.
Unless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.
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Beneficial Ownership Upon the Completion
of the Business Combination and Private Placements |
||||||||
Beneficial Owner |
Number of
Shares |
Percentage of
Outstanding Shares |
||||||
5% Stockholders | | |||||||
Sellers(8) | 600,000 | 1.56 | % | |||||
Sponsor(1) | 4,500,000 | 11.71 | % | |||||
Dicalite Management Group, Inc.(7) | 3,300,000 | 8.59 | % | |||||
MMCAP International Inc. SPC(2) | 2,800,000 | 7.29 | % | |||||
Linden Capital L.P.(4) | 2,435,299 | 6.34 | % | |||||
Polar Asset Management Partners Inc.(4) | 2,350,000 | 6.12 | % | |||||
UBS O’Connor LLC(5) | 2,733,444 | 7.11 | % | |||||
Baron Small Cap Fund | 2,000,000 | 5.2 | % | |||||
Directors and Named Executive Officers | | | ||||||
Irwin D. Simon(6) | - | - | ||||||
Albert Manzone | - | - | ||||||
Lucas Bailey | - | - | ||||||
Andrew Rusie | - | - | ||||||
Denise Faltischek | - | - | ||||||
Steven M. Cohen | - | - | ||||||
John M. McMillin | - | - | ||||||
Anuraag Agarwal | - | - | ||||||
Ira J. Lamel(6) | - | - | ||||||
All executive officers and directors as a group (nine individuals) | - | - |
(1) | According to a Schedule 13G/A filed with the SEC on June 26, 2020, Act II Global LLC and John Carroll, the managing member of Act II Global LLC, hold shared voting and dispositive power of the 4,500,000 shares of Whole Earth Brands, Inc. common stock held by Act II Global LLC. Mr. Carroll has sole voting and dispositive control over the shares held by Act II Global LLC and therefore may be deemed the beneficial owner of such shares. The principal business address for each of Act II Global LLC and Mr. Carroll is 745 5th Avenue, New York, New York 10151. Beneficial ownership presented in table includes 3,0000,000 shares of Whole Earth Brands, Inc. common stock issued to the Sponsor that are held in escrow and subject to release upon the earliest to occur of (i) the volume weighted-average per-share trading price of shares of Whole Earth Brands, Inc. common stock being at or above $20.00 per share for twenty (20) trading days in any thirty (30)-trading day continuous trading period during the five (5) years following the Closing Date (the “Escrow Period”), (ii) a Change in Control (as defined in the Purchase Agreement) and (iii) the expiration of the Escrow Period. |
(2) | According to a Schedule 13G/A filed with the SEC on February 5, 2020, MMCAP International Inc. SPC and MM Asset Management Inc. hold shared voting and dispositive power of 1,800,000 shares of Whole Earth Brands, Inc. common stock. MMCAP International Inc. SPC and MM Asset Management Inc. are the record and direct beneficial owners of the securities. MM Asset Management Inc. is the investment advisor of, and may be deemed to beneficially own securities held by, MMCAP International Inc. SPC. The address of the principal business office for MMCAP International Inc. SPC is c/o Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, P.O. Box 1348, Grand Cayman, Cayman Islands KY1-1008. The address of the principal business office of MM Asset Management Inc. is 161 Bay Street, TD Canada Trust Tower, Suite 2240, Toronto, Ontario, Canada M5J 2S1. Beneficial ownership presented in the table includes shares of Whole Earth Brands, Inc. common stock issued connection with the PIPE Financing. |
(3) | According to a Schedule 13G/A filed with the SEC on January 14, 2020, Linden GP LLC is the general partner of Linden Capital L.P. and, in such capacity, may be deemed to beneficially own 2,164,460 shares of Whole Earth Brands, Inc. common stock held by Linden Capital L.P. Linden Advisors LP is the investment manager of Linden Capital L.P. and trading advisor or investment advisor for separately managed accounts. Siu Min (Joe) Wong is the principal owner and controlling person of Linden Advisors LP and Linden GP LLC. In such capacities, Linden Advisors LP and Mr. Wong may each be deemed to beneficially own an aggregate of 2,435,299 shares of Whole Earth Brands, Inc. common stock held by Linden Capital L.P. and the managed accounts. The principal business address for Linden Capital is Victoria Place, 31 Victoria Street, Hamilton HM10, Bermuda. The principal business address for each of Linden Advisors LP, Linden GP LLC and Mr. Wong is 590 Madison Avenue, 15th Floor, New York, New York 10022. |
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(4) | According to a Schedule 13G filed with the SEC on February 10, 2019, Polar Asset Management Partners Inc. holds sole voting and dispositive power of 2,250,000 shares of Whole Earth Brands, Inc. common stock. The business address for the reporting person is 401 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada. Beneficial ownership presented in the table includes shares of Whole Earth Brands, Inc. common stock issued connection with the PIPE Financing. |
(5) | According to a Schedule 13G filed with the SEC on February 13, 2020, UBS O’Connor LLC has sole voting and dispositive power of 1,733,444 shares of Whole Earth Brands, Inc. common stock. UBS O’Connor LLC serves as the investment manager to (i) Nineteen77 Global Multi-Strategy Alpha Master Limited (“GLEA”) and (ii) Nineteen77 Global Merger Arbitrage Master Limited (“OGMA”). In such capacity, UBS O’Connor LLC exercises voting and investment power over the shares of Whole Earth Brands, Inc. common stock held for the account of GLEA and OGMA. UBS O’Connor LLC is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940, as amended. Kevin Russell, the Chief Investment Officer of UBS O’Connor LLC, also has voting control and investment discretion over the securities described herein held by GLEA and OGMA. As a result, each of UBS O’Connor LLC and Mr. Russell may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the Act II Class A Shares held for the account of GLEA and OGMA. The address of the principal business office of each of the reporting persons is One North Wacker Drive, 32nd Floor, Chicago, Illinois 60606. Beneficial ownership presented in the table includes shares of Whole Earth Brands, Inc. common stock issued connection with the PIPE Financing. |
(6) | Irwin D. Simon and Ira J. Lamel are members of the Sponsor. |
(7) | According to a Schedule 13G filed with the SEC on June 18, 2020, Dicalite Management Group, Inc., a Delaware corporation, is the record holder of, and holds shared voting and dispositive power over, 3,300,000 shares of Whole Earth Brands, Inc. common stock. Dicalite Management Group, Inc. is a wholly-owned subsidiary of Dicalite Management Holdings LLC, a Delaware limited liability company, the sole voting member of which is DPV Mineral Holding Company LLC, a Delaware limited company. The sole member of DPV Mineral Holding Company LLC is MTFG Management Services, LLC, a Delaware limited liability company. The sole member of MTFG Management Services, LLC is The Ronald O. Perelman 2016 Trust for Education and Charity, a New York trust. In such capacities, the foregoing entities may be deemed to have beneficial ownership of 3,300,000 Act II Class A Shares. The principal business address of each of Dicalite Management Group, Inc. and Dicalite Management Holdings LLC is 1 Belmont Avenue, Suite 500, Bala Cynwyd, Pennsylvania 19004. The principal business address of DPV Mineral Holding Company LLC, MTFG Management Services, LLC and The Ronald O. Perelman 2016 Trust for Education and Charity is 35 E. 62nd Street, New York, New York, 10065. |
(8) | Includes 600,000 shares of Whole Earth Brands, Inc. common stock acquired in open market transactions. |
Directors and Executive Officers
The Company’s directors and executive officers after the Closing are described in the Proxy Statement/Prospectus in the section titled “Management of Whole Earth Brands, Inc. Following the Business Combination,” and in the Supplement in the section titled “Update to Management of Whole Earth Brands, Inc. Following the Business Combination,” each of which is incorporated herein by reference.
Executive Compensation
The compensation of the named executive officers of Act II before the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Information About Act II — Officer and director compensation,” which is incorporated herein by reference. The compensation of the named executive officers of Merisant and MAFCO before the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Executive Compensation,” which is incorporated herein by reference.
The information set forth in this Current Report on Form 8-K under Item 5.02 is incorporated in this Item 2.01 by reference.
At the Shareholders Meeting, Act II’s shareholders approved the Whole Earth Brands, Inc. 2020 Long-Term Incentive Award Plan. A description of the material terms of the 2020 Plan is set forth in the section of the Proxy Statement/Prospectus titled “Shareholder Proposal 5— Whole Earth Brands, Inc. 2020 Long-Term Incentive Award Plan Proposal,” which is incorporated herein by reference. This summary is qualified in its entirety by reference to the complete text of the 2020 Plan, a copy of which is attached as an Exhibit 10.5 to this Current Report on Form 8-K.
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Certain Relationships and Related Transactions, and Director Independence
The certain relationships and related party transactions of the Company and Merisant and MAFCO are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” and in the Supplement in the section titled “Update to Certain Relationship and Related Person Transactions,” each of which are incorporated herein by reference.
Reference is made to the disclosure regarding director independence in the section of the Proxy Statement/Prospectus titled “Management of Whole Earth Brands, Inc. Following the Business Combination–Director Independence,” and in the section of the Supplement titled “Update to Management of Whole Earth Brands, Inc. Following the Business Combination,” each of which is incorporated herein by reference.
The information set forth under the section of the Supplement titled “Supplemental Information to Proposal No. 1—Business Combination Proposal — Related Agreements — Elimination of the Investors Agreement,” and under “Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers—Employment Agreements” of this Current Report on Form 8-K is incorporated into this Item 2.01 by reference.
The Company has adopted a formal written policy that will be effective upon the Business Combination providing that persons meeting the definition of “Related Person” under Item 404(a) of Regulation S-K such as the Company’s executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of the Company’s capital stock and any member of the immediate family of any of the foregoing persons are not permitted to enter into a related party transaction with the Company without the approval of the Company’s nominating and corporate governance committee, subject to the exceptions described below.
A related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships that would be required to be disclosed pursuant to Item 404(a) of Regulation S-K, in which the Company and any related person are, were or will be participants in which the amount involves exceeds $120,000, and in which a related person had or will have a direct or indirect material interest. Transactions involving compensation for services provided to the Company as an employee or director and certain other transactions not required to be disclosed under Item 404(a) of Regulation S-K are not covered by this policy.
Under the policy, the audit committee of the board of directors of the Company will review information that the audit committee deems necessary or appropriate to enable the committee to identify any existing or potential related person transactions and to effectuate the terms of the policy. In addition, under the Company’s code of ethics (as further described under Item 5.01 hereof, which is incorporated by reference into this Item 2.01), employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.
Legal Proceedings
Reference is made to the disclosure regarding legal proceedings in the sections of the Proxy Statement/Prospectus titled “Information About Act II—Legal Proceedings,” “Information About Merisant—Legal Proceedings,” “Information About MAFCO Worldwide—Legal Proceedings,” and in the section of the Supplement titled “Update to Legal Proceedings,” which are incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
The Company’s common stock began trading on the Nasdaq under the symbol “FREE” and its warrants began trading on the Nasdaq Market under the symbol “FREEW” on June 25, 2020. Act II has not paid any cash dividends on its ordinary shares to date. The payment of cash dividends by the Company in the future will be dependent upon the Company’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any dividends subsequent to the Business Combination will be within the discretion of the board of directors of the Company.
Information regarding Act II’s ordinary shares, warrants and units and related shareholder matters are described in the Proxy Statement/Prospectus in the section titled “Market Price and Dividend Information” and such information is incorporated herein by reference.
Recent Sales of Unregistered Securities
Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K concerning the issuance of the Company’s common stock to certain accredited investors, which is incorporated herein by reference.
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Description of Registrant’s Securities to be Registered
The description of the Company’s securities is contained in the Proxy Statement/Prospectus in the sections titled “Description of Whole Earth Brands, Inc. Securities” and “Comparison of Corporate Governance and Shareholder Rights,” which are incorporated herein by reference.
Indemnification of Directors and Officers
The description of the indemnification arrangements with the Company’s directors and officers is contained in the Proxy Statement/Prospectus in the sections titled “Description of Whole Earth Brands, Inc. Securities — Limitations on Liability and Indemnification of Officers and Directors,” and “Comparison of Corporate Governance and Shareholder Rights,” each of which is incorporated herein by reference.
Financial Statements and Supplementary Data
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial statements of the Company and the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Merisant and MAFCO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the Supplement in the appendices titled “Merisant and MAFCO’s Management’s Discussion and Analysis for the Three Months Ended March 31, 2020 and 2019,” each of which is incorporated herein by reference.
Financial Statements and Exhibits
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial information of the Company.
Item 3.02. | Unregistered Sales of Equity Securities |
The PIPE Financing
As previously disclosed, on February 12, 2020, Act II entered into subscription agreements (the “PIPE Subscription Agreements”), whereby the investors named therein (the “PIPE Investors”) committed to purchase shares of Whole Earth Brands, Inc. common stock and private placement warrants for aggregate proceeds of $75 million, simultaneously with or immediately prior to the Closing (the “PIPE Financing”). The PIPE Financing was conditioned on the Closing being scheduled to occur concurrently with or immediately following the closing of the PIPE Financing and other customary closing conditions.
The PIPE Financing closed on June 25, 2020, and the issuance of an aggregate of 7,500,000 Whole Earth Brands, Inc. common stock and 5,263,500 private placement warrants exercisable for 2,631,750 shares of Whole Earth Brands, Inc. common stock occurred immediately after the consummation of the Business Combination. The sale and issuance was made to accredited investors in reliance on Rule 506 of Regulation D under the Securities Act. No separate fees or commissions were paid to the placement agents other than payments made to such institutions for other services rendered in connection with the Act II initial public offering and/or the Business Combination.
This summary is qualified in its entirety by reference to the text of the form of PIPE Subscription Agreements, which are included as Exhibit 10.20 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.03. | Material Modification to Rights of Security Holders |
Certificate of Domestication, Certificate of Incorporation and Bylaws
In connection with the Closing of the Business Combination, on June 24, 2020, the Company domesticated into the State of Delaware from the Cayman Islands by filing a Certificate of Domestication (the “Certificate of Domestication”) and Certificate of Incorporation (the “Certificate of Incorporation”) with the Delaware Secretary of State and also adopted bylaws (the “Bylaws”), which together replace Act II’s Amended and Restated Memorandum and Articles of Association. The material terms of the Certificate of Domestication, the Certificate of Incorporation, the Bylaws and the general effect upon the rights of holders of the Company’s capital stock are discussed in the Proxy Statement/Prospectus under the sections titled “Comparison of Corporate Governance and Shareholder Rights,” “Description of Whole Earth Brands, Inc. Securities — Authorized Capitalization,” “Shareholder Proposal 2: The Domestication Proposal,” and “Shareholder Proposal 3: The Organizational Documents Proposal,” which are incorporated herein by reference.
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Copies of the Certificate of Incorporation, Bylaws and Certificate of Domestication are attached hereto as Exhibits 3.1, 3.2 and 3.3, respectively, and are incorporated herein by reference.
Amended and Restated Warrant Agreement
Reference is made to the disclosure set forth under Item 1.01 of this Current Report on Form 8-K concerning the amended and restated warrant agreement, which is incorporated by reference into this Item 3.03.
Indemnity Agreements
On June 25, 2020, we entered into indemnity agreements with each of our directors and executive officers. Each indemnity agreement provides for indemnification and advancement by the Company of certain expenses and costs relating to claims, suits or proceedings arising from service to the Company or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
The foregoing description of the indemnity agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnity agreements, a form of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.
Item 5.01. | Changes in Control of Registrant. |
Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 1: The Business Combination Proposal,” and in the Supplement in the section titled “Supplemental Information to Proposal No. 1 — Business Combination Proposal,” each of which is incorporated herein by reference. Further reference is made to the information contained under “Introductory Note” and Item 2.01 to this Current Report on Form 8-K, each of which is incorporated in this Item 5.01 by reference.
As of June 25, 2020, there were approximately 38,426,669 shares of Whole Earth Brands, Inc. common stock outstanding. These numbers (i) include 3,000,000 shares of common stock held by the Sponsor in escrow subject to release based on performance criteria and/or expiration of the Escrow Period; and (ii) exclude (a) 7,500,000 shares of common stock underlying the public warrants that remain outstanding after the completion of the Business Combination, (b) 2,631,750 shares of common stock underlying the private placement warrants that were issued to the PIPE Investors, and (c) the shares of common stock reserved for future issuance under the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan. As a result of the Business Combination, based on such assumptions and after giving effect to the terms of such arrangements, (i) pre-Business Combination public shareholders of Act II hold approximately 58.6% of the voting power of the Company, (ii) the Sponsor holds approximately 11.7% of such voting power, and (iii) the PIPE Investors hold approximately 19.5% of such voting power (including, for this purpose, only those shares acquired in connection with the PIPE Financing and excluding any other shares held by the PIPE Investors). In addition, non-affiliates of the Company hold approximately 88.3% of the voting power.
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Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Election of Directors and Appointment of Officers
The following persons are serving as executive officers and directors following the Closing. For information concerning the executive officers and directors, see the disclosures in the Proxy Statement/Prospectus in the sections titled “Information about Act II — Directors and Executive Officers,” “Management of Whole Earth Brands, Inc. Following the Business Combination,” “Executive Compensation,” and “Certain Relationships and Related Person Transactions,” and in the Supplement in the sections titled “Update to Management of Whole Earth Brands, Inc. Following the Business Combination” and “Update to Certain Relationships and Related Person Transactions,” each of which are incorporated herein by reference.
Name | Age | Position | ||
Irwin D. Simon | 61 | Executive Chairman of the Board of Directors | ||
Albert Manzone | 56 | Chief Executive Officer | ||
Lucas Bailey | 39 | President, Flavors & Ingredients | ||
Andrew Rusie | 46 | Chief Financial Officer | ||
Denise Faltischek(1)(3)(6) | 47 | Director | ||
Steven M. Cohen(2) (3) | 56 | Director | ||
John M. McMillin(1)(2)(3) | 66 | Director | ||
Anuraag Agarwal | 45 | Director | ||
Ira J. Lamel(1)(2)(4)(5) | 72 | Director |
(1) | Member of the audit committee |
(2) | Member of the compensation committee |
(3) | Member of the nominating and corporate governance committee |
(4) | Chair of the audit committee |
(5) | Chair of the compensation committee |
(6) | Chair of the nominating and corporate governance committee |
In connection with the closing of the Business Combination, effective as of immediately prior to the Domestication, (i) each of John Carroll, Ira J. Lamel, and Ashish Gupta resigned as executive officers of Act II; and (ii) each of John Carroll and Desireé Rogers resigned as directors of Act II and from any positions held by them on any committee of the board of directors of Act II.
Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan
At the Shareholders Meeting, Act II shareholders considered and approved the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan (the “2020 Plan”) and reserved 9,300,000 shares of common stock for issuance thereunder. The 2020 Plan was approved by the shareholders on June 24, 2020, and became effective as of the same date.
A more complete summary of the terms of the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan is set forth in the Proxy Statement/Prospectus in the section titled “Shareholder Proposal 5: The Incentive Award Plan Proposal.” That summary and the foregoing description are qualified in their entirety by reference to the text of the Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan, which is filed as Exhibit 10.5 hereto and incorporated herein by reference.
Long-Term Incentive, Special Incentive and Supplemental Bonus Awards
As a result of the Business Combination, the Company (through its subsidiaries) is now party to annual long-term incentive plans and special incentive plans that provide certain named executive officers with cash incentive award opportunities, subject to the achievement of certain performance objectives. A more complete summary of the terms of the Awards granted pursuant to such plans is set forth in the Proxy Statement/Prospectus in the section titled “Executive Compensation — Long-Term Incentive, Special Incentive and Supplemental Bonus Awards,” which is incorporated herein by reference.
Employment Agreements
As a result of the Business Combination, the Company (through its subsidiaries) is now party to employment agreements with each of the Company’s executive officers: Albert Manzone (Chief Executive Officer), Lucas Bailey (President, Flavors & Ingredients), and Andrew Rusie (Chief Financial Officer). For a summary of the employment agreements, see the disclosures in the Proxy Statement/Prospectus in the sections titled “Executive Compensation — Executive Compensation Arrangements — Existing Agreements,” which is incorporated by reference herein.
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This summary is qualified in its entirety by reference to the text of the employment agreements, copies of which are attached hereto as Exhibits 10.8 through 10.19 and are incorporated herein by reference.
Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item 5.07 | Submission of Matters to a Vote of Security Holders. |
Extraordinary General Meeting of Shareholders
On June 24, 2020, Act II reconvened an extraordinary general meeting of its shareholders (the “Shareholders Meeting”) at which the shareholders voted on the proposals set forth below, each of which is described in greater detail in the Proxy Statement/Prospectus. As previously disclosed, the Shareholders Meeting was originally convened and then adjourned, without conducting any other business, on June 15, 2020.
As of May 1, 2020, the record date for the Shareholders Meeting, there were 30,000,000 shares of Class A ordinary shares of Act II, par value $0.0001 per share (“Act II Class A Shares”), issued and outstanding and 7,500,000 Class B ordinary shares of Act II, par value $0.0001 per share (“Act II Class B Shares,” and together with Act II Class A Shares, “Act II Shares”), issued and outstanding. At the Shareholders Meeting, there were 33,056,855 Act II Shares were present in person or represented by proxy, and each of the proposals was approved by the shareholders. The final voting results for each matter submitted to a vote of the shareholders at the Shareholders Meeting are as follows:
The Business Combination Proposal — To approve by ordinary resolution and adopt the Purchase Agreement and the Business Combination.
FOR | AGAINST | ABSTENTIONS | ||
31,687,367 | 1,369,488 | 0 |
The Domestication Proposal — To approve by special resolution the change of Act II’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”).
FOR | AGAINST | ABSTENTIONS | ||
31,687,367 | 1,369,488 | 0 |
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The Organizational Documents Proposal — To approve by special resolution the following material differences between Act II’s Amended and Restated Memorandum and Articles of Association and the proposed new certificate of incorporation and the proposed new bylaws of Act II Global Acquisition Corp. (a corporation incorporated in the State of Delaware, and the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”)), which will be renamed “Whole Earth Brands, Inc.” in connection with the Business Combination (Act II after the Domestication, including after such change of name, is referred to herein as “Whole Earth Brands, Inc.”), including: (1) changing the corporate name from “Act II Global Acquisition Corp.” to “Whole Earth Brands, Inc.,” (2) making Whole Earth Brands, Inc.’s corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation, and (4) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination.
FOR | AGAINST | ABSTENTIONS | ||
31,687,367 | 1,369,488 | 0 |
The Stock Issuance Proposal — To approve by ordinary resolution for the purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of shares of Whole Earth Brands, Inc. common stock to the Sellers in connection with the Business Combination and any person or entity in connection with any incremental equity issuances, to the extent such issuances would require a shareholder vote under Nasdaq Listing Rule 5635.
FOR | AGAINST | ABSTENTIONS | ||
31,687,367 | 1,369,488 | 0 |
The Incentive Award Plan Proposal — To approve by ordinary resolution to approve and adopt the Whole Earth Brands, Inc. 2020 Long-Term Incentive Award Plan.
FOR | AGAINST | ABSTENTIONS | ||
31,687,367 | 1,369,488 | 0 |
Special Meeting of Public Warrant Holders
On June 24, 2020, Act II also held reconvened a special meeting (the “Warrant Holders Meeting”) of holders (the “Public Warrant Holders”) of Act II warrants issued in its initial public offering (the “Public Warrants”) at which the Public Warrant Holders voted on the proposal set forth below, which is described in greater detail in the Definitive Proxy Statement/Prospectus. As previously disclosed, the Warrant Holders Meeting was originally convened and then adjourned, without conducting any other business, on June 15, 2020.
There were 15,000,000 public warrants of Act II issued and outstanding as of May 1, 2020, the record date for the Warrant Holders Meeting. At the Warrant Holders Meeting, holders of 11,277,958 Public Warrants were present in person or represented by proxy, and the only proposal was approved by the Public Warrant Holders. The final voting results for the Warrant Amendment Proposal (defined below), the only matter submitted to a vote of the Public Warrant Holders at the Warrant Holders Meeting, are as follows:
The Warrant Amendment Proposal — To approve and adopt an amendment to the warrant agreement that governs Act II’s outstanding warrants (the “Warrant Amendment”) to provide that, immediately prior to the consummation of the Business Combination, (i) each of Act II’s outstanding warrants, which currently entitle the holder thereof to purchase one Act II Class A Share at an exercise price of $11.50 per share, will become exercisable for one-half of one share at an exercise price of $5.75 per one-half share ($11.50 per whole share), and (ii) each holder of a warrant will receive, for each such warrant, a cash payment of $0.75 (although the holders of the private placement warrants have waived their rights to receive such payment) (the “Warrant Amendment Proposal”).
FOR | AGAINST | ABSTENTIONS | ||
11,027,108 | 250,850 | 0 |
In light of receipt of the requisite approvals by Act II’s shareholders and the Public Warrant Holders described above, the Business Combination closed on June 25, 2020, and the Whole Earth Brands, Inc. common stock and warrants (after giving effect to the Warrant Amendment) began publicly trading on Nasdaq under the new symbols FREE and FREEW, respectively, when the market opened on the same day.
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Item 9.01. | Financial Statements and Exhibits. |
(a) | Financial statements of businesses acquired. |
Information responsive to Item 9.01(a) of Form 8-K is set forth in the financial statements included in the Proxy Statement/Prospectus beginning on page F-1 and in the financial statements included in the Supplement beginning on Page E-1, each of which are incorporated herein by reference.
(b) | Pro forma financial information. |
The unaudited pro forma condensed combined financial information of the Company for the year ended December 31, 2019 and as of and for the three months ended March 31, 2020, is filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
(c) | Shell company transactions. |
Reference is made to Items 9.01(a) and (b) and the exhibit referred to therein, which are incorporated herein by reference.
(d) | Exhibits. |
15 |
Exhibit
No. |
Description |
16 |
Exhibit
No. |
Description |
* | Filed herewith |
+ | Indicates a management or compensatory plan. |
† | Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request. |
# | Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the SEC upon request. |
‡ |
Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item 601(b)(10). |
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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.
Whole Earth Brands, Inc. | |||
Dated: June 30, 2020 | By: | /s/ Andrew Rusie | |
Andrew Rusie | |||
Chief Financial Officer | |||
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Exhibit 3.1
CERTIFICATE
OF INCORPORATION
OF
WHOLE EARTH BRANDS, INC.
First : The name of the Corporation is Whole Earth Brands, Inc. (the “Corporation”).
Second : The address of the registered office of the Corporation in the State of Delaware is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The name of its registered agent at that address is Corporation Service Company.
Third : The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “GCL”).
Fourth : The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 221,000,000 of which 220,000,000 shares shall be Common Stock, par value $0.0001 per share (the “Common Stock”), and 1,000,000 shares shall be Preferred Stock par value $0.0001 per share (the “Preferred Stock”). The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation are as follows:
(1) Preferred Stock. The Board of Directors of the Corporation (the “Board”) is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights and such qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in the resolution or resolutions adopted by the Board providing for the issue of such series all to the fullest extent now or hereafter permitted by the GCL. Without limiting the generality of the foregoing, the resolution or resolutions providing for the issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law. The number of authorized shares of the Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the GCL.
(2) Common Stock.
(A) General. The voting, dividend, liquidation, conversion and stock split rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board upon any issuance of the Preferred Stock of any series. Each share of Common Stock shall entitle its holder to equal voting, dividend, liquidation, conversion, stock split and any other rights in respect of such share of Common Stock.
(B) Voting. Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held by such holder. Each holder of Common Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation (as in effect at the time in question) (the “Bylaws”) and applicable law on all matters put to a vote of the stockholders of the Corporation.
(C) The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the GCL.
(D) Dividends. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, the holders of Common Stock shall be entitled to the payment of dividends when and as declared by the Board in accordance with applicable law and to receive other distributions from the Corporation. Any dividends declared by the Board to the holders of the then outstanding shares of Common Stock shall be paid to the holders thereof pro rata in accordance with the number of shares of Common Stock held by each such holder as of the record date of such dividend.
(E) Liquidation. Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the Corporation’s stockholders shall be distributed among the holders of the then outstanding shares of Common Stock pro rata in accordance with the number of shares of Common Stock held by each such holder.
Fifth : The name and mailing address of the Sole Incorporator is as follows:
Name | Address | |
Carina Meleca | 1251 Avenue of the Americas, New York, NY 10020 |
Sixth : The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by or under the direction of the Board.
(2) The Board is expressly empowered to adopt, amend or repeal, in whole or in part, the Bylaws in any manner not inconsistent with law, the Bylaws, and this Certificate of Incorporation.
(3) The number of directors of the Corporation shall be, as from time to time fixed by, or in the manner provided in, the Bylaws. Election of directors need not be by written ballot unless the Bylaws so provide.
(4) Subject to applicable law, any director or the entire Board of Directors may be removed only for cause and only by the affirmative vote of the holders of at least 66 2/3% of the total voting power of the then issued and outstanding capital stock of the Corporation entitled to vote in the election of directors, voting together as a single class.
(5) No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Article SIXTH by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.
(6) In addition to the powers and authority herein or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Certificate of Incorporation, and any Bylaws adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior act of the directors which would have been valid if such Bylaws had not been adopted.
(7) Unless otherwise required by law, special meetings of stockholders of the Corporation, for any purpose or purposes, may only be called by either (a) the Chairman of the Board, if there be one, (b) by the Board in the manner provided in the Bylaws.
(8) Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders, and the ability of the stockholders of the Corporation to consent in writing to the taking of any action is hereby specifically denied.
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(9) The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by applicable law as the same exists or may hereafter be modified from time to time (but, in the case of any such amendment or modification, only to the extent that such amendment or modification permits the Corporation to provide greater indemnification rights than said law permitted the Corporation to provide prior to such amendment or modification), and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board. The right to indemnification conferred by this Article SIXTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition upon receipt by the Corporation of an undertaking by or on behalf of the director or officer receiving advancement to repay the amount advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation under this Article SIXTH. The Corporation may, to the extent authorized from time to time by the Board, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article SIXTH to directors and officers of the Corporation. The rights to indemnification and to the advancement of expenses conferred in this Article SIXTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the Bylaws, any statute, agreement, vote of stockholders or disinterested directors or otherwise. Any repeal or modification of this Article SIXTH by the stockholders of the Corporation shall not adversely affect any rights to indemnification and to the advancement of expenses of a director, officer, employee or agent of the Corporation (collectively, the “Covered Persons”) existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
(10) The Corporation hereby acknowledges that certain Covered Persons may have rights to indemnification and advancement of expenses (directly or through insurance obtained by any such entity) provided by one or more third parties (collectively, the “Other Indemnitors”), and which may include third parties for whom such Covered Person serves as a manager, member, officer, employee or agent. The Corporation hereby agrees and acknowledges that notwithstanding any such rights that a Covered Person may have with respect to any Other Indemnitor(s), (i) the Corporation is the indemnitor of first resort with respect to all Covered Persons and all obligations to indemnify and provide advancement of expenses to Covered Persons, (ii) the Corporation shall be required to indemnify and advance the full amount of expenses incurred by the Covered Persons, to the fullest extent required by law, the terms of this Certificate of Incorporation, the Bylaws, any agreement to which the Corporation is a party, any vote of the stockholders or the Board, or otherwise, without regard to any rights the Covered Persons may have against the Other Indemnitors and (iii) to the fullest extent permitted by law, the Corporation irrevocably waives, relinquishes and releases the Other Indemnitors from any and all claims for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Other Indemnitors with respect to any claim for which the Covered Persons have sought indemnification from the Corporation shall affect the foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of any such advancement or payment to all of the rights of recovery of the Covered Persons against the Corporation. These rights shall be a contract right, and the Other Indemnitors are express third party beneficiaries of the terms of this paragraph. Notwithstanding anything to the contrary herein, the obligations of the Corporation under this paragraph 10 shall only apply to Covered Persons in their capacity as Covered Persons.
Seventh : Meetings of stockholders of the Corporation may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws.
Eighth : The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders of the Corporation herein are granted subject to this reservation.
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Ninth : If any provision of this Certificate of Incorporation becomes or is declared on any ground by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Certificate of Incorporation with a valid and enforceable provision that most accurately reflects the Corporation’s intent, in order to achieve, to the maximum extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Certificate of Incorporation shall be enforceable in accordance with its terms.
Tenth :
(1) Unless the Corporation consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery (the “Chancery Court”) of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any director, officer, stockholder, employee or agent of the Corporation arising out of or related to any provision of the GCL or this Certificate of Incorporation or the Bylaws or (iv) any action asserting a claim against the Corporation or any director, officer, stockholder, employee or agent of the Corporation governed by the internal affairs doctrine; except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.
(2) If any provision or provisions of this Article TENTH shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article TENTH (including, without limitation, each portion of any sentence of this Article TENTH containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
(3) Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933.
(4) Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article TENTH.
Eleventh : The existence of any prior Alternative Forum Consent shall not act as a waiver of the Corporation’s ongoing consent right as set forth above in this Article TENTH with respect to any current or future actions or claims.
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I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the GCL, do make this Certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 24th day of June, 2020.
/s/ Carina Meleca | |
Carina Meleca | |
Sole Incorporator |
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Exhibit 3.2
BYLAWS
OF
WHOLE EARTH BRANDS, INC.
A Delaware Corporation
Effective jUNE 24, 2020
TABLE OF CONTENTS
Page | ||
Article I | OFFICES | 1 |
Section 1.1 | Registered Office | 1 |
Section 1.2 | Other Offices | 1 |
Article II | MEETINGS OF STOCKHOLDERS | 1 |
Section 2.1 | Place of Meetings | 1 |
Section 2.2 | Annual Meetings | 1 |
Section 2.3 | Special Meetings | 1 |
Section 2.4 | Nature of Business at Meetings of Stockholders | 1 |
Section 2.5 | Nomination of Directors | 2 |
Section 2.6 | Notice | 4 |
Section 2.7 | Adjournments | 4 |
Section 2.8 | Quorum | 5 |
Section 2.9 | Voting | 5 |
Section 2.10 | Proxies | 5 |
Section 2.11 | List of Stockholders Entitled to Vote | 5 |
Section 2.12 | Record Date | 6 |
Section 2.13 | Stock Ledger | 6 |
Section 2.14 | Conduct of Meetings | 6 |
Section 2.15 | Inspectors of Election | 6 |
Section 2.16 | Action Without Meeting | 6 |
Article III | DIRECTORS | 6 |
Section 3.1 | Number and Election of Directors | 6 |
Section 3.2 | Vacancies | 7 |
Section 3.3 | Duties and Powers | 7 |
Section 3.4 | Meetings | 7 |
Section 3.5 | Organization | 7 |
Section 3.6 | Resignations and Removals of Directors | 7 |
Section 3.7 | Quorum; Required Vote | 8 |
Section 3.8 | Actions of the Board by Written Consent | 8 |
Section 3.9 | Meetings by Means of Conference Telephone | 8 |
Section 3.10 | Committees | 8 |
Section 3.11 | Compensation | 8 |
Section 3.12 | Interested Directors | 9 |
Article IV | OFFICERS | 9 |
Section 4.1 | General | 9 |
Section 4.2 | Election | 9 |
Section 4.3 | Voting Securities Owned by the Corporation | 9 |
Section 4.4 | Chairperson of the Board of Directors | 9 |
Section 4.5 | President | 9 |
Section 4.6 | Vice Presidents | 10 |
Section 4.7 | Secretary | 10 |
Section 4.8 | Treasurer | 10 |
Section 4.9 | Assistant Secretaries | 10 |
Section 4.10 | Assistant Treasurers | 11 |
Section 4.11 | Other Officers | 10 |
Article V | STOCK | 11 |
Section 5.1 | Shares of Stock | 11 |
Section 5.2 | Signatures | 11 |
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Section 5.3 | Lost Certificates | 11 |
Section 5.4 | Transfers | 11 |
Section 5.5 | Dividend Record Date | 11 |
Section 5.6 | Record Owners | 12 |
Section 5.7 | Transfer and Registry Agents | 12 |
Article VI | NOTICES | 12 |
Section 6.1 | Notices | 12 |
Section 6.2 | Waivers of Notice | 12 |
Article VII | GENERAL PROVISIONS | 12 |
Section 7.1 | Dividends | 12 |
Section 7.2 | Disbursements | 12 |
Section 7.3 | Fiscal Year | 12 |
Section 7.4 | Corporate Seal | 12 |
Article VIII | INDEMNIFICATION | 13 |
Section 8.1 | Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation | 13 |
Section 8.2 | Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation | 13 |
Section 8.3 | Authorization of Indemnification | 13 |
Section 8.4 | Good Faith Defined | 13 |
Section 8.5 | Indemnification by a Court | 14 |
Section 8.6 | Expenses Payable in Advance | 14 |
Section 8.7 | Nonexclusivity of Indemnification and Advancement of Expenses | 14 |
Section 8.8 | Insurance | 14 |
Section 8.9 | Certain Definitions | 14 |
Section 8.10 | Survival of Indemnification and Advancement of Expenses | 15 |
Section 8.11 | Limitation on Indemnification | 15 |
Section 8.12 | Indemnification of Employees and Agents | 15 |
Section 8.13 | Primacy of Indemnification | 15 |
Article IX | AMENDMENTS | 15 |
Section 9.1 | Amendments | 15 |
Section 9.2 | Entire Board of Directors | 15 |
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BYLAWS
OF
WHOLE EARTH BRANDS, INC.
(hereinafter called the “Corporation”)
Article I
OFFICES
Section 1.1 Registered Office. The registered office of the Corporation shall be as set forth in the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”).
Section 1.2 Other Offices. The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.
Article II
MEETINGS OF STOCKHOLDERS
Section 2.1 Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors.
Section 2.2 Annual Meetings. The Annual Meeting of Stockholders for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting of Stockholders.
Section 2.3 Special Meetings. Unless otherwise required by law or by the Certificate of Incorporation, Special Meetings of Stockholders, for any purpose or purposes, may only be called by either (i) the Chairperson, if there be one, or (ii) the Board of Directors pursuant to a resolution duly adopted by a majority of the Board of Directors. At a Special Meeting of Stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto).
Section 2.4 Nature of Business at Meetings of Stockholders. Only such business (other than nominations for election to the Board of Directors, which must comply with the provisions of Section 2.5) may be transacted at an Annual Meeting of Stockholders as is either (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (ii) otherwise properly brought before the Annual Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (iii) otherwise properly brought before the Annual Meeting by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.4 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (y) who complies with the notice procedures set forth in this Section 2.4.
(a) In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.
(b) To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Corporation not less than ninety (90) days nor more than one-hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
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(c) To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (i) as to each matter such stockholder proposes to bring before the Annual Meeting, a brief description of the business desired to be brought before the Annual Meeting and the proposed text of any proposal regarding such business (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend these bylaws, the text of the proposed amendment), and the reasons for conducting such business at the Annual Meeting, and (ii) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is being made, (A) the name and address of such person, (B) (1) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (2) the name of each nominee holder of shares of all stock of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (3) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (4) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (C) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with or relating to (1) the Corporation or (2) the proposal, including any material interest in, or anticipated benefit from the proposal to such person, or any affiliates or associates of such person, (D) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting; and (E) any other information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such person with respect to the proposed business to be brought by such person before the Annual Meeting pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder.
(d) A stockholder providing notice of business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of the Annual Meeting.
(e) No business shall be conducted at the Annual Meeting of Stockholders except business brought before the Annual Meeting in accordance with the procedures set forth in this Section 2.4 or Section 2.5; provided, however, that, once business has been properly brought before the Annual Meeting in accordance with such procedures, nothing in this Section 2.4 shall be deemed to preclude discussion by any stockholder of any such business. If the chairperson of an Annual Meeting determines that business was not properly brought before the Annual Meeting in accordance with the foregoing procedures, the chairperson shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.
(f) Nothing contained in this Section 2.4 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor provision of law).
Section 2.5 Nomination of Directors. Only persons who are nominated in accordance with the procedures of this Section 2.5 shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation to nominate and elect a specified number of directors in certain circumstances.
(a) Nominations of persons for election to the Board of Directors may be made at any Annual Meeting of Stockholders (i) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (ii) by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.5 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (y) who complies with the notice procedures set forth in this Section 2.5.
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(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.
(c) To be timely, a stockholder’s notice to the Secretary must be delivered to or be mailed and received at the principal executive offices of the Corporation in the case of an Annual Meeting, not less than ninety (90) days nor more than one-hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) (1) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (2) the name of each nominee holder of shares of all stock of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (3) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (4) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, (D) such person’s written representation and agreement that such person (1) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question, (2) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Corporation that has not been disclosed to the Corporation in such representation and agreement and (3) in such person’s individual capacity, would be in compliance, if elected as a director of the Corporation, and will comply with, all applicable publicly disclosed confidentiality, corporate governance, conflict of interest, Regulation FD, code of conduct and ethics, and stock ownership and trading policies and guidelines of the Corporation and (E) all information relating to such nominee for nomination that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, (A) the name and record address of the stockholder giving the notice and the name and principal place of business of such beneficial owner; (B) (1) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (2) the name of each nominee holder of shares of the Corporation owned beneficially but not of record by such person or any affiliates or associates of such person, and the number of shares of stock of the Corporation held by each such nominee holder, (3) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (4) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation; (C) a description of (1) all agreements, arrangements, or understandings (whether written or oral) between such person, or any affiliates or associates of such person, and any proposed nominee, or any affiliates or associates of such proposed nominee, (2) all agreements, arrangements, or understandings (whether written or oral) between such person, or any affiliates or associates of such person, and any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, or otherwise relating to the Corporation or their ownership of capital stock of the Corporation, and (3) any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person; (D) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting to nominate the persons named in its notice; and (E) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by (X) a completed written questionnaire (in a form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such proposed nominee, and such additional information with respect to such proposed nominee as would be required to be provided by the Company pursuant to Schedule 14A if such proposed nominee were a participant in the solicitation of proxies by the Company in connection with such annual or special meeting and (Y) a written representation and agreement (in form provided by the Corporation) that such nominee (i) if elected as director of the Corporation, intends to serve the entire term until the next meeting at which such nominee would face re-election and (ii) consents to being named as a nominee in the Corporation’s proxy statement pursuant to Rule 14a-4(d) under the Exchange Act and any associated proxy card of the Corporation and agrees to serve if elected as a director.
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(e) A stockholder providing notice of any nomination proposed to be made at an Annual Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.5 shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting, and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of such Annual Meeting.
(f) No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.5. If the Chairperson of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairperson shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.
Section 2.6 Notice. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting.
Section 2.7 Adjournments. Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment, a new record date is fixed for the adjourned meeting, notice of the adjourned meeting, in accordance with the requirements of Section 6 hereof, shall be given to each stockholder of record entitled to notice of and to vote at the meeting.
Section 2.8 Quorum. Unless otherwise required by applicable law, or the Certificate of Incorporation, the holders of a majority of the Corporation’s capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, until a quorum shall be present or represented.
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Section 2.9 Voting. Unless otherwise required (x) by applicable law, rule or regulation (including the rules of any stock exchange on which the Corporation’s shares are listed and traded), or (y) by the Certificate of Incorporation or these Bylaws, any question brought before any meeting of the stockholders, other than the election of directors, shall be decided by the vote of the holders of a majority of the total number of votes of the Corporation’s capital stock represented at the meeting and entitled to vote on such question, voting as a single class. Unless otherwise provided in the Certificate of Incorporation, each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 2.10. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.
Section 2.10 Proxies. Each stockholder entitled to vote at a meeting of the stockholders may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period.
(a) Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:
(i) stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(ii) stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram or cablegram to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such telegram or cablegram, provided that any such telegram or cablegram must either set forth or be submitted with information from which it can be determined that the telegram or cablegram was authorized by the stockholder. If it is determined that such telegrams or cablegrams are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.
(b) Any copy, facsimile telecommunication or other reliable reproduction of the writing, telegram or cablegram authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing, telegram or cablegram for any and all purposes for which the original writing, telegram or cablegram could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing, telegram or cablegram.
Section 2.11 List of Stockholders Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held or (ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
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Section 2.12 Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
Section 2.13 Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 2.11 or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.
Section 2.14 Conduct of Meetings. The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairperson of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting (including whether to adjourn such meeting). Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairperson of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairperson of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.
Section 2.15 Inspectors of Election. In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairperson or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.
Section 2.16 Action Without Meeting. Any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders.
Article III
DIRECTORS
Section 3.1 Number and Election of Directors. The Board of Directors shall consist of not less than one (1) nor more than fifteen (15) members, the exact number of which shall initially be seven (7) and thereafter fixed from time to time by the Board of Directors. Except as provided in Section 3.2, directors shall be elected by a plurality of the votes cast at each Annual Meeting of Stockholders and each director so elected shall hold office until the next Annual Meeting of Stockholders and until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
Section 3.2 Vacancies. Unless otherwise required by law or the Certificate of Incorporation, vacancies on the Board of Directors or any committee thereof arising through death, resignation, removal, an increase in the number of directors constituting the Board of Directors or such committee or otherwise may be filled only by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. The directors so chosen shall, in the case of the Board of Directors, hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier death, resignation or removal and, in the case of any committee of the Board of Directors, shall hold office until their successors are duly appointed by the Board of Directors or until their earlier death, resignation or removal.
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Section 3.3 Duties and Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.
Section 3.4 Meetings. The Board of Directors and any committee thereof may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors or any committee thereof may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors or such committee, respectively. Special meetings of the Board of Directors may be called by the Chairperson, if there be one, or by any two (2) or more directors. Special meetings of any committee of the Board of Directors may be called by the chairperson of such committee, if there be one, or any director serving on such committee. Notice thereof stating the place, date and hour of the meeting shall be given to each director (or, in the case of a committee, to each member of such committee) either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.
Section 3.5 Organization. At each meeting of the Board of Directors or any committee thereof, the Chairperson of the Board of Directors or the chairperson of such committee, as the case may be, or, in his or her absence or if there be none, a director chosen by a majority of the directors present, shall act as chairperson. Except as provided below, the Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors and of each committee thereof. In case the Secretary shall be absent from any meeting of the Board of Directors or of any committee thereof, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the chairperson of the meeting may appoint any person to act as secretary of the meeting. Notwithstanding the foregoing, the members of each committee of the Board of Directors may appoint any person to act as secretary of any meeting of such committee and the Secretary or any Assistant Secretary of the Corporation may, but need not if such committee so elects, serve in such capacity.
Section 3.6 Resignations and Removals of Directors.
(a) Any director of the Corporation may resign from the Board of Directors or any committee thereof at any time, by giving notice in writing to the Chairperson of the Board of Directors, if there be one, the President or the Secretary of the Corporation and, in the case of a committee, to the chairperson of such committee, if there be one. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective.
(b) Subject to applicable law, any director or the entire Board of Directors may be removed only for cause and only by the affirmative vote of the holders of at least 66 2/3% of the total voting power of the then issued and outstanding capital stock of the Corporation entitled to vote in the election of directors, voting together as a single class.
(c) Any director serving on a committee of the Board of Directors may be removed from such committee at any time by the Board of Directors.
Section 3.7 Quorum; Required Vote. Except as otherwise (x) required by applicable law, rule or regulation (including the rules of any stock exchange on which the Corporation’s shares are listed and traded), or (y) required by the Certificate of Incorporation or these Bylaws, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or a majority of the directors constituting such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors or committee members present at any meeting at which there is a quorum shall be the act of the Board of Directors or such committee, as applicable. If a quorum shall not be present at any meeting of the Board of Directors or any committee thereof, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.
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Section 3.8 Actions of the Board by Written Consent. Unless otherwise provided in the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee.
Section 3.9 Meetings by Means of Conference Telephone. Unless otherwise provided in the Certificate of Incorporation, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.9 shall constitute presence in person at such meeting.
Section 3.10 Committees.
(a) The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each member of a committee must meet the requirements for membership, if any, imposed by applicable law and the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading;
(b) The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Subject also to the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading, in the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another qualified member of the Board of Directors to act at the meeting in the place of any absent or disqualified member.
(c) Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.
(d) Notwithstanding anything to the contrary contained in (a)-(c) of this Section 3.10, the resolution of the Board of Directors establishing any committee of the Board of Directors and/or the charter of any such committee may establish requirements or procedures relating to the governance and/or operation of such committee that are different from, or in addition to, those set forth in these Bylaws and, to the extent that there is any inconsistency between these Bylaws and any such resolution or charter, the terms of such resolution or charter shall be controlling.
Section 3.11 Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.
Section 3.12 Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because any such director’s or officer’s vote is counted for such purpose if: (i) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
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Article IV
OFFICERS
Section 4.1 General. The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its sole discretion, may choose its Chairperson, one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairperson of the Board of Directors, need such officers be directors of the Corporation.
Section 4.2 Election. The Board of Directors, at its first meeting held after each Annual Meeting of Stockholders, shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer’s successor is elected and qualified, or until such officer’s earlier death, resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.
Section 4.3 Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
Section 4.4 Chairperson of the Board of Directors. The Chairperson of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and the Board of Directors. Except where by law the signature of the President is required, the Chairperson of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. The Chairperson of the Board of Directors shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these Bylaws or by the Board of Directors.
Section 4.5 President. The President shall, subject to the control of the Board of Directors and, if there be one, the Chairperson of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall be authorized to execute all bonds, mortgages, contracts and other instruments of the Corporation which require a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these Bylaws, the Board of Directors or the President. In the absence or disability of the Chairperson of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and, provided the President is also a director, the Board of Directors. If there be no Chairperson of the Board of Directors, or if the Board of Directors shall otherwise designate, the President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these Bylaws or by the Board of Directors.
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Section 4.6 Vice Presidents. At the request of the President or in the President’s absence or in the event of the President’s inability or refusal to act (and if there be no Chairperson of the Board of Directors), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairperson of the Board of Directors and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.
Section 4.7 Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairperson of the Board of Directors or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer’s signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.
Section 4.8 Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer’s possession or under the Treasurer’s control belonging to the Corporation.
Section 4.9 Assistant Secretaries. Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.
Section 4.10 Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Assistant Treasurer’s possession or under the Assistant Treasurer’s control belonging to the Corporation.
Section 4.11 Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
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Article V
STOCK
Section 5.1 Shares of Stock. Except as otherwise provided in a resolution approved by the Board of Directors, all shares of capital stock of the Corporation shall be uncertificated shares.
Section 5.2 Signatures. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.
Section 5.3 Lost Certificates. The Board of Directors may direct a new certificate or uncertificated shares be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares.
Section 5.4 Transfers. Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation, and in the case of certificated shares of stock, only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; or, in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided, however, that such surrender and endorsement, compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.
Section 5.5 Dividend Record Date. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 5.6 Record Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.
Section 5.7 Transfer and Registry Agents. The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.
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Article VI
NOTICES
Section 6.1 Notices. Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex or cable.
Section 6.2 Waivers of Notice. Whenever any notice is required by applicable law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Annual or Special Meeting of Stockholders or any regular or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these Bylaws.
Article VII
GENERAL PROVISIONS
Section 7.1 Dividends. Dividends upon the capital stock of the Corporation, subject to the requirements of the DGCL and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with these Bylaws), and may be paid in cash, in property, or in shares of the Corporation’s capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.
Section 7.2 Disbursements. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 7.3 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 7.4 Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
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Article VIII
INDEMNIFICATION
Section 8.1 Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation. Subject to Section 8.3, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
Section 8.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 8.3, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 8.3 Authorization of Indemnification. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.
Section 8.4 Good Faith Defined. For purposes of any determination under Section 8.3, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 8.1 or 8.2, as the case may be.
Section 8.5 Indemnification by a Court. Notwithstanding any contrary determination in the specific case under Section 8.3, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 8.1 or 8.2. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 8.1 or Section 8.2, as the case may be. Neither a contrary determination in the specific case under Section 8.3 nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.
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Section 8.6 Expenses Payable in Advance. Expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.
Section 8.7 Nonexclusivity of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 8.1 or 8.2 shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 8.1 or Section 8.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.
Section 8.8 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.
Section 8.9 Certain Definitions. For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term “another enterprise” as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.
Section 8.10 Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 8.11 Limitation on Indemnification. Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 8.5), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.
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Section 8.12 Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.
Section 8.13 Primacy of Indemnification. Notwithstanding that a director, officer, employee or agent of the Corporation (collectively, the “Covered Persons”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by other persons (collectively, the “Other Indemnitors”), with respect to the rights to indemnification, advancement of expenses and/or insurance set forth herein, the Corporation: (i) shall be the indemnitor of first resort (i.e., its obligations to Covered Persons are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Covered Persons are secondary); and (ii) shall be required to advance the full amount of expenses incurred by Covered Persons and shall be liable for the full amount of all liabilities, without regard to any rights Covered Persons may have against any of the Other Indemnitors. No advancement or payment by the Other Indemnitors on behalf of Covered Persons with respect to any claim for which Covered Persons have sought indemnification from the Corporation shall affect the immediately preceding sentence, and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Covered Persons against the Corporation. Notwithstanding anything to the contrary herein, the obligations of the Corporation under this Section 8.13 shall only apply to Covered Persons in their capacity as Covered Persons.
Article IX
AMENDMENTS
Section 9.1 Amendments. These Bylaws may be altered, amended or repealed in accordance with the Certificate of Incorporation and the DGCL.
Section 9.2 Entire Board of Directors. As used in this Article IX and in these Bylaws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.
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Adopted as of June 24, 2020
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Exhibit 3.3
CERTIFICATE OF DOMESTICATION
OF
ACT II GLOBAL ACQUISITION CORP.
Pursuant to Sections 103 and 388 of the General
Corporation Law of the State of Delaware
Act II Global Acquisition Corp., a Cayman Islands exempted company limited by its shares, which intends to domesticate as a Delaware corporation pursuant to this Certificate of Domestication (upon such domestication to be renamed “Whole Earth Brands, Inc.” and referred to herein as the “Corporation”), does hereby certify to the following facts relating to the domestication of the Corporation in the State of Delaware:
1. The Corporation was originally incorporated on the 16th day of August, 2018 under the laws of the Cayman Islands.
2. The name of the Corporation immediately prior to the filing of this Certificate of Domestication is “Act II Global Acquisition Corp.”
3. The name of the Corporation as set forth in the Certificate of Incorporation filed concurrently with this Certificate of Domestication is, and following such domestication shall be “Whole Earth Brands, Inc.”
4. The jurisdiction that constituted the seat, siege social or principal place of business or central administration of the Corporation immediately prior to the filing of this Certificate of Domestication is the Cayman Islands.
5. The domestication has been approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of Act II Global Acquisition Corp. and the conduct of its business or by applicable non-Delaware law, as appropriate.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Domestication to be executed in its name this 24th day of June, 2020.
[Signature Page follows]
ACT II GLOBAL ACQUISITION CORP., a Cayman Islands exempted company | ||
By: | /s/ Ira. J. Lamel | |
Name: | Ira J. Lamel | |
Title: | Chief Financial Officer |
Exhibit 4.2
AMENDED AND RESTATED WARRANT AGREEMENT
THIS AMENDED AND RESTATED WARRANT AGREEMENT (this “Agreement”), dated as of June 25, 2020, is by and between Whole Earth Brands, Inc., a Delaware corporation (f/k/a Act II Global Acquisition Corp., a Cayman Islands exempted company) (the “Company”) and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”, also referred to herein, in its capacity as the Company’s transfer agent, as the “Transfer Agent”).
WHEREAS, on April 25, 2019, the Company entered into that certain Private Placement Warrants Purchase Agreement with Act II Global LLC, a Delaware limited liability company (the “Sponsor”), pursuant to which the Sponsor purchased an aggregate of 6,750,000 warrants (the “Private Placement Warrants”) in connection with, and simultaneously upon, the closing of the Offering (as defined below) at a purchase price of $1.00 per Private Placement Warrant;
WHEREAS, the Company and the Warrant Agent entered into that certain Warrant Agreement, dated as of April 25, 2019 (the “Original Warrant Agreement”), which provided for the form and provisions of the Initial Warrants (as defined below), the terms upon which they shall be issued and exercised, and the respective rights, limitations of rights, and immunities of the Company, the Warrant Agent, and the holders of the Initial Warrants;
WHEREAS, on April 30, 2019, the Company completed its initial public offering (the “Offering”) of units of the Company’s equity securities, each such unit comprised of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”) and one-half of one Public Warrant (as defined below) (the “Units”) and, in connection therewith, issued and delivered 15,000,000 warrants (including 1,950,000 warrants pursuant to the partial exercise of the underwriters’ over-allotment option) to public investors in the Offering (the “Public Warrants” and, together with the Private Placement Warrants, the “Initial Warrants”). Each whole Initial Warrant entitled the holder thereof to purchase one Ordinary Share for $11.50 per Ordinary Share, subject to adjustment as described herein;
WHEREAS, the Company filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File No. 333-230756 (the “Registration Statement”) and prospectus (the “Prospectus”), for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the Public Warrants and the Ordinary Shares included in the Units;
WHEREAS, on December 19, 2019, the Company entered into a Purchase Agreement (as amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), pursuant to which, among other things, the Company purchased all of the outstanding equity interests of Merisant Company, Merisant Luxembourg, Sarl, Mafco Worldwide LLC, Mafco Shanghai LLC, EVD Holdings LLC and Mafco Deutschland GmbH (the “Transaction”);
WHEREAS, it is a condition to the closing of the Transaction that, among other things, the Warrant Amendment (as defined in the Transaction Agreement) be approved in order to reduce the number of Ordinary Shares issuable upon exercise of the Initial Warrants by half;
WHEREAS, Section 9.8 of the Original Warrant Agreement provided that the Original Warrant Agreement may be amended with the vote or written consent of the registered holders of 65% of the then-outstanding Public Warrants;
WHEREAS, at a meeting of the warrant holders on June 24, 2020, holders of at least 65% of the then-outstanding Public Warrants approved that, in connection with the closing of the Transaction, each Warrant shall become exercisable for one-half of one Ordinary Share with an exercise price of $5.75 per one-half Ordinary Share ($11.50 per whole Ordinary Share) and each holder of a Warrant shall receive a special distribution of $0.75 per Warrant;
WHEREAS, in connection with the closing of the Transaction, the Company effected the Warrant Amendment, as approved by the warrant holders, the Sponsor cancelled all of its Private Placement Warrants and the Company issued Private Placement Warrants exercisable for 2,631,750 Ordinary Shares (after giving effect to the Warrant Amendment) to certain investors who entered into subscription agreements with the Company on or about February 12, 2020 (the “PIPE Investors”). In order to reflect the closing of the Transaction and the fact that the PIPE Investors shall be entitled to registration rights under a subscription agreement rather than a separate registration rights agreement, the Private Placement Warrants shall bear the legend set forth on Exhibit A hereto instead of the legend previously affixed to the Sponsor’s Private Placement Warrants;
WHEREAS, in connection with the closing of the Transaction, the Company effected a deregistration under the Cayman Islands Companies Law (2020 Revision) and a domestication under Section 388 of the Delaware General Corporation Law (the “Domestication”), pursuant to which the Company’s jurisdiction of incorporation was transferred by way of continuation from the Cayman Islands to the State of Delaware and the name of the Company was changed to “Whole Earth Brands, Inc.”;
WHEREAS, as a result of the transactions described above, each outstanding Warrant of the Company now represents the right to purchase one-half of one share of Common Stock, par value $0.0001 per share (“Common Stock”), of the Company with an exercise price of $5.75 per one-half share ($11.50 per whole share). Immediately after giving effect to the closing of the Transaction, the Private Placement Warrants and the Public Warrants are collectively referred to herein as the “Warrants”;
WHEREAS, the Company desires that the Warrant Agent continue to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise, as applicable, of the Warrants;
WHEREAS, as a result of the transactions described above, the Company and the Warrant Agent desire to amend and restate the Original Warrant Agreement in its entirety, in accordance with the terms thereof, such that this Agreement will take effect immediately following the Closing; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form of Warrant. Each Warrant shall be issued in registered form only, and, if a physical certificate is issued, shall be in substantially the form of Exhibit B hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.
2.2 Effect of Countersignature. If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. All of the Public Warrants shall initially be represented by one or more book-entry certificates (each, a “Book-Entry Warrant Certificate”) deposited with The Depository Trust Company (the “Depositary”) and registered in the name of Cede & Co., a nominee of the Depositary. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Book-Entry Warrant Certificate, or (ii) institutions that have accounts with the Depositary (each such institution, with respect to a Warrant in its account, a “Participant”).
If the Depositary subsequently ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive Warrant Certificate”). Such Definitive Warrant Certificate shall be in the form annexed hereto as Exhibit B, with appropriate insertions, modifications and omissions, as provided above.
2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”) as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on a Definitive Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4 Detachability of Warrants. The Common Stock and Public Warrants comprising the Units shall trade separately.
2.5 No Fractional Warrants. The Company shall not issue fractional Warrants.
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2.6 Private Placement Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor, the PIPE Investors or any Permitted Transferees (as defined below), as applicable, the Private Placement Warrants: (i) may be exercised for cash or on a cashless basis, pursuant to subsection 3.3.1 (c) hereof, (ii) may not be transferred, assigned or sold until thirty (30) days after the closing of the Transaction, and (iii) shall not be redeemable by the Company; provided, however, that in the case of (ii) the Private Placement Warrants and any shares of Common Stock held by the Sponsor, the PIPE Investors or any Permitted Transferees, as applicable, and issued upon exercise of the Private Placement Warrants may be transferred by the holders thereof:
(a) to the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors, any affiliate of the Sponsor or to any member(s) of the Sponsor or any of their affiliates, officers, directors and direct and indirect equityholders;
(b) in the case of an individual, by gift to a member such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an affiliate of such individual or to a charitable organization;
(c) in the case of an individual, by virtue of the laws of descent and distribution upon death of such person;
(d) in the case of an individual, pursuant to a qualified domestic relations order;
(e) by private sales or transfers made in connection with the consummation of the Transaction at prices no greater than the price at which the Warrants were originally purchased; or
(f) by virtue of the laws of the State of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor;
provided, however, that, in the case of clauses (a) through (f), these transferees (the “Permitted Transferees”) enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.
3. Terms and Exercise of Warrants.
3.1 Warrant Price. Each Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $5.75 per one-half share ($11.50 per whole share), subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1; provided, however, that a Warrant may not be exercised for a fractional share, so that only a multiple of two Warrants may be exercised at a given time. The term “Warrant Price” as used in this Agreement shall mean the price per one-half share of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than twenty (20) Business Days, provided, that the Company shall provide at least twenty (20) days prior written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical among all of the Warrants. The term “Business Day” as used in this Agreement shall mean any day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally open for normal business.
3.2 Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the later of: (i) the date that is thirty (30) days after the first date on which the Company completed the Transaction, or (ii) the date that is twelve (12) months from the date of the closing of the Offering, and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five (5) years after the date on which the Company completed the Transaction, (y) the liquidation of the Company, or (z) other than with respect to the Private Placement Warrants to the extent then held by the original purchasers thereof, the PIPE Investors or their respective Permitted Transferees, the Redemption Date (as defined below) as provided in Section 6.2 hereof (the “Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection 3.3.2 below with respect to an effective registration statement. Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Private Placement Warrant) to the extent then held by the original purchasers thereof, the PIPE Investors or their respective Permitted Transferees in the event of a redemption (as set forth in Section 6 hereof), each outstanding Warrant (other than a Private Placement Warrant to the extent then held by the original purchasers thereof, the PIPE Investors or their respective Permitted Transferees in the event of a redemption) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in duration among all the Warrants.
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3.3 Exercise of Warrants.
3.3.1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised, or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “Book-Entry Warrants”) on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”) Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant in accordance with the Depositary’s procedures, and (iii) payment in full of the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for shares of Common Stock and the issuance of such Common Stock, as follows:
(a) by certified check payable to the order of the Warrant Agent or by wire transfer;
(b) in the event of a redemption pursuant to Section 6 hereof in which the Company’s board of directors (the “Board”) has elected to require all holders of the Warrants to exercise such Warrants (except as otherwise provided in section 6.4) on a “cashless basis,” by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the Fair Market Value (as defined in this subsection 3.3.1(b)) over the Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b) and Section 6.3, the “Fair Market Value” shall mean the average last sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the Warrants, pursuant to Section 6 hereof;
(c) with respect to any Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor, the PIPE Investors or Permitted Transferees, as applicable, by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the excess of the Fair Market Value, (as defined in this subsection 3.3.1(c)) over the Warrant Price, by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Fair Market Value” shall mean the average reported last sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which notice of exercise of the Warrant is sent to the Warrant Agent; or
(d) as provided in Section 7.4 hereof.
3.3.2 Issuance of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not have been exercised. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate are exercised, a notation shall be made to the records maintained by the Depositary, its nominee for each Book-Entry Warrant Certificate, or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing, the Company shall not be obligated to issue any shares of Common Stock pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares of Common Stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying its obligations under Section 7.4. No Warrant shall be exercisable and the Company shall not be obligated to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise have been registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence of the Registered Holder of the Warrants, except pursuant to Section 7.4. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless, in which case the purchaser of a Unit containing such Public Warrants shall have paid the full purchase price for the Unit solely for the shares of Common Stock underlying such Unit. In no event will the Company be required to net cash settle the Warrant exercise. The Company may require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to subsection 3.3.1(b) and Section 7.4. If, by reason of any exercise of Warrants on a “cashless basis”, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number, the number of shares of Common Stock to be issued to such holder.
3.3.3 Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement and the certificate of incorporation and bylaws of the Company shall be validly issued as fully paid and non-assessable.
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3.3.4 Date of Issuance. Upon proper exercise of a Warrant, the Company shall instruct the Warrant Agent in writing to make the necessary entries in the register of members of the Company in respect of the Common Stock and to issue a certificate if requested by the holder of such Warrant. Each person in whose name any book-entry position in the register of members of the Company for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry position in the register of members of the Company representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the register of members of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the register of members or book-entry system are open.
3.3.5 Maximum Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection 3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify)(the “Maximum Percentage”) of the shares of Common Stock issued and outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number shares of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining the number of issued and outstanding shares of Common Stock, the holder may rely on the number of issued and outstanding shares of Common Stock as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock issued and outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall, within two (2) Business Days, confirm orally and in writing to such holder the number of shares of Common Stock then issued and outstanding. In any case, the number of issued and outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such number of issued and outstanding shares of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock Dividends.
4.1.1 Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of issued and outstanding shares of Common Stock is increased by a dividend payable in Common Stock, or by a split of shares of Common Stock or other similar event, then, on the effective date of such stock dividend, split or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the issued and outstanding Common Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the Fair Market Value (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for shares of Common Stock) and (ii) one (1) minus the quotient of (x) the price per shares of Common Stock paid in such rights offering divided by (y) the Fair Market Value. For purposes of this subsection 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price payable for Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “Fair Market Value” means the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
4.1.2 Extraordinary Dividends. If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above, or (b) Ordinary Cash Dividends (as defined below), (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, “Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in the Offering).
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4.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of issued and outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in issued and outstanding shares of Common Stock.
4.3 Adjustments in Exercise Price.
4.3.1 Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.
4.4 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding shares of Common Stock (other than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely affects the par value of such Common Stock), or in the case of any merger or consolidation of the Company with or into another entity or conversion of the Company as another entity (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the issued and outstanding shares of Common Stock), or in the case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is liquidated or dissolved, the holders of the Warrants shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance” ); provided, however, that in connection with the closing of any such consolidation, merger, sale or conveyance, the successor or purchasing entity shall execute an amendment hereto with the Warrant Agent providing for delivery of such Alternative Issuance; provided, further, that (i) if the holders of the Common Stock were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the Common Stock under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any successor rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 50% of the issued and outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Common Stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided, further, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable in the form of shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount (in dollars) equal to the difference of (but in no event less than zero) (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such amount, (1) Section 6 of this Agreement shall be taken into account, (2) the price of each share of Common Stock shall be the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event, (3) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined as of the trading day immediately prior to the day of the announcement of the applicable event, and (4) the assumed risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration” means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share of Common Stock, and (ii) in all other cases, the amount of cash per each share of Common Stock, if any, plus the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassification, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than the par value per share issuable upon exercise of the Warrant.
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4.5 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.
4.6 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number of shares of Common Stock to be issued to such holder.
4.7 Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.8 Other Events. In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment, provided, however, that under no circumstances shall the Warrants be adjusted pursuant to this Section 4.8 as a result of any issuance of securities in connection with the Transaction. The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, in the case of certificated Warrants, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise provided herein or in any Book-Entry Warrant Certificate or Definitive Warrant Certificate, each Book-Entry Warrant Certificate and Definitive Warrant Certificate may be transferred only in whole and only to the Depositary, to another nominee of the Depositary, to a successor depository, or to a nominee of a successor depository; provided further, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.
5.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant certificate or book-entry position for a fraction of a warrant.
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5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption. Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of the Warrants, as described in Section 6.2 below, at the price of $0.01 per Warrant (the “Redemption Price”), provided that the last sales price of the Common Stock reported has been at least $18.00 per share (subject to adjustment in compliance with Section 4 hereof), on each of twenty (20) trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the redemption is given and provided that there is an effective registration statement covering the Common Stock issuable upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as defined in Section 6.2 below) or the Company has elected to require the exercise of the Warrants on a “cashless basis” pursuant to subsection 3.3.1; provided, however, that if and when the Public Warrants become redeemable by the Company, the Company may not exercise such redemption right if the issuance of Common Stock upon exercise of the Public Warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
6.2 Date Fixed for, and Notice of, Redemption. In the event that the Company elects to redeem all of the Warrants, the Company shall fix a date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the “30-day Redemption Period”) to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered Holder received such notice.
6.3 Exercise After Notice of Redemption. The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with subsection 3.3.1(b) of this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date. In the event that the Company determines to require all holders of Warrants to exercise their Warrants on a “cashless basis” pursuant to subsection 3.3.1, the notice of redemption shall contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including the “Fair Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case. On and after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.
6.4 Exclusion of Private Placement Warrants. The Company agrees that the redemption rights provided in this Section 6 shall not apply to the Private Placement Warrants if at the time of the redemption such Private Placement Warrants continue to be held by the Sponsor, PIPE Investors or any Permitted Transferees, as applicable. However, once such Private Placement Warrants are transferred (other than to Permitted Transferees under Section 2.6), the Company may redeem the Private Placement Warrants, provided that the criteria for redemption are met, including the opportunity of the holder of such Private Placement Warrants to exercise the Private Placement Warrant prior to redemption pursuant to Section 6.3. Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such transfer cease to be Private Placement Warrants and shall become Public Warrants under this Agreement.
6.5 Mandatory Cash Distribution. Notwithstanding anything contained in this Agreement to the contrary, at the Effective Time (as defined in the Transaction Agreement), each Warrant issued and outstanding immediately prior to the Effective Time shall, automatically and without any action by the Registered Holder thereof, be entitled to receive a cash distribution payable by or at the direction of the Company as soon as reasonably practicable following the Effective Time, upon receipt of any documents as may reasonably be required by the Warrant Agent, in the amount of $ .
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1 No Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
7.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
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7.3 Reservation of Common Stock. the Company shall at all times reserve and keep available a number of its authorized but unissued Common Stock that shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration of Common Stock; Cashless Exercise at Company’s Option.
7.4.1 Registration of the Common Stock. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after the closing of the Transaction, it shall use its best efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the Warrants. The Company shall use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the 60th Business Day following the closing of the Transaction, holders of the Warrants shall have the right, during the period beginning on the 61st Business Day after the closing of the Transaction and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption) for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the Fair Market Value (as defined below) by (y) the Fair Market Value. Solely for purposes of this subsection 7.4.1, “Fair Market Value” shall mean the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request, provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience) stating that (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities Act (or any successor statute)) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the first three sentences of this subsection 7.4.1.
7.4.2 Cashless Exercise at Company’s Option. If the Common Stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act (or any successor statute), the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor statute) as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall not be required to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Common Stock issuable upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary. If the Company does not elect at the time of exercise to require a holder of Public Warrants who exercises Public Warrants to exercise such Public Warrants on a “cashless basis,” it agrees to use its best efforts to register or qualify for sale the Common Stock issuable upon exercise of the Public Warrant under the blue sky laws of the state of residence of the exercising Public Warrant holder to the extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1 Payment of Taxes. The Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
8.2 Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
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8.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.
8.3 Fees and Expenses of Warrant Agent.
8.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
8.4 Liability of Warrant Agent.
8.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President, Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.
8.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid and fully paid and non-assessable.
8.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of the Warrants.
8.6 Waiver. The Warrant Agent has no right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date of the Original Warrant Agreement, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
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9. Miscellaneous Provisions.
9.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.
9.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
Whole Earth Brands, Inc.
125 S. Wacker Drive, Suite 3150
Chicago, IL 60606
Attention: Andrew Rusie, Chief Financial Officer
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3 Applicable Law. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
9.4 Persons Having Rights under this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto and the Registered Holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6 Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8 Amendments. This Agreement may be amended by the parties hereto without the consent of any Registered Holder (i) for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders, and (ii) to provide for the delivery of Alternative Issuance pursuant to Section 4.4. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Private Placement Warrants, shall require the vote or written consent of the Registered Holders of 65% of the then outstanding Public Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the Registered Holders.
9.9 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
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9.10 Complete Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof (including, for the avoidance of doubt, the Original Warrant Agreement).
Exhibit A – Legend (Private Placement Warrants)
Exhibit B – Form of Warrant Certificate
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
Whole Earth Brands, Inc. | ||
By: | /s/ Andrew Rusie | |
Name: | Andrew Rusie | |
Title: | Chief Financial Officer | |
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | ||
By: | /s/ Isaac Kagan | |
Name: | Isaac Kagan | |
Title: | Vice President |
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EXHIBIT A
LEGEND (PRIVATE PLACEMENT WARRANTS)
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES THE TRANSACTION (AS DEFINED IN THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER THE APPLICABLE SUBSCRIPTION AGREEMENT EXECUTED BY THE COMPANY.”
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EXHIBIT B
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
WHOLE EARTH BRANDS, INC.
Incorporated Under the Laws of the Delaware
CUSIP [__]
Warrant Certificate
This Warrant Certificate certifies that __________, or registered assigns, is the registered holder of warrant(s) evidenced hereby (the “Warrants” and each, a “Warrant”) to purchase shares of common stock, $0.0001 par value per share (“Common Stock”), of the Whole Earth Brands, Inc., a Delaware Corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable for one-half of one fully paid and non-assessable share of Common Stock. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round down to the nearest whole number of shares of Common Stock to be issued to the Warrant holder. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Exercise Price for any Warrant is equal to $5.75 per one-half share ($11.50 per whole share); provided however, that a Warrant may not be exercised for a fractional share, so that only a multiple of two Warrants may be exercised at a given time. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
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WHOLE EARTH BRANDS, INC. | ||
By: | ||
Name: | ||
Title: | ||
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | ||
By: | ||
Name: | ||
Title: |
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [__], 2020 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating to the shares of Common Stock is current, except through “cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
17
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment for such shares of Common Stock to the order of the Whole Earth Brands, Inc. (the “Company”) in the amount of $______ in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of _______, whose address is _________ and that such shares of Common Stock be delivered to ________________ whose address is ________. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of _________, whose address is ___________ and that such Warrant Certificate be delivered to __________, whose address is __________________.
In the event that the Warrant has been called for redemption by the Company pursuant to Section 6 of the Warrant Agreement and the Company has required cashless exercise pursuant to Section 6.3 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1 (b) and Section 6.3 of the Warrant Agreement.
In the event that the Warrant is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.
In the event that the Warrant is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Common Stock that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive shares of Common Stock. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Common Stock be registered in the name of ____________, whose address is _______________ and that such Warrant Certificate be delivered to ______________ , whose address is __________.
[Signature Page Follows]
18
Date:______, 20 | |
(Signature) | |
(Address) | |
(Tax Identification Number) |
Signature Guaranteed: | |
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE))
19
Exhibit 10.1
LOAN AGREEMENT
AMONG
WHOLE EARTH BRANDS, INC.,
AS BORROWER
THE FINANCIAL INSTITUTIONS WHOSE NAMES
APPEAR AS LENDERS ON
THE SIGNATURE PAGES HEREOF,
AND
TORONTO DOMINION (TEXAS) LLC,
AS ADMINISTRATIVE AGENT
WITH
BOFA
SECURITIES, INC.,
AS SYNDICATION AGENT
BMO CAPITAL MARKETS CORP.,
TRUIST BANK,
AS DOCUMENTATION AGENTS
AND
TD SECURITIES (USA) LLC,
BMO CAPITAL MARKETS CORP.,
BOFA SECURITIES, INC.,
SunTrust Robinson Humphrey, Inc.
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
Dated as of June 25, 2020
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
TABLE OF CONTENTS
Page | |||
ARTICLE 1 Definitions and Interpretation | 1 | ||
Section 1.1 | Defined Terms | 1 | |
Section 1.2 | Other Definitional Provisions | 53 | |
Section 1.3 | Divisions | 53 | |
Section 1.4 | Disclaimer of Liability on the LIBOR Successor Rate | 53 | |
Section 1.5 | Pro Forma Calculations and Adjustments | 54 | |
ARTICLE 2 LOANS AND LETTERS OF CREDIT | 55 | ||
Section 2.1 | The Loans and Letters of Credit | 55 | |
Section 2.2 | Manner of Borrowing and Disbursements | 56 | |
Section 2.3 | Interest | 60 | |
Section 2.4 | Fees | 61 | |
Section 2.5 | Mandatory Commitment Reduction | 62 | |
Section 2.6 | Optional Commitment Reductions | 63 | |
Section 2.7 | Optional Prepayments | 63 | |
Section 2.8 | Repayments | 64 | |
Section 2.9 | Notes; Loan Accounts | 67 | |
Section 2.10 | Manner of Payment | 67 | |
Section 2.11 | Reimbursement | 70 | |
Section 2.12 | Pro Rata Treatment | 71 | |
Section 2.13 | Capital Adequacy | 72 | |
Section 2.14 | Lender Tax Forms | 73 | |
Section 2.15 | Administrative Agent’s Clawback | 75 | |
Section 2.16 | Letters of Credit | 75 | |
Section 2.17 | Incremental Facility | 83 | |
Section 2.18 | Change of Lending Office | 86 | |
Section 2.19 | Swing Line Loans | 86 | |
ARTICLE 3 Conditions Precedent | 87 | ||
Section 3.1 | Conditions Precedent to Effectiveness | 87 | |
Section 3.2 | Conditions Precedent to Each Advance after the Closing Date | 92 | |
Section 3.3 | Conditions Precedent to Issuance of Letters of Credit | 93 | |
ARTICLE 4 Representations and Warranties | 94 | ||
Section 4.1 | Representations and Warranties | 94 | |
Section 4.2 | Survival of Representations and Warranties, etc. | 107 | |
ARTICLE 5 AFFIRMATIVE Covenants | 107 | ||
Section 5.1 | Preservation of Existence and Similar Matters | 107 | |
Section 5.2 | Business; Compliance with Applicable Law; Data Security | 108 | |
Section 5.3 | Maintenance of Properties | 108 |
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Section 5.4 | Accounting Methods and Financial Records | 109 | |
Section 5.5 | Insurance | 109 | |
Section 5.6 | Payment of Taxes and Claims | 109 | |
Section 5.7 | Employee Benefit Plans | 110 | |
Section 5.8 | Visits and Inspections | 110 | |
Section 5.9 | [Reserved] | 111 | |
Section 5.10 | Use of Proceeds | 111 | |
Section 5.11 | [Reserved] | 111 | |
Section 5.12 | Covenants Regarding Formation of Subsidiaries and Acquisitions; Partnership, Subsidiaries | 111 | |
Section 5.13 | Further Assurances | 113 | |
Section 5.14 | Environmental Matters | 115 | |
Section 5.15 | Post-Closing Conditions | 115 | |
ARTICLE 6 Information Covenants | 116 | ||
Section 6.1 | Quarterly Financial Statements and Information | 116 | |
Section 6.2 | Annual Financial Statements and Information | 116 | |
Section 6.3 | Compliance Certificates | 116 | |
Section 6.4 | Copies of Other Reports | 117 | |
Section 6.5 | Notice of Litigation and Other Matters | 118 | |
Section 6.6 | Environmental Disclosure | 120 | |
Section 6.7 | Electronic Delivery of Documents | 121 | |
Section 6.8 | Patriot Act; KYC Information | 121 | |
Section 6.9 | Lenders’ Meetings | 122 | |
ARTICLE 7 Negative Covenants | 122 | ||
Section 7.1 | Indebtedness of the Borrower and its Subsidiaries | 122 | |
Section 7.2 | Limitation on Liens; Negative Pledge | 124 | |
Section 7.3 | Amendment and Waiver | 125 | |
Section 7.4 | Liquidation, Merger or Disposition of Assets | 125 | |
Section 7.5 | Limitation on Guaranties | 128 | |
Section 7.6 | Investments and Acquisitions | 128 | |
Section 7.7 | Restricted Payments and Restricted Purchases | 130 | |
Section 7.8 | Financial Covenants | 132 | |
Section 7.9 | ERISA | 132 | |
Section 7.10 | Affiliate Transactions | 132 | |
Section 7.11 | Sale-Leaseback | 132 | |
Section 7.12 | Restrictive Agreements | 133 | |
Section 7.13 | Changes in Lines of Business | 133 | |
Section 7.14 | Control Agreements | 133 | |
Section 7.15 | Limitation on Changes in Fiscal Year | 134 | |
Section 7.16 | Use of Proceeds Covenant | 134 | |
Section 7.17 | Permitted Activities of the Borrower and Intermediate Holdco | 134 | |
ARTICLE 8 Default | 135 | ||
Section 8.1 | Events of Default | 135 |
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Section 8.2 | Remedies | 138 | |
Section 8.3 | Payments Subsequent to Declaration of Event of Default | 139 | |
ARTICLE 9 The Administrative Agent | 140 | ||
Section 9.1 | Appointment and Authorization | 140 | |
Section 9.2 | Interest Holders | 140 | |
Section 9.3 | Consultation with Counsel | 140 | |
Section 9.4 | Documents | 140 | |
Section 9.5 | Administrative Agent and Affiliates | 140 | |
Section 9.6 | Responsibility of the Administrative Agent | 141 | |
Section 9.7 | Action by the Administrative Agent | 141 | |
Section 9.8 | Notice of Default or Event of Default | 142 | |
Section 9.9 | Responsibility Disclaimed | 142 | |
Section 9.10 | Indemnification | 143 | |
Section 9.11 | Credit Decision | 144 | |
Section 9.12 | Successor Administrative Agent | 144 | |
Section 9.13 | Delegation of Duties | 145 | |
Section 9.14 | Security Documents | 145 | |
Section 9.15 | Collateral Actions | 145 | |
Section 9.16 | Other Agents | 145 | |
Section 9.17 | Certain ERISA Matters | 146 | |
Section 9.18 | Interest Hedge Agreements, Other Hedging Agreements and Bank Products Documents | 147 | |
ARTICLE 10 Change in Circumstances Affecting Advances | 147 | ||
Section 10.1 | LIBOR Basis Determination Inadequate or Unfair | 147 | |
Section 10.2 | Illegality | 148 | |
Section 10.3 | Increased Costs | 148 | |
Section 10.4 | Effect On Other Advances | 150 | |
Section 10.5 | Claims for Increased Costs and Taxes | 150 | |
Section 10.6 | Effect of Benchmark Transition Event | 150 | |
ARTICLE 11 Miscellaneous | 152 | ||
Section 11.1 | Notices | 152 | |
Section 11.2 | Indemnity; Expenses; Limitation of Liabilities | 155 | |
Section 11.3 | Waivers | 156 |
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Section 11.4 | Set-Off | 157 | |
Section 11.5 | Successors and Assigns | 158 | |
Section 11.6 | Accounting Principles | 164 | |
Section 11.7 | Counterparts | 165 | |
Section 11.8 | Governing Law | 165 | |
Section 11.9 | Severability | 165 | |
Section 11.10 | Interest | 166 | |
Section 11.11 | Table of Contents and Headings | 166 | |
Section 11.12 | Amendment and Waiver | 166 | |
Section 11.13 | Entire Agreement | 168 | |
Section 11.14 | Other Relationships | 168 | |
Section 11.15 | Directly or Indirectly | 169 | |
Section 11.16 | Reliance on and Survival of Various Provisions | 169 | |
Section 11.17 | Senior Debt | 169 | |
Section 11.18 | Obligations Several | 169 | |
Section 11.19 | Confidentiality | 169 | |
Section 11.20 | Acknowledgement and Consent to Bail-In of Affected Financial Institutions | 170 | |
Section 11.21 | Acknowledgement Regarding Any Supported QFCs | 171 | |
Section 11.22 | Release of Collateral; Guarantors | 172 | |
Section 11.23 | Electronic Execution of Assignments and Loan Documents | 172 | |
Section 11.24 | Judgment Currency | 172 | |
Section 11.25 | Waiver of Sovereign Immunity | 173 | |
ARTICLE 12 Waiver of Jury Trial | 174 | ||
Section 12.1 | Waiver of Jury Trial; Waiver of Special, Exemplary, Punitive or Consequential Damages | 174 |
-v-
Exhibits | |||
Exhibit A | - | Form of Assignment and Assumption Agreement | |
Exhibit B | - | Form of Pledge Agreement | |
Exhibit C | - | Form of Security Agreement | |
Exhibit D | - | Form of Solvency Certificate | |
Exhibit E | - | Form of Subsidiary Guaranty | |
Exhibit F | - | Form of Incremental Facility Note | |
Exhibit G | - | Form of Notice of Conversions, Continuations or Prepayments | |
Exhibit H | - | Form of Notice of Incremental Facility Commitment | |
Exhibit I | - | Form of Compliance Certificate | |
Exhibit J | - | Form of Request for Advance | |
Exhibit K | - | Form of Request for Issuance of Letter of Credit | |
Exhibit L | - | Form of Request for Swing Line Loan | |
Exhibit M | - | Form of Revolving Loan Note | |
Exhibit N | - | Form of Term Loan Note | |
Exhibit O | Form of Swing Line Note | ||
Schedules | |||
Schedule 1 | Liens | ||
Schedule 2 | Affiliate Transactions | ||
Schedule 3 | Trademarks, Patents, Copyrights | ||
Schedule 4.1(u) | Collective Bargaining | ||
Schedule 4.1(z) | Subsidiaries | ||
Schedule 5 | Commitment Ratios | ||
Schedule 5.15 | Post Closing Obligations | ||
Schedule 6 | Corporate Information of the Borrower and its Subsidiaries | ||
Schedule 6.1 | Material Subsidiaries | ||
Schedule 7 | Leased and Owned Real Property | ||
Schedule 7.1 | Scheduled Indebtedness | ||
Schedule 7.6(h) | Scheduled Investments | ||
Schedule 8 | Bank and Other Accounts |
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LOAN AGREEMENT
This Loan Agreement (this “Agreement”) is entered into as of June 25, 2020, by and among Whole Earth Brands, Inc., a Delaware corporation (formerly Act II Global Acquisition Corp., a Cayman Islands exempted company) (the “Borrower”), the financial institutions signatory hereto (together with their respective successors and permitted assigns, the “Lenders”) and Toronto Dominion (Texas) LLC, as administrative agent (together with its successors and permitted assigns, the “Administrative Agent”) for itself and on behalf of the Lenders and the Issuing Bank.
W I T N E S S E T H:
WHEREAS, Act II Global Acquisition Corp., a Cayman Islands exempted company (“Act II”) has effected a deregistration under the Cayman Islands Companies Law (2020 Revision) and a domestication under Section 388 of the Delaware General Corporation Law (the “Domestication”), pursuant to which Act II’s jurisdiction of incorporation was transferred by way of continuation from the Cayman Islands to the State of Delaware and its name changed to “Whole Earth Brands, Inc.”;
WHEREAS, pursuant to the Acquisition Agreement (as defined below), the Borrower will acquire from the Sellers (as defined in the Acquisition Agreement) (collectively, the “Seller”) all of the issued and outstanding capital stock and certain assets of the entities identified in the Acquisition Agreement (collectively, the “Target”) and assume certain liabilities of the Target (such acquisition and assumption, together with the Domestication and the payment of fees and expenses in connection with the foregoing, the “Transaction”); and
WHEREAS, the Borrower has requested, and the Lenders have agreed, to extend certain credit facilities to the Borrower upon the terms and subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties hereby agree as follows:
ARTICLE 1
Definitions and Interpretation
Section 1.1 Defined Terms. For the purposes of this Agreement (including the above recitals):
“Acquisition” shall mean (whether by purchase, exchange, issuance of stock or other equity or debt securities, merger, reorganization, amalgamation or any other method) (a) any acquisition by the Borrower or any Subsidiary of the Borrower of any other Person, which Person shall then become consolidated with the Borrower or any Subsidiary in accordance with GAAP; or (b) any acquisition by the Borrower or any Subsidiary of the Borrower of all or substantially all of the assets of any other Person or assets that form a business unit of such Person.
“Acquisition Agreement” shall mean that certain Purchase Agreement, dated as of December 19, 2019, as amended by that certain Amendment No. 1 to Purchase Agreement, dated as of February 12, 2020, by and among Act II and the Seller, that certain Amendment No. 2 to Purchase Agreement, dated as of May 8, 2020, by and among Act II and the Seller and that certain Amendment no. 3 to Purchase Agreement, dated as of June 15, 2020, by and among Act II and the Seller.
“Act II” shall have the meaning set forth in the Preamble.
“Administrative Agent” shall mean Toronto Dominion (Texas) LLC, in its capacity as Administrative Agent for the Lenders or any successor Administrative Agent appointed pursuant to Section 9.12.
“Administrative Agent’s Account” shall mean that certain deposit account with the following wire instructions: Bank of America, 100 West 33rd Street, New York, New York, USA, 10001, 026-009-593, BOFAUS3N, 6550-6-53000, Toronto-Dominion (Texas) LLC, 31 West 52nd Street, New York, New York, USA, 10019, Ref: Whole Earth Brands, Inc.
“Administrative Agent’s Office” shall mean the office of the Administrative Agent located at 222 Bay Street, 15th Floor, Toronto, Ontario, Canada M5K 1A2, or such other office as may be designated pursuant to the provisions of Section 11.1.
“Administrative Questionnaire” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Advance” shall mean amounts advanced by the Lenders (or any of them, as applicable) to or for the benefit of the Borrower pursuant to Article 2 on the occasion of any borrowing and having the same initial Interest Rate Basis and Interest Period, as applicable, and any Request for Advance or other borrowing hereunder; and “Advances” shall mean more than one Advance.
“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Lender” shall have the meaning set forth in Section 10.5.
“Affiliate” shall mean, with respect to a Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, such first Person. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled” by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting powers for the election of directors, managing general partners or equivalent governing body of such Person.
“Agreement” shall mean this Loan Agreement, as further amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms and conditions hereof.
“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Credit Parties and their Subsidiaries from time to time concerning or relating to bribery, corruption or money laundering, including, without limitation, the United States Foreign Corrupt Practices Act of 1977 and the UK Bribery Act 2010.
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“Anti-Money Laundering Laws” shall mean all Applicable Laws, rules, and regulations of any jurisdiction applicable to the Credit Parties and their Subsidiaries from time to time concerning or relating to money laundering and bank secrecy, including but not limited to the Patriot Act.
“Applicable Law” shall mean, in respect of any Person, all provisions of constitutions, statutes, rules, regulations and orders of any Governmental Entity applicable to such Person from time to time, including, without limiting the foregoing, all Food and Drug Laws, ERISA, all Environmental Laws, Data Protection Laws, and all orders, decisions, judgments and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.
“Applicable Margin” shall mean a percentage per annum: (a) until the delivery of a Compliance Certificate for the first full Fiscal Quarter following the Closing Date, 2.50%, in the case of Base Rate Advances, and 3.50% in the case of LIBOR Advances, and (b) thereafter, the applicable percentages per annum set forth in the table below, based upon the Consolidated Total Net Leverage Ratio as reflected in the financial statements and Compliance Certificates required to be delivered for the Fiscal Quarter or Fiscal Year most recently ended pursuant to Sections 6.1, 6.2 or 6.3, as applicable:
Tier | Consolidated Total Net Leverage Ratio | LIBOR | Base Rate |
1 | Less than or equal to 1.50 to 1.00 | 3.00% |
2.00%
|
2 |
Less than or equal to 2.25 to 1.00 and greater than 1.50 to 1.00
|
3.25% |
2.25%
|
3 |
Less than or equal to 3.00 to 1.00 and greater than 2.25 to 1.00
|
3.50% | 2.50% |
4 | Greater than 3.00 to 1.00 | 3.75% | 2.75% |
The adjustments provided for in this definition shall be effective with respect to any increase or decrease of the Applicable Margin on the Business Day immediately following the date on which financial statements and Compliance Certificates are delivered to the Administrative Agent pursuant to Sections 6.1, 6.2, and 6.3, as the case may be. If at any time the Borrower has not submitted to the Administrative Agent the applicable information within three (3) Business Days of the date required under Sections 6.1, 6.2, and 6.3, then upon the request of the Required Lenders, the Applicable Margin shall be determined on and after the Business Day immediately following such required date as if the Consolidated Total Net Leverage Ratio were greater than 3.00 to 1.00 and such Applicable Margin shall remain in effect until the Business Day immediately following the date on which such applicable information is delivered. Promptly following the receipt of the applicable information under Sections 6.1, 6.2, and 6.3, the Administrative Agent shall give each Lender and the Borrower telefacsimile or telephonic notice (confirmed in writing) of the Applicable Margin in effect from such date, provided that failure to give such notice to the Borrower will not diminish or otherwise affect the effectiveness of such Applicable Margin.
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If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Required Lenders reasonably determine that (1) the Consolidated Total Net Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (2) a proper calculation of the Consolidated Total Net Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall automatically and retroactively be obligated to pay to the Administrative Agent (for the ratable benefit of the Lenders and Issuing Bank), promptly following written demand by the Administrative Agent, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period; provided that if, as a result of any restatement or other event a proper calculation of the Consolidated Total Net Leverage Ratio would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrower pursuant this paragraph shall be based upon the excess, if any, of the amount of interest and fees that should have been paid for all applicable periods over the amount of interest and fees paid for all such periods.
“Approved Electronic Communications” shall mean any notice, demand, communication, information, document or other material writing that any Credit Party provides to Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent or to the Lenders by means of electronic communications pursuant to Section 11.1(c); provided, however, that Approved Electronic Communication shall exclude (i) any Notice of Incremental Facility Commitment, any Request for Issuance of Letter of Credit and any other notice, demand, communication, information, document or other material relating to a request for a new Loan, or a Conversion or Continuation of an existing Loan, (ii) any notice pursuant to Section 2.6 or Section 2.7 and any other notice relating to the payment of any principal or other amount due under any Loan Document prior to the scheduled date therefor, and (iii) all notices of any Default or Event of Default.
“Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Assignment and Assumption Agreement” shall mean any Assignment and Assumption Agreement substantially in the form of Exhibit A attached hereto pursuant to which any Lender, as further provided in Section 11.5, sells a portion of its Revolving Commitments, Incremental Facility Commitments, if any, and/or Loans.
“Attributable Receivables Indebtedness” shall mean the principal amount of Indebtedness which (a) if a Receivables Facility permitted hereunder is structured as a secured lending agreement, would constitute the principal amount of such Indebtedness or (b) if a Receivables Facility permitted hereunder is structured as a purchase agreement, would be outstanding at such time under the Receivables Facility if the same were structured as a secured lending agreement rather than a purchase agreement.
“Auction” shall have the meaning set forth in Section 11.5(g)(i).
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“Auction Manager” shall mean (a) the Administrative Agent or any of its Affiliates or (b) any other financial institution or advisor agreed by the Borrower and the Administrative Agent (whether or not an Affiliate of the Administrative Agent) to act as an arranger in connection with any repurchases pursuant to Section 11.5(g)(i).
“Authorized Signatory” with respect to any Person, shall mean the president, the chief financial officer, the chief executive officer, the chief operating officer, vice president or any other officer of such Person, if any, which officer shall be duly authorized and designated in writing from time to time by such Person to execute documents, agreements and instruments on behalf of such Person.
“Available Letter of Credit Commitment” shall mean, at any time, the lesser of (a) (i) the Letter of Credit Commitment, minus (ii) all Letter of Credit Obligations then outstanding, and (b) the Available Revolving Commitment on such date.
“Available Revolving Commitment” shall mean, as of any date, the amount by which (a) the Revolving Commitment in effect on such date exceeds (b) the sum of (i) the Revolving Loans then outstanding and (ii) the aggregate amount of all Letter of Credit Obligations and Swing Line Loans then outstanding.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their Affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank Products” shall mean all cash management products and services extended to the Credit Parties by a Bank Products Bank, including, without limitation, (a) merchant card services, credit or stored value cards, and corporate purchasing cards; (b) cash management or related services, including, without limitation, ACH Transactions, remote deposit capture services, electronic funds transfer, e-payable, stop payment services, account reconciliation services, lockbox services, depository and checking services, overdraft, information reporting, deposit accounts, securities accounts, controlled disbursement services, and wire transfer services; and (c) bankers’ acceptances, drafts, letters of credit (other than Letters of Credit) (and the issuance, amendment, renewal, or extension thereof), and documentary services.
“Bank Products Bank” shall mean any Person that, at the time it enters into a Bank Products Document, is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender, in each case, in its capacity as a party to such Bank Products Document.
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“Bank Products Documents” shall mean all instruments, agreements and other documents entered into from time to time by the Credit Parties in connection with any of the Bank Products.
“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.
“Bankruptcy Laws” shall mean the Bankruptcy Code and any other applicable insolvency or other similar law of any jurisdiction, including any law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it.
“Base Rate” shall mean for any day a fluctuating rate per annum equal to the greatest of (a) the rate of interest per annum determined by the Administrative Agent from time to time in its sole discretion as its prime commercial lending rate for such day for U.S. Dollar loans made in the United States, (b) the Federal Funds Rate plus one-half of one percent (0.50%), (c) LIBOR for an Interest Period of one-month beginning on such day plus one percent (1.00%), and (d) two percent (2.00%). The Base Rate is not necessarily the lowest rate of interest charged by the Administrative Agent in connection with extensions of credit.
“Base Rate Advance” shall mean an Advance which the Borrower requests to be made as a Base Rate Advance or is Converted to a Base Rate Advance, in accordance with the provisions of Section 2.2, which bears interest at the Base Rate Basis and which shall be in a principal amount of at least $250,000 and an integral multiple of $50,000.
“Base Rate Basis” shall mean a simple interest rate equal to the sum of (a) the Base Rate and (b) the Applicable Margin applicable to Base Rate Advances. The Base Rate Basis shall be adjusted automatically as of the opening of business on the effective date of each change in the Base Rate to account for such change, and, if applicable, shall also be adjusted to reflect changes of the Applicable Margin applicable to Base Rate Advances as of the effective date of any such change in the Applicable Margin.
“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to LIBOR for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of LIBOR with an Unadjusted Benchmark Replacement for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of LIBOR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities at such time.
-6-
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to LIBOR:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR; or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to LIBOR:
(a) a public statement or publication of information by or on behalf of the administrator of LIBOR announcing that such administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR;
(b) a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased or will cease to provide LIBOR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide LIBOR; or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative.
“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the ninetieth (90th) day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than ninety (90) days after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the Required Lenders) and the Lenders.
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“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to LIBOR and solely to the extent that LIBOR has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced LIBOR for all purposes hereunder in accordance with Section 10.6 and (y) ending at the time that a Benchmark Replacement has replaced LIBOR for all purposes hereunder pursuant to Section 10.6.
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BHC Act Affiliate” of a party shall mean an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Borrower” shall have the meaning set forth in the Preamble.
“Business Day” shall mean a day (a) excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a Continuation or Conversion of or into, or an Interest Period for, a LIBOR Advance or a notice by the Borrower with respect to any such borrowing, repayment, prepayment, Continuation, Conversion or Interest Period, that day is also a day on which dealings in U.S. Dollar deposits are carried out in the London interbank market.
“Camden Facility” shall mean the facility located at 300 Jefferson Street, Camden, New Jersey, owned by Mafco Worldwide Corporation.
“Capital Expenditures” shall mean, for any period and for any Person, the sum (without duplication) of all expenditures made by the Borrower and its Subsidiaries during such period that are or are required to be treated as capital expenditures under GAAP.
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“Capital Lease” shall mean, subject to Section 11.6, as to any Person, any lease of any interest in any kind of Property by that Person as lessee that is, should be or should have been recorded as a “capital lease” in accordance with GAAP.
“Capital Lease Obligations” shall mean, subject to Section 11.6, all obligations of any Person under Capital Leases, in each case taken at the amount thereof accounted for as a liability in accordance with GAAP.
“Cash Equivalents” shall mean, as at any date of determination, (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by (i) any Lender or (ii) any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (A) is at least “adequately capitalized” (as defined in the regulations of its primary applicable U.S. federal banking regulator) and (B) has Tier 1 capital (as defined in such regulations) of not less than $500,000,000; and (d) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) to (c) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s. In the case of Investments by a Foreign Subsidiary or any Investments (to the extent permitted under this Agreement) made in a country outside the United States, Cash Equivalents shall also include (y) Investments of the type and maturity described in clauses (a) through (d) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (z) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments.
“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Entity or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Entity; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or any foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” shall mean (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire), directly or indirectly, the voting rights associated with more than forty percent (40%) of the issued and outstanding Ownership Interests of the Borrower; (b) the failure of the Borrower to own directly, beneficially and of record, free and clear of all Liens or other encumbrances (in each case, except Liens under the Loan Documents securing the Obligations), one-hundred percent (100%) of the issued and outstanding voting rights and economic interests of Intermediate Holdco’s Ownership Interests on a fully diluted basis; (c) the failure of the Borrower to have the right to designate and elect directly all of the board of directors of Intermediate Holdco or otherwise to Control Intermediate Holdco; or (d) except as permitted hereunder, the failure of the Borrower to own, directly or indirectly, free and clear of all Liens or other encumbrances (except Permitted Liens), one-hundred percent (100%) of the voting and economic Ownership Interests of each of its Subsidiaries (on a fully diluted basis).
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“Closing Date” shall mean June 25, 2020.
“Closing Date Material Adverse Effect” shall have the meaning assigned to the term “Material Adverse Effect” in the Acquisition Agreement.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” shall mean any real and personal property of any kind constituting collateral for the Obligations pursuant to, in accordance with and subject to the terms and conditions of any Security Document.
“Commitment Fee Rate” shall a percentage per annum: (a) until the delivery of a Compliance Certificate for the first full Fiscal Quarter following the Closing Date, 0.35%, and (b) thereafter and until the Revolving Maturity Date, the applicable percentages per annum set forth in the table below, based upon the Consolidated Total Net Leverage Ratio as reflected in the financial statements and Compliance Certificates required to be delivered for the Fiscal Quarter or Fiscal Year most recently ended pursuant to Sections 6.1, 6.2 or 6.3, as applicable:
Tier | Consolidated Total Net Leverage Ratio | Commitment Fee Rate |
1 | Less than or equal to 1.50 to 1.00 | 0.30% |
2 |
Less than or equal to 2.25 to 1.00 and greater than 1.50 to 1.00
|
0.35% |
3 |
Less than or equal to 3.00 to 1.00 and greater than 2.25 to 1.00
|
0.35% |
4 | Greater than 3.00 to 1.00 | 0.40% |
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The adjustments provided for in this definition shall be effective with respect to any increase or decrease of the Commitment Fee Rate on the date on which financial statements and Compliance Certificates are delivered to the Administrative Agent pursuant to Sections 6.1, 6.2, and 6.3, as the case may be. If at any time the Borrower has not submitted to the Administrative Agent the applicable information within three (3) Business Days of the date required under Sections 6.1, 6.2, and 6.3, then upon the request of the Required Revolving Lenders, the Commitment Fee Rate shall be determined on and after the Business Day immediately following such required date as if the Consolidated Total Net Leverage Ratio were greater than 3.00 to 1.00, and such Commitment Fee Rate shall remain in effect until the Business Day immediately following the date on which such applicable information is delivered. Promptly following the receipt of the applicable information under Sections 6.1, 6.2, and 6.3, the Administrative Agent shall give each Revolving Lender and the Borrower telefacsimile or telephonic notice (confirmed in writing) of the Commitment Fee Rate in effect from such date, provided that failure to give such notice to the Borrower will not diminish or otherwise affect the effectiveness of such Commitment Fee Rate.
If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Required Revolving Lenders reasonably determine that (1) the Consolidated Total Net Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (2) a proper calculation of the Consolidated Total Net Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall automatically and retroactively be obligated to pay to the Administrative Agent (for the ratable benefit of the Revolving Lenders), promptly following written demand by the Administrative Agent, an amount equal to the excess of the amount of fees that should have been paid for such period over the amount of fees actually paid for such period; provided that if, as a result of any restatement or other event a proper calculation of the Consolidated Total Net Leverage Ratio would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrower pursuant this paragraph shall be based upon the excess, if any, of the amount of the fees that should have been paid for all applicable periods over the amount of the fees paid for all such periods.
“Commitment Ratio” shall mean, with respect to any Lender for any Commitment, or once funded, for any Loan, the percentage equivalent of the ratio which such Lender’s portion of such Commitment and/or Loan bears to the aggregate amount of such Commitment and/or Loan (as each may be adjusted from time to time as provided herein); and “Commitment Ratios” shall mean, with respect to any Commitment, or once funded, for any Loan, the Commitment Ratios of all of the Lenders with respect to such Commitment and/or Loan. As of the Closing Date, the Commitment Ratios of the Lenders party to this Agreement are as set forth on Schedule 5 attached thereto.
“Commitments” shall mean, collectively, the Revolving Commitment, the Term Loan Commitment and any Incremental Facility Commitment, and “Commitment” shall mean any one of the foregoing Commitments; and provided, for greater certainty, that the commitments in respect of Letters of Credit constitute part of the Revolving Commitment.
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
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“Compliance Certificate” shall mean a certificate, substantially in the form of Exhibit I attached hereto, signed on the Borrower’s behalf by an Authorized Signatory, vice president of finance or controller of the Borrower, together with any schedules, exhibits or annexes attached thereto delivered pursuant to Section 6.3.
“Consolidated EBITDA” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis, the sum of:
(a) | Net Income (excluding any extraordinary gains and losses), plus |
(b) | to the extent deducted in determining Net Income, the sum of, without duplication: |
(i) | depreciation and amortization expense, |
(ii) | all provisions for federal, state, provincial or other domestic and foreign Tax expense (excluding property Taxes) and franchise Taxes, |
(iii) | Interest Expense, |
(iv) | the fees, costs, charges or expenses incurred by the Borrower and its Subsidiaries in connection with (x) the consummation of the Transaction, the Acquisition Agreement and this Agreement and (y) any other acquisitions, mergers, consolidations, investments, debt financings, equity issuances and dispositions, and any amendments or other modifications to this Agreement (in each case of this clause (y), whether or not consummated); provided that the aggregate amount added pursuant to this sub-clause (b)(iv)(y) for any four (4) consecutive Fiscal Quarter period shall in no event exceed the greater of $4,500,000 and 7.5% of Consolidated EBITDA for such period (calculated prior to such add-back), |
(v) | extraordinary losses (excluding extraordinary losses from discontinued operations), |
(vi) | any non-cash expenses, charges, expenses, losses or items (including any write-offs, write-downs or impairments) reducing Net Income for such period, |
(vii) | any unrealized foreign exchange losses reducing Net Income for such period and any unrealized losses in such period resulting from obligations under Interest Hedge Agreements, |
(viii) | solely with respect to any facts or circumstances arising after the Closing Date that are not contemplated by the financial model in clause (b)(x), the amount of any restructuring charge or reserve deducted (and not added back) in such period in computing Net Income, including any restructuring costs incurred in connection with acquisitions, mergers, consolidations or dispositions after the Closing Date, costs related to the closure and/or consolidation of facilities, severance costs, retention charges, systems establishment costs and excess pension charges; provided that the aggregate amount added pursuant to clause (b)(ix) and this clause (b)(viii) or pursuant to the definition of “Pro Forma Basis” for any four (4) consecutive Fiscal Quarters shall in no event exceed 20% of Consolidated EBITDA for such period (calculated prior to any such add-backs pursuant to this clause (b)(viii)), |
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(ix) | solely with respect to any facts or circumstances arising after the Closing Date that are not contemplated by the financial model in clause (b)(x), (1) 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, during such period and (2) any other cost savings, operating expense reductions, operating improvements and synergies; provided that (x) such cost savings, operating expense reductions, operating improvements and other synergies are reasonably identifiable, factually supportable, expected to have a continuing impact on the operations of the Borrower and its Subsidiaries and have been determined by the Borrower in good faith to be reasonably anticipated to be realizable within twelve (12) months following any such action as set forth in reasonable detail on a certificate of the chief financial officer of the Borrower delivered to the Administrative Agent, (y) no such amounts shall be added pursuant to this clause to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through the definition of “Pro Forma Basis” or otherwise and (z) the aggregate amount added pursuant to clause (b)(viii) and this clause (b)(ix) or pursuant to the definition of “Pro Forma Basis” for any four (4) consecutive Fiscal Quarters shall in no event exceed 20% of Consolidated EBITDA for such period (calculated prior to any such add-backs pursuant to this clause (b)(ix)), |
(x) | add-backs set forth in the financial model dated May 2020 (and as supplemented by the Borrower on June 3, 2020) delivered to the Administrative Agent on May 27, 2020, and |
(xi) | deductions in respect of payments made to employees or independent contractors of the Borrower and its Subsidiaries, or other providers of services to the Borrower and its Subsidiaries, under any annual or long-term cash incentive plan that are paid to satisfy or in accordance with any accrued or contractual obligations in effect prior to or on the Closing Date, minus |
(c) | to the extent included in determining Net Income for such period, the sum of, without duplication: (i) gain from any sale of or disposition of Property, equipment or other long-term assets, other than sales of inventory in the ordinary course of business; (ii) any cancellation of Indebtedness income; (iii) any refund or credit of federal, state, provincial or other domestic and foreign Taxes (excluding property Taxes) and franchise Taxes actually received in such period, (iv) interest income; (v) any extraordinary gains; (vi) any non-cash gains or income or other or non-cash items; (vii) any unrealized foreign exchange gains increasing Net Income for such period; (viii) gains from early extinguishment of Indebtedness or obligations under Interest Hedge Agreements; (ix) the amount of any cash payment made during such period in respect of any non-cash accrual, reserve or other non-cash charge that is accounted for in a prior period to the extent added back in the calculation of Consolidated EBITDA for any previous period and which does not otherwise reduce Net Income for the current period, and (x) unrealized gains in such period resulting from obligations under Interest Hedge Agreements. |
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“Consolidated Net Working Capital” shall mean the sum of total current assets (excluding cash and Cash Equivalents) and long-term accounts receivable minus the sum of total current liabilities and long-term deferred revenue, in each case of the Borrower and its Subsidiaries as set forth on the consolidated balance sheet of the Borrower as of the most recent period for which financial statements were required to have been delivered pursuant to Section 6.1 and Section 6.2.
“Consolidated Total Assets” shall mean, the consolidated total assets of the Borrower and its Subsidiaries as set forth on the consolidated balance sheet of the Borrower as of the most recent period for which financial statements were required to have been delivered pursuant to Section 6.1 and Section 6.2.
“Consolidated Total Net Leverage Ratio” shall mean, as of any date, the ratio of (a)(i) Total Debt outstanding on such date minus (ii) Unencumbered Cash on such date in an amount not to exceed $25,000,000 to (b) LTM EBITDA.
“Continue,” “Continuation” and “Continued” shall mean the continuation, as applicable, pursuant to Article 2 of a LIBOR Advance as a LIBOR Advance, from one Interest Period to a different Interest Period.
“Control” shall mean, with respect to a Person, possession by another Person, directly or indirectly, of the power to direct or cause the direction of the management or policies of such first Person, whether through the ability to exercise voting power, by contract or otherwise. The words “Controlling” and “Controlled” have correlative meanings.
“Convert,” “Conversion” and “Converted” shall mean a conversion pursuant to Article 2 of a LIBOR Advance into a Base Rate Advance or of a Base Rate Advance into a LIBOR Advance, as applicable.
“Copyright Security Agreement” shall mean any Copyright Security Agreement, among any of the Borrower or a Subsidiary of the Borrower and the Administrative Agent, for the benefit of the Secured Parties, and any similar agreement, in each case in form and substance reasonably satisfactory to the Administrative Agent and as amended, restated, supplemented, replaced or otherwise modified from time to time.
“Covered Entity” shall mean any of the following:
(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
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(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” shall have the meaning set forth in Section 11.21.
“Credit Party” shall mean, collectively, the Borrower and each Guarantor.
“Cumulative Credit” shall mean:
(a) the greater of (A) zero and (B) 50% of Net Income for the period (taken as one accounting period) from the first full Fiscal Quarter ending after the Closing Date to the end of the most recently ended Fiscal Quarter for which financial statements have been delivered pursuant to Sections 6.1 or 6.2, as applicable; plus
(b) without duplication of any amounts added pursuant to the definition of “Investment” in Section 1.1 or pursuant to Section 7.6, an amount equal to any returns in cash and Cash Equivalents (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received during the Cumulative Credit Reference Period for such date of determination by the Borrower or any Subsidiary in respect of any Investments made pursuant to Section 7.6(n); minus
(c) the aggregate of amounts applied pursuant to Sections 7.6(n) and 7.7(e) during the Cumulative Credit Reference Period for such date of determination.
“Cumulative Credit Reference Period” shall mean, with respect to any date of determination, the period commencing on the Closing Date and ending on such date of determination.
“Data Protection Laws” shall mean any and all applicable national/federal or state/provincial data protection and privacy laws and regulations covering the processing of Personal Information, including but not limited to U.S. federal and state laws, the EU General Data Protection Regulation (“GDPR”), any national implementing laws of the GDPR, and the e-Privacy Directive 2002/58/EC.
“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States, Insolvency Act 1986 of the United Kingdom, Companies Act 2006 of the United Kingdom and all other liquidation, winding-up, judicial management, adjustment of debt, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws (such laws include any applicable corporations legislation to the extent the relief sought under such corporations legislation relates to or involves the compromise, settlement, adjustment or arrangement of debt) of the United States, United Kingdom or other applicable jurisdictions from time to time in effect.
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“Default” shall mean any Event of Default, and any of the events specified in Section 8.1, regardless of whether there shall have occurred any passage of time or giving of notice, or both, that would be necessary in order to constitute such event an Event of Default.
“Default Rate” shall mean a simple per annum interest rate equal to the sum of (a) the applicable Interest Rate Basis, plus (b) two percent (2.00%).
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulting Lender” shall mean, subject to Section 2.2(e)(v), any Lender that:
(a) for any reason fails or refuses to fund all or any of its portion of a Loan or Letter of Credit within two (2) Business Days of the date when the Borrower has satisfied each of the conditions in Sections 3.2 and/or Section 3.3, as applicable;
(b) for any reason fails or refuses to pay to the Administrative Agent, any Issuing Bank or any other Lender within two (2) Business Days of the date when due any amount required to be paid by such Lender hereunder or under any other Loan Document (unless such payment is being contested in good faith by such Lender);
(c) has notified Borrower, the Administrative Agent or any Issuing Bank or Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect, when the Borrower has satisfied each of the conditions in Section 3.2 and/or Section 3.3, as applicable;
(d) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (d) upon receipt of such written confirmation by the Administrative Agent and the Borrower);
(e) has, or has a direct or indirect parent company that has (i) become the subject of a proceeding under any Bankruptcy Law or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Entity so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Entity) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender; or
(f) becomes (or has a direct or indirect parent company that becomes) the subject of a Bail-In Action.
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Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (f) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.2(e)(v)) upon delivery of written notice of such determination to the Borrower, the Issuing Bank and each Lender.
“Disqualified Equity” shall mean equity having mandatory redemption, repurchase, repayment or similar requirements that is effective prior to the later of (a) six (6) months after the Maturity Date as set forth in clause (a) of the definition thereof, and (b) the date upon which all dividends or distributions, at the election of the Borrower, may be payable in additional shares of such equity security. For avoidance of doubt, “Disqualified Equity” shall not include any Ownership Interests which would not be Disqualified Equity but for a requirement that such Ownership Interests be redeemed in connection with a Change of Control or asset sale, or any Ownership Interests issued pursuant to a plan for the benefit of the employees of the Borrower or any of its Subsidiaries or to management or directors which would not be Disqualified Equity but for a redemption requirement in connection with death, disability or termination of such employee, manager or director.
“Disqualified Institution” shall mean (a) any competitor of the Borrower or its Subsidiaries designated by the Borrower as a “Competitor” by written notice delivered to the Administrative Agent from time to time, and/or (b) any Affiliate of the foregoing that is either (x) identified in writing as such by the Borrower from time to time or (y) clearly identifiable as such on the basis of such Affiliate’s name; provided that any supplement to such list of Disqualified Institutions under clause (a) or (b) will become effective three (3) Business Days after delivery of such designation to the Administrative Agent and in no event shall a supplement apply retroactively to disqualify any Lender or Participant as of the date of such supplement; provided, further, that the term “Disqualified Institution” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent from time to time. It is understood and agreed that the Administrative Agent (i) shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce compliance with, the provisions of the Loan Documents relating to Disqualified Institutions and (ii) shall not have any liability with respect to or arising out of any assignment or participation of any Loan or Commitment, or disclosure of confidential information, to any Disqualified Institution.
“Documentation Agents” shall mean BMO Capital Markets Corp. and Truist Bank.
“Domestic Subsidiary” shall mean any Subsidiary organized under the laws of any state of the United States or the District of Columbia.
“Domestication” shall have the meaning set forth in the Preamble.
“Drug” shall mean a product regulated as a drug under the Food and Drug Laws.
“Early Opt-in Election” shall mean the occurrence of:
(a) (i) a determination by the Administrative Agent or (ii) a notification by the Required Lenders to the Administrative Agent (with a copy to the Borrower) that the Required Lenders have determined that U.S. dollar-denominated syndicated credit facilities being executed at such time, or that include language similar to that contained in Section 10.6, are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace LIBOR, and
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(b) (i) the election by the Administrative Agent or (ii) the election by the Required Lenders to declare that an Early Opt-in Election has occurred and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders or by the Required Lenders of written notice of such election to the Administrative Agent.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” shall mean: (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than (x) a natural Person or (y) the Borrower (except as permitted under Section 11.5(g)), or any of its Affiliates) approved (each such approval in the following clauses (i), (ii) and (iii) not to be unreasonably withheld or delayed) by (i) the Administrative Agent, (ii) in the case of an assignment of a Revolving Commitment, if such assignment increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding), the Issuing Bank, and (iii) unless an Event of Default has occurred and is continuing, the Borrower (it being understood that such approval of the Borrower shall not apply to any assignments made by the initial Lenders pursuant to the primary syndication of the Loans and Commitments under this Agreement); provided, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; provided, however, that in no event shall a Disqualified Institution be eligible to be an Eligible Assignee.
“Environmental Claim” shall mean any written notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or written directive (conditional or otherwise), by any Governmental Entity, arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (b) in connection with any Release of Hazardous Material or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or harm to health, safety (with respect to exposure to Hazardous Materials), natural resources or the environment from Hazardous Materials.
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“Environmental Laws” shall mean any and all current or future foreign or domestic, federal, or state (or any subdivision thereof) Applicable Laws or any other requirements of a Governmental Entity relating to (a) pollution or the protection of the environment, including those relating to any Hazardous Materials Activity; (b) the generation, use, storage, transportation or disposal of Hazardous Materials; or (c) workplace exposure to Hazardous Materials or the protection of human, plant or animal health or welfare, in each case, from exposure to Hazardous Materials.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy any minimum funding obligation under the Code or ERISA, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability, a termination under Section 4041A of ERISA, or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan; (i) a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsections .62, .63, .64, .65, .66, .67, or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following thirty (30) days such that notice to the PBGC would be required; or (j) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or a Subsidiary of the Borrower, or an ERISA Affiliate.
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
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“Event of Default” shall mean any of the events specified in Section 8.1, provided that any requirement for notice or lapse of time, or both, has been satisfied.
“Excess Cash Flow” shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis, as of the end of any Fiscal Year of the Borrower based on the audited financial statements provided under Section 6.2 for such Fiscal Year, the excess, if any, of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such Fiscal Year increased for decreases (and decreased for increases) in Consolidated Net Working Capital (excluding (1) any portion of Consolidated Net Working Capital constituting the current portion of any long-term liability (including any Capital Lease Obligations) or the current portion of Interest Expense, (2) all Indebtedness consisting of Revolving Loans, Swing Line Loans and Letter of Credit Obligations to the extent otherwise included therein, (3) any deferred Tax assets and deferred Tax liabilities, (4) any change in Consolidated Net Working Capital resulting from any Acquisition by the Borrower or its Subsidiaries (including liabilities in respect of unpaid earn-outs) or dispositions permitted under this Agreement and (5) deferred revenue arising from cash receipts that are earmarked for specific projects) not including cash from the beginning to the end of the applicable Fiscal Year; minus (b) without duplication, to the extent included in Consolidated EBITDA, the sum of (i) unfinanced Capital Expenditures paid with Internally Generated Funds, (ii) Interest Expense paid with Internally Generated Funds, (iii) scheduled principal payments paid with Internally Generated Funds in respect of Indebtedness for Money Borrowed, (iv) prepayments (other than Voluntary Prepayments) of the Loans with Internally Generated Funds, and with respect to prepayments of the Revolving Loans, only to the extent such prepayments are accompanied by a permanent reduction of the Revolving Commitment, provided that purchases of Term Loans made pursuant to Section 11.5(g) shall be deducted in an amount equal to the cash actually paid by Borrower pursuant to such Section 11.5(g), (v) extraordinary and non-recurring charges to the extent paid with Internally Generated Funds, (vi) income Taxes paid in cash, (vii) Letter of Credit fees, (viii) Permitted Acquisitions and Investments permitted under Section 7.6 paid with Internally Generated Funds, (ix) payments with Internally Generated Funds permitted under Section 7.7(d) and (e), (x) any costs associated with growth investments, establishing new facilities or in connection with new market start-up activities (including costs for integration, facility openings, employee searches and hires, travel and housing costs and related legal and accounting fees, costs and expenses), in each case, to the extent paid with Internally Generated Funds, (xi) amounts included in Consolidated EBITDA pursuant to clauses (b)(iv), (v), (viii), (ix)(1) or (x) of the definition thereof, in each case only to the extent that either (1) such amounts are paid with Internally Generated Funds or (2) such amounts constitute non-cash charges, and (xii) non-cash amounts included in Consolidated EBITDA pursuant to clause (b)(ix)(2) of the definition thereof.
“Excess Cash Flow Amount” shall mean (a) fifty percent (50%) of Excess Cash Flow if the Consolidated Total Net Leverage Ratio on the last day of the applicable Fiscal Year is greater than 2.50 to 1.00, (b) twenty-five percent (25%) of Excess Cash Flow if the Consolidated Total Net Leverage Ratio on the last day of the applicable Fiscal Year is greater than 2.00 to 1.00, but less than or equal to 2.50 to 1.00, and (c) zero percent (0%) of Excess Cash Flow if the Consolidated Total Net Leverage Ratio on the last day of the applicable Fiscal Year is less than or equal to 2.00 to 1.00, in each case minus all Voluntary Prepayments of the Loans during the applicable Fiscal Year.
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“Excluded Hedging Obligations” shall mean, with respect to any Credit Party, any Hedging Obligations if, and to the extent that, all or a portion of such Credit Party’s Guaranty of, or the grant by such Credit Party of a security interest to secure, such Hedging Obligations (or any Guaranty thereof) is or becomes illegal or unlawful under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Credit Party or the grant of such security interest would otherwise have become effective with respect to such related Hedging Obligations but for such Credit Party’s failure to constitute an “eligible contract participant” at such time. If any Hedging Obligations arise under a master agreement governing more than one Interest Hedge Agreement or Other Hedging Agreement, such exclusion shall apply only to the portion of such Hedging Obligations that are attributable to Interest Hedge Agreements or Other Hedging Agreements for which such Guaranty or security interest is or becomes illegal or unlawful under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof).
“Excluded Taxes” shall mean, with respect to the Administrative Agent or any Lender or Issuing Bank, (a) Taxes imposed on (or measured by) its net income (however denominated), branch profits Taxes, and franchise Taxes, in each case (i) imposed pursuant to the laws of the jurisdiction (or any political subdivision thereof) in which such recipient is organized or in which the principal office or applicable lending office of such recipient is located or (ii) that are Other Connection Taxes, (b) in the case of a Lender or Issuing Bank, any U.S. federal withholding Tax that is in effect and would apply to a payment to such Lender or Issuing Bank at the time such Lender or Issuing Bank becomes a party to this Agreement (other than pursuant to Sections 10.5 and 11.12(b) or otherwise at the Borrower’s request) or designates a new lending office (other than pursuant to Section 2.18 or otherwise at the Borrower’s request) except to the extent that such Lender or Issuing Bank (in the case of the designation of a new lending office) or its assignor (in the case of an assignment) was entitled, at the time of designation of a new lending office or assignment, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.10, (c) any Tax that would not have been imposed but for the failure of a Lender, Issuing Bank or the Administrative Agent, as applicable, to comply with Section 2.14 and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Factoring Transaction” shall mean any transaction or series of transactions entered into by the Borrower or any of its Subsidiaries pursuant to which such party consummates a “true sale” of its Receivables to a non-related third party on terms acceptable to the Administrative Agent; provided that (a) such Factoring Transaction is non-recourse to the Borrower or any of its Subsidiaries and their assets, other than any recourse solely attributable to a breach by the Borrower of representations and warranties that are customarily made by a seller in connection with a “true sale” of Receivables on a non-recourse basis, and (b) such Factoring Transaction is consummated pursuant to contracts, arrangements or agreements entered into with respect to the “true sale” of Receivables on terms reasonably acceptable to the Administrative Agent.
“FATCA” shall mean Section 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any U.S. or non-U.S. fiscal or regulatory legislation or official rules adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of the foregoing.
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“FDA” shall mean the United States Food and Drug Administration, and any successor agency thereto.
“Federal Funds Rate” shall mean for any day, the rate per annum (expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day; provided (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent, in its capacity as a Lender, on such day on such transactions as determined by the Administrative Agent, and (c) if the Federal Funds Rate is at any time less than zero, the Federal Funds Rate shall be deemed to be zero for the purposes of this Agreement.
“Federal Reserve Bank of New York’s Website” shall mean the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Fee Letter” shall mean that certain Fee Letter dated as December 19, 2019 among Act II, the Administrative Agent, TD Securities (USA) LLC and The Toronto-Dominion Bank, New York Branch, as amended prior to the Closing Date.
“Fiscal Year” and “Fiscal Quarter” shall mean, with respect to any Person, such Person’s fiscal years or fiscal quarters.
“Fixed Charge Coverage Ratio” shall mean, at any time of determination, the ratio of (a) LTM EBITDA to (b) LTM Fixed Charges.
“Fixed Charges” shall mean for any period, the sum of (without duplication) (a) the aggregate of all Interest Expense paid in cash during such period, (b) scheduled payments of principal with respect to Indebtedness for Money Borrowed during such period (as such amounts with respect to the Loans may be reduced by the application of prepayments pursuant to Section 2.8(i)), (c) cash income taxes (excluding property taxes) of the Borrower and its Subsidiaries paid during such period, (d) Maintenance Capital Expenditures made during such period and (e) Restricted Payments and Restricted Purchases under Section 7.7(c), (d), and (e) paid in cash (other than Restricted Payments made to the Borrower or any Subsidiary by any Subsidiary of the Borrower) by the Borrower and its Subsidiaries during such period.
“Flood Hazard Property” shall mean any Mortgaged Real Estate located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.
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“Food and Drug Laws” shall mean, collectively, (i) the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301 et seq., as amended from time to time, together with any rules and regulations promulgated thereunder, and any similar law, and analogous foreign or state laws and their respective implementing regulations, to the extent that such laws, rules or regulations regulate Food Products and/or Drugs, and (ii) any other applicable federal, state and municipal, domestic and foreign law governing the safety, purity, labeling, distribution, and advertising of Food Products and/or Drugs sold for consumption from time to time; and, in respect of all such laws, all rules, regulations and orders administered by the U.S. Food and Drug Administration or any other Governmental Entity, in each case, which impose standards with respect to the safety and marketing of Food Products and/or Drugs, including any such laws relating to the manufacture, labeling, packaging, transportation, distribution or sale of such products.
“Food or Drug Permit” shall mean any permit, clearance, consent, waiver, license, exemption, registration, authorization or other action required under or issued, granted, given, authorized by or made pursuant to Food and Drug Laws.
“Food Product” shall mean a product regulated as a food or dietary supplement under the Food and Drug Laws.
“Foreign Lender” shall have the meaning set forth in Section 2.14(a)(ii).
“Foreign Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
“Foreign Pledge Agreement” shall mean a pledge agreement, charge agreement or similar agreement executed by a Credit Party, granting a Lien on Ownership Interests of a Foreign Subsidiary to secure the Obligations, governed by the law of the jurisdiction of organization of such Foreign Subsidiary and in form and substance acceptable to the Administrative Agent.
“Foreign Subsidiary” shall mean any Subsidiary that is organized under the laws of a jurisdiction other than the United States, a State thereof or the District of Columbia.
“Fund” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“GAAP” shall mean, subject to the terms of Section 11.6, generally accepted accounting principles which are in effect from time to time in the United States of America, consistently applied.
“Governmental Entity” shall mean any (a) multinational, federal, national, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, domestic or foreign, (b) any subdivision, agent, agency, commission, board, bureau, ministry or authority of any of the foregoing, or (c) any quasi-governmental or private body exercising any regulatory, self-regulatory, expropriation or taxing authority under or for the account of any of the foregoing.
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“Guarantor” shall mean (a) each wholly-owned Domestic Subsidiary of the Borrower in existence on the Closing Date (after giving effect to the Transaction), other than any Immaterial Subsidiary, (b) each wholly-owned Domestic Subsidiary of the Borrower that becomes a Guarantor hereto pursuant to Section 5.12 and (c) any other Person that provides a Guaranty of the Obligations.
“Guaranty,” “Guarantee” or “Guaranteed,” as applied to an obligation, shall mean and include (a) a guaranty, direct or indirect, in any manner, of all or any part of such obligation and (b) any agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of all or any part of such obligation, including, without limiting the foregoing, any reimbursement obligations as to amounts drawn down by beneficiaries of outstanding letters of credit; provided that endorsements of instruments for deposit or collection shall be excluded. The amount of any Guaranty hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the obligations in respect of which such Guaranty is made (or, if such Guaranty is limited by its terms to a lesser amount, such lesser amount) or, if not determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guarantying Person in good faith.
“Hazardous Materials” shall mean any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Entity.
“Hazardous Materials Activity” shall mean any past, current activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, storage, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.
“Hedge Termination Value” shall mean, in respect of any one or more Interest Hedge Agreements or Other Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Interest Hedge Agreements or Other Hedging Agreements, (a) for any date on or after the date such Interest Hedge Agreements or Other Hedging Agreements 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(s), if any, determined as the mark-to-market value(s) for such Interest Hedge Agreements or Other Hedging Agreements, as determined by making at mid-market the calculations required by Section 6(e)(ii)(2)(A) of the ISDA Master Agreement (1992 version), or Section 6(e)(ii)(2) of the ISDA Master Agreement (2002 version) as if such agreement were being terminated as a result of a Termination Event with two Affected Parties (as defined in such Interest Hedge Agreement or Other Hedging Agreement) on that Business Day. Capitalized terms used in this definition not otherwise defined shall have the meanings given to them in the applicable ISDA Master Agreement.
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“Hedging Obligations” shall mean, with respect to any Person, any obligation of such Person to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“IBA” shall mean the ICE Benchmark Administration.
“Immaterial Subsidiary” shall mean any Subsidiary of the Borrower other than a Material Subsidiary.
“Impacted Lender” shall mean any Lender (a) as to which the Issuing Bank has notice that such Lender believes it will become a Defaulting Lender or that such Lender has defaulted in fulfilling its obligations under any other syndicated credit facility to which such Lender is a party or (b) that is deemed insolvent or is subject to a bankruptcy or other related proceeding or any forced liquidation.
“Incremental Facility” shall mean the additional Indebtedness for Money Borrowed for which the Borrower may obtain commitments pursuant to Section 2.17 and that is the subject of a Notice of Incremental Facility Commitment which shall be subject to the terms and conditions of this Agreement.
“Incremental Facility Advance” shall mean a Loan made under an Incremental Facility by any Lender holding all or a portion of the Incremental Facility Commitment with respect to such Incremental Facility.
“Incremental Facility Amount” shall mean, subject to Section 2.17, an amount not to exceed (x) (i) $50,000,000, plus (ii) the aggregate principal amount of Term Loans that were voluntarily prepaid prior to the date of the applicable increase, plus (y) an unlimited amount so long as, in the case of this clause (y) after giving effect to such increase, the Consolidated Total Net Leverage Ratio is less than or equal to 2.00 to 1.00 (calculated on a Pro Forma Basis immediately after giving effect to the incurrence thereof and to any Acquisition or other Investment consummated in connection therewith).
“Incremental Facility Commitment” shall mean the commitment of any Person or Persons (which may be Lenders) to make Term Loans to the Borrower in accordance with such commitment and such applicable Notice of Incremental Facility Commitment (provided that, if the Borrower obtains an Incremental Facility Commitment from more than one Person, such commitments shall be several obligations of each such Person); and “Incremental Facility Commitments” shall mean the aggregate of the Incremental Facility Commitments with respect to all Incremental Facilities.
“Incremental Facility Commitment Ratios” shall mean, with respect to any Incremental Facility, the percentages in which the Persons holding the related Incremental Facility Commitment are severally bound to fund their respective portions of Incremental Facility Advances to the Borrower under such Incremental Facility.
“Incremental Facility Loans” shall mean, collectively, the amounts advanced by the Persons holding an Incremental Facility Commitment to the Borrower as part of an Incremental Facility and, if requested by any such Person, evidenced by the Incremental Facility Notes.
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“Incremental Facility Maturity Date” shall mean, with respect to any Incremental Facility, the date specified in the related Notice of Incremental Facility Commitment as the maturity date of such Incremental Facility, which maturity date shall not in any event be earlier than the date certain set forth in the definition of Term Loan Maturity Date.
“Incremental Facility Notes” shall mean those certain Incremental Facility Notes issued to each Person having all or a portion of an Incremental Facility Commitment who requests an Incremental Facility Note substantially in the form of Exhibit F attached hereto and any extension, renewals, amendments to, or replacements of the foregoing in accordance with the terms thereof and hereof.
“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money of any kind (including all Indebtedness for Money Borrowed), (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Persons under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding trade accounts payable and accrued expenses incurred in the ordinary course of business) that in accordance with GAAP would be included as liabilities on the balance sheet of such Person, (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, but, with respect to such Indebtedness that is non-recourse, only to the extent of the lesser of the amount of such Indebtedness or the fair market value of the property at the time of determination that is encumbered by such Lien, (f) all Guaranties by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) the face amount of all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) the obligations of such Person in respect of (x) the Hedge Termination Value under all Interest Hedge Agreements and all Other Hedging Agreements on such date, and (k) all obligations of such Person, whether or not contingent, to purchase, redeem, retire, defease or otherwise make any payment in respect of Disqualified Equity, valued at, in the case of redeemable preferred Ownership Interests that is Disqualified Equity, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such Ownership Interests plus accrued and payable (but unpaid) dividends. Notwithstanding the foregoing, Indebtedness shall not include (i) deferred revenue, as determined in accordance with GAAP, arising in the ordinary course of business, (ii) preferred stock required to be treated as indebtedness under GAAP (other than to the extent constituting Disqualified Equity) or (iii) purchase price adjustments in connection with Permitted Acquisitions. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s Ownership Interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indebtedness for Money Borrowed” shall mean, with respect to any Person, without duplication, (a) Indebtedness for money borrowed and Indebtedness represented by notes payable and drafts accepted representing extensions of credit, (b) all obligations evidenced by bonds (excluding surety, performance and similar bonds), debentures, notes or other similar instruments, (c) the outstanding principal component of all Capital Lease Obligations, (d) all reimbursement obligations with respect to outstanding letters of credit (to the extent drawn), (e) all Indebtedness issued or assumed as full or partial payment for property or services (other than deferred revenue, as determined in accordance with GAAP, arising in the ordinary course of business, and trade payables and accrued expenses arising in the ordinary course of business), whether or not any such notes, drafts, obligations or Indebtedness represent Indebtedness for money borrowed, that in accordance with GAAP would be included as liabilities on the balance sheet of such Person, and (f) without duplication, Guaranties of any of the foregoing. For purposes of this definition, interest paid-in-kind or capitalized (including accreted amounts thereon) shall be deemed Indebtedness for Money Borrowed.
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“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” shall have the meaning set forth in Section 11.2(a).
“Interest Expense” shall mean, with respect to any Person for any period, interest expense (whether cash or non-cash) of such Person determined in accordance with GAAP for the relevant period ended on such date, including, in any event, interest expense with respect to any Indebtedness of such Person.
“Interest Hedge Agreements” shall mean the obligations of any Person pursuant to any arrangement with any other Person whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, any “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act, interest rate swaps, caps, floors, collars and similar agreements.
“Interest Hedge Bank” shall mean any Person that, at the time it enters into an Interest Hedge Agreement required or permitted under this Agreement, is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender, in each case, in its capacity as a party to such Interest Hedge Agreement.
“Interest Period” shall mean:
(a) | in connection with any Base Rate Advance, the period beginning on the date such Advance is made or the date on which such Base Rate Advance is Converted from a LIBOR Advance to a Base Rate Advance and ending on the earlier of the last Business Day of the calendar quarter in which such Advance is made or the date on which such Base Rate Advance is Converted to a LIBOR Advance, provided, however, that if a Base Rate Advance is made or a LIBOR Advance is Converted to a Base Rate Advance on the last Business Day of any calendar quarter, it shall have an Interest Period ending on, and its Payment Date shall be, the last Business Day of the following calendar quarter, and |
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(b) | in connection with any LIBOR Advance, a period of one (1), two (2), three (3), or six (6) months, as selected by the Borrower or otherwise determined in accordance with this Agreement. |
Notwithstanding the foregoing, however, (i) any applicable Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless, with respect to LIBOR Advances only, such Business Day falls in another calendar month, in which case such Interest Period shall end on the first preceding Business Day, (ii) any applicable Interest Period, with respect to LIBOR Advances only, which begins on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period is to end shall (subject to clause (i) above) end on the last day of such calendar month, and (iii) the Borrower shall not select an Interest Period which extends beyond the applicable Maturity Date, or such earlier date as would interfere with the Borrower’s obligations to make scheduled payments under Section 2.5, Section 2.8, or Section 2.17. Interest shall be due and payable with respect to any Advance as provided in Section 2.3.
“Interest Rate Basis” shall mean the Base Rate Basis or LIBOR Basis, as appropriate.
“Intermediate Holdco” shall mean Project Taste Intermediate LLC, a Delaware limited liability company.
“Internally Generated Funds” shall mean funds of the Borrower and its Subsidiaries not constituting the proceeds of any Indebtedness (other than Revolving Loans), issuance, sale or other disposition of Ownership Interests, asset sale or other disposition, casualty, condemnation, or expropriation; in each case, to the extent such proceeds are utilized by the Borrower and its subsidiaries within thirty (30) days of the receipt thereof and thereafter such proceeds shall constitute Internally Generated Funds.
“Investment” shall mean, with respect to the Borrower or any of its Subsidiaries, (a) any loan, advance or extension of credit (other than extensions of credit to customers or vendors in the ordinary course of business) by such Person to, or any Guaranty or other contingent liability with respect to the Ownership Interests, Indebtedness or other obligations of, or any contributions to the capital of, any other Person, or (b) any purchase or other acquisition by such Person of any interest in any Ownership Interests, limited partnership interests, general partnership interest, or other securities of, or any debt of, another Person, other than an Acquisition. The amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but giving effect to any returns or distributions of capital or repayment of principal actually received in case by such Person with respect thereto.
“IRS” shall have the meaning set forth in Section 4.1(m)(i).
“Issuing Bank” shall mean (a) The Toronto-Dominion Bank, New York Branch, as the issuer of any other Letters of Credit, and (b) any other Revolving Lender from time to time designated by the Borrower as an Issuing Bank, with the consent of such Revolving Lender and the Administrative Agent, in which case the term “Issuing Bank” shall mean The Toronto-Dominion Bank, New York Branch and each such Revolving Lender, individually or collectively as the context shall require, and their respective successors and permitted assigns hereunder, in such capacity.
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“Joint Lead Arrangers and Joint Bookrunners” shall mean, collectively, TD Securities (USA) LLC, BMO Capital Markets Corp., BofA Securities, Inc. and SunTrust Robinson Humphrey, Inc.
“Junior Debt” shall mean (a) any unsecured Indebtedness for Money Borrowed, (b) any Indebtedness that is subordinated in right of payment to the Obligations and (c) any Indebtedness that is secured on a junior basis to the Obligations.
“Knowledge” shall mean the actual knowledge (without inquiry, other than reasonable inquiry in the scope of the normal duties of such Person), at the relevant time, of an Authorized Signatory of the Borrower. “Known” and “Knowingly” shall have a meaning correlative thereto.
“Landlord Agreement” shall mean a landlord waiver, consent, or similar agreement with respect to real property of a Credit Party that provides the Administrative Agent with, among other things and to the extent obtainable in the circumstances, an acknowledgment by the landlord of the Liens securing the Obligations, access to the applicable leased real property of any Credit Party, notice of default and cure rights, in each case, in form and substance reasonably satisfactory to the Administrative Agent in its sole discretion not to be unreasonably withheld or delayed.
“Lenders” shall have the meaning set forth in the Preamble, and shall include Persons who become Lenders pursuant to any Incremental Facility, and any assignee which becomes a Lender pursuant to and in accordance with Section 11.5.
“Letter of Credit Commitment” shall mean the commitment of the Issuing Bank to issue Letters of Credit hereunder in an aggregate amount up to $5,000,000(or any higher amount, not to exceed $10,000,000, as agreed from time to time, in writing, by Issuing Bank in its sole discretion).
“Letter of Credit Obligations” shall mean, at any time, the sum of (a) an amount equal to the aggregate undrawn and unexpired amount (including the amount to which any such Letters of Credit can be reinstated pursuant to the terms hereof) of the then outstanding Letters of Credit and (b) an amount equal to the aggregate drawn, but unreimbursed drawings on any Letters of Credit.
“Letters of Credit” shall mean collectively, commercial Letters of Credit and Standby Letters of Credit issued by the Issuing Bank on behalf of the Borrower or its Subsidiaries from time to time in accordance with the terms hereof.
“LIBOR” shall mean for any Interest Period with respect to any LIBOR Advance the greater of (a) one percent (1.00%) and (b) the following:
(i) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the Reuters Monitor Screen LIBOR01 (or such other page as may replace that page in that service) that displays an average LIBOR (or a comparable successor rate which is approved by the Administrative Agent) for deposits in U.S. Dollars (for delivery on the first (1st) day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period, or
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(ii) if the rate referenced in the preceding subsection (i) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other publicly available page or other service that displays an average LIBOR (or any comparable successor rate which is approved by the Administrative Agent) rate for deposits in U.S. Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period, or
(iii) if the rate referenced in the preceding subsections (i) and (ii) are not available, the rate per annum determined by the Administrative Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at which deposits in U.S. Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Advance being made, Continued or Converted by the Borrower and with a term equivalent to such Interest Period would be offered by the Administrative Agent’s London branch to major banks in the offshore U.S. Dollar market at their request at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period.
“LIBOR Advance” shall mean an Advance which the Borrower requests to be made as a LIBOR Advance, which is Converted from a Base Rate Advance to a LIBOR Advance, or which is reborrowed or Continued as a LIBOR Advance, in accordance with the provisions of Section 2.2, which bears interest on a LIBOR Basis and which shall be in a principal amount of at least $500,000 and in an integral multiple of $100,000.
“LIBOR Basis” shall mean a simple per annum interest rate (rounded upward, if necessary, to the nearest one-hundredth (1/100th) of one percent) equal to the sum of (a) the quotient of (i) LIBOR divided by (ii) one minus the LIBOR Reserve Percentage, if any, stated as a decimal, plus (b) the Applicable Margin. The LIBOR Basis shall apply to Interest Periods of one (1), two (2), three (3), or six (6) months and, once determined, shall remain unchanged during the applicable Interest Period, except for changes to reflect adjustments in the LIBOR Reserve Percentage and, if applicable, the Applicable Margin as adjusted pursuant to the definition thereof. The LIBOR Basis for any LIBOR Advance shall be adjusted as of the effective date of any change in the LIBOR Reserve Percentage and, if applicable, the Applicable Margin. The Borrower may not elect an Interest Period in excess of six (6) months unless the Administrative Agent has notified the Borrower that each of the Lenders (in such Lender’s discretion) has funds available to it for such Lender’s portion of the proposed Advance which are not required for other purposes and that such funds are available to each Lender at a rate (exclusive of reserves and other adjustments) at or below the LIBOR for such Advance and Interest Period.
“LIBOR Reserve Percentage” shall mean the percentage which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System, as such regulation may be amended from time to time, as the maximum reserve requirement applicable with respect to Eurocurrency Liabilities (as that term is defined in Regulation D), whether or not any Lender has any such Eurocurrency Liabilities subject to such reserve requirement at that time.
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“Lien” shall mean, with respect to any Property, any mortgage, lien, hypothec, pledge, collateral assignment, charge, security interest, title retention agreement, levy, attachment, garnishment or other encumbrance of any kind in respect of such Property, whether created by statute, contract, the common law or otherwise, and whether or not choate, vested or perfected.
“Loan Documents” shall mean this Agreement, the Subsidiary Guaranty, the Notes, the Security Documents, the Fee Letter, all Requests for Advance, all Requests for Letters of Credit, all Notices of Conversions, Continuations or Prepayments, all Notices of Incremental Facility Commitments, all Real Property Documentation, all Landlord Agreements, non-disturbance agreements, bailee letters, mortgagee agreements or similar agreements, and all other documents and agreements executed or delivered by any Credit Party in connection with or pursuant to this Agreement (other than the Acquisition Agreement or any documents and agreements (other than those specified above) executed or delivered in connection with or pursuant to any Permitted Acquisition).
“Loans” shall mean, collectively, the Revolving Loans, the Term Loans, the Swing Line Loans and any Incremental Facility Loans.
“LTM EBITDA” shall mean, as of any date of determination, Consolidated EBITDA of the Borrower and its Subsidiaries as of the last day of the most recently completed Test Period. Notwithstanding the foregoing, but subject to any adjustment set forth in the definition of “Consolidated EBITDA” with respect to any calculations of LTM EBITDA occurring after the Closing Date which include any of the Fiscal Quarters ending June 30, 2019, September 30, 2019, December 31, 2019 and March 31, 2020, the Consolidated EBITDA for such Fiscal Quarters included in LTM EBITDA shall be solely to the extent not already reflected in the calculation thereof, shall be $13,400,000, $15,400,000, $17,300,000, and $14,400,000, respectively.
“LTM Fixed Charges” shall mean, as of any date of determination, Fixed Charges as of the last day of the most recently completed Test Period.
“Maintenance Capital Expenditures” shall mean, with respect to any Person for any period, the aggregate of all Capital Expenditures by such Person and its Subsidiaries during such period that are for any existing systems or equipment to maintain competitive and operating efficiency or for renewal of existing customer agreements, or for the replacement of such systems or equipment, but excluding any Capital Expenditures relating to (a) any success based Capital Expenditures related to new customers, (b) any Capital Expenditures relating any new expansion of or new construction upon leasehold, building or land improvement, or (c) any Capital Expenditures associated with increasing services for existing and new customers.
“Material Contract” shall mean each agreement, contract, lease, guaranty, license, or other arrangement (other than the Loan Documents) of the Borrower or any of its Subsidiaries as to which the breach, termination, nonperformance or failure to renew would be reasonably expected to have a Materially Adverse Effect and any replacements, substitutions or renewals of such agreements other than to the extent such replacement, substitution or renewal would not satisfy the foregoing test.
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“Material Foreign First Tier Subsidiary” shall mean (a) Merisant Spain SL, (b) Wei Feng Enterprises Limited, (c) Extraits Vegetaux et Derives, S.A.S. and (d) any Foreign Subsidiary (i) the majority of the Ownership Interests of which are directly owned by a Credit Party and (ii) that, (x) as of the last day of the most recent Test Period, had total assets (determined on a consolidated basis for such Foreign Subsidiary and its Subsidiaries) of at least $25,000,000 or (y) during such Test Period, had revenues (determined on a consolidated basis for such Foreign Subsidiary and its Subsidiaries and excluding intercompany revenues) in an amount greater than or equal to 5.00% of the amount of consolidated total revenues of the Borrower and its Subsidiaries for such period; provided that no Foreign Subsidiary shall be excluded as a Material Foreign First Tier Subsidiary until, and for so long as, the Borrower shall have designated such Foreign Subsidiary’s status as such in writing to the Administrative Agent.
“Material Subsidiary” shall mean (a) Intermediate Holdco, (b) each Subsidiary of the Borrower listed on Schedule 6.1 and (c) each other Subsidiary of the Borrower that, (i) as of the last day of the most recent Test Period, had total assets (determined on a consolidated basis for such Subsidiary and its Subsidiaries) in an amount greater than or equal to 5.00% of the amount of Consolidated Total Assets of the Borrower and its Subsidiaries or (ii) during such Test Period, had revenues (determined on a consolidated basis for such Subsidiary and its Subsidiaries and excluding intercompany revenues) in an amount greater than or equal to 5.00% of the amount of consolidated total revenues of the Borrower and its Subsidiaries during such period; provided that no Subsidiary shall be excluded as a Material Subsidiary until, and for so long as, the Borrower shall have designated such Subsidiary’s status as such in writing to the Administrative Agent; and provided, further, that if, as of the last day of or during any such period, as applicable, the total assets or revenues of all Subsidiaries (in each case, determined on a consolidated basis for each such Subsidiary and its Subsidiaries) that under clause (i) and (ii) above would not constitute Material Subsidiaries shall have exceeded 10.00% of Consolidated Total Assets or revenues, as the case may be, of the Borrower and its Subsidiaries in the aggregate, then one or more of such excluded Subsidiaries shall for all purposes of the Loan Documents be deemed to be Material Subsidiaries in descending order based on the amounts (determined on a consolidated basis for such Subsidiary and its Subsidiaries) of their total assets or revenues, as the case may be, until such excess shall have been eliminated.
“Materially Adverse Effect” shall mean any material adverse effect upon any of the following: (a) the business, assets, liabilities, condition (financial or otherwise), results of operations or properties of the Borrower and its Subsidiaries on a consolidated basis, taken as a whole, or (b) the binding nature, validity, or enforceability against the applicable Credit Parties, taken as a whole, of this Agreement, the other Loan Documents and the Notes, or (c) the ability of the Borrower and its Subsidiaries to timely perform the obligations under this Agreement or any other Loan Document to which the Borrower or such Subsidiary is a party; or (d) the rights and remedies of the Administrative Agent and the Lenders under this Agreement or any other Loan Document; or (e) the validity, perfection or priority of a Lien in favor of Administrative Agent for the benefit of Secured Parties on a material portion of the Collateral, taken as a whole; in each case, whether resulting from any single act, omission, situation, status, event or undertaking, or taken together with other such acts, omissions, situations, statuses, events or undertakings. “Material Adverse Effect” shall have a meaning correlative thereto.
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“Maturity Date” shall mean (a) the Revolving Maturity Date, the Term Loan Maturity Date the Swing Line Maturity Date or any Incremental Facility Maturity Date, as appropriate or (b) such earlier date as payment of the Obligations in full shall be due (whether by acceleration, reduction of the Revolving Commitments to zero or otherwise, in each case, in accordance with and subject to the terms and conditions of this Agreement).
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.
“Mortgage” shall mean a charge, mortgage, deed of trust or debenture, as applicable, from the applicable Credit Party owning the real property subject thereto, in form and substance reasonably satisfactory to the Administrative Agent, granting a Lien thereon to Administrative Agent, for the benefit of the Secured Parties, to secure the Obligations.
“Mortgaged Real Estate” shall mean all real property which, from time to time, is owned by a Credit Party and subject to a Mortgage.
“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.
“Necessary Authorizations” shall mean any governmental or other regulatory authority and all other material approvals, licenses, filings and registrations necessary in order to enable the Borrower and its Subsidiaries to conduct their respective businesses as currently conducted and enter into the transactions contemplated hereby, including, without limitation, all consents needed to acquire, maintain and operate material owned real property locations.
“Net Income” shall mean net income (or loss) of the Borrower and its Subsidiaries on a consolidated basis for any period taken as a single accounting period determined in accordance with GAAP; provided that there shall be excluded (x) the income of any Subsidiary (other than a Credit Party) to the extent that the declaration or payment of dividends or similar distributions by the Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary and (y) the income of any Person in which any other person (other than the Borrower or a wholly owned Subsidiary or any director holding qualifying shares in accordance with applicable law) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid in such period or any subsequent period to the Borrower or a wholly owned Subsidiary by such Person in respect of such income.
“Net Proceeds (Asset Sales)” shall mean, with respect to any sale or other disposition of assets (other than sales or dispositions of inventory or worn out or obsolete assets, in each case, in the ordinary course of business, but including, in the case of a casualty, insurance proceeds and, in the case of a condemnation, expropriation or similar event, condemnation or expropriation awards, net proceeds as a result of eminent domain and lost or damaged assets or similar payments) by the Borrower or any of its Subsidiaries, the difference between (a) the aggregate amount of cash or Cash Equivalents received (including proceeds of insurance paid (other than proceeds received from business interruption insurance) with respect to lost or damaged assets, awards arising from condemnation or expropriation of assets or taking by eminent domain and including by way of sale or discounting of a note, installment receivable or other receivable, but excluding any consideration received in the form of assumption of Indebtedness for Money Borrowed or other obligations relating to such properties or assets or received in any other non-cash form) therefrom by such Person, and (b) the sum of (i) all direct costs and expenses incurred in connection therewith (including, without limitation, all legal, title and recording tax expenses, commissions and other reasonable fees and expenses and all federal, state, foreign and local taxes required to be paid or estimated in good faith to be payable or accrued as a liability as a consequence of such asset sale or other disposition), (ii) all payments made by such Person on any Indebtedness for Money Borrowed or other Indebtedness reasonably acceptable to the Administrative Agent which is secured by the assets subject to such asset sale or other disposition in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such asset sale or other disposition or by Applicable Law, be repaid out of the proceeds from such asset sale or other disposition, (iii) amounts held in reserve or escrow to be applied as part of the purchase price (provided, that such amounts shall be included as Net Proceeds (Asset Sales) at such time as such cash is released and delivered to the Borrower or any of its Subsidiaries) and (iv) a reasonable reserve for any adjustment in respect of the sale price of such asset(s) required pursuant to GAAP and/or the after-tax costs of any indemnification payments (fixed or contingent) attributable to the seller’s indemnities to the purchaser undertaken by the Borrower or any of its Subsidiaries in connection with such asset sale or other disposition (provided that such amounts shall be included as Net Proceeds (Asset Sales) at such time as any such reserve is no longer required).
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“Net Proceeds (Indebtedness)” shall mean, with respect to any issuance or other incurrence of any Indebtedness for Money Borrowed of the Borrower or its Subsidiaries not otherwise permitted under Section 7.1, the difference between (a) the aggregate amount of cash or Cash Equivalents received in connection with the issuance or other incurrence of such Indebtedness, and (b) the aggregate amount of any reasonable and customary transaction costs and expenses or commissions incurred in connection therewith, including, without limitation, all reasonable documented out of pocket fees and expenses of attorneys, accountants and other consultants, all reasonable underwriting or placement agent fees, and reasonable fees and expenses of any trustee, registrar or transfer agent.
“Net Proceeds (Ownership Interests)” shall mean, with respect to any sale, issuance or other disposition of any Ownership Interests of the Borrower, or any cash capital contributions received, by the Borrower, the difference between (a) the aggregate amount of cash or Cash Equivalents received in connection with any such capital contribution or the sale, issuance or other disposition of such Ownership Interests, and (b) the aggregate amount of any reasonable and customary transaction costs and commissions actually incurred in connection therewith, including, without limitation, all reasonable documented out of pocket fees and expenses of attorneys, accountants and other consultants, all reasonable underwriting or placement agent fees, and reasonable fees and expenses of any trustee, registrar or transfer agent.
“Non-Consenting Lender” shall have the meaning set forth in Section 11.12(b).
“Non-Reimbursed Amount” shall mean any amount owing to the Issuing Bank as a result of the failure of any Lender to pay to the Issuing Bank the amount of such Revolving Lender’s pro rata share of any amount described in Section 2.16 (whether in connection with the purchase of a participation in any Letter of Credit, a request or deemed request for a Revolving Loan to satisfy the Borrower’s reimbursement obligations with respect to any Letter of Credit, or otherwise) based on such Revolving Lender’s Revolving Commitment Ratio.
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“Notes” shall mean, collectively, the Revolving Loan Notes, the Term Loan Notes, the Swing Line Note, and the Incremental Facility Notes, if any.
“Notice of Conversions, Continuations or Prepayments” shall mean a certificate designated as a “Notice of Conversions, Continuations or Prepayments,” signed on the Borrower’s behalf by an Authorized Signatory of the Borrower requesting the Continuation or Conversion of an Advance hereunder, or notifying the Administrative Agent of the intent of the Borrower to prepay any Advance or reduce the Revolving Commitment, which certificate shall be in substantially the form of Exhibit G attached hereto, and shall, (a) specify the date of such Continuation, Conversion, prepayment of the Advance or reduction of the Revolving Commitment, which shall be a Business Day, the amount of the Advance to be Converted, Continued or prepaid or the commitment reduction, the Interest Rate Basis for the Advance, and, with respect to LIBOR Advances, the Interest Period of such LIBOR Advance to be Continued, Converted or prepaid by the Borrower and (b) with respect to a Continuation of or Conversion to a LIBOR Advance, state that there shall not exist, on the date of the requested Continuation, or Conversion and after giving effect thereto, a Default or, if a Default will exist, describing in detail such Default.
“Notice of Incremental Facility Commitment” shall mean any Notice of Incremental Facility Commitment executed in accordance with Section 2.17, which notice shall be substantially in the form of Exhibit H attached hereto and shall be delivered to the Administrative Agent for distribution to the Lenders.
“Obligations” shall mean all payment and performance obligations of every kind, nature and description of the Borrower and the other Credit Parties, and any other obligors to the Lenders, the Issuing Bank, any Indemnitees, Bank Products Banks, Interest Hedge Banks, Other Hedge Banks, or the Administrative Agent, or any of them, (a) arising under this Agreement and the other Loan Documents (including, without limitation, any interest, fees, expenses and other charges on the Loans or otherwise under the Loan Documents that would accrue but for the filing of a bankruptcy action with respect to the Borrower or any of its Subsidiaries, whether or not such claim is allowed in such bankruptcy action) as they may be amended from time to time, or (b) arising under any Interest Hedge Agreements and any Other Hedging Agreements, in each case, permitted under Section 7.1(e), as such agreements may be amended from time to time; or (c) arising under any Bank Products, as such agreements may be amended from time to time. Any other term or provision of this Agreement or any other Loan Document to the contrary notwithstanding, the “Obligations”, “Secured Obligations,” or “Guaranteed Obligations” of any Credit Party shall exclude, as to such Credit Party, Excluded Hedging Obligations of such Credit Party.
“OFAC” shall mean the United States Department of the Treasury’s Office of Foreign Assets Control or any successor thereto.
“Organizational Documents” shall mean, with respect to any Person, all formation, organizational and governing documents, instruments and agreements, including (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its bylaws, as amended (or equivalent or comparable constitutive documents), (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended (or equivalent or comparable constitutive documents), (c) with respect to any general partnership, its partnership agreement, as amended (or equivalent or comparable constitutive documents) and (d) with respect to any limited liability company, its certificate or articles of organization or formation, as amended, and its operating agreement, as amended (or equivalent or comparable constitutive documents).
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“Other Connection Taxes” shall mean Taxes imposed as a result of a present or former connection between a recipient of any payment pursuant to any Loan Document and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced under any Loan Document or sold or assigned an interest in any Loan or Loan Document).
“Other Hedge Bank” shall mean any Person that, at the time it enters into an Other Hedging Agreement required or permitted under this Agreement, is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender, in each case, in its capacity as a party to such Other Hedging Agreement.
“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.
“Other Taxes” shall mean any and all present and future stamp, court, intangible, recording, filing, documentary or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to any Loan Document except any Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Sections 2.18, 10.5, or 11.12(b) or otherwise at the Borrower’s request).
“Ownership Interests” shall mean, as applied to any Person, corporate stock and any and all securities, shares, partnership interests (whether general, limited, special or other), limited liability company interests, membership interests, equity interests, participations, rights or other equivalents (however designated and of any character) of corporate stock of such Person or any of the foregoing issued by such Person (whether a corporation, a partnership, a limited liability company or another entity) and includes, without limitation, securities convertible into Ownership Interests and rights, warrants or options to acquire Ownership Interests.
“PACA” shall mean the Perishable Agricultural Commodities Act, 1930, 7 U.S.C. Sections 499a-499t, as amended, together with all rules and regulations thereunder.
“Participant” shall have the meaning set forth in Section 11.5(e).
“Participant Register” shall have the meaning set forth in Section 11.5(e).
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“Patent Security Agreement” shall mean any Patent Security Agreement among any of the Borrower or a Subsidiary of the Borrower and the Administrative Agent, for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Administrative Agent and as amended, restated, replaced, supplemented, replaced or otherwise modified from time to time.
“Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) (P.L. 107-56, 115 Stat. 272 (2001)), and any successor or replacement statute.
“Payment Date” shall mean the last day of any Interest Period.
“Payment in Full” shall mean (i) the payment in full of all Obligations in immediately available funds (other than (a) obligations for taxes, costs, indemnifications, reimbursements, damages and other contingent liabilities in respect of which no claim or demand for payment has been made or, in the case of indemnifications, no notice has been given and (b) obligations and liabilities under Interest Hedge Agreements, Bank Products Documents and Other Hedging Agreements as to which arrangements satisfactory to the applicable Interest Hedge Bank, Bank Products Bank or Other Hedge Bank shall have been made), (ii) the termination of the Commitments, and (iii) the cash collateralization of any outstanding Letters of Credit in an amount equal to 103% of the Letters of Credit Obligations or other arrangements satisfactory to the Issuing Bank shall have been made. “Paid in Full” shall have shall have a meaning correlative thereto.
“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.
“Perfection Certificate” shall mean that certain perfection certificate, dated as of the date hereof, executed and delivered by each Credit Party, and each other Perfection Certificate (which shall be in form and substance consistent with the Perfection Certificate delivered on the date hereof or otherwise reasonably acceptable to the Administrative Agent) executed and delivered by the applicable Credit Parties pursuant to the Security Documents, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with this Agreement (including pursuant to any officer’s certificate delivered pursuant to Section 6.3(b) or upon the reasonable request of the Administrative Agent pursuant to the Security Documents).
“Permitted Acquisition” shall mean (a) the Transaction and (b) any Acquisition by the Borrower or any wholly-owned Subsidiary of the Borrower which complies with each of the following:
(a) | such Acquisition is not hostile or contested; |
(b) | after giving effect to such Acquisition (and the incurrence or assumption of Indebtedness for Money Borrowed in connection therewith) on a Pro Forma Basis, the Consolidated Total Net Leverage Ratio shall be not greater than the maximum amount permitted pursuant to Section 7.8(a) and the Fixed Charge Coverage Ratio shall be no less than the minimum amount permitted pursuant to Section 7.8(b); |
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(c) | the assets so acquired or, as the case may be, the assets of the Person so acquired shall be in the lines of business of the Borrower carried on by the Borrower on the Closing Date or business reasonably related or ancillary, complementary or incidental thereto or representing a reasonable expansion thereof; |
(d) | the Administrative Agent shall have received a certificate from the Borrower to the effect that, both before and after giving effect to such Acquisition, (i) (x) all of the representations and warranties of the Borrower and the other Credit Parties under this Agreement and the other Loan Documents to which it is a party, respectively (except to the extent relating specifically to a specific prior date) are true and correct in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect qualifier, such representation or warranty shall be true and correct in all respects), both before and after giving effect to such Acquisition, after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties, or (y) if the Lenders providing an Incremental Facility Loan to finance a Permitted Acquisition have agreed to a “certain funds” provision, (A) such of the representations and warranties made by or on behalf of the applicable acquired company or business (or the seller thereof) in the applicable acquisition agreement as are material to the interests of the Lenders, but only to the extent that the Borrower or any of its Subsidiaries has the right to terminate the obligations of the Borrower or any of its Subsidiaries under such acquisition agreement or not consummate such Acquisition as a result of the inaccuracy of such representations or warranties in such acquisition agreement, and (B) each of the Specified Representations, in each case are true and correct at such time, or, at the Borrower’s option, as of the date that the applicable acquisition agreement is executed, in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect qualifier, such representation or warranty shall be true and correct in all respects), both before and after giving effect to such Acquisition, after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties; (ii) no Default or Event of Default hereunder shall exist at the time of such Acquisition or be caused thereby, unless the Lenders providing an Incremental Facility Loan to finance a Permitted Acquisition have agreed to a “certain funds” provision in which case, no Default or Event of Default shall exist at the time the applicable acquisition agreement is executed and no Event of Default under Section 8.1(a), (g) or (h) shall exist at the time of the consummation of such Acquisition; (iii) if the purchase price for such Acquisition is greater than the greater of (x) $20,000,000 and (y) 30% of LTM EBITDA, the Lenders shall have received a quality of earnings report in form and substance satisfactory to the Administrative Agent, and (iv) calculations evidencing the Borrower’s compliance on the date of such Acquisition on a Pro Forma Basis with the covenants set forth in Section 7.8 for the last day of the immediately preceding Fiscal Quarter for which financial statements were required to be delivered hereunder (provided, that if the Lenders providing an Incremental Facility Loan to finance a Permitted Acquisition have agreed to a “certain funds” provision, then the Borrower’s compliance with this clause (iv) shall be determined as of the last day of the Fiscal Quarter immediately preceding the execution of the applicable definitive acquisition agreement with respect thereto), before and after giving effect on a Pro Forma Basis to the Acquisition and Advances made in connection with such Acquisition and interest to accrue thereon; |
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(e) | if the Acquisition is an Acquisition of Ownership Interests, the Acquisition is effected in such manner so that the acquired Ownership Interests (which shall constitute 100% of the Ownership Interests of the target) are, directly or indirectly, owned by the Borrower or any of its Subsidiaries and, if effected by merger, consolidation or amalgamation, the Borrower or such Subsidiary (or the target into which any such Subsidiary is merged, consolidated, or amalgamated provided that the surviving entity becomes a Subsidiary of the Borrower) is the surviving, continuing or resulting entity; |
(f) | if the purchase price for such Acquisition is greater than $10,000,000, the Borrower shall have delivered evidence that it or such wholly-owned Subsidiary is acquiring the assets or Ownership Interests free and clear of all Indebtedness and Liens (other than Permitted Liens and Indebtedness permitted under Section 7.1 hereunder) to the Administrative Agent’s reasonable satisfaction; |
(g) | if the purchase price for such Acquisition is greater than $10,000,000, the Borrower shall have delivered to the Administrative Agent at least ten (10) calendar days (or such shorter period as may be agreed to by the Administrative Agent in writing in its sole discretion) prior to the date of the intended consummation of such Acquisition, an information packet which shall include: (i) a description of the Persons party to such Acquisition, (ii) a description of the structure and material terms of such Acquisition, (iii) to the extent available to the Borrower, historical financial statements of any Person to be acquired by the Borrower in such Acquisition for the prior two (2) years, and (iv) such other information (to the extent available to the Borrower) related to the Acquisition as reasonably requested by Administrative Agent; |
(h) | the Borrower and any Subsidiary of the Borrower that is organized, created, acquired, resulting from or otherwise party to such Acquisition shall have delivered or shall deliver within forty-five (45) calendar days after such Acquisition (or such longer period agreed by the Administrative Agent) Security Documents and any other documents, agreements or instruments requested by the Administrative Agent to perfect the Administrative Agent’s Lien on all such assets or Ownership Interests acquired by the Borrower or such Subsidiary in such Acquisition, in each case, in accordance with and subject to the terms and conditions of Sections 5.12 and 5.13 and the Security Documents; |
(i) | the total consideration (including cash, assumption of Indebtedness, seller earnest money paid and non-cash consideration, and net of acquired cash and Cash Equivalents) for all such Acquisitions (excluding the Transaction) of (x) assets located outside the United States and (y) Ownership Interests in a Person organized in a jurisdiction outside the United States, shall not exceed $20,000,000 in the aggregate during the term of this Agreement but excluding (i) any consideration consisting of Ownership Interests of the Borrower or the Net Proceeds (Ownership Interests) included in such consideration, in each case other than Disqualified Equity, and (ii) any assets or Ownership Interests that would otherwise be subject to this clause, the fair market value of which, in the good faith judgment of the Borrower, constitute less than 15% of the fair market value of all assets and Ownership Interests acquired as part of the applicable transaction or series of related transactions; |
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(j) | the Administrative Agent shall have received a certificate, in form and scope reasonably acceptable to the Administrative Agent, from the Borrower confirming that each of the conditions set forth in clauses (b), (c), (d), (e), and (i) in this definition to be satisfied by the Credit Parties (assuming, for such purpose, that any condition expressly within the discretion of the Administrative Agent or any Lender has been consented to or otherwise approved) have been satisfied prior to the consummation of such Acquisition; and |
(k) | if the purchase price for such Acquisition is greater than $10,000,000, within a reasonable period of time following the consummation of such Acquisition, the Administrative Agent shall have received copies of all material transaction documents executed and delivered in connection with such Acquisition. |
“Permitted Holders” shall mean (a) each of Irwin D. Simon, John Carroll, Ira J. Lamel, Ashish Gupta, Anuraag Agarwal and John M. McMillin and (b) any Related Person of the foregoing.
“Permitted Liens” shall mean, as applied to any Person:
(a) | any Lien given to secure the Obligations; |
(b) | Liens for taxes, assessments, judgments, governmental charges or levies or claims not yet due and payable or the non-payment of which is being contested in good faith by appropriate proceedings diligently conducted, so long as adequate reserves with respect thereto are set aside in accordance with GAAP or the amount of such Lien is fully bonded, but only so long as no foreclosure, distraint, sale or similar proceedings have been commenced with respect thereto; |
(c) | Liens of carriers, warehousemen, landlords, mechanics, vendors, laborers and materialmen (solely to the extent arising by operation of law) incurred in the ordinary course of business for sums not overdue for more than thirty (30) days or, if overdue, that are being diligently contested in good faith by appropriate proceedings diligently conducted, so long as adequate reserves with respect thereto are set aside in accordance with GAAP or the amount of such Lien is fully bonded, but only so long as no foreclosure, distraint, sale or similar proceedings have been commenced with respect thereto, or bonded or insured over; |
(d) | Liens incurred in the ordinary course of business in connection with (i) worker’s compensation and unemployment insurance, social security obligations, assessments or government charges and (ii) public utility services when required by such utility in connection with the operations of the Borrower and its Subsidiaries; |
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(e) | easements, rights-of-way, zoning restrictions, licenses, reservations or restrictions on use, minor defects or irregularities in title (including leasehold title), and other similar encumbrances (or amendments to the foregoing) on the use of real property which do not individually or in the aggregate materially interfere with the ordinary conduct of the business of such Person or the use of such property, including encumbrances respecting minor encroachments by the property over neighboring lands and/or permitted under agreements with the owners of such other lands and minor encroachments over the property; |
(f) | Liens filed in respect of financed assets, leased assets or Capital Lease Obligations or purchase money Indebtedness, conditional sale, or other title retention agreement, in each case to the extent permitted pursuant to Section 7.1; provided, that (i) any such Lien attaches only to the Property acquired with the proceeds of such Indebtedness and (ii) the principal amount of the Indebtedness secured thereby does not exceed the cost of such Property; |
(g) | Liens on or in respect of deposits or pledges of cash or letters of credit posted in the ordinary course of business to secure (i) performance of statutory obligations, surety or appeal bonds, performance bonds, trade contracts, leases, government contracts, bids or tenders or similar obligations (other than for the repayment of Indebtedness); provided that, any such Lien attaches only to the cash collateral or letter of credit posted to secure such obligations; and (ii) pledges and deposits securing liability for reimbursement or indemnification obligations of (including obligations in respect of Letters of Credit, bank guarantees or similar instruments for the benefit of) insurance carriers in respect of property, casualty or liability insurance provided by such insurance carriers; |
(h) | judgment Liens which do not result in an Event of Default under Section 8.1(h); |
(i) | Liens consisting of rights of set-off of a customary nature or bankers’ Liens on amounts on deposit, whether arising by contract or operation of law, incurred in the ordinary course of business; |
(j) | Liens solely on any cash earnest money deposits made by the Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement entered into by it in connection with an Acquisition or Investment permitted hereunder; |
(k) | Liens in existence on the Closing Date and disclosed on Schedule 1 attached hereto, including replacement Liens on Property subject to such Lien (but only such Property) in connection with Refinancing Indebtedness in respect of the underlying Indebtedness; |
(l) | Liens disclosed by any survey or title insurance policies delivered to the Administrative Agent under this Agreement and any replacement, extension or renewal of any such Lien; provided that such replacement, extension or renewal Lien shall not cover any Property other than the Property that was subject to such Lien prior to such replacement, extension or renewal; provided, further, that any Indebtedness and other obligations secured by such replacement, extension or renewal Lien are permitted by this Agreement; |
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(m) | any Lien existing on any Property or asset prior to the acquisition thereof pursuant to a Permitted Acquisition by the Borrower or any Subsidiary or existing on any Property or asset of any Person that becomes a Subsidiary after (A) the date hereof prior to the time such Person becomes a Subsidiary so long as such Lien was not created in anticipation of such acquisition, (B) such Liens are applicable only to specific Property, (C) such Liens are not “blanket” or all assets Liens and (D) the Indebtedness and any refinancing thereof secured by such Liens is permitted under Section 7.1(h); |
(n) | any interest or title of a lessor under any lease permitted by this Agreement; |
(o) | (A) leases or subleases granted to others with respect to any of the Borrower’s or its Subsidiaries’ owned or leased real property not interfering in any material respect (i) with respect to all such owned or leased real property, with the business of the Borrower and its Subsidiaries, taken as a whole and (ii) with respect to headquarters locations or locations where material books and records are located, with the business of the Borrower and its Subsidiaries conducted at such location; and (B) in respect of subleases, Liens in favor of the lessor under the prime lease in the sublease and Liens consisting of an assignment of rents and related obligations thereunder; |
(p) | licenses and sublicenses, including any such agreements related to intellectual property, granted to others not interfering in any material respect with the use of the applicable Property by Borrower or its Subsidiaries or any business of the Borrower and its Subsidiaries; |
(q) | Liens filed in respect of true leases and subleases of the Borrower or any of its Subsidiaries and Liens arising from precautionary UCC financing statements regarding operating leases or consignment or bailee arrangements; |
(r) | Liens on assets of Foreign Subsidiaries; provided that (i) such Liens do not extend to, or encumber, assets that constitute Collateral or the Ownership Interests of the Borrower or any of the Material Subsidiaries, and (ii) such Liens only extend to the assets of any Foreign Subsidiary and secure only Indebtedness incurred by such Foreign Subsidiary pursuant to Section 7.1(p); |
(s) | Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business |
(t) | additional Liens so long as the aggregate principal amount of all obligations so secured does not exceed $10,000,000 at any time outstanding; and |
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(u) | Liens on Receivables and related assets securing Attributable Receivables Indebtedness under the applicable Receivables Facility permitted to be incurred pursuant to this Agreement. |
“Person” shall mean an individual, corporation, limited liability company, association, partnership, joint venture, trust or estate, an unincorporated organization, a government or any agency or political subdivision thereof, or any other entity.
“Personal Information” shall mean (i) any information that identifies or can be used to identify, alone or in the aggregate, a natural person, or (ii) any information or data that is defined as “personal information” or “personal data” under Data Protection Laws.
“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 or Section 430 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any Credit Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA, or in respect of which the Borrower or any Credit Party or any Subsidiary of the Borrower could have any liability.
“Plan Asset Regulations” shall mean 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA, as amended from time to time.
“Platform” shall mean IntraLinks/IntraAgency, SyndTrak, Debtdomain or similar electronic transmission system approved by the Administrative Agent.
“Pledge Agreement” shall mean a Pledge Agreement between the Borrower and any of the Borrower’s Subsidiaries which becomes a Guarantor hereto pursuant to Section 5.12 or otherwise and the Administrative Agent, for the benefit of the Secured Parties, each substantially in the form of Exhibit B attached hereto, in each case, as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms thereof.
“Pro Forma Basis” shall be determined in accordance with Section 1.5.
“Projections” shall have the meaning set forth in Section 4.1(q).
“Property” shall mean all types of real, personal or mixed property and all types of tangible or intangible property.
“PSA” shall mean the Packers and Stockyards Act, 1921, 7 U.S.C. Section 181, as amended together with all rules and regulations thereunder.
“PTE” shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“QFC” shall have the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” shall have the meaning set forth in Section 11.21.
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“Qualified ECP Guarantor” shall mean, each Credit Party that is an “eligible contract participant” as defined in the Commodity Exchange Act or any regulations promulgated thereunder.
“Real Property Documentation” shall mean, with respect to each parcel or tract of the Mortgaged Real Estate, a Mortgage, mortgagee policy of title insurance in an amount not to exceed (a) 110% of the fair market value of the Mortgaged Real Estate in jurisdictions that impose mortgage recording taxes (or other such lower amount as the Administrative Agent may approve), all as subject to the title insurance regulations in the state where the Mortgaged Real Estate is located or (b) the amount of debt secured by such property (or other such lower amount as the Administrative Agent may approve), fixture filings (if applicable), environmental reports and assessments (if available), flood zone certificates, surveys, and such other instruments, documents and certificates as Administrative Agent may reasonably require, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent.
“Receivables” shall mean all accounts receivable (including all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).
“Receivables Facility” shall mean any of one or more Receivables financing facilities, as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Borrower or any of its Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Borrower or any of its Subsidiaries sells (including in the form of a capital contribution or deferred purchase price evidenced by a deferred purchase price note) its Receivables to a Receivables Subsidiary or a Receivables SPV that in turn sells its Receivables or interests therein and related collateral to one or more Person or Persons (that are not the Borrower or any of its Subsidiaries) or grants a security interest in its Receivables or interests therein and related collateral to secure loans to the Receivables Subsidiary or a Receivables SPV from such Person or Persons, such a Receivables Facility is consummated pursuant to contracts, arrangements or agreements entered into on terms reasonably acceptable to the Administrative Agent.
“Receivables SPV” shall mean any Person who is not a Subsidiary of the Borrower that is a special purpose entity, variable interest entity or other bankruptcy remote entity created for the purpose of facilitating a receivables program.
“Receivables Subsidiary” shall mean any wholly-owned Subsidiary of the Borrower (a) formed for the purpose of, and that solely engages only in, one or more Receivables Facilities, and in each case engages only in activities reasonably related or incidental thereto and (b) designated to the Administrative Agent as a Receivables Subsidiary within thirty (30) days of the creation or formation thereof. Any such designation shall be evidenced to the Administrative Agent by delivery to the Administrative Agent of a certificate of a financial officer of the Borrower certifying that, to the best of such officer’s Knowledge and belief, such designation complied with the foregoing requirements.
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“Refinancing Indebtedness” shall mean refinancings, renewals, or extensions of Indebtedness; provided that the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension.
“Register” shall have the meaning set forth in Section 11.5(d).
“Related Person”, with respect to any Permitted Holder, shall mean: (1) any spouse or immediate family member of such Permitted Holder, any trust created for the benefit of such individual or such individual’s estate, executor, administrator, committee or beneficiaries; (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding all the interests of which consist of such Permitted Holder and/or such other Persons referred to in the immediately preceding clause (1) or (3) any wholly-owned Subsidiary of such Permitted Holder and/or such other Persons referred to in the immediately preceding clause (1).
“Release” shall mean any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Replacement Lender” shall have the meaning set forth in Section 2.2(e)(iv).
“Request for Advance” shall mean a certificate designated as a “Request for Advance,” signed on the Borrower’s behalf by an Authorized Signatory, vice president of finance or controller of the Borrower requesting an Advance hereunder, which shall be in substantially the form of Exhibit J attached hereto, and shall, (a) specify the date of the Advance, which shall be a Business Day, the amount of the Advance, the Interest Rate Basis for the Advance, and, with respect to LIBOR Advances, the Interest Period selected by the Borrower, (b) if applicable, specify the Applicable Margin then in effect, (c) state that the requirements of Section 3.2 have been satisfied and (d) with respect to any Incremental Facility Advance, state generally the purposes for which such proceeds shall be utilized.
“Request for Issuance of Letter of Credit” shall mean any certificate signed on the Borrower’s behalf by an Authorized Signatory, vice president of finance or controller or officer with similar authority of the Borrower requesting that the Issuing Bank issue a Letter of Credit hereunder, which certificate shall be in substantially the form of Exhibit K attached hereto and shall, among other things, state (a) the stated amount of the Letter of Credit, (b) the effective date for the issuance of the Letter of Credit (which shall be a Business Day), (c) the date on which the Letter of Credit is to expire (which shall be a Business Day), (d) the Person for whose benefit such Letter of Credit is to be issued, (e) that the requirements of Section 3.3 have been satisfied and (f) other relevant terms of such Letter of Credit.
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“Request for Swing Line Loan” shall mean a certificate designated as a “Request for Swing Line Loan,” signed on the Borrower’s behalf by an Authorized Signatory of the Borrower requesting a Swing Line Loan hereunder, which shall be in substantially the form of Exhibit L attached hereto, and shall, among other things, (a) specify the date of the Advance, which shall be a Business Day and the amount of the Swing Line Loan, and (b) state that the requirements of Section 3.2 have been satisfied.
“Required Lenders” shall mean, at any date of determination, Lenders the total of whose outstanding Loans and unused portion of the Commitments exceeds fifty percent (50%) of the outstanding Loans and unused portion of the Commitments of all Lenders entitled to vote hereunder; provided that (x) if at any time there are only two (2) Lenders, Required Lenders shall mean both Lenders and (y) if at any time there are more than two (2) Lenders, Required Lenders shall mean at least two (2) Lenders. The Loans and unused portion of the Commitments of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. For purposes of this definition each Lender, each Affiliate of such Lender, and each Approved Fund of such Lender shall be treated as a single Lender.
“Required Revolving Lenders” shall mean, at any date of determination, Revolving Lenders the total of whose outstanding Revolving Loans and unused Revolving Commitments exceeds fifty percent (50%) of the outstanding Revolving Loans and unused Revolving Commitments of all Revolving Lenders entitled to vote hereunder; provided that (x) if at any time there are only two (2) Revolving Lenders, Required Revolving Lenders shall mean both Revolving Lenders and (y) if at any time there are more than two (2) Revolving Lenders, Required Revolving Lenders shall mean at least two (2) Revolving Lenders. The Loans and Commitments of any Defaulting Lender shall be disregarded in determining Required Revolving Lenders at any time. For the purposes of this definition, each Lender, each Affiliate of such Lender, and each Approved Fund of such Lender, shall be treated as a single Lender.
“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Payment” shall mean (a) any direct or indirect distribution, dividend or other payment to any Person (other than to the Borrower or any Subsidiary of the Borrower) on account of any Ownership Interests in the Borrower or any of its Subsidiaries (other than (i) dividends payable solely in common stock of or other Ownership Interests in such Person not constituting Disqualified Equity and (ii) stock splits), including, without limitation, any direct or indirect distribution, dividend or other payment to any Person (other than to the Borrower or any Subsidiary of the Borrower) on account of any warrants or other rights or options to acquire Ownership Interests of the Borrower or any of its Subsidiaries (other than payments or distributions made to satisfy any tax due upon the vesting of any incentive equity security, including the exercise of an option, held by any employee or former employee, including their respective beneficiaries, of the Borrower), (b) any payment of principal of, or interest on, or payment into a sinking fund for the retirement of, or any defeasance of any Junior Debt, or (c) any management, consulting or similar fees, or any interest thereon, payable by the Borrower or any of its Subsidiaries to any of their respective Affiliates (other than such fees and interest payable to the Borrower or any of its Subsidiaries).
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“Restricted Purchase” shall mean any payment (including, without limitation, any sinking fund payment, prepayment or installment payment) on account of the purchase, redemption, defeasance or other acquisition or retirement of any Ownership Interest in the Borrower or any of its Subsidiaries, including, without limitation, any warrants or other rights or options to acquire shares of capital stock or other Ownership Interests in the Borrower or of any of its Subsidiaries or any loan, advance, release or forgiveness of Indebtedness by the Borrower or any of its Subsidiaries to any partner, shareholder or Affiliate (other than to the Borrower or a Subsidiary of the Borrower) of any such Person.
“Revolving Commitment” shall mean the several obligations of the Revolving Lenders to fund their respective portions of the Revolving Loans to the Borrower and to acquire participations in Letters of Credit hereunder in accordance with their respective Revolving Commitment Ratios in the aggregate sum of up to $50,000,000, pursuant to the terms hereof, as such obligations may be reduced and increased from time to time, pursuant to the terms hereof.
“Revolving Commitment Ratio” shall mean with respect to any Lender with an obligation to fund under the Revolving Commitment, the percentage equivalent of the ratio which such Lender’s portion of the Revolving Commitment bears to the aggregate amount of the Revolving Commitment (as each may be adjusted from time to time as provided herein); and “Revolving Commitment Ratios” shall mean, with respect to the Revolving Commitment, Revolving Commitment Ratios of all the Lenders with respect to the Revolving Commitment. As of the Closing Date, the Revolving Commitment Ratios of the Lenders party to this Agreement (together with the dollar amount of their respective portion of the Revolving Commitment) are as set forth on Schedule 5 attached hereto.
“Revolving Lenders” shall mean those Lenders having a Revolving Commitment.
“Revolving Loan Notes” shall mean, collectively, those certain Revolving Loan Notes dated as of the Closing Date and issued to each of the Lenders with a Revolving Commitment who requests such a Revolving Loan Note by the Borrower and any other promissory note issued by the Borrower to evidence the Revolving Loans pursuant to this Agreement, each substantially in the form of Exhibit M attached hereto, and any extensions, renewals, or amendments to, or replacements of, the foregoing.
“Revolving Loans” shall mean, collectively, those amounts advanced by the Revolving Lenders to the Borrower under the Revolving Commitment (whether in the form of LIBOR Advances or Base Rate Advances) not to exceed the amount of the Revolving Commitment at any time.
“Revolving Maturity Date” shall mean June 25, 2025, or such earlier date as payment of the Revolving Loans shall be due (whether by acceleration, reduction of the Revolving Commitment to zero or otherwise, in each case, in accordance with and subject to the terms and conditions hereof).
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“S&P” shall mean Standard & Poor’s Ratings Services, a division of S&P Global Inc., or any successor thereto.
“Sale-Leaseback Transaction” shall have the meaning set forth in Section 7.11.
“Sanctioned Country” shall mean, at any time, a country, region or territory that is the subject of comprehensive Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea Region of Ukraine).
“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (including OFAC’s Specially Designated Nationals and Blocked Persons List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, or by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury, or other relevant sanctions authority; (b) any Person operating, organized or resident in a Sanctioned Country; or (c) any Person that is 50% or more owned, directly or indirectly, individually or in the aggregate, or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any such Person or Persons described in the foregoing clauses (a) and (b).
“Sanctions” shall mean any and all economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and restrictions and anti-terrorism laws, including but not limited to those imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, any European member state, Her Majesty’s Treasury, or other relevant sanctions authority in any jurisdiction (a) in which the Borrower or any of its Subsidiaries or Affiliates is located, organized or conducts business, (b) in which any of the proceeds of the Loans will be used, or (c) from which repayment of the Loans will be derived.
“Secured Parties” shall mean, collectively, the Administrative Agent, the Lenders, the Issuing Bank, the Interest Hedge Banks, the Bank Products Banks, the Other Hedge Banks, and each co-agent or sub-agent appointment by the Administrative Agent from time to time pursuant to Section 9.14, and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Security Documents.
“Security Agreement” shall mean that certain Security Agreement dated as of the Closing Date between the Borrower, its Subsidiaries (including any of the Borrower’s Subsidiaries which becomes a Guarantor hereto pursuant to Section 5.12 or otherwise) and the Administrative Agent, for the benefit of the Secured Parties, substantially in the form of Exhibit C attached hereto, as amended, restated, supplemented, replaced or otherwise modified from time to time.
“Security Documents” shall mean the Security Agreement, the Pledge Agreement, any Foreign Pledge Agreement, any Mortgages, any Trademark Security Agreement, any Copyright Security Agreement, any Patent Security Agreement, any debenture delivery agreements, any collateral assignment, and any other agreement or instrument providing or perfecting Collateral for the Obligations whether now or hereafter in existence, and providing the Administrative Agent, for the ratable benefit of the Secured Parties with Collateral for the Obligations, and any filings, registrations, instruments, agreements, and documents related to the foregoing.
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“Security Interest” shall mean all Liens in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, created hereunder or under any of the Security Documents to secure the Obligations.
“Seller” shall have the meaning set forth in the Preamble.
“SOFR” with respect to any day shall mean the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.
“Solvency Certificate” shall mean a certificate dated as of the Closing Date, substantially in the form of Exhibit D attached hereto, signed on behalf of the Borrower by an Authorized Signatory, together with any schedules, exhibits or annexes appended thereto.
“Solvent” shall mean, with respect to the Borrower and its Subsidiaries on a particular date, that on such date (a) the Fair Value and Present Fair Salable Value of the assets of the Borrower and its Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities; (b) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; and (c) the Borrower and its Subsidiaries taken as a whole will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature. Capitalized terms used in this definition and not otherwise defined in this Agreement shall have the meanings given to them in the Solvency Certificate.
“Specified Acquisition Representations” shall mean the representations and warranties made by or on behalf of the Seller and/or the Target in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the Borrower or its Affiliates have the right to terminate their obligations under the Acquisition Agreement or to decline to consummate the Transaction as a result of the failure of such representations or warranties to be true and correct.
“Specified Representations” shall mean those representations (in each case, with respect to the Credit Parties) made in Sections 4.1(a), (b), (c), (d)(i) and (iii), (f), (n), (o), (r) (subject to the last paragraph of Section 3.1), (s), (y)(iv), the last two sentences of (aa), and (bb).
“Standby Letter of Credit” shall mean any letter of credit issued by the Issuing Bank in accordance with the terms hereof to support obligations of the Borrower or its Subsidiaries incurred in the ordinary course of business or in connection with any transaction permitted under this Agreement.
“Subsidiary” shall mean, as applied to any Person, (a) any corporation of which more than fifty percent (50%) of the outstanding stock having ordinary voting power to elect a majority of its board of directors, regardless of the existence at the time of a right of the holders of any class or classes of securities of such corporation to exercise such voting power by reason of the happening of any contingency, or any partnership or limited liability company of which more than fifty percent (50%) of the outstanding Ownership Interests, is at the time owned directly or indirectly by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, or (b) any other entity which is directly or indirectly Controlled by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.
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“Subsidiary Guaranty” shall mean that certain Subsidiary Guaranty, in favor of the Administrative Agent, for the benefit of the Secured Parties, given by the Subsidiaries of the Borrower (including any Subsidiary that becomes a Guarantor hereto pursuant to Section 5.12 or otherwise), substantially in the form of Exhibit E attached hereto, in each case, as amended, restated, supplemented, replaced or otherwise modified from time to time in accordance with the terms thereof.
“Supported QFC” shall have the meaning set forth in Section 11.21.
“Swing Line Commitment” shall mean the commitment of the Swing Line Lender to make Swing Line Loans up to an aggregate amount outstanding at any time of $10,000,000.
“Swing Line Lender” shall mean The Toronto-Dominion Bank, New York Branch, in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.
“Swing Line Loans” shall mean an Advance made by the Swing Line Lender for the account of the Borrower under the Swing Line Commitment.
“Swing Line Maturity Date” shall mean the Revolving Maturity Date, or such earlier date as payment of the Swing Line Loans shall be due (whether by acceleration, reduction of the Revolving Commitment to zero or otherwise).
“Swing Line Note” shall mean that certain Swing Line Note in the aggregate original principal amount not to exceed the initial Swing Line Commitment, and issued to the Swing Line Lender by the Borrower and any other promissory note issued by the Borrower to evidence the Swing Line Loans pursuant to this Agreement substantially in the form of Exhibit O attached hereto and any extensions, renewals, or amendments to, or replacements of, the foregoing.
“Syndication Agent” shall mean BofA Securities, Inc.
“Target” shall have the meaning set forth in the Preamble.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Entity, including any interest, additions to tax or penalties applicable thereto.
“Term Loan Commitment” shall mean the several obligations of the Lenders to fund their respective portions of the Term Loans to the Borrower pursuant to the terms hereof and in accordance with their respective Term Loan Commitment Ratios in the aggregate sum of $140,000,000 pursuant to the terms hereof.
“Term Loan Commitment Ratios” shall mean the percentages in which the Lenders are severally bound to fund their respective portions of Advances to the Borrower under the Term Loan Commitment, which are set forth (together with dollar amounts) as of the Closing Date on Schedule 5 attached hereto.
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“Term Loan Maturity Date” shall mean shall mean June 25, 2025, or such earlier date as payment of the Term Loans shall be due (whether by acceleration or otherwise, in each case, in accordance with and subject to the terms and conditions hereof).
“Term Loan Notes” shall mean, collectively, those certain Term Loan Notes dated as of the Closing Date, in the aggregate principal amount of the amount determined in accordance with the definition of Term Loan Commitment, and issued to each of the Lenders with outstanding Term Loans who requests such a Term Loan Note by the Borrower and any other promissory note issued by the Borrower to evidence the Term Loans pursuant to this Agreement, each substantially in the form of Exhibit N attached hereto, and any extensions, renewals, or amendments to, or replacements of, the foregoing.
“Term Loans” shall mean, collectively, (a) the amounts advanced by the Lenders to the Borrower under the Term Loan Commitment as Base Rate Advances or LIBOR Advances, not to exceed the amount of the Term Loan Commitment and evidenced by the Term Loan Notes, as applicable, and (b) if any, the Incremental Facility Loans.
“Term SOFR” shall mean the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Test Period” shall mean the most recently ended four (4) Fiscal Quarter period for which financial statements have been delivered to the Administrative Agent pursuant to Section 6.1 or 6.2, as applicable (or with respect to periods prior to the first Fiscal Quarter for which financial statements pursuant to such Sections have been delivered, the four (4) consecutive Fiscal Quarters of the Target then last ended).
“Total Debt” shall mean, for the Borrower and its Subsidiaries on a consolidated basis as of any date, the sum (without duplication) of the principal amount of all Indebtedness for Money Borrowed of the Borrower and its Subsidiaries determined in accordance with GAAP.
“Trademark Security Agreement” shall mean any Trademark Security Agreement among any of the Borrower or a Subsidiary of the Borrower and the Administrative Agent, for the benefit of the Secured Parties, or similar agreements, each in form and substance reasonably satisfactory to the Administrative Agent, in each case, as amended, restated, supplemented, replaced or otherwise modified from time to time.
“Transaction” shall have the meaning set forth in the Preamble.
“UCC” shall have the meaning set forth in Section 1.2.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
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“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Unencumbered Cash” shall mean unrestricted and unencumbered (other than any Liens granted under the Loan Documents, Liens permitted under any applicable account control agreement executed in connection with this Agreement and, for the accounts described in Section 7.14(a), (b) and (c), Liens under clause (i) of the definition of Permitted Liens) cash and Cash Equivalents of Borrower and its Subsidiaries, on a consolidated basis, that are either held (x) in a pledged deposit or securities account that is located in the U.S or (y) in a deposit or securities account that is located outside the U.S. to the extent such cash and Cash Equivalents is not prohibited or delayed by Applicable Law of an applicable non-US jurisdiction from being repatriated to the Borrower or any other Subsidiary that is not subject to any such prohibition or delay.
“U.S.” shall mean the United States of America.
“U.S. Dollars” and the sign “$” shall mean lawful money of the United States of America.
“U.S. Special Resolution Regimes” shall have the meaning set forth in Section 11.21.
“Voluntary Prepayment” shall mean a prepayment made in any Fiscal Year of the Borrower pursuant to Section 2.7 of principal of (a) the Term Loans to the extent that such prepayment (i) reduces the scheduled installments of principal due in respect of Term Loans as set forth in Section 2.8 in any subsequent Fiscal Year and (ii) did not occur in connection with a refinancing of such Term Loans and (b) the Revolving Loans to the extent such prepayments are accompanied by a permanent reduction of the Revolving Commitment, in each case of clauses (a) and (b), so long as such prepayments are made with Internally Generated Funds.
“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the remaining aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each scheduled installment, sinking fund, serial maturity or other required payment of principal including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment, in each case of clauses (a) and (b), without giving effect to the application of any prior prepayment to such installment, sinking fund, serial maturity or other required payment of principal.
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” shall mean any Credit Party and the Administrative Agent.
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“Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.2 Other Definitional Provisions. All definitions contained in the Loan Documents are equally applicable to the singular and plural forms of the terms defined. Unless the context clearly states otherwise, the use of “include” or “including” shall be by way of example rather than by limitation. The words “hereof,” “herein” and “hereunder” and words of similar import in any Loan Document refer to such Loan Document as a whole and not to any particular provision of such Loan Document. The term “continuing,” “continuation” or “continuance” shall mean, in reference to any Default or Event of Default that has occurred, that such Default or Event of Default has not been either cured or waived in writing by the Required Lenders or all Lenders, as applicable, in accordance with Section 11.12. Unless otherwise specified, all Article and Section references in any Loan Document pertain to such Loan Document. Terms used herein or in any Security Document that are defined in Article 9 of the Uniform Commercial Code in effect in the State of New York on the date hereof (the “UCC”), unless otherwise defined herein or in such Security Document, shall have the meanings specified in the UCC. All references in any Loan Document to any agreement shall be deemed to mean and refer to such agreement as it may be amended, restated, modified or supplemented from time to time, except as otherwise expressly provided in such reference or otherwise expressly prohibited by the terms of such Loan Document, including, without limitation (with respect to this Agreement), pursuant to Section 7.3. The preamble and recitals to any Loan Document are incorporated in such Loan Document by reference.
Section 1.3 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division (whether under Delaware law or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Ownership Interests at such time.
Section 1.4 Disclaimer of Liability on the LIBOR Successor Rate. The interest rate on LIBOR Advances is calculated by reference to LIBOR. LIBOR is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions to the IBA for purposes of IBA setting LIBOR. As a result, it is possible that commencing in 2022, LIBOR may no longer be available or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on Loans where the interest rate is calculated by reference to LIBOR. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of LIBOR. Upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, Section 10.6 provides a mechanism for determining an alternative rate of interest. The Administrative Agent will promptly notify the Borrower, pursuant to Section 10.6, of any change to the reference rate upon which the interest rate on LIBOR Advances is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of LIBOR or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section 10.6, whether upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 10.6), including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, LIBOR or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.
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Section 1.5 Pro Forma Calculations and Adjustments.
(a) | For purposes of calculating the compliance of any transaction with any provision hereof that requires such compliance to be on a “Pro Forma Basis”, such transaction shall be deemed to have occurred (other than for purposes of calculating Excess Cash Flow) as of the first day of the most recently ended Test Period. Notwithstanding anything to the contrary herein, Consolidated Total Net Leverage Ratio and Fixed Charge Coverage Ratio shall each be calculated on a Pro Forma Basis with respect to each relevant transaction occurring during the applicable four (4) Fiscal Quarter period to which such calculation relates, and/or subsequent to the end of such four (4) Fiscal Quarter period but not later than the date of such calculation; provided that, notwithstanding the foregoing, when calculating (x) the Consolidated Total Net Leverage Ratio for purposes of (i) determining applicable percentage of Excess Cash Flow, (ii) Applicable Margin, and (y) the Consolidated Total Net Leverage Ratio and the Fixed Charge Coverage Ratio for the purposes of determining actual compliance (and not pro forma compliance or compliance on a Pro Forma Basis) with the financial covenants set forth in Section 7.8, any relevant and any related adjustment contemplated in the definition of Pro Forma Basis that occurred subsequent to the end of the applicable four (4) quarter period shall not be given pro forma effect. |
(b) | In connection with the compliance with any test, covenant, or calculation of any ratio hereunder upon giving effect to a transaction on a “Pro Forma Basis”, (i) any Indebtedness incurred, acquired or assumed, or repaid, by the Borrower or any of its Subsidiaries in connection with such transaction (or any other transaction which occurred during the relevant Test Period) shall be deemed to have been incurred, acquired or assumed, or repaid, as the case may be, as of the first day of the relevant Test Period, (ii) if such Indebtedness has a floating or formula rate, then the rate of interest for such Indebtedness for the applicable period for purposes of the calculations contemplated by this definition shall be determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of such calculations, (iii) such calculation shall be made without regard to the netting of any cash proceeds of Indebtedness incurred by the Borrower or any of its Subsidiaries in connection with such transaction (but without limiting the pro forma effect of any prepayment of Indebtedness with such cash proceeds), (iv) if any Indebtedness incurred, acquired or assumed in connection with such transaction is in the nature of a revolving credit facility, the entire principal amount of such facility shall be deemed to have been drawn, and (v) all other adjustments with respect to such transaction shall be reasonably satisfactory to the Administrative Agent. |
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ARTICLE 2
LOANS AND LETTERS OF CREDIT
Section 2.1 The Loans and Letters of Credit.
(a) | Revolving Loans. The Revolving Lenders agree, severally, in accordance with their respective Revolving Commitment Ratios and not jointly, upon the terms and subject to the conditions of this Agreement to lend and relend to the Borrower, prior to the Revolving Maturity Date, amounts which do not exceed, in the aggregate, at the time of any Advance under the Revolving Commitment, the amount of the Available Revolving Commitment as then in effect. Subject to the terms and conditions hereof, Advances under the Revolving Commitment may be repaid and reborrowed from time to time on a revolving basis. |
(b) | Term Loans. The Lenders having a Term Loan Commitment agree, severally, in accordance with their respective Term Loan Commitments and not jointly, upon the terms and subject to the conditions of this Agreement to lend to the Borrower, on the Closing Date, amounts which do not exceed, in the aggregate, the Term Loan Commitments of all Lenders with a Term Loan Commitment. Once repaid, Advances under the Term Loan Commitment may not be reborrowed. |
(c) | [Reserved.] |
(d) | The Letters of Credit. Subject to the terms and conditions of this Agreement, the Issuing Bank agrees to issue Letters of Credit for the account of the Borrower or any Subsidiary thereof pursuant to Section 2.16 in an aggregate amount at the time of issuance of any Letter of Credit hereunder not to exceed the Available Letter of Credit Commitment then in effect. |
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(e) | Swing Line Loans. The Swing Line Lender agrees, on the terms and conditions of this Agreement, and from time to time prior to the Swing Line Maturity Date to make Advances to the Borrower on any Business Day in amounts which do not exceed, in the aggregate, at the time of any Advance under the Swing Line Commitment, the amount of such Swing Line Lender’s Swing Line Commitment. Subject to the terms and conditions hereof, Advances under the Swing Line Commitment may be repaid and reborrowed from time to time on a revolving basis. |
Section 2.2 Manner of Borrowing and Disbursements.
(a) | Choice of Interest Rate, Etc. All Advances shall be made in U.S. Dollars only and shall, at the option of the Borrower, be made as a LIBOR Advance or Base Rate Advance, as specified in each Request for Advance therefor; provided, however, at such time as there shall have occurred and be continuing an Event of Default hereunder, the Borrower shall not have the right to receive or Continue a LIBOR Advance. Any notice given to the Administrative Agent in connection with a requested Advance hereunder shall be given to the Administrative Agent prior to 11:00 A.M. (New York, New York time) in order for such Business Day to count toward the minimum number of Business Days required in this Section 2.2. LIBOR Advances shall in all cases be subject to Section 2.3(e) and Article 10. |
(b) | Base Rate Advances. |
(i) | Advances. The Borrower shall give the Administrative Agent, in the case of Base Rate Advances, at least one (1) Business Day’s prior written notice prior to 11:00 A.M. (New York, New York time) on such date that notice is given, in each case in the form of a Request for Advance or prior telephonic notice followed immediately by a Request for Advance; provided, however, that the Borrower’s failure to confirm any telephonic notice with a Request for Advance shall not invalidate any notice so given if acted upon by the Administrative Agent; provided, further that any notice with respect to a Base Rate Advance under the Swing Line Commitment may be delivered prior to 11:00 A.M. (New York, New York time) on the date of such Advance. |
(ii) | Repayments and Conversions. The Borrower may (A) repay or prepay a Base Rate Advance without regard to its Payment Date, (i) with respect to Base Rate Advances that are Revolving Loans, at any time without prior written notice, and (ii) with respect to Base Rate Advances that are Term Loans, upon prior written notice in the form of a Notice of Conversions, Continuations, or Prepayments received prior to 11:00 A.M. (New York, New York time) one (1) Business Day prior to such repayment or prepayment or telephonic notice followed immediately by a Notice of Conversions, Continuations, or Prepayments, (B) Continue all or a portion of the principal amount of any Base Rate Advance (other than a Swing Line Loan) as a Base Rate Advance upon prior written notice in the form of a Notice of Conversions, Continuations, or Prepayments received prior to 11:00 A.M. (New York, New York time) one (1) Business Day prior to such continuance, (C) upon at least three (3) Business Days’ prior written notice, prior to 11:00 A.M. (New York, New York time) on such date that notice is given, in the form of a Notice of Conversions, Continuations, or Prepayments, or telephonic notice followed immediately by a Notice of Conversions, Continuations, or Prepayments, Convert all or a portion of the principal of any Base Rate Advance (other than a Swing Line Loan) as one or more LIBOR Advances, or (D) elect to not reborrow all or any portion of a Base Rate Advance. On the date indicated by the Borrower, such Base Rate Advance shall be so Continued or Converted, as applicable. The failure to give timely notice hereunder with respect to the Payment Date of any Base Rate Advance (other than a Swing Line Loan) shall be considered a continuation of a Base Rate Advance. |
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(c) | LIBOR Advances. |
(i) | Advances. Upon request of the Borrower, the Administrative Agent, whose determination shall be conclusive absent manifest error, shall determine the LIBOR Basis and shall notify the Borrower of such LIBOR Basis. The Borrower shall give the Administrative Agent, in the case of LIBOR Advances, at least three (3) Business Days’ irrevocable prior written notice prior to 11:00 A.M. (New York, New York time) on such date that notice is given, in the form of a Request for Advance or prior telephonic notice followed immediately by a Request for Advance; provided, however, that the Borrower’s failure to confirm any telephonic notice with a Request for Advance shall not invalidate any notice so given if acted upon by the Administrative Agent. Upon receipt of each such notice from the Borrower, the Administrative Agent shall promptly notify each Lender by telephone (followed by telecopy) or telecopy of the contents thereof. |
(ii) | Conversions and Continuations. Prior to 11:00 A.M. (New York, New York time) at least three (3) Business Days prior to the Payment Date for each LIBOR Advance, the Borrower shall give the Administrative Agent irrevocable prior written notice in the form of a Notice of Conversions, Continuations or Prepayments or prior telephonic notice followed promptly by a Notice of Conversions, Continuations or Prepayments specifying whether (A) all or a portion of such LIBOR Advance is to be Continued in whole or in part as one or more LIBOR Advances, (B) all or a portion of such LIBOR Advance is to be Converted in whole or in part as a Base Rate Advance, or (C) all or a portion of such LIBOR Advance is to be repaid. The failure to give such notice shall be considered a request to Continue such LIBOR Advance with a period of one (1) month. Upon such Payment Date such LIBOR Advance will, subject to the provisions hereof, be so Continued, Converted or repaid, as applicable. Upon receipt of each such notice from the Borrower, the Administrative Agent shall promptly notify each Lender by telephone (followed by telecopy) or telecopy of the contents thereof. |
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(d) | Notification of Lenders. Upon receipt of a Request for Advance or a Notice of Conversions, Continuations or Prepayments from the Borrower with respect to any outstanding Advance prior to the Payment Date for such Advance, the Administrative Agent shall promptly but no later than the close of business on the day of such notice notify each Lender by telephone (followed promptly by telecopy) or telecopy of the contents thereof and the amount of such Lender’s portion of the Advance. Each Lender shall, not later than 2:00 P.M. (New York, New York time) on the date of borrowing specified in such notice, make available to the Administrative Agent at the Administrative Agent’s Account, or at such other account as the Administrative Agent shall designate, the amount of its portion of any Advance which represents an additional borrowing hereunder in immediately available funds. |
(e) | Disbursement. |
Promptly on the date of an Advance hereunder (other than in connection with a Continuation or Conversion), the Administrative Agent shall, subject to the satisfaction of the conditions set forth in Section 3.2, disburse the amounts made available to the Administrative Agent by the Lenders in like funds by (A) transferring the amounts so made available by wire transfer pursuant to the Borrower’s instructions, or (B) in the absence of such instructions, crediting the amounts so made available to the account of the Borrower set forth herein below (or such other account as the Borrower shall direct in writing):
Bank Name: |
[***] |
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Account Name: |
[***] |
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Routing Number: |
[***] |
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Account Number: |
[***] |
(i) | Unless the Administrative Agent shall have received notice from a Lender prior to 2:00 P.M. (New York, New York time) (A) in the case of a Base Rate Advance, on the date of such Advance or (B) in the case of a LIBOR Advance, two (2) Business Days prior to the date of such Advance, that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Advance, the Administrative Agent may assume that such Lender has made or will make such portion available to the Administrative Agent on the date of such Advance and the Administrative Agent may (although it is not its current practice to do so) in its sole discretion and in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent the Lender does not make such ratable portion available to the Administrative Agent, such Lender agrees to repay to the Administrative Agent on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at the Federal Funds Rate. |
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(ii) | If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s portion of the applicable Advance for purposes of this Agreement. If such Lender does not repay such corresponding amount within one (1) Business Day of the Administrative Agent’s demand therefor, the Administrative Agent shall notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent, with interest at the Interest Rate Basis applicable to such Advance; which payment may be made by an Advance of a Revolving Loan. The failure of any Lender to fund its portion of any Advance shall not relieve any other Lender of its obligation, if any, hereunder to fund its respective portion of the Advance on the date of such borrowing, but no Lender shall be responsible for any such failure of any other Lender. |
(iii) | In the event that a Lender for any reason becomes a Defaulting Lender, then, until such time as such Defaulting Lender ceases to be a Defaulting Lender in accordance with Section 2.2(e)(v), (A) such Defaulting Lender shall not have the right to vote, unless such Defaulting Lender is a Defaulting Lender solely under subclause (e) of the definition thereof and the bankruptcy court has issued an order which reaffirms such Defaulting Lender’s Loans and, if any, Commitments hereunder, regarding any issue on which voting is required or advisable under this Agreement or any other Loan Document, and such Defaulting Lender’s portion of the Loans shall not be counted as outstanding for purposes of determining the Lenders entitled to vote hereunder (provided that such Defaulting Lender shall not have its Maturity Date postponed, its Commitments increased or extended, or amounts due to it postponed or permanently reduced (other than by way of payment) or be otherwise disproportionately affected without its consent), and (B) no such Defaulting Lender shall have the right to receive payments of principal, interest or fees from the Borrower, the Administrative Agent or the other Lenders in respect of its portion of the Loans until such Defaulting Lender ceases to be a Defaulting Lender, except as expressly permitted herein. |
(iv) | The Borrower at its own cost and expense may designate an Eligible Assignee (a “Replacement Lender”) to assume all or any part of the Commitments and the obligations of any such Defaulting Lender hereunder, and to purchase the outstanding Loans of such Defaulting Lender and such Defaulting Lender’s rights hereunder and with respect thereto, and within ten (10) Business Days after such designation the Defaulting Lender shall (x) sell to such Replacement Lender, without recourse upon, warranty by or expense to such Defaulting Lender, by way of an Assignment and Assumption Agreement substantially in the form of Exhibit A attached hereto, for a purchase price equal to (unless such Defaulting Lender agrees to a lesser amount) the outstanding principal amount of the Loans of such Defaulting Lender, plus all interest accrued and unpaid thereon and all other amounts owing to such Defaulting Lender hereunder, including without limitation, any amount which would be payable to such Defaulting Lender pursuant to Section 2.11, and (y) assign to such Replacement Lender the Commitments of such Defaulting Lender. In the event any Defaulting Lender fails to execute the Assignment and Assumption Agreement in connection with an assignment pursuant to this Section, the Borrower may, upon two (2) Business Days’ prior notice to the Defaulting Lender, execute such agreement on behalf of the Defaulting Lender, and each such Lender hereby grants to the Borrower an irrevocable power of attorney (which shall be coupled with an interest) for such purpose. Upon such assumption and purchase by the Replacement Lender and subject to acceptance and recording of such Assignment and Assumption Agreement by the Administrative Agent pursuant to Section 11.5(d), such Replacement Lender shall be deemed to be a “Lender” for purposes of this Agreement and such Defaulting Lender shall cease to be a “Lender” for purposes of this Agreement and shall no longer have any obligations or rights hereunder (other than any obligations or rights which according to this Agreement shall survive the termination of the Commitments). |
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(v) | If the Borrower, the Administrative Agent and the Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Revolving Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the applicable Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. |
Section 2.3 Interest.
(a) | On Base Rate Advances. Interest on each Base Rate Advance shall be computed on the basis of a year of 365/366 days (360 days to the extent based on the Federal Funds Rate) for the actual number of days elapsed (which shall include the first day of such Interest Period but exclude the last day) and shall accrue daily and be payable in U.S. Dollars at the Base Rate Basis for such Advance, in arrears on the applicable Payment Date. Interest on Base Rate Advances then outstanding shall also be due and payable in U.S. Dollars on the applicable Maturity Dates. |
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(b) | On LIBOR Advances. Interest on each LIBOR Advance shall be computed on the basis of a 360-day year for the actual number of days elapsed (which shall include the first day of such Interest Period but exclude the last day). Interest on each LIBOR Advance shall accrue and be payable in U.S. Dollars at the LIBOR Basis for such Advance, in arrears on the applicable Payment Date, and, in addition, if the Interest Period for a LIBOR Advance exceeds three (3) months, interest on such LIBOR Advance shall also be due and payable in arrears on every three-month anniversary of the beginning of such Interest Period. Interest on LIBOR Advances then outstanding shall also be due and payable in U.S. Dollars on the applicable Maturity Dates. |
(c) | Interest if no Notice of Selection of Interest Rate Basis. If the Borrower fails to give the Administrative Agent timely notice of its selection of an Interest Rate Basis, or if for any reason a determination of a LIBOR Basis for any Advance is not timely concluded, the Base Rate Basis shall apply to such Advance. In the event the Borrower fails to specify an Interest Period for any LIBOR Advance in the applicable Request for Advance or Notice of Conversions, Continuations or Prepayments, the Borrower shall be deemed to have selected an Interest Period of one (1) month. |
(d) | Interest Upon Default. Immediately upon the occurrence and during the continuance of an Event of Default under Section 8.1(b), (f) or (g), the outstanding principal balance of the Loans shall bear interest at the Default Rate. Upon the occurrence and during the continuance of any Event of Default, other than any Event of Default pursuant to Section 8.1(b), (f) or (g), at the Required Lenders’ discretion and upon written notice to the Borrower, the outstanding principal balance of the Loans shall bear interest at the Default Rate. Such interest shall be payable by the Borrower on written demand of the Administrative Agent or, if not sooner demanded, on the next Payment Date and shall accrue from the occurrence of such Event of Default until the earliest of (i) cure or waiver of the applicable Event of Default, (ii) agreement by the Required Lenders to rescind the charging of interest at the Default Rate, and (iii) Payment in Full of the Obligations. |
(e) | LIBOR Advances. At no time may the number of outstanding LIBOR Advances exceed eight (8). |
Section 2.4 Fees.
(a) | Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each of the Lenders in accordance with its respective Revolving Commitment Ratio, a commitment fee equal to the Available Revolving Commitment (less any outstanding Letters of Credit but not any Swing Line Loans for purposes of this calculation) multiplied by the Commitment Fee Rate; provided that the Borrower shall not be required to pay any amount described in this Section 2.4(a) for the account of any Defaulting Lender for any period during which such Lender is and continues to be a Defaulting Lender. Such commitment fees shall be computed on the basis of a 360-day year for the actual number of days elapsed (which shall include the first day of such period but exclude the last day), shall be payable quarterly in arrears on the last Business Day of each calendar quarter, and shall be fully earned when due, and shall be non-refundable when paid. A final payment of any commitment fee then payable shall also be due and payable on the Revolving Maturity Date. |
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(b) | Letter of Credit Fees. |
(i) | The Borrower shall pay to the Issuing Bank for its own account (A) a fee on the undrawn face amount of any outstanding Letter of Credit from the date of issuance through the earlier to occur of (1) the expiration date of each such Letter of Credit and (2) the surrender thereof to the Issuing Bank for cancellation at a rate of one-quarter of one percent (0.25%) per annum, which fee shall be computed on the basis of a 360-day year for the actual number of days elapsed, and (B) any reasonable and customary fees charged by the Issuing Bank for issuance and administration of such Letters of Credit, each of which fees shall be payable quarterly in arrears on the last Business Day of each calendar quarter and shall be fully earned when due and non-refundable when paid. A final payment of such letter of credit fees shall also be due and payable on the Revolving Maturity Date. |
(ii) The Borrower shall also pay to the Administrative Agent for the account of each of the Lenders in accordance with their respective Revolving Commitment Ratios, a fee on the undrawn face amount of any outstanding Letters of Credit for each day from the date of issuance thereof through the expiration date for each such Letter of Credit at a rate per annum equal to the Applicable Margin for LIBOR Advances under the Revolving Commitment as set forth in the definition of Applicable Margin; provided that the Borrower shall not be required to pay any amount for the account of any Defaulting Lender for any period during which such Lender is and continues to be a Defaulting Lender. Such letter of credit fee shall be computed on the basis of a 360-day year for the actual number of days elapsed and shall be payable quarterly in arrears for each quarter on the last Business Day of each calendar quarter and shall be fully earned when due and non-refundable when paid. A final payment of all letter of credit fees shall also be due and payable on the Revolving Maturity Date.
Section 2.5 Mandatory Commitment Reduction.
(a) | Revolving Commitment. The Revolving Commitment shall be automatically and permanently reduced to zero (0) on the close of business on the Revolving Maturity Date. |
(b) | Swing Line Commitment. The Swing Line Commitment shall be automatically and permanently reduced from time to time on the date of each reduction of the Revolving Commitment by the amount, if any, by which the amount of the Swing Line Commitment exceeds the Revolving Commitment after giving effect to any such reduction of the Revolving Commitment. |
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Section 2.6 Optional Commitment Reductions. The Borrower shall have the right, at any time and from time to time after the Closing Date, upon at least three (3) Business Days’ prior written notice which written notice shall be a Notice of Conversions, Continuations or Prepayments in substantially the form set forth on Exhibit G attached hereto to the Administrative Agent, without premium or penalty, to cancel or reduce permanently all or a portion of the Revolving Commitment on a pro rata basis among the Lenders holding Revolving Commitments; provided, however, that any such partial reduction shall be made in an amount not less than $250,000 and in integral multiples of not less than $100,000 (unless reducing the applicable Commitment to zero); provided, further, that the Borrower may permanently reduce the Revolving Commitment of any Defaulting Lender or Non-Consenting Lender in accordance with Section 2.2(e)(iv) and Section 11.12(b), respectively. As of the date of cancellation or reduction set forth in such notice, the Revolving Commitment shall be permanently reduced to the amount stated in the Borrower’s notice for all purposes herein, and the Borrower shall pay to the Administrative Agent for the Lenders the amount necessary to reduce the principal amount of the Revolving Loans and the Letter of Credit Obligations, then outstanding, to not more than the amount of the Revolving Commitment, as so reduced, together with accrued interest on the amount so prepaid and, on the last day of the calendar quarter in which such reduction is made, commitment fees accrued through the date of the reduction with respect to the amount reduced.
Section 2.7 Optional Prepayments.
(a) | Permitted Prepayments. Any time and from time to time: |
(i) with respect to Base Rate Advances, the Borrower may prepay any such Loans on any Business Day in whole or in part without premium or penalty, in minimum amounts of $250,000 and integral multiples of $100,000 in excess of that amount (or such lesser amount if the outstanding amount of such Advances is less than the foregoing thresholds);
(ii) with respect to LIBOR Advances, the Borrower may prepay any such Loans on any Business Day in whole or in part without premium or penalty, subject to Section 2.11, in minimum amounts of $250,000 and integral multiples of $100,000 in excess of that amount (or such lesser amount if the outstanding amount of such Advances is less than the foregoing thresholds); and
(iii) anything in this Agreement to the contrary notwithstanding, prepayments of Incremental Facility Loans shall be subject to the terms of the related Notice of Incremental Facility Commitment.
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(b) | Notice. All such optional prepayments shall be made: |
(i) in the case of Base Rate Advances, in accordance with Section 2.2(b)(ii); and
(ii) in the case of LIBOR Advances, in accordance with Section 2.2(c)(ii);
which written notice shall be a Notice of Conversions, Continuations or Prepayments in substantially the form set forth on Exhibit G, in each case given to the Administrative Agent by 2:00 P.M. (New York, New York time) on the date required; provided, that the Borrower may state that any such notice under this Section 2.7 is conditioned upon the consummation of a refinancing of the Loans, in which case such notice may be postponed or revoked by the Borrower (by written notice to the Administrative Agent received no later than 12:00 P.M. (New York City time) on the specified effective date) if such refinancing shall not be consummated or otherwise shall be delayed. The Borrower shall reimburse the Lenders and the Administrative Agent, promptly (and in any event within ten (10) Business Days thereafter) upon written demand by the applicable Lender or the Administrative Agent, for any loss or reasonable, documented out of pocket expense incurred by any Lender or the Administrative Agent in connection with such prepayment, in each case, as set forth in and subject to the terms and conditions of Sections 2.10 and 2.11.
(c) | Payments Generally. Prepayments of the Loans pursuant to this Section 2.7 shall be applied to the scheduled payments of Term Loan in the manner specified by the Borrower (or, in the absence of any such specification, in the direct order of maturity) so long as no Event of Default shall have occurred and be continuing (in which case, such payments shall be applied scheduled payments of Term Loan in inverse order of maturity). |
Section 2.8 Repayments.
(a) | Term Loans. Subject to Sections 2.7 and 2.8(b), (d), (e), (f) and (h), the principal balance of the Term Loans, to the extent then outstanding, shall be repaid on the last day of each calendar quarter, commencing on September 30, 2020, and continuing on the last day of each calendar quarter until the Term Loan Maturity Date and in the percentage set forth below of the principal amount of the Term Loans outstanding on the Closing Date: |
Calendar Quarter End | Percentage Amount Due |
September 30, 2020 | 1.25% |
December 31, 2020 | 1.25% |
March 31, 2021 | 1.25% |
June 30, 2021 | 1.25% |
September 30, 2021 | 1.25% |
December 31, 2021 | 1.25% |
March 31, 2022 | 1.25% |
June 30, 2022 | 1.25% |
September 30, 2022 | 1.25% |
December 31, 2022 | 1.25% |
March 31, 2023 | 1.25% |
June 30, 2023 | 1.25% |
September 30, 2023 | 2.50% |
December 31, 2023 | 2.50% |
March 31, 2024 | 2.50% |
June 30, 2024 | 2.50% |
September 30, 2024 | 2.50% |
December 31, 2024 | 2.50% |
March 31, 2025 | 2.50% |
Term Loan Maturity Date | All unpaid aggregate principal amounts of any outstanding Term Loans |
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(b) | Closing Date. If on the Closing Date the Term Loan Commitment is greater than $140,000,000, and after giving effect to the Transaction, the sum of the undrawn Revolving Commitment and cash and Cash Equivalents as set forth on the consolidated balance sheet of the Borrower exceeds $75,000,000, the Borrower shall, within one (1) Business Day of the Closing Date, make a repayment in the amount equal to the lesser of (x) the amount of such excess and (y) $45,000,000 (which amount, at the Borrower’s election, may be net funded from the Advances on the Closing Date). |
(c) | Loans in Excess of Revolving Commitment. If, at any time the amount of the Revolving Loans, Swing Line Loans and the Letter of Credit Obligations shall exceed the Revolving Commitment, the Borrower shall, on such date and subject to Sections 2.10 and 2.11, make a repayment of the principal amount of the Revolving Loans, in an amount equal to such excess, together with any accrued interest and fees with respect thereto, and/or repay, cancel or otherwise discharge the Letter of Credit Obligations in an aggregate amount equal to such excess, as applicable or any combination thereof. |
(d) | Repayments Upon Sales of Assets. In addition to the repayments otherwise set forth in this Section 2.8, promptly (but in any event within five (5) Business Days) following the receipt of Net Proceeds (Asset Sales) in excess of $5,000,000 in any Fiscal Year, the Loans shall be repaid by an amount equal to such Net Proceeds (Asset Sales), together with any accrued interest on the portion of the Loans repaid; provided, however, that, if no Event of Default has occurred and is continuing, no such repayment shall be required if the Borrower notifies the Administrative Agent on or before the date such repayment would otherwise be required under this Section 2.8(d) that the Borrower intends to use any or all of such Net Proceeds (Asset Sales) to invest in assets used or useful in the business of the Borrower and its Subsidiaries (which investment may be in the form of any Permitted Acquisition) within twelve (12) months of the date of such sale, lease, transfer or other disposition, in which case, the repayment of the Loans which is otherwise required under this Section 2.8(d) up to the amount of the Net Proceeds (Asset Sales) to be reinvested pursuant to this Section 2.8(d) need not be made, but if all or part of such Net Proceeds (Asset Sales) are not used within such twelve (12) month period, then the Loans shall be repaid by an amount equal to the Net Proceeds (Asset Sales) calculated based on the portion of Net Proceeds (Asset Sales) not invested pursuant to this Section 2.8(d) on the day immediately following such twelve (12) month period (unless the Borrower shall have entered into a firm and binding commitment to reinvest such Net Proceeds (Asset Sales) during such twelve (12) month period, in which case such repayment (if required) shall be made on the later of (A) the day that is 180 days following the date such commitment becomes effective and (B) the day immediately following such twelve (12) month period). Such repayments shall be applied as set forth in Section 2.8(i). |
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(e) | Debt Issuances. In addition to the repayments otherwise set forth in this Section 2.8, promptly (but in any event within five (5) Business Days) following any receipt of Net Proceeds (Indebtedness) the Loans shall be repaid by the amount of such Net Proceeds (Indebtedness), together with accrued interest on the portion of the Loans repaid. Such repayments shall be applied as set forth in Section 2.8(i). |
(f) | Annual Excess Cash Flow Repayments. In addition to the other repayments set forth in this Section 2.8, commencing with the Fiscal Year ending December 31, 2021, on the tenth (10th) day after the date on which audited annual financial statements are required to be delivered pursuant to Section 6.2 for each Fiscal Year, the Loans shall be repaid by an amount equal to the Excess Cash Flow Amount for the preceding Fiscal Year, together with accrued interest on the portion of the Loans repaid. |
(g) | Incremental Facility Loans. Subject to Sections 2.7 and 2.8(b), (c), (d), (e), (f), and (h), the Incremental Facility Loans shall be repaid on terms and conditions as set forth in the related Notice of Incremental Facility Commitment. |
(h) | Revolving Maturity Date, Term Loan Maturity Date, Swing Line Maturity Date and Incremental Facility Maturity Date. In addition to the foregoing, a final payment of (i) all Revolving Loans, together with accrued interest and fees with respect thereto, shall be due and payable on the Revolving Maturity Date, (ii) the Term Loans, together with accrued interest and fees with respect thereto, shall be due and payable on the Term Loan Maturity Date, (iii) all Swing Line Loans, together with accrued interest and fees with respect thereto, shall be due and payable on the Swing Line Maturity Date and (iv) the Incremental Facility Loans, if any, together with accrued interest and fees with respect thereto, shall be due and payable on the Incremental Facility Maturity Date. |
(i) | Repayment Application. The repayments described in Section 2.8(d), (e) (including as a result of the application of clause (j) below) and (f) above shall be applied first, to the next four (4) scheduled payments of Term Loans set forth in Section 2.8(a), second, to the Term Loans and (to the extent so provided in the related Notice of Incremental Facility Commitment if such Incremental Facility is a Term Loan) the Incremental Facility Loans, if any, on a pro rata basis to the Term Loans and such Incremental Facility Loans remaining scheduled payments, ratably against the remaining scheduled repayments set forth in Section 2.8(a), as applicable (or in the applicable Notice of Incremental Facility Commitment, as the case may be), third, to the Revolving Loans then outstanding (until the Revolving Loan balance is zero) without a permanent reduction of the Commitments and fourth, to cash collateralize Letters of Credit (if any). The repayments pursuant to Section 2.8(b) through (h) above shall be accompanied by any reimbursement required under Section 2.11. Notwithstanding the foregoing provisions of this Section 2.8, to the extent that any mandatory prepayment under Section 2.8(d) or (f) would result in the Borrower’s incurring liability pursuant to Section 2.11, the Borrower may defer such mandatory prepayment to a date that is not later than ninety (90) days following the date on which such prepayment would (in the absence of this Section 2.8(i)) have been required to be made by depositing cash in an amount equal to such mandatory prepayment in an interest-bearing deposit account under the sole dominion and control of the Administrative Agent. Such funds shall be applied to make the applicable mandatory prepayment (or portions thereof from time to time) as and when such application would not result in the Borrower incurring liability under Section 2.11, but in any event such mandatory prepayment shall be made in full by not later than the ninetieth (90th) day following the date on which it would have been required to be paid in the absence of this Section 2.8(i). |
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(j) | Notwithstanding any other provisions of this Section 2.8, (i) to the extent that all or any portion of the Excess Cash Flow attributable to Foreign Subsidiaries is prohibited or delayed by Applicable Law of an applicable non-US jurisdiction from being repatriated to the Borrower or any applicable Domestic Subsidiary, the portion of such Excess Cash Flow so affected will not be required to be applied as a mandatory prepayment at the times provided in this Section 2.8 but may be retained by the applicable Foreign Subsidiary for so long, but only so long, as Applicable Law of such jurisdiction will not permit repatriation of such amount to the Borrower or any such Domestic Subsidiary, and once such repatriation of any of such affected Excess Cash Flow is permitted under Applicable Law of such jurisdiction, such Excess Cash Flow will then be promptly (and in any event not later than five (5) Business Days thereafter) applied as a mandatory prepayment pursuant to this Section 2.8) or (ii) to the extent that the Borrower has determined in good faith, in consultation with the Administrative Agent, that repatriation to the Borrower or any applicable Domestic Subsidiary of all or any portion of the Excess Cash Flow attributable to Foreign Subsidiaries would have material adverse Tax consequences to the Borrower and its Subsidiaries (taken as a whole) with respect to such amount, the portion of Excess Cash Flow so affected will not be required to be applied as a mandatory prepayment at the times provided in this Section 2.8 but may be retained by the applicable Foreign Subsidiary for so long, but only so long, as the applicable material adverse Tax consequences with respect to such Excess Cash Flow remain, and if the Borrower determines in good faith, in consultation with the Administrative Agent, that such repatriation of any of such affected Excess Cash Flow would no longer have material adverse Tax consequences, such Excess Cash Flow will then be promptly (and in any event not later than five Business Days thereafter) applied as a mandatory prepayment pursuant to this Section 2.8. |
Section 2.9 Notes; Loan Accounts. The Loans shall be repayable in accordance with the terms and provisions set forth herein and, upon request by any Lender, shall be evidenced by Notes issued to such Lender. Upon such request, (i) one Revolving Loan Note and one Term Loan Note shall be payable to each requesting Lender, or its registered assigns, in accordance with such Lender’s respective applicable Commitment Ratio, (ii) one Incremental Facility Note shall be payable to each requesting Lender, or its registered assigns, in accordance with such Lender’s respective Incremental Facility Commitment Ratio, as applicable and (iii) one Swing Line Note shall be delivered to the Swing Line Lender, or its registered assigns, in accordance with its Swing Line Commitment. Such Notes shall be issued by the Borrower to any Lender upon the request of such Lender and shall be duly executed and delivered on the Borrower’s behalf by one or more Authorized Signatories. Each Lender may open and maintain on its books in the name of the Borrower a loan account with respect to its portion of the Loans and interest thereon. Each Lender which opens such a loan account shall debit such loan account for the principal amount of its portion of each Advance made by it and accrued interest thereon, and shall credit such loan account for each payment on account of principal of or interest on its Loans. The records of a Lender with respect to the loan account maintained by it shall be prima facie evidence of its portion of the Loans and accrued interest thereon absent manifest error, but the failure of any Lender to make any such notations or any error or mistake in such notations shall not affect the Borrower’s repayment obligations with respect to such Loans.
Section 2.10 Manner of Payment.
(a) | Each payment (including, without limitation, any prepayment) by the Borrower on account of the principal of or interest on the Loans, commitment fees and any other amount owed to the Lenders or the Administrative Agent or any of them under this Agreement, the Notes or any other Loan Document shall be made not later than 2:00 P.M. (New York, New York time) on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent’s Office, for the account of the Lenders or the Administrative Agent, as the case may be, in U.S. Dollars in immediately available funds. Any payment received by the Administrative Agent after 2:00 P.M. (New York, New York time) shall be deemed received on the next Business Day. Receipt by the Administrative Agent of any payment intended for any Lender or Lenders hereunder prior to 2:00 P.M. (New York, New York time) on any Business Day shall be deemed to constitute receipt by such Lender or Lenders on such Business Day. In the case of a payment for the account of a Lender, the Administrative Agent will promptly thereafter distribute the amount so received in like funds to such Lender. If the Administrative Agent shall not have received any payment from the Borrower as and when due, the Administrative Agent will promptly notify the Lenders accordingly. In the event that the Administrative Agent shall fail to make distribution to any Lender as required under this Section 2.10, the Administrative Agent agrees to pay such Lender interest from the date such payment was due until paid at the Federal Funds Rate. Subject to any contrary provisions in the definition of Interest Period, if any payment under this Agreement or any of the other Loan Documents is specified to be made on a day which is not a Business Day, it shall be made on the next Business Day, and such extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment. |
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(b) | The Credit Parties agree to pay principal, interest, fees and all other amounts due hereunder or under the Notes (if applicable) or under any other Loan Document without set off or counterclaim or any deduction or withholding whatsoever and free and clear of all Taxes, unless required by Applicable Law. If a Withholding Agent is required by Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) to deduct or withhold any Tax from or in respect of any sum payable to the Administrative Agent or any Lender or Issuing Bank hereunder, under any Note or under any other Loan Document: (i) if such Tax is an Indemnified Tax, the amount payable by the applicable Credit Party hereunder or thereunder, as applicable, shall be increased to the extent necessary to provide that, after making all required deductions or withholdings for such Indemnified Taxes (including deductions or withholdings applicable to additional sums payable under this Section 2.10(b)), the Administrative Agent or such Lender or Issuing Bank, as applicable, receives an amount equal to the sum it would have received had no such deductions or withholdings been made; (ii) the Withholding Agent shall be entitled to make such deductions or withholdings from such sums payable hereunder or thereunder, as applicable, and pay the amount so deducted or withheld to the relevant taxing authority as required by Applicable Law; and (iii) the applicable Credit Party shall provide the Administrative Agent or such Lender, as applicable, with evidence that such deducted amounts have been paid to the relevant taxing authority by delivery to the Administrative Agent, or the Lender or the Issuing Bank on whose account such payment was made of the official tax receipts or copies of such receipts within thirty (30) days after payment for such Tax or, to the extent such receipts are not available, such other evidence as may be reasonably satisfactory to the Administrative Agent, or such Lender or Issuing Bank. In the event a Lender, the Issuing Bank or the Administrative Agent, in their respective sole discretion exercised in good faith, determines that it has received a refund of any Taxes to which it has been indemnified pursuant to this Section 2.10, such Lender, the Issuing Bank or the Administrative Agent, as applicable, shall pay the amount of such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section, with respect to Taxes giving rise to such refund); provided that (x) such refund shall be without interest (other than any interest paid by such relevant Governmental Entity with respect to such refund) and shall be net of all reasonable, documented out-of-pocket expenses of such Lender, Issuing Bank or Administrative Agent, as applicable, related to such refund and (y) the calculation of such refund shall be determined in good faith solely by such Lender, Issuing Bank or the Administrative Agent, as applicable; provided, further, that, the Borrower, upon request of any Lender, the Issuing Bank or the Administrative Agent, as applicable, agrees to repay the amount paid over to the Borrower under this Section 2.10(b) (plus any penalties, interest or other charges imposed by the Governmental Entity) to such Lender, the Issuing Bank or Administrative Agent, as applicable, in the event such Lender, the Issuing Bank or Administrative Agent, as applicable, is required to repay such refund to the Governmental Entity. In no event will any Lender, Issuing Bank or Administrative Agent be required to pay an amount to the Borrower, the payment of which would place such Lender, Issuing Bank or Administrative Agent in a less favorable net after tax position than they would otherwise have been in if the additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person. |
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(c) | In addition, the Credit Parties shall timely pay to the relevant Governmental Entity in accordance with Applicable Law, or at the option of the Administrative Agent, timely reimburse it for the payment of, any Other Taxes. |
(d) | The Credit Parties shall jointly and severally indemnify the Administrative Agent, each Lender and the Issuing Bank, within thirty (30) days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.10) payable or paid by the Administrative Agent, such Lender or Issuing Bank or required to be withheld or deducted from a payment to the Administrative Agent, such Lender or Issuing Bank and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, in each case whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Entity. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or Issuing Bank, or by the Administrative Agent on behalf of itself, such Lender or Issuing Bank shall be conclusive absent manifest error. |
(e) | Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.5(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Entity. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e). |
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(f) | Prior to the declaration of an Event of Default under Section 8.1, and except as otherwise provided in Sections 2.7, 2.8(i), and Section 8.3, if some but less than all amounts due from the Borrower are received by the Administrative Agent with respect to the Obligations, the Administrative Agent shall distribute such amounts in the following order of priority, all in accordance where applicable with the respective Commitment Ratios of the Lenders for the applicable Commitment: first to the payment of any fees or expenses then due and payable to the Administrative Agent and the Lenders, or any of them; second to the payment of interest then due and payable on the Loans; third to the payment of all other amounts not otherwise referred to in this Section 2.10(f) then due and payable to the Administrative Agent and the Lenders, or any of them, hereunder or under the Notes or any other Loan Document, and fourth ratably to the payment of principal then due and payable on the Loans then outstanding. |
(g) | Each party’s obligations under Section 2.10(b), (c), (d) and (e) shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or Issuing Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document. |
(h) | For purposes of Section 2.10(b), (c), (d) and (e), the term “Applicable Law” includes FATCA. |
Section 2.11 Reimbursement.
(a) | Whenever any Lender shall sustain or incur any actual loss or reasonable, documented, out-of-pocket expenses in connection with (i) failure by the Borrower to borrow, Continue or Convert any LIBOR Advance after having given notice of its intention to so borrow, Continue or Convert in accordance with Section 2.2 (whether by reason of the Borrower’s election not to proceed or the non-fulfillment of any of the conditions set forth in Article 3), (ii) prepayment (or failure to prepay after giving notice thereof) or Conversion to a Base Rate Advance of any LIBOR Advance in whole or in part for any reason (including because of Sections 10.1 or 10.2) on the date that is not the last day of the applicable Interest Period, or (iii) failure by the Borrower to repay any LIBOR Advance when required hereunder, the Borrower agrees to pay to such Lender, upon such Lender’s demand, an amount sufficient to compensate such Lender for all such losses and reasonable, documented, out-of-pocket expenses. Such Lender’s good faith determination of the amount of such losses or reasonable out-of-pocket expenses, as set forth in writing, delivered to the Borrower and the Administrative Agent and accompanied by calculations in reasonable detail demonstrating the basis for its demand, shall be conclusively correct absent manifest error. |
(b) | Losses subject to reimbursement hereunder shall include, without limiting the generality of the foregoing, reasonable, documented, out-of-pocket expenses incurred by any Lender, including, without duplication, any Participant of such Lender permitted hereunder on behalf of such Lender in connection with the re-employment of funds prepaid, Continued, Converted, paid, repaid, not borrowed, not Continued, not Converted or not paid, as the case may be, and will be payable whether any applicable Maturity Date is changed by virtue of an amendment hereto (unless such amendment expressly waives such payment) or as a result of acceleration of the Obligations. For the purposes of calculating amounts payable to a Lender under this subsection, each Lender shall be deemed to have actually funded its relevant LIBOR Advance through the purchase of a deposit bearing interest at LIBOR in an amount equal to the amount of that LIBOR Advance and having a maturity comparable to the relevant Interest Period; provided, that each Lender may fund any LIBOR Advance in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection. |
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Section 2.12 Pro Rata Treatment.
(a) | Advances. Each Advance from the Lenders under the Revolving Commitments made after the Closing Date shall be made pro rata on the basis of the respective Revolving Commitment Ratios of such Lenders. On the Closing Date, each Advance from the Lenders having Term Loan Commitments shall be made pro rata on the basis of the respective Term Loan Commitment Ratios of such Lenders. Each Advance from the Lenders having the Incremental Facility Commitment relating to such Advance shall be made pro rata on the basis of the respective Incremental Facility Commitment Ratios of such Lenders relating to such Advance in the manner provided in the applicable Notice of Incremental Facility Commitment. |
(b) | Payments. Except as provided in Section 2.2(e)(v), Section 2.6, Section 11.5, Section 11.12(b) and Article 10, each payment and prepayment of principal of the Loans made under this Agreement, and each payment of interest on the Loans made under this Agreement, shall be made to the Lenders pro rata on the basis of their respective unpaid principal amounts outstanding under the applicable Loans immediately prior to such payment or prepayment. If any Lender shall obtain any payment (whether involuntary, through the exercise of any right of set-off, or otherwise, but excluding any payment in connection with Section 2.2(e)(v), Section 2.6, Section 11.5, 11.12(b), or Article 10) in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon or other such obligations greater than its ratable share of such payment as provided herein, such Lender shall (i) notify the Administrative Agent of such fact and (ii) forthwith purchase (for cash at face value) from the other Lenders such participations in the portion of the applicable Loans and such other obligations of the other Lenders as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.12(b) may, to the fullest extent permitted by Applicable Law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. The provisions of this Section shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (after giving effect to any amendment hereto consented to by the Required Lenders so long as such amendment does not provide for a distribution of proceeds from the exercise of remedies (including any such set-off or counterclaim) following an Event of Default that is inconsistent with Section 8.3). |
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Section 2.13 Capital Adequacy. If after the date hereof, the adoption of any Applicable Law regarding the capital adequacy or liquidity of banks or bank holding companies, or any Change in Law (whether adopted before or after the Closing Date) or any change in the interpretation or administration thereof by any Governmental Entity, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any such Lender with any directive regarding capital adequacy or liquidity (whether or not having the force of law) of any such Governmental Entity, central bank or comparable agency, has or would have the effect of reducing the rate of return on any Lender’s capital or requiring the maintenance of additional liquidity (or that of its parent company) as a consequence of its obligations hereunder with respect to the Loans, the Revolving Commitment, Swing Line Commitment and the Incremental Facility Commitment, to a level below that which it could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s policies with respect to capital adequacy and liquidity immediately before such adoption, change, Change in Law or compliance) by an amount reasonably deemed by such Lender, in good faith to be material, then, upon the earlier of ten (10) Business Days after demand by such Lender or the Maturity Date, the Borrower shall promptly pay to such Lender such additional amounts as shall be sufficient to compensate such Lender for such reduced return, together with interest on such amount from the tenth (10th) Business Day after the date of demand or the applicable Maturity Date, until payment in full thereof, at the Base Rate Basis. Before giving any notice to the Administrative Agent pursuant to this Section 2.13, such Lender shall designate a different lending office if such designation will avoid the need for giving such notice and will not, in the sole reasonable judgment of such Lender, be otherwise materially disadvantageous to such Lender. Notwithstanding the foregoing, the Borrower shall only be obligated to compensate such Lender for any amount under this subsection arising or occurring at any time (a) (i) in the case of each such request for compensation, during the period commencing not more than ninety (90) days prior to the date on which such Lender submits such request and (ii) during which, because of the unannounced retroactive application of such law, regulation, interpretation, request or directive, such Lender could not have known that the resulting reduction in return might arise and (b) such Lender is imposing additional amounts as described under this Section 2.13 on other similarly situated borrowers. A certificate of such Lender delivered to the Borrower and the Administrative Agent setting forth the amount to be paid to such Lender by the Borrower as a result of any event referred to in this paragraph and supporting calculations in reasonable detail shall be presumptively correct absent manifest error.
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Section 2.14 Lender Tax Forms. On or prior to the Closing Date, and prior to the date on which any Person becomes a Lender, Issuing Bank or Administrative Agent hereunder, and from time to time thereafter if required by Applicable Law due to a change in circumstances or as reasonably requested by the Borrower or the Administrative Agent (unless such Lender is not legally entitled to do so), each Lender, Administrative Agent, and Issuing Bank shall provide the Administrative Agent and the Borrower with such properly completed documentation reasonably requested by the Administrative Agent or the Borrower or prescribed by Applicable Law as will permit any payments hereunder or under any Note or other Loan Document to be made without or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.14(a)(i), (a)(ii) and (a)(iv) below) shall not be required if in the Lender’s, Administrative Agent’s, or Issuing Bank’s (as applicable) reasonable judgment such completion, execution or submission would subject such Lender, Administrative Agent, or Issuing Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender, Administrative Agent, or Issuing Bank. For purposes of this Section 2.14, the term “Applicable Law” includes FATCA.
(a) | Without limiting the generality of the foregoing, |
(i) any Lender that is a “United States Person” as defined in Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(ii) any Lender that is not a “United States Person” as defined in Section 7701(a)(30) (each, a “Foreign Lender”) shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(A) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
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(B) executed copies of IRS Form W-8ECI;
(C) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) certification reasonably acceptable to Borrower that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or
(D) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner;
(iii) | any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and |
(iv) | if a payment made to a Lender, Administrative Agent, or Issuing Bank under any Loan Document would be subject to United States federal withholding imposed by FATCA if such Lender, Administrative Agent, or Issuing Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender, Administrative Agent, or Issuing Bank shall deliver to the Administrative Agent and the Borrower such forms or other documents as shall be prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Administrative Agent or the Borrower, as applicable, to comply with their obligations under FATCA and to determine that such Lender, Administrative Agent, or Issuing Bank has complied with its obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. |
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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
Section 2.15 Administrative Agent’s Clawback. Unless the Administrative Agent shall have received notice from the Borrower one (1) Business Day prior to the date on which any payment is due to the Administrative Agent for the account of any Lender hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute the amount due to the Lenders. In such event, if the Borrower has not in fact made such payment in full, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Rate. Nothing in this Section 2.15 shall be deemed to constitute a waiver or cure of any Default or Event of Default under Article 8.
Section 2.16 Letters of Credit.
(a) | Subject to the terms and conditions hereof, the Issuing Bank, on behalf of the Revolving Lenders, and in reliance on the agreements of such Revolving Lenders holding Revolving Commitments set forth in subsection (c) of this Section 2.16, hereby agrees to issue one (1) or more Letters of Credit up to an aggregate face amount equal to the Available Letter of Credit Commitment determined immediately prior to giving effect to the issuance thereof; provided, however, that the Issuing Bank shall not issue any Letter of Credit unless the conditions precedent to the issuance thereof set forth in Section 3.3 have been satisfied or waived, and shall have no obligation to issue any Letter of Credit if any Default then exists or would be caused thereby or if, after giving effect to such issuance, the Available Revolving Commitment would be less than zero; and provided further, however, that at no time shall the aggregate amount of the Letter of Credit Obligations outstanding hereunder exceed the Letter of Credit Commitment. Each Letter of Credit shall (1) be denominated in U.S. Dollars and (2) expire no later than the earlier to occur of (A) five (5) Business Days prior to the date certain set forth in the definition of Revolving Maturity Date and (B) one (1) year after its date of issuance (or such longer period as agreed from time to time, in writing, by the Issuing Lender in its sole discretion), provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional successive one-year periods (which shall in no event extend beyond the date referred to in clause (A) above). |
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(b) | The Borrower may from time to time request that the Issuing Bank issue a Letter of Credit. The Borrower shall execute and deliver to the Administrative Agent and the Issuing Bank a Request for Issuance of Letter of Credit for each Letter of Credit to be issued by the Issuing Bank, not later than 2:00 P.M. (New York, New York time) on the fifth (5th) Business Day preceding the date on which the requested Letter of Credit is to be issued, or such shorter notice as may be acceptable to the Issuing Bank and the Administrative Agent. Upon receipt of any such Request for Issuance of Letter of Credit, subject to satisfaction or waiver of all conditions precedent thereto as set forth in Section 3.3, the Issuing Bank shall process such Request for Issuance of Letter of Credit and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby. The Issuing Bank shall, upon request, furnish a copy of such Letter of Credit to any Lender following the issuance thereof. |
(c) | Each Lender irrevocably authorizes the Issuing Bank to issue, reconfirm, reissue and extend each Letter of Credit in accordance with the terms of this Agreement. The Issuing Bank hereby sells, and each Lender with a Revolving Commitment hereby purchases, on a continuing basis, a participation and an undivided interest in (A) the obligations of the Issuing Bank to honor any draws under the Letters of Credit issued pursuant to this Agreement and (B) the Indebtedness of the Borrower to the Issuing Bank under this Agreement relating to each Letter of Credit and any reimbursement or indemnification agreement relating to each Letter of Credit, such participation being in the amount of such Lender’s pro rata share of such obligations and Indebtedness based on such Lender’s Revolving Commitment Ratio. At the Borrower’s option, the Borrower may, by written notice to the Administrative Agent, elect to reallocate all or any part of any Defaulting Lender’s pro rata share of the Letter of Credit Obligations among all Revolving Lenders that are not Defaulting Lenders but only to the extent (x) the Revolving Loans and the Letter of Credit Obligations (or participations with respect thereto) of all Revolving Lenders that are not Defaulting Lenders plus such Defaulting Lender’s pro rata share of the Letter of Credit Obligations, except to the extent cash collateralized, does not exceed the Revolving Commitments (excluding the Revolving Commitment of any Defaulting Lender except to the extent of any outstanding Revolving Loans of such Defaulting Lender) and (y) no Default or Event of Default has occurred and is continuing at such time. To the extent the Letter of Credit Obligations of any Defaulting Lender have not been reallocated pursuant to the prior sentence, the Issuing Bank shall not be under any obligation to issue any Letter of Credit if a failure to fund obligations under this Section 2.16 exists with respect to any Revolving Lender or any such Revolving Lender is at such time a Defaulting Lender or an Impacted Lender, unless the Issuing Bank has entered into arrangements reasonably satisfactory to the Issuing Bank with the Borrower or such Lender to eliminate the Issuing Bank’s risk with respect to such Lender’s funding of its participation of such Letter of Credit. |
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(d) | Upon receipt of a draw certificate from the beneficiary of a Letter of Credit, the Issuing Bank shall promptly notify the Administrative Agent and the Administrative Agent shall notify the Borrower and each Lender with a Revolving Commitment, by telephone or telecopy, of the amount of the requested draw and, in the case of each Lender holding a Revolving Commitments, such Lender’s portion of such draw amount as calculated in accordance with its Revolving Commitment Ratio. |
(e) | The Borrower hereby agrees to immediately reimburse the Issuing Bank for amounts paid by the Issuing Bank in respect of draws under a Letter of Credit issued at the Borrower’s request in an amount in U.S. Dollars and in same day funds, equal to the amount of such draw. In order to facilitate such repayment, the Borrower hereby irrevocably requests the Revolving Lenders, and the Revolving Lenders hereby severally agree, on the terms and conditions of this Agreement (other than as provided in Article 2 with respect to the amounts of, the timing of requests for, and the repayment of Advances hereunder and in Article 3 with respect to conditions precedent to Advances hereunder), with respect to any drawing under a Letter of Credit prior to the occurrence of an Event of Default under Section 8.1(f) or (g), to make an Advance (which Advance shall be a Base Rate Advance) to the Borrower under the Revolving Commitment on each day on which a draw is made under any Letter of Credit and in the amount of and in the applicable currency of such draw, and to pay the proceeds of such Advance directly to the Issuing Bank to reimburse the Issuing Bank for the amount paid by it upon such draw. Each Revolving Lender shall pay its share of such Advance by paying its portion of such Advance in U.S. Dollars to the Administrative Agent in accordance with Section 2.2(e) and its respective Revolving Commitment Ratio, without reduction for any set off or counterclaim of any nature whatsoever and regardless of whether any Default or Event of Default (other than with respect to an Event of Default under Section 8.1(f) or (g)) then exists or would be caused thereby. If at any time that any Letters of Credit are outstanding, any of the events described in clause (f) or (g) of Section 8.1 shall have occurred and be continuing, then each Lender with a Revolving Commitment shall, automatically upon the occurrence of any such event and without any action on the part of the Issuing Bank, the Borrower, the Administrative Agent or the Revolving Lenders, or any of them, be deemed to have purchased an undivided participation in the face amount of all Letters of Credit then outstanding in an amount equal to such Revolving Lender’s Revolving Commitment Ratio times the face amount of all Letters of Credit then outstanding, and each such Revolving Lender shall, notwithstanding such Event of Default, upon a drawing under any Letter of Credit, immediately pay to the Administrative Agent for the account of the Issuing Bank, in immediately available funds and in the currency of such drawing, the amount of Revolving Lender’s participation (and the Issuing Bank shall deliver to such Lender a loan participation certificate dated the date of the occurrence of such event and in the amount of such Lender’s Revolving Commitment Ratio times the face amount of all Letters of Credit then outstanding). The disbursement of funds in connection with a draw under a Letter of Credit pursuant to this Section 2.16(e) shall be subject to the terms and conditions of Section 2.2(e). The obligation of each Revolving Lender to make payments to the Administrative Agent, for the account of the Issuing Bank, in accordance with this Section 2.16 shall be absolute and unconditional and no Lender shall be relieved of its obligations to make such payments by reason of noncompliance by any other Person with the terms of the Letter of Credit or for any other reason other than the gross negligence, bad faith or willful misconduct of the Issuing Bank, as determined by a final, non-appealable order of a court of competent jurisdiction. The Administrative Agent shall promptly remit to the Issuing Bank the amounts so received from the other Lenders. Any overdue amounts payable by the Revolving Lenders to the Issuing Bank in respect of a draw under any Letter of Credit shall bear interest, payable on demand, at the Federal Funds Rate plus 1.0%. |
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(f) | Any overdue amounts payable by the Borrower under this Section 2.16 shall bear interest, payable on the earlier of demand or the Revolving Maturity Date, for each day from and including the date payment thereof was due to, but excluding, the date of actual payment, at the Default Rate. |
(g) | The Borrower agrees that any action taken or omitted to be taken by the Issuing Bank in connection with any Letter of Credit, except for such actions or omissions as shall constitute gross negligence, bad faith or willful misconduct on the part of the Issuing Bank as determined by a final, non-appealable order of a court of competent jurisdiction, shall be binding on the Borrower as between the Borrower and the Issuing Bank, and shall not result in any liability of the Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the Lenders for Advances made to reimburse the Issuing Bank for draws under the Letter of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances: |
(i) Any lack of validity or enforceability of any Loan Document;
(ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any right which the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting) or any Lender (other than the defense of payment to such Lender in accordance with the terms of this Agreement) or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, any other Loan Document or any unrelated transaction;
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(v) Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;
(vi) The insolvency of any Person issuing any documents in connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower and any beneficiary or transferee of any Letter of Credit;
(viii) Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;
(ix) Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;
(x) Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the Issuing Bank;
(xi) Any other circumstances arising from causes beyond the control of the Issuing Bank;
(xii) Payment by the Issuing Bank under any Letter of Credit against presentation of a sight draft or a certificate which does not comply with the terms of such Letter of Credit; and
(xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
Neither the Administrative Agent, the Issuing Bank, the Lenders nor any related party of any of the foregoing shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to above), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided, that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any actual direct damages (as opposed to special, indirect (including claims for loss profits or other consequential damages), or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by Applicable Law) arising from Issuing Bank’s failure to exercise due care when determining whether drafts or other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree, that in the absence of gross negligence, bad faith or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised due care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
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(h) | If any Change in Law (adopted after the Closing Date), any change in the interpretation or administration thereof (adopted after the Closing Date), or any change in compliance with Applicable Law by the Issuing Bank or any Revolving Lender as a result of any official request or directive of any Governmental Entity, central bank or comparable agency (whether or not having the force of law) (issued after the Closing Date) shall (i) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, capital adequacy or liquidity, assessment or other requirements or conditions against Letters of Credit issued by the Issuing Bank or against participations by any other Lender in the Letters of Credit or (ii) impose on the Issuing Bank or any other Lender any other condition regarding any Letter of Credit or any participation therein, and the result of any of the foregoing in the reasonable determination of the Issuing Bank or such Lender, as the case may be, is to increase the cost to the Issuing Bank or such Lender of issuing or maintaining any Letter of Credit or purchasing or maintaining any participation therein, as the case may be, by an amount (which amount shall be reasonably determined) deemed by the Issuing Bank or such Lender in good faith to be material, then, within ten (10) Business Days after demand by the Issuing Bank or such Lender, the Borrower shall promptly pay the Issuing Bank or such Lender, as the case may be, such additional amount or amounts as shall be sufficient to compensate the Issuing Bank or such Lender for such increased costs, together with interest on such amount from the tenth (10th) Business Day after the date of demand, until payment in full thereof at the Base Rate Basis; provided, however, in no event shall the Issuing Bank or such Lender be entitled to receive compensation under this Section 2.16(h) for a period in excess of ninety (90) days preceding such demand for compensation; provided, further, that if the Change in Law or other applicable circumstances giving rise to such increased costs is retroactive, the 90-day period referred to above shall be extended to include the period of retroactive effect thereto; and provided, further, the Borrower shall only be obligated to compensate such Issuing Bank for any amount under this subsection arising or occurring at any time that the Issuing Bank is imposing additional amounts as described under this Section 2.16(h) on other similarly situated borrowers. A certificate of the Issuing Bank or such Lender setting forth the amount, and in reasonable detail the basis for the Issuing Bank or such Lender’s good faith determination of such amount, to be paid to the Issuing Bank or such Lender by the Borrower as a result of any event referred to in this paragraph shall be presumptively correct absent manifest error. |
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(i) | Each Revolving Lender shall be responsible (to the extent not reimbursed by the Borrower) for its pro rata share (based on such Lender’s Revolving Commitment Ratio) of any and all reasonable out-of-pocket costs, expenses (including, without limitation, reasonable legal fees) and disbursements which may be incurred or made by the Issuing Bank in connection with the collection of any amounts due under, the administration of, or the presentation or enforcement of any rights conferred by any Letter of Credit, the Borrower’s or any Guarantor’s obligations to reimburse or otherwise, except that no Lender shall be liable to the Issuing Bank for any portion of such out-of-pocket costs, expenses (including, without limitation, reasonable legal fees) and disbursements from the gross negligence, bad faith or willful misconduct of the Issuing Bank, as determined by a final, non-appealable judicial order of a court of competent jurisdiction. In the event the Borrower shall fail to pay such expenses of the Issuing Bank within ten (10) Business Days after demand for payment by the Issuing Bank, each Revolving Lender shall thereupon pay to the Issuing Bank its pro rata share (based on such Lender’s Revolving Commitment Ratio) of such expenses within five (5) days from the date of the Issuing Bank’s notice to the Revolving Lenders of the Borrower’s failure to pay; provided, however, that if the Borrower or any Guarantor shall thereafter pay such expense, the Issuing Bank will repay to such Revolving Lender the amounts received from the Borrower. |
(j) | The Borrower agrees that each Advance by a Revolving Lender to reimburse the Issuing Bank for draws under any Letter of Credit, shall, for all purposes hereunder, be deemed to be an Advance under the Revolving Commitment to the Borrower and shall be payable and bear interest in accordance with all other Revolving Loans to the Borrower. |
(k) | The Borrower will indemnify and hold harmless the Administrative Agent, the Issuing Bank and each other Lender and each of their respective employees, representatives, officers and directors from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, without limitation, reasonable out-of-pocket attorneys’ fees (as such fees are incurred and documented); provided, that reimbursement of attorneys’ fees shall be limited to fees of one external counsel (which may be Jones Day), one local counsel in each applicable jurisdiction (which may be a single local counsel acting in multiple jurisdictions) and one regulatory counsel for each relevant area of expertise for all of the Administrative Agent, the Issuing Bank and the Lenders (and, in the event of any conflict of interest, one external counsel (which may be Jones Day), one local counsel in each applicable jurisdiction (which may be a single local counsel acting in multiple jurisdictions) and one regulatory counsel for each relevant area of expertise for each party subject to such conflict) in any relevant jurisdiction), which may be imposed on, incurred by or asserted against the Administrative Agent, the Issuing Bank or any such other Lender in any way relating to or arising out of the issuance, honor or dishonor of a Letter of Credit in accordance with Section 11.2; provided, however, that (x) the Borrower shall not be liable to the Administrative Agent, the Issuing Bank or any such Lender for any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the gross negligence, bad faith or willful misconduct of the Administrative Agent, the Issuing Bank or such Lender or to the extent the Person seeking indemnification hereunder is determined to have materially breached its obligations hereunder or under the other Loan Documents, as the case may be, as determined by a final non-appealable order of a court of competent jurisdiction, and (y) the Borrower shall not have indemnification obligations hereunder with respect to claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, which relate to disputes solely among Persons entitled to indemnification hereunder (other than a claim against the Issuing Bank acting in its capacity as such). This Section 2.16(k) shall survive termination of this Agreement, and shall not apply to Taxes other than any Taxes that represent loss, claims, or damages arising from any non-Tax claim. |
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(l) | For the purposes of Sections 8.2, 9.8, 9.12, 11.2, 11.3, 11.4, 11.16 and 11.18 of this Agreement, the Issuing Bank shall be deemed to be a Lender hereunder and shall have all the rights and benefits of a Lender thereunder. |
(m) | Subject to the appointment and acceptance of a successor issuer below, the Issuing Bank may resign as Issuing Bank upon sixty (60) days’ prior written notice to the Administrative Agent, the Lenders and the Borrower. If the Issuing Bank shall resign as Issuing Bank under this Agreement, then the Borrower shall appoint from among the Lenders with a Revolving Commitment a successor issuer of Letters of Credit, whereupon such successor issuer shall succeed to the rights, powers and duties of the Issuing Bank. At the time such resignation shall become effective, the Borrower shall pay to the resigning Issuing Bank all accrued and unpaid fees pursuant to Section 2.4(b)(i). The acceptance of any appointment as the Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory to the Borrower and the Administrative Agent and, from and after the effective date of such agreement, such successor Lender shall have all the rights and obligations of the previous Issuing Bank under this Agreement and the other Loan Documents. If none of the other Lenders with a Revolving Commitment accepts such appointment within ninety (90) days after the Issuing Bank submitted its notice of resignation, the Issuing Bank’s resignation shall still be effective if Issuing Bank determines in good faith that it is either unable or that it is commercially unreasonable for it to continue to issue Letters of Credit hereunder. After the resignation of the Issuing Bank hereunder, the resigning Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit. After any retiring Issuing Bank’s resignation as Issuing Bank, the provisions of this Agreement relating to the Issuing Bank shall inure to its benefit as to any actions taken or omitted to be taken by it (i) while it was Issuing Bank under this Agreement or (ii) at any time with respect to Letters of Credit issued by such Issuing Bank. |
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(n) | Notwithstanding anything to the contrary set forth in this Agreement, a Letter of Credit issued hereunder may contain a statement to the effect that such Letter of Credit is issued for the account of a Subsidiary of the Borrower; provided that, notwithstanding such statement, the Borrower shall be the actual account party for all purposes of this Agreement for such Letter of Credit and such statement shall not affect the Borrower’s reimbursement obligations hereunder with respect to such Letter of Credit. |
(o) | Unless otherwise expressly agreed by the Issuing Bank and the Borrower when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Standby Letter of Credit and (ii) the rules of the “Uniform Customs and Practice for Documentary Credits”, as most recently published by the International Chamber of Commerce shall apply to each commercial Letter of Credit. |
Section 2.17 Incremental Facility.
(a) | After the Closing Date and subject to the terms and conditions of this Agreement, the Borrower may request an Incremental Facility Commitment on any Business Day in the form of (i) one or more new Term Loan facilities and/or (ii) an increase in the existing Term Loan by sending notice thereof to the Administrative Agent for distribution to the Lenders; provided, however, (A) the aggregate principal amount of any Incremental Facility Loan during the term of this Agreement shall not exceed the Incremental Facility Amount, (B) after giving effect on a Pro Forma Basis to such Incremental Facility Loan and any Permitted Acquisition or Investment made with the proceeds thereof, the Consolidated Total Net Leverage Ratio shall be less than the maximum amount permitted pursuant to Section 7.8(a), (C) the Borrower may not request an Incremental Facility Commitment after the occurrence and during the continuance of an Event of Default, including, without limitation, any Event of Default that would result after giving effect to any Incremental Facility Loan and the anticipated use of proceeds thereof (unless the Lenders providing such Incremental Facility Loan otherwise agree), (D) (1) each request for an Incremental Facility Commitment shall be in a minimum principal amount of $5,000,000 and (2) on the effective date of the requested Incremental Facility Commitment (after giving effect thereto and the use of proceeds thereof) the aggregate principal amount of the outstanding Incremental Facility Loans shall not exceed the Incremental Facility Amount, (E) the maturity date for Incremental Facility Loans shall not be earlier than the date certain set forth in the definition of Term Loan Maturity Date, (F) the Weighted Average Life to Maturity of any Incremental Facility Loan shall not be shorter than the remaining Weighted Average Life to Maturity of the Term Loans and (G) except as set forth in this Section 2.17 with respect to maturity, amortization and all-in yield, any Incremental Facility Loans shall have the same terms as the existing Term Loans or shall have terms that are not more restrictive to the Borrower and its Subsidiaries than the terms applicable to the existing Term Loans. Any Incremental Facility Commitment shall be governed by the related Notice of Incremental Facility Commitment, this Agreement and the other Loan Documents. The Borrower may seek commitments in respect of the Incremental Facility Commitments from existing Lenders and other lenders reasonably satisfactory to the Administrative Agent. The decision of any Lender to provide an Incremental Facility Commitment to the Borrower shall be at such Lender’s sole discretion and shall be made in writing. No Lender shall have an obligation to participate in any Incremental Facility Commitment. Amendments to this Agreement that are required to give effect to an Incremental Facility shall only require the consent of the Borrower and Administrative Agent, except to the extent that a specific Lender’s consent is otherwise required with respect to an issuance by such Lender of any Incremental Facility Commitment. |
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(b) | Prior to the effectiveness of an Incremental Facility Commitment, the Borrower shall (i) deliver to the Administrative Agent for distribution to the Lenders a Notice of Incremental Facility Commitment in substantially the form of Exhibit F attached hereto and (ii) provide revised Projections to the Administrative Agent upon the reasonable request of the Administrative Agent, which shall be in substantially the same form as the Projections delivered to the Administrative Agent prior to the Closing Date and which shall set forth the Consolidated Total Net Leverage Ratio, after giving effect to such Incremental Facility Commitment (and the anticipated use of proceeds thereof). The Incremental Facility Commitment and each Loan made under the Incremental Facilities shall be in the form of and constitute an Advance that shall be made subject to all of the terms and conditions contained in this Agreement (including, without limitation, the conditions set forth in Section 3.2, except as otherwise provided in this Section 2.17) applicable to, and shall constitute and comprise a portion of, the Loans and Obligations and, except as otherwise provided in this Section 2.17, shall be on terms substantially consistent with, and no more favorable than, those applicable to the Term Loans. |
(c) | No Incremental Facility Commitment or Incremental Facility Loan shall by itself result in any reduction of the Revolving Commitment, Term Loan Commitment, Revolving Commitment Ratio or Term Loan Commitment Ratio of the Lender making such Incremental Facility Commitment. |
(d) | Incremental Facility Loans (i) subject to Section 2.17(a), shall be repaid as agreed to by the Borrower and the Lenders making such Incremental Facility Loans; (ii) shall for all purposes be Loans and Obligations hereunder and under the Loan Documents; (iii) shall, if requested by a Lender providing an Incremental Facility Commitment, be represented by Incremental Facility Notes in substantially the form of Exhibit F attached hereto; and (iv) shall rank pari passu with the other Loans for purposes of Sections 2.10 and 8.2. |
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(e) | Subject to Section 2.17(a), unless otherwise agreed by the Credit Parties and the Administrative Agent, Incremental Facility Loans shall be subject to the pricing, interest rate and amortization provisions of this Agreement then applicable to Term Loans; provided, the interest rate margins (excluding arrangement, commitment, structuring and underwriting fees and amendment fees and other similar fees, in each case, not generally shared with other Lenders), upfront fees, original issue discount (calculated based on a four (4) year life to maturity) and the LIBOR floor, if any, applicable to an Incremental Facility Loan shall not be greater than the highest margin that may, under any circumstances (other than in the case of the Default Rate), be payable with respect to the Loans, upfront fees, original issue discount and LIBOR floor, (provided, that such differential between interest rate floors will be equated to the applicable all-in-yield for purposes of determining whether an increase to the interest rate under the initial Term Loan will be required, but only to the extent an increase in the interest rate floor in the initial Term Loan would cause an increase in the interest rate then in effect thereunder, and in such case, the interest rate floor (but not the interest rate margin) applicable to the initial Term Loan will be increased to the extent of such differential between interest rate floors if any, payable with respect to the Term Loans) plus 0.50% per annum, unless the interest rate with respect to the preexisting Loans is increased so as to be equal to the interest rate applicable to the applicable Incremental Facility Loan minus 0.50% per annum. Upon the making of an Incremental Facility Loan, such Loans shall for all purposes be deemed to be Term Loans hereunder. |
(f) | Incremental Facility Loans shall be requested by the Borrower pursuant to a request (which shall be in substantially the form of a Request for Advance) delivered in the same manner as a Request for Advance, but shall be funded pro rata only by those Lenders or Persons holding the related Incremental Facility Commitment, as applicable. |
(g) | Each of the Credit Parties and the Lenders shall execute and deliver such agreements, documents and instruments reasonably requested by Administrative Agent to effectuate all of the foregoing provisions of this Section 2.17; provided that, any opinion of counsel requested by the Administrative Agent in connection with an Incremental Facility Commitment may contain the qualification that no opinion is given with respect to the most favored nations provision set forth in clause (e) above. |
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(h) | Notwithstanding anything to the contrary herein, if the proceeds of any Incremental Facility Loans will be used to consummate a Permitted Acquisition and the Borrower so elects and the Lenders providing such Incremental Facility Loan so agree, (x) in clause (a)(B) above shall apply only at the time the as of the date the definitive acquisition agreement (the “Subject Acquisition Agreement”) in respect thereof is executed (after giving effect on a Pro Forma Basis to the Incremental Facility Loan and the Permitted Acquisition or Investment as though they had occurred on such date), (y) the condition that at the time any Incremental Facility Loans are made (and after giving effect thereto), no Default or Event of Default shall exist, shall be limited to a condition that no Event of Default under Section 8.1(b), (f) or (g) shall exist at such time; provided that no Default or Event of Default shall exist as of the date the Subject Acquisition Agreement is executed (after giving effect on a Pro Forma Basis to the Incremental Facility Loan and the Permitted Acquisition or Investment as though they had occurred on such date) and (z) the condition that the representations and warranties of the Borrower and each other Credit Party contained in Article 4 or any other Loan Document shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) at the time that any such Incremental Facility Advance is made (and after giving effect thereto), shall be limited to the accuracy of the representations and warranties that would constitute Specified Representations and the representations in the Subject Acquisition Agreement made by or with respect to the acquisition target, its subsidiaries and their respective businesses that are material to the interests of the Lenders, but only to the extent that the Borrower or an Affiliate of the Borrower has the right to terminate its or their obligations under the Subject Acquisition Agreement or to decline to consummate such Permitted Acquisition as a result of a breach of such representations in the Acquisition Agreement. |
Section 2.18 Change of Lending Office. Each Lender and the Issuing Bank agrees that, if any Lender or the Issuing Bank requests compensation or requires the Borrower to pay an additional amount under Sections 2.10(b) through (d), 2.13, 2.16(h) or Article 10 with respect to such Lender or the Issuing Bank, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender or Issuing Bank) to designate another lending office for any Loans or Letters of Credit affected by such event, provided that such designation is made on such terms that such Lender or Issuing Bank and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 2.18 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 2.10(b) through (d), 2.13, 2.16(h) or Article 10.
Section 2.19 Swing Line Loans.
(a) | Each Swing Line Loan shall be in a minimum amount of (i) $100,000 and in an integral multiple of $50,000, and shall be made upon notice given not later than 11:00 A.M. (New York, New York time) by the Borrower to the Administrative Agent and the Swing Line Lender. Each notice of a Swing Line Loan shall be in substantially the form of Exhibit L shall be irrevocable and binding on the Borrower once given by it to the Administrative Agent and the Swing Line Lender, and shall specify (i) the date of the Swing Line Loan and (ii) the amount of the Swing Line Loan. Upon fulfillment of the applicable conditions set forth in Section 3.2, the applicable Swing Line Lender will, upon notice to the Administrative Agent, make such funds available to the Borrower in accordance with Article 2. |
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(b) | Upon the earlier to occur of (i) the last Business Day of each calendar week and (ii) a request by the Swing Line Lender (at any time in its sole and absolute discretion) on behalf of the Borrower (and the Borrower hereby irrevocably authorizes the Swing Line Lender to so request on its behalf) for the Revolving Lenders to make an Advance to refinance a Swing Line Loan, upon notice to the Administrative Agent by the Swing Line Lender no later than 11:00 A.M. (New York, New York time) on the applicable date of such requested Advance, each Revolving Lender shall make a Base Rate Advance payable to the Swing Line Lender in an amount equal to such Revolving Lender’s pro rata share of the amount of Swing Line Loans made by the Swing Line Lender then outstanding and all accrued but unpaid interest thereon. The occurrence of either (i) or (ii) above shall be deemed to be a Request for Advance for purposes hereof and shall be made in accordance with the provisions of Section 2.2 without regard to the minimum amounts or the timing of requests specified therein or the satisfaction of the conditions set forth in Section 3.2. |
(c) | If for any reason any Swing Line Loan cannot be refinanced by an Advance as contemplated by Section 2.19(b), each Revolving Lender shall be deemed to have purchased an undivided participation in the relevant Swing Line Loan and the Swing Line Lender shall be deemed to have requested that each of the Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.19(b) shall be deemed payment in respect of such participation. |
(d) | If and to the extent that any Revolving Lender shall not have made the amount of its pro rata share of such Swing Line Loan available to the Administrative Agent in accordance with the provisions of Section 2.19(c), such Revolving Lender agrees to pay to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of the deemed Request for Advance pursuant to Section 2.19(b) until the date such amount is paid to the Administrative Agent, for the account of the applicable Swing Line Lender, at the Federal Funds Rate. |
(e) | Each Revolving Lender’s obligation to make Base Rate Advances or to purchase and fund risk participations in a Swing Line Loan pursuant to this Section 2.19 shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default, or (iii) any other occurrence, event or condition, whether or not similar to any of the foregoing. No funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein. |
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness. The effectiveness of this Agreement and the Commitments hereunder and the obligations to make the Loans or issue Letters of Credit on the Closing Date are subject to the prior or substantially contemporaneous fulfillment or waiver of each of the following conditions:
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(a) | The Administrative Agent and the Lenders shall have received each of the following: |
(i) | this Agreement and the Subsidiary Guaranty, each duly executed and delivered and which shall be in full force and effect; |
(ii) | duly executed Security Documents together with all filings, documents and instruments necessary to confirm the perfection of the Administrative Agent’s Liens on the Collateral with the priority required hereby, and all of the pledged Collateral, if any, referred to in the Security Documents and then owned by any Credit Party, together with executed and undated endorsements for transfer in the case of pledged Collateral constituting securities, along with evidence that all other actions necessary to perfect (to the extent required by the Security Documents) the Lien on the pledged Collateral purported to be created by the Security Documents have been taken; |
(iii) | a duly executed Perfection Certificate; |
(iv) | duly executed Notes for any Lender that requests Notes at least three (3) Business Days prior to the Closing Date; |
(v) | duly executed certificate of the secretary (or similar Authorized Signatory) of each Credit Party dated as of the Closing Date, including a certificate of incumbency with respect to two or more than two Authorized Signatories of such Person, together with the following items: (A) a true, correct and complete copy of each Organizational Document of such Credit Party as in effect on the Closing Date, (B) certificates of status (or equivalent) for such Credit Party issued by the Secretary of State or similar state official for the state of incorporation, formation or organization of such Credit Party, as applicable, and (C) a true, complete and correct copy of the corporate or other organizational resolutions of such Credit Party authorizing such Credit Party, as applicable, to execute, deliver and perform the Loan Documents to which such Credit Party is a party; |
(vi) | legal opinions of DLA Piper LLP (US), counsel to the Credit Parties in form and substance reasonably acceptable to the Administrative Agent; |
(vii) | duly executed Solvency Certificate demonstrating that upon the initial funding of the Loans, on a consolidated basis, the Borrower shall be Solvent; |
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(viii) | (A) upon the reasonable written request of any Lender or the Administrative Agent made at least ten (10) Business Days prior to the Closing Date, documentation and other information so requested in connection with applicable “know your customer” and Anti-Money Laundering Laws, including the Patriot Act, in each case, at least three (3) Business Days prior to the Closing Date, and (B) upon the written request of any Lender or the Administrative Agent made at least five (5) Business Days prior to the Closing Date, if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification in relation to the Borrower at least three (3) Business Days prior to the Closing Date; |
(ix) | (A) a customary pro forma balance sheet and pro forma income statements for the Borrower and its Subsidiaries as of the last day and for the most recent period of four (4) consecutive Fiscal Quarters ending at least forty-five (45) days prior to the Closing Date; (B) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2019, (C) an unaudited balance sheet and related statements of operations and cash flows of the Borrower and its Subsidiaries for each Fiscal Quarter subsequent to December 31, 2018, and ended at least forty-five (45) days prior to the Closing Date and (D) an unaudited balance sheet and related statements of operations and cash flows of the Sweetener Business of Flavors Holdings Inc. and the Licorice Business of Flavors Holdings Inc. for each Fiscal Quarter ended on or after March 31, 2020, but solely to the extent such Fiscal Quarter has ended at least forty-five (45) days prior to the Closing Date; |
(x) | a duly executed and delivered Request for Advance (and, if applicable, a duly executed and delivered Request for Issuance of Letter of Credit); |
(xi) | Lien search results with respect to the Borrower and its Subsidiaries reasonably satisfactory to the Administrative Agent; |
(xii) | reasonably satisfactory evidence that all guarantees of the Existing Credit Agreements (as defined in the Acquisition Agreement) by the Target and its Subsidiaries have been terminated or will be terminated substantially concurrently with the funding of the initial Advances hereunder and all Liens shall thereupon be released; |
(xiii) | duly executed payoff letters, in form and substance reasonably acceptable to the Administrative Agent, or other evidence reasonably satisfactory to the Administrative Agent that all other Indebtedness of the Borrower and its Subsidiaries and the Target and its Subsidiaries shall have been repaid in full, and all commitments in respect thereof terminated, and all guarantees and security therefor shall have been discharged and released, other than the Indebtedness that is permitted to remain in effect under the terms of the Acquisition Agreement; |
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(xiv) | evidence satisfactory to the Administrative Agent that none of the Collateral shall be subject to any other Lien, except for Permitted Liens and Liens securing Indebtedness that will be refinanced in full and to be released concurrently with the funding of the initial Advances hereunder; and |
(xv) | the use of commercially reasonable efforts to provide customary evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect and all premiums thereon paid and that the Administrative Agent has been named as lenders loss payee and/or additional insured, as applicable, under each appropriate insurance policy to the extent required hereunder. |
(b) | Transaction. |
(i) | Substantially concurrent with the initial funding of the Term Loans (1) the Borrower shall have received an equity contribution in the aggregate amount of at least $210,000,000 (the “Borrower Equity Contribution”), which when combined with, without duplication, the equity interests of Act II Sponsor LLC, a Delaware limited liability company, and the Purchaser Ordinary Shares Consideration (as defined in the Acquisition Agreement) (the “Sellers Equity Rollover”) shall constitute the Minimum Equity Amount, (2) the Sellers Equity Rollover shall have occurred and (3) the refinancing and repayment of the existing Indebtedness for Money Borrowed of the Target shall have occurred other than as set forth on Schedule 7.1 or as permitted by Section 7.1(c) (with all applicable related liens and guarantees to be released and terminated or customary provisions therefor made). For the purposes of this clause (b), the “Minimum Equity Amount” shall be an amount that is not less than sixty-five percent (65.0%) of the sum, without duplication, of (A) the aggregate gross proceeds of the Term Loans to be borrowed on the Closing Date plus (B) the Borrower Equity Contribution plus (C) the Sellers Equity Rollover. |
(ii) | The Transaction shall have been consummated pursuant to the Acquisition Agreement without any alteration, amendment or other change, supplement or waiver thereto, or any consent having been given, in the case of any of the foregoing in a manner which would be materially adverse to the Lenders (in their capacities as such), the Joint Lead Arrangers and Joint Bookrunners or the Administrative Agent, unless consented to in writing by the Administrative Agent, such consent not to be unreasonably withheld, delayed or conditioned; provided that (I) any decrease of less than ten percent (10%) in such purchase price shall not be deemed to be materially adverse to the interests of the Lenders so long as such decrease is allocated, first, to reduce the Borrower Equity Contribution to an amount not less than the greater of (x) the Minimum Equity Amount and (y) $210,000,000 and, thereafter, as a reduction of the Term Loan Commitment, (II) any increase in the purchase price shall not be materially adverse to the interests of the Lenders so long as such increase is funded by an increase in the Borrower Equity Contribution or other cash equity proceeds; and (III) any modifications to the second sentence of Section 10.7 of the Acquisition Agreement or (to the extent that the Acquisition Agreement provides that a modification, waiver or termination thereof would require the approval in writing of the Administrative Agent) any provision or definition referenced therein, or the definition of “Material Adverse Effect” in, the Acquisition Agreement shall be deemed to be materially adverse to the interests of the Administrative Agent. |
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(iii) | The Administrative Agent shall have been provided with a copy of each alteration, amendment or other change, supplement or waiver to the Acquisition Agreement, or any consent with respect thereto, that could reasonably be expected to impact the interests of the Lenders, the Joint Lead Arrangers and Joint Bookrunners or the Administrative Agent. |
(c) | The Specified Acquisition Representations shall be true and correct, and the Specified Representations shall be true and correct in all material respects (in each case, any representation or warranty that is qualified as to “materiality” or similar language shall be true and correct in all respects on the Closing Date). |
(d) | Since September 30, 2019, except as set forth on Section 3.10 of the Sellers Disclosure Schedule (as defined in the Acquisition Agreement) or as expressly contemplated in the Acquisition Agreement, there has not occurred any Closing Date Material Adverse Effect. |
(e) | The Borrower shall certify to the Administrative Agent and the Lenders as to the satisfaction of the conditions in Section 3.1(b), (c) and (d). |
(f) | The Borrower shall have paid to the Administrative Agent all outstanding costs, fees, expenses (to the extent due and invoiced at least three (or such shorter period as agreed between the Borrower and the Administrative Agent) Business Days prior to the Closing Date) and other compensation required to be paid to TD Securities (USA) LLC, the Administrative Agent or the Lenders to the extent then due and payable hereunder or as set forth in the Fee Letter. |
Notwithstanding the foregoing, to the extent any Lien in the intended Collateral (other than any Collateral the Lien on which may be perfected by the filing of a UCC financing statement, the filing of intellectual property security agreements in connection with any material intellectual property with the United States Patent and Trademark Office and the United States Copyright Office or the delivery of stock certificates or equivalent instruments together with stock powers or equivalent instruments of transfer executed in blank) is not provided or perfected on the Closing Date after the Credit Parties’ use of commercially reasonable efforts to do so, the perfection of such Lien will not constitute a condition precedent to the making of any Advance on the Closing Date.
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For purposes of determining compliance with this Section 3.1 on the Closing Date, each Lender or the Issuing Bank that has funded its Loans or issued a Letter of Credit on the Closing Date shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice from such Lender or the Issuing Bank prior to the proposed Closing Date specifying its objection thereto.
The acceptance of any Loan or Letter of Credit shall be deemed to be a representation and warranty by the Borrower as to compliance with this Section 3.1 on the Closing Date.
Section 3.2 Conditions Precedent to Each Advance after the Closing Date. Except as otherwise expressly provided herein (including pursuant to Section 2.17), the obligation of the Lenders to make each Advance after the Closing Date (other than in connection with a Continuation or Conversion) is subject to the fulfillment or waiver of each of the following conditions immediately prior to or substantially contemporaneously with such Advance:
(a) | All of the representations and warranties of the Borrower under this Agreement and the other Loan Documents (including, without limitation, all representations and warranties with respect to the Borrower’s Subsidiaries), which, pursuant to Section 4.2, are made at and as of the time of such Advance (except to the extent relating specifically to a specific prior date), shall be true and correct at such time in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect qualifier, such representation or warranty shall be true and correct in all respects), both before and after giving effect to the application of the proceeds of such Advance, and after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties; except that for purposes of this Section 3.2, the representations and warranties contained in Section 4.1(v) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.1 and 6.2, respectively; |
(b) | No Default or Event of Default hereunder shall exist at the time of such Advance or be caused thereby; |
(c) | The Administrative Agent shall have received a duly executed Request for Advance; |
(d) | The Consolidated Total Net Leverage Ratio calculated on a Pro Forma Basis shall be less than the maximum amount permitted pursuant to Section 7.8(a); and |
(e) | At the time of, and after giving pro forma effect to, any Advance requested under the Revolving Commitment the total amount of outstanding Revolving Loans and Letter of Credit Obligations shall not exceed the Revolving Commitment and the outstanding principal balance of the Swing Line Loans shall not exceed the Swing Line Commitment. |
For purposes of determining compliance with this Section 3.2 on the date of any Advance, each Lender that has funded its Loans on the date of such Advance shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice from such Lender or the Issuing Bank prior to the proposed date of such Advance specifying its objection thereto.
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The acceptance of proceeds of any Advance which would increase the aggregate principal amount of Loans outstanding shall be deemed to be a representation and warranty by the Borrower as to compliance with this Section 3.2 (to the extent applicable with respect to the requested Advance) on the date any such Loan is made.
Section 3.3 Conditions Precedent to Issuance of Letters of Credit. The obligation of the Issuing Bank to issue each Letter of Credit hereunder after the Closing Date is subject to the fulfillment or waiver of each of the following conditions immediately prior to or substantially contemporaneously with such issuance.
(a) | All of the representations and warranties of the Borrower under this Agreement and the other Loan Documents (including, without limitation, all representations and warranties with respect to the Borrower’s Subsidiaries), which, pursuant to Section 4.2, are made at and as of the time of issuance of such Letter of Credit (except to the extent relating specifically to a specific prior date), shall be true and correct at such time in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect qualifier, such representation or warranty shall be true and correct in all respects), both before and after giving effect to the issuance of such Letter of Credit, and after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties, except that for purposes of this Section 3.3, the representations and warranties contained in Section 4.1(v) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.1 and 6.2, respectively; |
(b) | There shall not exist, on the date of the issuance of such Letter of Credit and after giving effect thereto, a Default or Event of Default hereunder and the Administrative Agent shall have received a Request for Issuance of Letter of Credit so certifying; |
(c) | On the date of such issuance, after giving effect to the issuance requested, the total amount of outstanding Revolving Loans, Swing Line Loans and Letter of Credit Obligations shall not exceed the Revolving Commitment; and |
(d) | Each of the Administrative Agent and the Issuing Bank shall have received all such other certificates, statements or other documents as the Administrative Agent or the Issuing Bank may request with respect to such Letter of Credit and the use thereof. |
The acceptance of any Letter of Credit shall be deemed to be a representation and warranty by the Borrower as to compliance with this Section 3.3 on the date any such Letter of Credit is issued.
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ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees, represents and warrants in favor of the Administrative Agent, the Issuing Bank and each Lender that (with respect to representations and warranties on the Closing Date, after giving effect to the Transaction):
(a) | Name; Organization; Ownership; Power; Qualification. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and the Domestication has occurred. Each Subsidiary of the Borrower is duly organized, validly existing and (as applicable) in good standing under the laws of the jurisdiction of its incorporation, formation or organization. The Borrower has the corporate power and authority to own its properties and to carry on its business as now conducted. Each Subsidiary of the Borrower has the corporate, limited liability company or limited partnership power and authority (as applicable) to own its properties and to carry on its business as now conducted. The Borrower and each of its Subsidiaries is duly qualified, in good standing and authorized to do business in each jurisdiction in which the character of their respective properties or the nature of their respective businesses requires such qualification or authorization, except where failure to be in good standing, or to be so qualified or licensed, in the aggregate, would not reasonably be expected to have a Materially Adverse Effect. The name of the Borrower and each other Credit Party as it appears in official filings in the jurisdiction of its incorporation, formation or other organization, the type of entity of the Borrower and each other Credit Party (including corporation, partnership, limited partnership or limited liability company), organizational identification number issued by the jurisdiction of incorporation, formation or organization of the Borrower and each other Credit Party or a statement that no such number has been issued by the jurisdiction of organization or incorporation, the location of the chief executive office of the Borrower and each other Credit Party, in each case, as of the Closing Date, is set forth on Schedule 6 attached hereto. The Borrower and each of its Subsidiaries has only one jurisdiction of incorporation, formation or organization. |
(b) | Authorization; Enforceability. The Borrower has the corporate power and has taken all necessary corporate action to borrow hereunder, to execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms, and to consummate the transactions contemplated hereby and thereby. This Agreement and the other Loan Documents to which Borrower is a party have been duly executed and delivered by the Borrower and are legal, valid and binding obligations of the Borrower, enforceable against the Borrower, in accordance with their respective terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity. |
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(c) | The Borrower and Subsidiaries: Authorization; Enforceability. On and after the Closing Date, to the extent that the Borrower has any Subsidiaries, the Borrower, directly or indirectly, has the unrestricted right to vote the issued and outstanding Ownership Interests of the Subsidiaries, owned by the Borrower and such Ownership Interests of such Subsidiaries has been duly authorized and issued and is fully paid and, to the extent applicable, non-assessable. Each Subsidiary of the Borrower that is a Credit Party has the power and has taken all necessary corporate or other organizational action to authorize it to execute, deliver and perform each of the Loan Documents to which it is a party in accordance with their respective terms and to consummate the transactions contemplated by this Agreement and by such Loan Documents. Each of the Loan Documents to which any Subsidiary of the Borrower is a party is a legal, valid and binding obligation of such Subsidiary, enforceable against such Subsidiary, in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity. |
(d) | Non-Contravention; Governmental Authorizations; Other Consents. The execution, delivery and performance, in accordance with their respective terms, by the Borrower of this Agreement and the Notes, as applicable, and by the Borrower or the other Credit Parties of each of the other Loan Documents to which they are respectively party, and the consummation of the transactions contemplated hereby and thereby, do not and will not (i) require any consent, approval, authorization, permit or license, governmental or otherwise, not already obtained, except as would not reasonably be expected to have a Materially Adverse Effect, (ii) violate any Applicable Law respecting the Borrower or any of its Subsidiaries except as would not reasonably be expected to have a Materially Adverse Effect, (iii) conflict with, result in a breach of, or constitute a default under the Organizational Documents of the Borrower or any of its Subsidiaries, (iv) result in a breach of, or constitute a default under any material indenture, agreement, or other instrument, to which the Borrower or any of its Subsidiaries is a party or by which any of them or their respective properties may be bound except where such breaches or defaults, individually or in the aggregate, would not reasonably be expected to have a Materially Adverse Effect, or (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any of its Subsidiaries, except for Permitted Liens. |
(e) | Business. The Borrower and its Subsidiaries are engaged solely in the business in which they are engaged on the Closing Date and business reasonably related or ancillary, complementary or incidental thereto or representing a reasonable expansion thereof. As of the Closing Date, the Borrower and its Subsidiaries own no real property having a fair market value in excess of $7,500,000. |
(f) | Necessary Authorizations. The Borrower and its Subsidiaries have secured all Necessary Authorizations and none of the Necessary Authorizations are the subject of any pending or, to the Borrower’s Knowledge, threatened (in writing) revocation, except where the failure to secure such Necessary Authorization or the failure of such Necessary Authorization to be in full force and effect would not reasonably be expected to have a Materially Adverse Effect. |
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(g) | Compliance with Laws; Data Privacy and Security; Food and Drug Laws. |
(i) | Laws Generally. The Borrower and its Subsidiaries are in compliance with all Applicable Law, except where the failure to be in compliance would not individually or in the aggregate reasonably be expected to have a Materially Adverse Effect. |
(ii) | Data Security. Except as individually or in the aggregate would not reasonably be expected to have a Materially Adverse Effect, (i) the Borrower and each of its Subsidiaries has complied with all Applicable Laws related to data security, and the protection, use, storage, handling and processing of Personal Information, (ii) the Borrower and each of its Subsidiaries has implemented and is in compliance with technical and organizational measures to assure the integrity and security of (a) transactions executed through its computer systems, and of (b) all confidential or proprietary data, including Personal Information, possessed or retained by or on behalf of the Borrower or any Subsidiary, (iii) there has been no actual or alleged breach of security or unauthorized access to or acquisition, use, loss, destruction, compromise or disclosure of any Personal Information, confidential or proprietary data or any other such information maintained or stored by, or on behalf of, the Borrower or any Subsidiary involving data of suppliers, customers or other Persons and (iv) there have been no facts or circumstances that would require the Borrower or any Subsidiary to give notice to any suppliers, consumers or other Persons of any actual or perceived data security breaches pursuant to the requirements of all Applicable Laws requiring notice of such a breach. |
(iii) | Data Privacy. Except as individually or in the aggregate would not reasonably be expected to have a Materially Adverse Effect, (i) the Borrower and its Subsidiaries are in compliance with all Applicable Laws, statutes, judgments, orders, rules, regulations, contractual obligations, and internal and published corporate policies and procedures governing the privacy, security, collection, use, storage, processing, disclosure, transmission, and sharing of all Personal Information, (ii) the Borrower and its Subsidiaries have provided all notices and obtained all consents as required by Applicable Law, and (iii) no Person has brought any complaint, claim, or action against the Borrower and its Subsidiaries regarding any alleged violation under Applicable Law regarding their Personal Information. |
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(iv) | Food and Drug Laws. Except as individually or in the aggregate would not reasonably be expected to have a Materially Adverse Effect, (A) the Borrower and its Subsidiaries’ Food Product and Drug business and operations are, and during the previous three (3) years have been, in compliance with all applicable requirements of the Food and Drug Laws, (B) none of the Food Product and/or Drugs manufactured or sold by the Borrower and its Subsidiaries poses a threat to the health or safety of a consumer when used in the intended manner, (C) there exists, and has existed at all relevant times, substantiation meeting the standards of the relevant regulatory bodies of the jurisdictions in which the Food Product or Drug are sold for any and all claims of the products produced, distributed or sold by the Borrower or any of its Subsidiaries, (D) the Borrower and its Subsidiaries are not aware of any condition, event or circumstance that could reasonably be expected to prevent or impede compliance with any Food or Drug Permit or interfere with the compliant manufacture and sale of Food Products and/or Drugs by such Person as currently carried out and (E) none of the Borrower or its Subsidiaries or the facilities in which any of the Food Product and/or Drugs manufactured or sold by the Borrower and its Subsidiaries are made or handled are now subject (and none of the foregoing have been subject during the previous three (3) years) to any adverse inspection by a Governmental Entity, finding, recall, investigation, penalty assessment, audit or other compliance or enforcement action related to a Food Product or Drug by the FDA, any state authority, or any other Governmental Entity having responsibility for the regulation of Food Products and/or Drugs. |
(v) | Packers and Stockyards Act. No Credit Party or any Subsidiary of any Credit Party is a “live poultry dealer” (as such term is defined in the PSA) or otherwise purchases or deals in live poultry of any type whatsoever. No Credit Party or any Subsidiary of any Credit Party purchases livestock pursuant to “cash sales” (as such term is defined in the PSA). No Credit Party or any Subsidiary of any Credit Party is subject to the trust provisions of the PSA. No Credit Party or any Subsidiary of any Credit Party is engaged in, or shall engage in, raising, cultivating, propagating, fattening, grazing or any other farming, livestock or agricultural operations. |
(vi) | Perishable Agricultural Commodities Act (PACA). No Credit Party or any Subsidiary of any Credit Party is subject to PACA. |
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(h) | Environmental Laws. None of the Borrower or its Subsidiaries, or, to such Person’s Knowledge, any of their respective owned or leased real property or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any violation of Environmental Law, any Environmental Claim, or any Hazardous Materials Activity, in each case, that, individually or in the aggregate, would reasonably be expected to have a Materially Adverse Effect. To the Borrower’s Knowledge, there are no unremedied conditions, occurrences, or Release which would reasonably be expected to form the basis of an Environmental Claim against, the Borrower or any of its Subsidiaries that, in either case, individually or in the aggregate, would reasonably be expected to have a Materially Adverse Effect. Within the past five (5) years, none of the Borrower or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any owned or leased real property of any Credit Party, and, to the Borrower’s Knowledge, no such Person’s operations involve the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under Environmental Laws, in either case, that, individually or in the aggregate, would reasonably be expected to have a Materially Adverse Effect. The Borrower and its Subsidiaries are in compliance with all Environmental Laws, except where the failure to be in compliance would not be reasonably expected to have, individually or in the aggregate, a Materially Adverse Effect. To the Borrower’s Knowledge, no event or condition has occurred and is continuing with respect to the Borrower or any of its Subsidiaries relating to any violation of any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which, in each case, individually or in the aggregate has had, or would reasonably be expected to have, a Materially Adverse Effect. |
(i) | Title to Assets. |
(i) Each of the Borrower and its Subsidiaries has good, legal title to, or a valid leasehold interest in, all of its material personal and real property (in each case, subject to Permitted Liens and immaterial defects or irregularities in title which would not reasonably be expected to have a Materially Adverse Effect) necessary to operate the business in which they are engaged on the Closing Date. The assets of the Borrower and its Subsidiaries are not subject to any Liens, except for Permitted Liens. Except for financing statements evidencing Permitted Liens, none of the Borrower nor any of its Subsidiaries has authorized, pursuant to a security agreement or otherwise, the filing of any financing statement in any state or other jurisdiction under the UCC as in effect in any jurisdiction which names the Borrower or any of its Subsidiaries as debtor or which covers or purports to cover any of the assets of the Borrower or any of its Subsidiaries.
(ii) | The owned and leased real property of the Credit Parties listed on Schedule 7 attached hereto as of the Closing Date and, after the Closing Date, described in any Compliance Certificate delivered hereunder as of the date of such Compliance Certificate, constitute all of the material real property owned, leased, subleased, or used by the Credit Parties. Each of the Borrower and each other Credit Party owns good fee simple title (subject to Permitted Liens) to all of its owned locations, if any, and valid leasehold interests (subject to Permitted Liens), in all of its material leased locations, all as described on Schedule 7 attached hereto as of the Closing Date or as described in any Compliance Certificate delivered hereunder as of the date of such Compliance Certificate. None of the locations owned by any of the Borrower or any of its Subsidiaries, if any, is subject to any Liens other than Permitted Liens. No portion of the locations of any of the Borrower or any of its Subsidiaries has suffered any material damage by fire, hurricane or other casualty loss that has not heretofore been repaired and restored in all material respects or otherwise remedied, in each case, except where the failure to repair or restore would not reasonably be expected to have a Materially Adverse Effect. All permits required to have been issued or appropriate to enable the locations to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect, except where the failure to obtain or maintain such permits would not reasonably be expected to have a Materially Adverse Effect. |
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(j) | No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Entity is pending or, to the Knowledge of the Borrower, threatened in writing by or against the Borrower or any of its Subsidiaries or against any of its or their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated thereby or (b) which would reasonably be expected to have a Materially Adverse Effect. |
(k) | Taxes. All federal, state or local income tax returns and other material tax returns (or any extensions thereof) of the Borrower and each of its Subsidiaries required by Applicable Law to be filed have been duly filed and all such returns accurately reflect in all material respects all tax liabilities of each respective Credit Party and Subsidiary thereof for the periods covered thereby. All federal, state, and other income and non-income Taxes, including, without limitation, withholding taxes, assessments and other governmental charges or levies required to be withheld, remitted or paid by the Borrower or any of its Subsidiaries or imposed upon the Borrower or any of its Subsidiaries or any of their respective properties, income, profits or assets, which are due and payable, have been properly withheld, remitted, or paid, except any such Taxes (i) the payment of which the Borrower or any of its Subsidiaries is diligently contesting in good faith, (ii) for which adequate reserves have been provided on the appropriate books and (iii) as to which no Lien other than a Permitted Lien has attached and no foreclosure, distraint, sale or similar proceedings have been commenced. The charges, accruals and reserves on the books of the Borrower and each of its Subsidiaries in respect of taxes are, in the reasonable judgment of the Borrower, adequate in accordance with GAAP. |
(l) | No Materially Adverse Change. There has occurred no event or occurrence since December 31, 2019, which has had or which would reasonably be expected to have a Materially Adverse Effect. |
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(m) | Plans. |
(i) Each Plan is in compliance with the applicable provisions of ERISA, the Code, and other Federal and state laws except where failure to comply would not reasonably be expected to have a Materially Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the United States Internal Revenue Service (“IRS”) (or the time period for making an application for such a letter to the IRS with respect thereto has not expired) and, to the Knowledge of the Borrower, except as would not reasonably be expected to have a Materially Adverse Effect, nothing has occurred which would reasonably be expected to prevent, or cause the loss of, such qualification. Except as would not reasonably be expected to have a Materially Adverse Effect, (A) each Plan (other than a Multiemployer Plan) to which Section 412 of the Code or Section 302 of ERISA applies has satisfied the requirements of Sections 412, 430 and 436 of the Code and Sections 302 and 303 of ERISA, and (B) no such Plan has a “funding shortfall” within the meaning of Section 430(c) of the Code or Section 303(c) of ERISA or is in “at-risk status” within the meaning of Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA or subject to the limitations of Section 436 of the Code. Except as would not reasonably be expected to have a Materially Adverse Effect, (x) no Plan has or has incurred an accumulated funding deficiency within the meaning of Section 302 of ERISA or Section 412 of the Code, nor (y) has any waiver of the minimum funding standards of Section 302 of ERISA and Section 412 of the Code been requested of or granted by the IRS with respect to any Plan, nor (z) has any Lien in favor of any Plan arisen under Section 412(n) or 430(k) of the Code or Section 302(f) or 303(k) of ERISA.
(ii) There are no pending or, to the Knowledge of the Borrower, threatened (in writing) claims, actions, or lawsuits, or action by any Governmental Entity, with respect to any Plan that would reasonably be expected to have a Materially Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or would reasonably be expected to have a Materially Adverse Effect.
(iii) Except as would not reasonably be expected to have a Materially Adverse Effect: (A) no ERISA Event has occurred or is reasonably expected to occur; (B) the Borrower and the other Credit Parties have not incurred, and do not reasonably expect to incur, any liability under Section 409, 502(i), 502(l), or Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA) or under Section 401(a)(29), 4971 or 4975 of the Code; (C) the Borrower and the other Credit Parties have not incurred, and do not reasonably expect to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, could result in such liability) under Section 4201 of ERISA with respect to a Multiemployer Plan; (D) the Borrower and the other Credit Parties have not engaged in a transaction that would reasonably be expected to be subject to Section 4069 or 4212(c) of ERISA; and (E) no event described in Section 4062(e) of ERISA has occurred with respect to any such Plan.
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(iv) No Lien imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary of the Borrower exists or is likely to arise on account of any Plan, and, with respect to any ERISA Affiliate, no such Lien exists or is likely to arise on account of any Plan to the extent any such Lien would be reasonably likely to result in a Materially Adverse Effect on the Borrower or any Subsidiary of the Borrower.
(v) With respect to any Foreign Plan, except as would not reasonably be expected to have a Materially Adverse Effect: (A) all employer and employee contributions required by law or by the terms of the Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices and neither the Borrower nor any of its Subsidiaries has incurred any unpaid obligation in connection with the termination of, or withdrawal from, any Foreign Plan; (B) the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the accrued benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted accounting principles; and (C) it has been registered as required and has been maintained in substantial compliance with its terms and with the requirements of any and all Applicable Laws and has been maintained, where required in good standing with applicable regulatory authorities.
(vi) The amount of unfunded liabilities associated with any retiree welfare benefits under all employee benefit plans within the meaning of Section 3(3) of ERISA maintained or contributed to by the Borrower or any Subsidiary of the Borrower would not reasonably be expected to have a Materially Adverse Effect.
(vii) As of the Closing Date, the Borrower is not an entity whose assets are deemed to be “plan assets” (within the meaning of the Plan Asset Regulations) and will not be using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Plans in connection with the Loans or the Commitments.
(n) | Compliance with Regulations T, U and X. None of the Borrower nor any of its Subsidiaries is engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying and none of the Borrower or its Subsidiaries owns or presently intends to acquire, any “margin security” or “margin stock” as defined in Regulations T, U and X (12 C.F.R. Parts 220, 221 and 224) of the Board of Governors of the Federal Reserve System (herein called “margin stock”). None of the proceeds of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute this transaction a “purpose credit” within the meaning of said Regulations T, U and X. The Borrower has not taken, caused or authorized to be taken, and will not take any action which might cause this Agreement, the Notes or any other Loan Documents to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as now in effect or as the same may hereafter be in effect. If so reasonably requested by the Administrative Agent, the Borrower will furnish the Administrative Agent with (i) a statement or statements in conformity with the requirements of Federal Reserve Forms G-3 and/or U-1 referred to in Regulation U of said Board of Governors and (ii) other documents evidencing its compliance with the margin regulations reasonably requested by the Administrative Agent. Neither the making of the Loans nor the use of proceeds thereof will violate, or be inconsistent with, the provisions of Regulation T, U or X of said Board of Governors. |
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(o) | Investment Company Act. None of the Borrower nor any of its Subsidiaries is an “Investment Company” or is a company “controlled” by an “Investment Company” as such terms are defined in the Investment Company Act of 1940, as amended, and neither the entering into or performance by the Borrower and its Subsidiaries of this Agreement and the Loan Documents nor the issuance of the Notes violates any provision of such Act or requires any consent, approval or authorization of, or registration with, the Securities and Exchange Commission or any other Governmental Entity pursuant to any provisions of such Act. |
(p) | Absence of Default, Etc. The Borrower and its Subsidiaries are in compliance in all material respects with all of the provisions of their respective Organizational Documents. No default has occurred which has not been remedied or waived, the occurrence or non-occurrence of which constitutes (i) a default or event of default by the Borrower or any of its Subsidiaries under any indenture, agreement or other instrument relating to material Indebtedness of the Borrower or any of its Subsidiaries, or (ii) a default or event of default under any Material Contract, or any judgment, decree or order to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries or any of their respective properties may be bound or affected, in each case of (i) and (ii), which would reasonably be expected to have a Materially Adverse Effect. |
(q) | Accuracy and Completeness of Information. No written information, reports, prospectuses and other papers and data relating to the Borrower or any of its Subsidiaries and furnished by the Borrower or any of its Subsidiaries to the Administrative Agent or the Lenders (other than the Projections (as defined below), other financial projections, forecasts, budgets, forward-looking statements, information of a general economic or industry specific nature, and third-party generated data), when furnished and taken as a whole, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which such statements were made (except as supplemented, updated or corrected by subsequent information, reports, prospectuses and other papers and data provided prior to the next occurring Advance), and all projections, forecasts, budgets and other forward-looking statements of the Borrower and its Subsidiaries (including, without, limitation, forecasts and projected financial statements) (the “Projections”), (i) are based on estimates and assumptions that the Borrower believes in good faith to be reasonable at the time such Projections are prepared; and (ii) reflect, as of the date prepared, the Borrower’s good faith forecast of the results of operations and other information projected therein for the periods covered thereby (it being understood that Projections by their nature are inherently uncertain and no assurances can be given that the results reflected in the Projections will be achieved and that actual results may vary materially from such Projections). The Borrower has disclosed to the Administrative Agent and the Lenders all transactions in existence on the Closing Date between the Borrower or any of its Subsidiaries, on the one hand, and any Affiliate of the Borrower, on the other hand (other than transactions among the Borrower and its Subsidiaries) that would reasonably be expected to be material and adverse to the interests of the Lenders. |
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(r) | Priority. The Security Interest is a valid and, upon filing of appropriate UCC financing statements, will be a perfected first priority security interest (unless such security interest is subject to a first priority Permitted Lien) in favor of the Administrative Agent, for the benefit of the Secured Parties, in that portion of the Collateral in which a security interest may be perfected by filing a UCC financing statement, securing, in accordance with the terms of the Security Documents, the Obligations, and the Collateral is subject to no Liens other than Permitted Liens. Subject to the last paragraph of Section 3.1, the Liens created by the Security Documents are enforceable as security for the Obligations in accordance with their terms with respect to the Collateral subject, as to enforcement of remedies, to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law, and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors’ rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower or any of its Subsidiaries, as the case may be). |
(s) | Solvency. As of the Closing Date and after giving effect to the Transaction and the initial funding of the Advances on the Closing Date, the Borrower and its Subsidiaries, on a consolidated basis, will be Solvent. |
(t) | Patents, Trademarks, etc. The Borrower and each of its Subsidiaries owns, possesses, or otherwise has the right to use all material patents, trademarks (including Internet domain names), trademark rights, trade names, trade name rights, service marks, copyrights (including computer software), know-how, trade secrets and other intellectual property, necessary in the conduct its respective business as now conducted, subject to no Lien except for Permitted Liens. The conduct of such businesses do not infringe, misappropriate, violate, conflict with or dilute the intellectual property rights of any other Person, except as would not reasonably be expected to have a Materially Adverse Effect. All non-expired issued patents, pending patent applications, registered trademarks, pending trademark applications, registered trade names, registered copyrights and pending copyrights applications owned by any of the Borrower or any other Credit Party, together with all state, and/or federal application or registration numbers, as applicable, and any similar local law equivalents, as of the Closing Date are listed on Schedule 3 attached hereto. The issued patent, trademark registrations, and copyright registrations listed on Schedule 3, are, to the Knowledge of the Borrower, valid and enforceable as of the Closing Date, and no such registration or application on Schedule 3 is subject to any pending or threatened (in writing) proceeding challenging the validity, enforceability or the respective holder’s ownership or use of such item, in each case except as would not reasonably be expected to have a Materially Adverse Effect. |
(u) | Collective Bargaining. Other than as set forth on Schedule 4.1(u), as of the Closing Date, none of the Borrower or any of its Subsidiaries is a party to any collective bargaining agreement with a union. To the Knowledge of the Borrower, as of the Closing Date, there are no (i) grievances, disputes, or controversies with any union representing the employees of the Borrower or any of its Subsidiaries to the extent that such grievances, disputes, or controversies would reasonably be expected to cause a Materially Adverse Effect or (ii) threats of strikes, work stoppages, or any asserted pending demands for collective bargaining by any union to the extent that such threats would reasonably be expected to cause a Materially Adverse Effect. |
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(v) | Financial Statements; Undisclosed Liabilities. The Borrower has furnished or caused to be furnished to the Administrative Agent as of the Closing Date, the financial statements described in Section 3.1(a)(ix), all of which (other than Projections) have been prepared in accordance with GAAP and present fairly in all material respects the consolidated financial position of the Borrower on and as at such dates and the results of operations for the periods then ended (subject to normal year-end and audit adjustments and the absence of footnotes and supplementing information). The consolidated financial statements of the Borrower and its Subsidiaries furnished to the Administrative Agent and the Lenders subsequent to the Closing Date under Sections 6.1 and 6.2 have been prepared in accordance with GAAP and present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries on and as at such dates and the consolidated results of operations for the periods then ended (subject, in the case of unaudited financial statements, to normal year-end and audit adjustments and the absence of footnotes and supplementing information). None of the Borrower nor any of its Subsidiaries has any Indebtedness or other material obligations or liabilities, contingent or otherwise, in each case that would be required to be disclosed on such financial statements in accordance with GAAP on the date of the most recent financial statements referred to in the preceding sentence other than as disclosed in the most recent financial statements, or arising in the ordinary course of business, or as set forth or referred to in this Agreement, subject, in the case of unaudited financial statements, to normal year-end and audit adjustments and the absence of footnotes and supplementing information. |
(w) | Brokers. None of the Borrower or its Subsidiaries or Affiliates thereof has any obligation to any Person in respect of any finder’s or brokerage fees (other than as set forth in the Fee Letter and Section 2.4) in connection with the obtaining, making or closing of the Loans on the Closing Date which has not been satisfied. |
(x) | Use of Proceeds. (i) The proceeds of any Advance will be used only for the purposes specified in Section 5.10. |
(y) | Sanctioned Persons; Sanctioned Countries; Anti-Corruption Laws. |
(i) | None of the Credit Parties, any of their respective Subsidiaries or any director, officer, employee, agent, or Affiliate of the Credit Parties or any of their respective Subsidiaries is (1) a Sanctioned Person; (2) is located, organized or resident in, or a citizen of, a country, region or territory whose government is the subject of Sanctions; or (3) is otherwise a Person (x) whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (y) who engages in any dealings or transactions prohibited by Section 2 of Executive Order 13224, or, to its knowledge, is otherwise associated with any such Person in any manner violative of Section 2 or (z) subject to the limitations or prohibitions under any other OFAC regulation. |
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(ii) | The Credit Parties and their Subsidiaries have implemented, and maintain in effect, policies and procedures designed to ensure compliance in all material respects by the Credit Parties, their Subsidiaries and their respective directors, officers, employees and agents with Sanctions. The Credit Parties, their Subsidiaries and their respective directors, officers and employees, and, to the Knowledge of the Credit Parties, their agents, are, and in the past five (5) years have been, in compliance with Sanctions. |
(iii) | The Credit Parties and their Subsidiaries have implemented, and maintain in effect, policies and procedures designed to ensure compliance in all material respects by the Credit Parties, their Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws. The Credit Parties, their Subsidiaries and their respective directors, officers and employees, and, to the Knowledge of the Credit Parties, their agents are in compliance with Anti-Corruption Laws. |
(iv) | The Credit Parties will not, directly or indirectly, use the proceeds of the Loans or Letters of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (A) to fund any activities or business of or with any Sanctioned Person or in any Sanctioned Country; (B) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as Administrative Agent, Joint Lead Arranger and Joint Bookrunner, Issuing Bank, Lender, underwriter, advisor, investor, or otherwise); (C) in any manner that could cause any Person to be blocked or designated as a Sanctioned Person; or (D) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws. |
(z) | Subsidiaries. Schedule 4.1(z) sets forth as of the Closing Date the name of each direct or indirect Subsidiary of the Borrower, its jurisdiction of organization, the total number of issued and outstanding shares or other interests of Ownership Interests thereof, the classes and number of issued and outstanding shares or other interests of Ownership Interests of each such class, the name of each holder of Ownership Interests thereof and the number of shares or other interests of such Ownership Interests held by each such holder and the percentage of all outstanding shares or other interests of such class of Ownership Interests held by such holders. |
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(aa) | Anti-Money Laundering Laws. At any time after, one-hundred and twenty (120) days of the Closing Date, the Credit Parties and their Subsidiaries shall have adopted and implemented, and, thereafter, maintained in effect, policies and procedures designed to ensure compliance in all material respects by the Credit Parties, their Subsidiaries and their respective directors, officers, employees and agents with Anti-Money Laundering Laws. To the extent applicable, the Credit Parties, their Subsidiaries and their respective directors, officers and employees, and, to the Knowledge of the Credit Parties, their agents, are in compliance with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (ii) Anti-Money Laundering Laws, and (iii) any other law, rule or regulation pertaining to the prevention of future acts of terrorism. Neither the making available of the Loans or the Letters of Credit nor the use of any part of the proceeds thereof will violate the (i) Trading with the Enemy Act, as amended or any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R Subtitle B, Chapter V, as amended) or any other enabling legislation or executive order relating thereto or any other applicable economic sanctions law, (ii) Anti-Money Laundering Laws, or (iii) any other Applicable Law, rule or regulation pertaining to the prevention of future acts of terrorism. No part of the proceeds of the Loans or the Letters of Credit will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity on behalf of a government (or department, agency, or instrumentality thereof) or for or on behalf of any public international organization, in order to obtain, retain or direct business or obtain any improper advantage, in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws. |
(bb) | Beneficial Ownership. The information included in the most recently delivered Beneficial Ownership Certification to the Administrative Agent is true and correct in all respects. |
(cc) | Designation as Senior Debt. The Obligations constitute “Senior Debt”, “Designated Senior Debt”, or any similar term under and as defined in the agreements relating to any Indebtedness of the Borrower or any Guarantor, including any subordinated Indebtedness, which contains such designation. |
(dd) | Insurance. The Borrower and its Subsidiaries maintain insurance in compliance with Section 5.5. |
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Section 4.2 Survival of Representations and Warranties, etc.
All representations and warranties made by the Borrower under this Agreement and any other Loan Document shall be true and correct in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect qualifier, such representation or warranty shall be true and correct in all respects) on the date of each Advance (except to the extent relating specifically to a specific prior date) (other than in connection with a Continuation or Conversion) and on the date of issuance of each Letter of Credit, except to the extent relating specifically to the Closing Date or any other particular date. All representations and warranties made under this Agreement and the other Loan Documents shall survive, and not be waived by, the execution hereof by the Lenders, the Administrative Agent or the Issuing Bank, any investigation or inquiry by any Lender, the Administrative Agent or the Issuing Bank or the making of any Advance (other than in connection with a Continuation or Conversion) or the issuance of any Letter of Credit under this Agreement.
ARTICLE 5
AFFIRMATIVE Covenants
Until Payment in Full (subject to Section 11.16), and unless the Required Lenders, or such greater number of Lenders as may be expressly provided herein, shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. Except as permitted under Section 7.4, the Borrower will, and will cause each of the Borrower’s Subsidiaries to:
(a) | preserve and maintain (i) its existence and (ii) its material rights, franchises, licenses and privileges in the jurisdiction of its incorporation, formation or organization, including, without limiting the foregoing, all other Necessary Authorizations, in each case to the extent material to operation of the business in the ordinary course, except in the case of clause (ii) to the extent failure to do so would not reasonably be expected to have a Materially Adverse Effect; |
(b) | qualify and remain qualified and authorized to do business in its jurisdiction of organization; and |
(c) | not reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated or organized as of the Closing Date without providing prior written notice to the Administrative Agent and so long as the applicable Credit Party or their Subsidiaries takes such action as the Administrative Agent may request in order to preserve its, the Issuing Bank’s and the Lenders’ rights under the Loan Documents. |
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Section 5.2 Business; Compliance with Applicable Law; Data Security. The Borrower will, and will cause each of its Subsidiaries to (a) engage in the business permitted in Section 4.1(e); (b) comply with the requirements of all Applicable Law (including Food and Drug Laws), except where failure to comply would not reasonably be expected to have a Materially Adverse Effect; (c) make or cause to be made prompt payment of contributions required to meet the minimum funding standards set forth in ERISA with respect to each Plan except where failure to do so would not reasonably be expected to have a Materially Adverse Effect; (d) take all actions reasonably necessary in its reasonable judgment to maintain and protect all patents, patent rights, trademarks, trade names, copyrights, licenses, technology, software, know-how, database rights, domain names, trade secrets, confidential information and other intellectual property owned by the Borrower or any of its Subsidiaries or necessary to the conduct of its business, including (i) protecting the secrecy and confidentiality of the confidential information and trade secrets of the Borrower or such other Subsidiary, (ii) taking all actions reasonably necessary in its reasonable judgment to ensure that none of the trade secrets of the Borrower or such other Subsidiary shall fall or has fallen into the public domain, (iii) protecting the secrecy and confidentiality of the material source code of all computer software programs and applications owned or licensed by the Borrower or such other Subsidiary, (iv) maintaining the validity and enforceability of such intellectual property, unless such intellectual property is not, in the reasonable business judgment of the Borrower or any of its Subsidiaries, necessary or useful to the conduct of its business, and (v) pursuing the registration and maintenance of each patent, trademark, or copyright registration or application, now or hereafter included in such intellectual property, including the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings, except in each case where the failure to take any such action, individually or in the aggregate, could not reasonably be expected to result in a Materially Adverse Effect; (e) comply with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws in accordance with Section 4.1(y); (f) maintain the policies and procedures described in Section 4.1(y); and (g) except as individually or in the aggregate would not reasonably be expected to have a Materially Adverse Effect, (i) maintain compliance with all Applicable Laws, (ii) maintain and implement controls, policies, procedures, and technical safeguards to protect the privacy, security, and integrity of Personal Information, computer systems and processes as required by Applicable Law and/or consistent with industry standards and practices, and (iii) prevent unauthorized access to, or acquisition, use, loss, destruction, compromise or disclosure of, any Personal Information, confidential or proprietary data maintained or stored by it.
Section 5.3 Maintenance of Properties. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, maintain or cause to be maintained in the ordinary course of business in good repair, working order and condition (ordinary wear and tear and damages caused by casualty or condemnation excepted) all property necessary in the operation of their respective businesses (whether owned or held under lease) and from time to time make or cause to be made all needed repairs, renewals, replacements, additions, betterments and improvements thereto, to the extent necessary to continue their respective businesses as now conducted, other than obsolete, worn out, or unused assets and dispositions permitted under Section 7.4(a).
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Section 5.4 Accounting Methods and Financial Records. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, maintain a system of accounting established and administered in accordance with GAAP, keep adequate records and books of account consistent with GAAP. The Borrower and its Subsidiaries will maintain a Fiscal Year ending on December 31 of each year.
Section 5.5 Insurance. The Borrower will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies liability, casualty, property and business interruption insurance (including, without limitation, insurance with respect to its tangible Collateral) in at least such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Administrative Agent (but not more frequently than once per year so long as no Event of Default shall have occurred and be continuing), upon the request of the Administrative Agent, information so requested as to the insurance carried. Without limiting the generality of the foregoing, the Borrower will maintain or cause to be maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System, and (b) replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses. The Administrative Agent shall be named as lenders loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such casualty, property and liability insurance (other than directors’ and officers’, workers compensation or similar insurance policies and business interruption insurance), as applicable, and each provider of any such insurance, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent, shall agree that it will give the Administrative Agent thirty (30) days (and ten (10) days for non-payment of premiums) prior written notice before any such policy or policies shall be altered or canceled.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, pay, discharge, withhold and remit all Taxes imposed upon them when due, including, without limitation, withholding taxes, assessments and governmental charges or levies required to be paid, withheld or remitted by them or imposed upon them or their income or profits or upon any properties belonging to them, as required by Applicable Law, prior to the date on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien or charge upon any of their properties; except that no such Tax need be paid (i) which is being diligently contested in good faith and for which adequate reserves shall have been set aside in accordance with GAAP on the appropriate books, but only so long as such Tax does not become a Lien or charge other than a Permitted Lien, and (ii) if no foreclosure, distraint, sale or similar proceedings shall have been commenced with respect thereto. Except as individually or in the aggregate would not reasonably be expected to have a Materially Adverse Effect, the Borrower will, and will cause each of the Borrower’s Subsidiaries to, file all federal, state or local income tax returns and other tax returns required by Applicable Law.
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Section 5.7 Employee Benefit Plans. For each existing, or hereafter adopted, Plan, or other employee benefit plan, which is intended to meet the qualification requirements of Section 401(a) of the Code (collectively, with the Plan, a “Qualified Plan”), the Borrower will, and will cause each of the Borrower’s Subsidiaries to, in a timely fashion comply with and perform in all material respects all of its obligations under and in respect of such plan, including under any funding agreements and all Applicable Laws (including any fiduciary, funding, investment and administration obligations), except where such failure to comply or perform would not reasonably be expected to have a Materially Adverse Effect. All employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of each Qualified Plan shall be paid or remitted by the Borrower, and the Borrower’s Subsidiaries in a timely fashion in accordance with the terms thereof, any funding agreements and all Applicable Laws, except (x) for such amount which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside in accordance with GAAP on the appropriate books or (y) where such failure to remit, pay or contribute would not reasonably be expected to have a Materially Adverse Effect. The Borrower shall deliver to Administrative Agent (a) if requested by Administrative Agent, copies of each annual and other return, report or valuation with respect to each such Plan as filed with any applicable Governmental Entity but only to the extent such item is in the possession or control of the Borrower or any Credit Party; (b) promptly after receipt thereof, a copy of any direction, order, notice, ruling or opinion that the Borrower or any of its Subsidiaries may receive from any applicable Governmental Entity with respect to any Plan, if such direction, order, notice, ruling or opinion involves a liability in excess of $500,000; and (c) notification within thirty (30) days after (i) any increases in the benefits of any existing Plan of the Borrower or its Subsidiaries having a cost to one or more of the Borrower or its Subsidiaries exceeding $500,000 per annum in the aggregate, in the benefits of any existing Plan, (ii) the establishment of any new Plan by the Borrower or the its Subsidiaries, or (iii) the commencement of material contributions to any Plan to which the Borrower or any of its Subsidiaries was not previously contributing.
Section 5.8 Visits and Inspections. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, while no Event of Default has occurred and is continuing, upon reasonable prior notice, and at any time following the occurrence and during the continuance of an Event of Default, permit representatives of the Administrative Agent to (a) visit and inspect the properties of the Borrower or any of its Subsidiaries during normal business hours, (b) inspect and make extracts from and copies of their respective books and records, and (c) discuss with their respective principal officers and respective accountants their respective businesses, assets, liabilities, financial positions, results of operations and business prospects; provided that, (i) any Lender may accompany the Administrative Agent on any such visit or inspection and participate in any such discussions at no additional cost to the Borrower, (ii) unless an Event of Default is in existence the Borrower shall bear the cost of only inspections by the Administrative Agent only and only one such inspection, examination or discussion per year and (iii) the applicable Credit Party may, at its option, have one or more employees or representatives present at any such inspection, examination or discussion.
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Section 5.9 [Reserved].
Section 5.10 Use of Proceeds.
(a) | On the Closing Date, the proceeds of the Term Loan will be used by the Borrower, together with the Borrower Equity Contribution, (i) to repay and refinance the existing Indebtedness for Money Borrowed of the Target other than as set forth on Schedule 7.1 or as permitted by Section 7.1(c), (ii) to pay the cash consideration for the Transaction and (iii) to pay fees and expenses in connection with the foregoing or with the Loan Documents. |
(b) | The Borrower will use the proceeds of Revolving Loans incurred on the Closing Date (i) in an amount not to exceed $5,000,000, for general corporate purposes and working capital needs, including to pay a portion of the Transaction consideration and fees and expenses in connection with the Transaction, (ii) to fund original issue discount or upfront fees in connection with “market flex” provisions, and (iii) to backstop, replace or cash collateralize existing letters of credit. |
(c) | The Borrower will use the proceeds of Revolving Loans incurred after the Closing Date to finance working capital needs and other general corporate purposes (including Capital Expenditures) of the Borrower and its Subsidiaries. |
(d) | After the Closing Date, the Borrower may use the aggregate proceeds of Incremental Facilities to finance Permitted Acquisitions, Investments and Capital Expenditures. |
Section 5.11 [Reserved].
Section 5.12 Covenants Regarding Formation of Subsidiaries and Acquisitions; Partnership, Subsidiaries.
(a) | Additional Domestic Subsidiaries. Subject to clause (b) below, within thirty (30) days (or such later date as the Administrative Agent and the Borrower may agree) after (i) the Acquisition by the Borrower or any of its Subsidiaries of any interests in any Person which becomes a direct or indirect Subsidiary of the Borrower (other than a Foreign Subsidiary, an Immaterial Subsidiary or a Receivables Subsidiary), or (ii) the formation of any new direct or indirect Subsidiary of the Borrower (other than a Foreign Subsidiary, an Immaterial Subsidiary or a Receivables Subsidiary), (A) the Borrower will cause such new Subsidiary to provide to the Administrative Agent (1) an executed Addendum to Security Agreement, together with appropriate UCC-1 financing statements, (2) an executed Trademark Security Agreement, Patent Security Agreement or Copyright Security Agreement, if applicable and appropriate, together with appropriate recording instruments, (3) an executed Addendum to Subsidiary Guaranty; provided, that notwithstanding anything herein to the contrary no Foreign Subsidiary. Immaterial Subsidiary or Receivables Subsidiary will execute a Guaranty or grant a Security Interest or Lien in any of its assets or property to secure such Guaranty, (4) an executed Pledge Agreement Supplement, and (5) an executed certificate of the secretary (or similar Authorized Signatory) for such new Subsidiary, together with appropriate attachments; and (B) if such acquired or new Subsidiary is a direct Subsidiary of the Borrower, the Borrower will, or if such acquired or new Subsidiary is a direct Subsidiary of a direct or indirect Subsidiary of the Borrower that is a Credit Party, the Borrower will cause such Credit Party to, pledge to the Administrative Agent all of the Ownership Interests (or other instruments or securities evidencing ownership) of such acquired or new Subsidiary as additional Collateral for the Obligations to be held by the Administrative Agent in accordance with the terms of the Pledge Agreement and execute and deliver to the Administrative Agent all such documentation for such pledge as, in the reasonable opinion of the Administrative Agent, is necessary to grant and perfect such Liens on and subject to the terms set forth in the Security Documents; provided, that notwithstanding anything herein to the contrary, no Foreign Subsidiary, Immaterial Subsidiary or Receivables Subsidiary shall be required to execute a Pledge Agreement (or joinder thereto). If requested by the Administrative Agent, in connection with an acquisition or formation of a Subsidiary (other than a Foreign Subsidiary, an Immaterial Subsidiary or a Receivables Subsidiary) described in this Section 5.12(a), the Borrower will deliver to the Administrative Agent legal opinions similar to those delivered on the Closing Date, which opinions shall be in form and substance reasonably acceptable to the Administrative Agent. |
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(b) | Additional Foreign Subsidiaries. Notify the Administrative Agent promptly after any Person becomes a Material Foreign First Tier Subsidiary, and at the request of the Administrative Agent, promptly thereafter (and, in any event, within sixty (60) days after such request, as such time period may be extended by the Administrative Agent in its sole discretion), cause (i) the applicable Credit Party to deliver to the Administrative Agent a Foreign Pledge Agreement pledging 100% of the Ownership Interests of any such new Material Foreign First Tier Subsidiary and a consent thereto executed by such new Material Foreign First Tier Subsidiary (including if applicable, original certificated Ownership Interests (or the equivalent thereof pursuant to the Applicable Laws and practices of any relevant foreign jurisdiction) evidencing the Ownership Interests of such new Material Foreign First Tier Subsidiary, together with an appropriate undated stock or other transfer power for each certificate duly executed in blank by the registered owner thereof), (ii) such Person to deliver to the Administrative Agent such opinions, documents and certificates as may be reasonably requested by the Administrative Agent, (iii) such Person to deliver to the Administrative Agent such updated Schedules to the Loan Documents as requested by the Administrative Agent with regard to such Person and (iv) such Person to deliver to the Administrative Agent such other documents as may be reasonably requested by the Administrative Agent, which documents shall be in form and substance reasonably acceptable to the Administrative Agent. |
Any document, agreement or instrument (other than legal opinions) executed or issued pursuant to this Section 5.12 shall be a “Loan Document” for purposes of this Agreement and, in the case of documents executed in connection with Section 5.12(a)(ii)(A)(1), (2) and (4), Section 5.12(a)(ii)(B) and Section 5.12(b)(i), each shall be a “Security Document” for purposes of this Agreement.
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Section 5.13 Further Assurances.
(a) | Upon the Administrative Agent’s reasonable request, the Borrower will promptly cure, or cause to be cured, defects in the creation and issuance of any of the Notes and the execution and delivery of the Loan Documents (including this Agreement), resulting from any acts or failure to act by the Borrower or any of its Subsidiaries or any employee or officer thereof. The Borrower at its expense will promptly execute and deliver to the Administrative Agent and the Lenders, or cause to be executed and delivered to the Administrative Agent and the Lenders, all such other and further documents, agreements and instruments to (i) subject the Collateral to the Liens now or hereafter intended to be covered by the Security Documents, and (ii) perfect and maintain the validity, effectiveness and priority of any Security Document and any Lien intended to be created thereunder, in each case as may be reasonably requested by the Administrative Agent. |
(b) | Each of the Borrower and its Subsidiaries acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement with respect to Security Interests created herein and in the other Loan Documents without the prior written consent of the Administrative Agent or its representative and agrees that it will not do so without the prior written consent of the Administrative Agent or its representative, subject to such Person’s rights under Section 9-509(d)(2) of the UCC. |
(c) | If any material assets (including any owned real property with a fair market value of at least $7,500,000 or improvements thereto or any interest therein) are acquired by the Borrower or any Guarantor after the Closing Date (other than assets constituting Collateral under the Security Documents which become subject to the Lien of the Security Documents upon acquisition thereof, or with respect to which actions to perfect are not required under the terms of the Security Documents), the Borrower will notify the Administrative Agent thereof, and, if requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Borrower’s Subsidiaries (other than Foreign Subsidiaries, Immaterial Subsidiaries and Receivables Subsidiaries) to take, all such actions as shall be necessary or requested by the Administrative Agent to grant and perfect such Liens on and subject to the terms set forth in the Security Documents, including those set forth in Section 5.12, as applicable, all at the expense of the Borrower and the Borrower’s Subsidiaries. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, use commercially reasonable efforts to defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein other than Permitted Liens. The Borrower agrees to, and will cause each of the Borrower’s Subsidiaries to, comply with the requirements of all Applicable Laws necessary to grant to the Secured Parties a valid and perfected first Security Interest in the Collateral as and to the extent required by this Agreement and the Security Documents. The Administrative Agent is hereby authorized by the Borrower to file any financing statements in accordance with and subject to the terms and conditions of the Security Documents. The Borrower agrees, and will cause each of the Borrower’s Subsidiaries to, take the following actions as the Administrative Agent may request, from time to time, by way of reasonably cooperating with the Administrative Agent’s custodians and keeping stock records. Subject to any limitation expressly set forth herein, in accordance with Section 11.2, the Borrower and the other Credit Parties shall be responsible for any and all reasonable and documented out-of-pocket fees, costs and expenses (including any property or similar taxes, attorneys’ fees for one firm of attorneys per relevant jurisdiction or costs for insurance of any kind), which the Administrative Agent may incur with respect to the Credit Parties’ compliance with this Section 5.13 (including, without limitation, in filing public notices; in preparing or filing documents; in protecting, maintaining, or preserving the Collateral or its interest therein; in enforcing or foreclosing the Liens hereunder, whether through judicial procedures or otherwise; or in defending or prosecuting any actions or proceedings arising out of or relating to its transactions with the Borrower, or any of the Borrower’s Subsidiaries). If the same are not promptly paid by such Persons upon presentation of correct, detailed invoices, the Administrative Agent may pay same on such Person’s behalf, and the amount thereof shall be an Obligation secured hereby and due to the Administrative Agent on demand. |
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(d) | If the Borrower or any Credit Party acquires any real property with a fair market value of at least $7,500,000 or leases after the Closing Date any real property or with respect to clause (iii) below only, any leased real property location, after the Closing Date, such Person shall do the following: |
(i) | promptly notify the Administrative Agent; |
(ii) | if designated in writing by the Administrative Agent in its discretion, within ninety (90) days (or such later date as Administrative Agent may agree to), with respect to any parcel of such owned real property, execute and deliver to the Administrative Agent a Mortgage in recordable form on such location, and in each case, as applicable, deliver to the Administrative Agent the other items of the types described in the definition of Real Property Documentation with respect thereto as the Administrative Agent may require, and all provisions of this Agreement (including, without limitation, the foregoing provisions of this Section 5.13 and all other applicable representations, warranties and covenants) that are applicable to owned real property or Mortgages shall apply thereto (except to the extent that the same may need to be reasonably adapted in order to be truthful with respect thereto); provided that, any such Mortgages shall not be executed unless (x) no later than 20 Business Days prior to the execution of the Mortgage, the Administrative Agent and Lenders have received all necessary flood documents (e.g., life of loan flood hazard determinations, borrower notices, etc., as applicable) and (ii) all Lenders have confirmed to the Administrative Agent that they have completed their flood due diligence; and |
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(iii) | with respect to each such location if it is a leased real property location at which there is Collateral with a fair market value in excess of $2,500,000 or any other location at which Collateral with a fair market value in excess of $2,500,000 is stored or maintained, use commercially reasonable efforts for a period of sixty (60) consecutive calendar days to obtain a Landlord Agreement from the lessor thereof or such bailee, as applicable. |
Section 5.14 Environmental Matters.
(a) | Hazardous Materials Activities, Etc. The Borrower will, and will cause each of the Borrower’s Subsidiaries to, promptly take any and all actions necessary to (i) cure any violation of applicable Environmental Laws by such Person that would reasonably be expected to have, individually or in the aggregate, a Materially Adverse Effect, and (ii) make an appropriate response to any Environmental Claim against such Person and discharge any obligations it has to any Person thereunder where failure to do so would reasonably be expected to have, individually or in the aggregate, a Materially Adverse Effect. |
(b) | Environmental Audits. If a Release of Hazardous Materials occurs on real property owned or leased by a Credit Party that would reasonably be expected to have a Materially Adverse Effect, upon written request of the Administrative Agent, the Borrower shall commission, or cause to be commissioned, an environmental site assessment/audit report of any real property owned or leased by any Credit Party directly affected by such Release (or an update of such assessment/audit report), within such period as Administrative Agent may approve after such request, and all such assessments/audits reports or updates thereof shall be at the Borrower’s expense and risk. In addition, if an environmental assessment/audit report has been prepared at the request of or on behalf of the Administrative Agent or any Governmental Entity, the Borrower shall cause copies of such report to be delivered to the Administrative Agent promptly upon the preparation thereof. |
Section 5.15 Post-Closing Conditions. The Borrower will, and will cause each of its Subsidiaries to, as applicable, not later than the dates specified therefor on Schedule 5.15 (or such later dates as the Administrative Agent may agree in writing, which may include electronic correspondence, in its sole discretion), satisfy each of the requirements set forth on Schedule 5.15.
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ARTICLE 6
Information Covenants
Until Payment in Full, and unless the Required Lenders, or such greater number of Lenders as may be expressly provided herein, shall otherwise consent in writing the Borrower shall, and shall cause each of its Subsidiaries to, furnish or cause to be furnished to the Administrative Agent:
Section 6.1 Quarterly Financial Statements and Information. Within forty-five (45) days (or, if the Borrower is then required to file quarterly financial statements with the Securities and Exchange Commission, such longer period, not to exceed five (5) additional days, during which the Borrower is permitted to timely file such quarterly financial statements) after the last day of each of the first three (3) Fiscal Quarters of each Fiscal Year of the Borrower commencing with June 30, 2020, the unaudited balance sheet of the Borrower and its Subsidiaries on a consolidated basis as at the end of such Fiscal Quarter, and the related statements of operations and the related statements of cash flows of the Borrower and its Subsidiaries on a consolidated basis, which (in the case of statements of operations) shall set forth in comparative form such figures as at the end of and for such Fiscal Quarter from the prior Fiscal Year, shall be accompanied by management’s discussion and analysis and shall be certified by the Borrower in a certificate executed on behalf of the Borrower by any Authorized Signatory of the Borrower to have been prepared in accordance with GAAP and to present fairly in all material respects the financial position of the Borrower and its Subsidiaries on a consolidated basis as at the end of such period and the results of operations for such period, and for the elapsed portion of the Fiscal Year ended with the last day of such period, subject only to normal year end and audit adjustments and the absence of footnotes and supplementary information.
Section 6.2 Annual Financial Statements and Information. Within ninety (90) days (or, if the Borrower is then required to file annual financial statements with the Securities and Exchange Commission, such longer period, not to exceed fifteen (15) additional days, during which the Borrower is permitted to timely file such annual financial statements) after the end of each Fiscal Year of the Borrower commencing with the Fiscal Year ending December 31, 2020, the audited balance sheet of the Borrower and its Subsidiaries on a consolidated basis as of the end of such Fiscal Year and the related audited consolidated statements of operations for such Fiscal Year and for the previous Fiscal Year, the related audited consolidated statements of cash flow and stockholders’ equity for such Fiscal Year and for the previous Fiscal Year, which shall be accompanied by management’s discussion and analysis and an opinion of accountants of recognized standing acceptable to the Administrative Agent, which opinion states that such consolidated financial statements are prepared in all material respects in accordance with GAAP, and which opinion shall be without (i) a “going concern” or like qualification or exception and (ii) any qualification or exception as to the scope of such audit (other than with respect to the impending maturity of any or all Indebtedness incurred under this Agreement, or any prospective Event of Default resulting from the noncompliance with any covenant contained in Section 7.8).
Section 6.3 Compliance Certificates. At the time the financial statements are furnished pursuant to Section 6.1 (other than with respect to the last Fiscal Quarter of each Fiscal Year) or Section 6.2, (x) a report setting forth the information required by Section 5(e)(v) of the Security Agreement or confirming that there has been no change in such information since the Closing Date or the date of the last financial statements furnished pursuant to Section 6.1 or Section 6.2 and (y) a certificate of the Borrower executed on its behalf by an Authorized Signatory of the Borrower as to its financial performance, in substantially the form attached hereto as Exhibit I:
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(a) | setting forth as and at the end of such Fiscal Quarter or Fiscal Year, as the case may be, reasonable detail and information necessary to establish () the Consolidated Total Net Leverage Ratio and Fixed Charge Coverage Ratio, in each case, as of such date and whether or not the Borrower was in compliance with the requirements of Section 7.8, (ii) Cumulative Credit, (iii) all Material Subsidiaries and all Material Foreign First Tier Subsidiaries and (iv), commencing with the Fiscal Year ending December 31, 2021, with respect to financial statements furnished pursuant to Section 6.2, Excess Cash Flow; |
(b) | commencing with the Fiscal Year ending December 31, 2021, with respect to financial statements furnished pursuant to Section 6.2, certifying that there have been no changes to the Perfection Certificate since the Closing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 6.3(b), or if there have been any such changes, a list in reasonable detail of such changes; and |
(c) | stating that no Default or Event of Default has occurred as at the end of such Fiscal Quarter or Fiscal Year, as the case may be, or, if a Default or Event of Default has occurred, disclosing each such Default or Event of Default and its nature, when it occurred, whether it is continuing and, in the case of a Default which has not yet become an Event of Default the steps being taken by the Borrower with respect to such Default. |
Section 6.4 Copies of Other Reports.
(a) | Promptly upon receipt thereof, copies of all final reports, if any, submitted to the board of directors (or audit committee of the board of directors) of the Borrower by such Person’s independent public accountants regarding such Person, including, without limitation, any final management report prepared in connection with the annual audit referred to in Section 6.2; |
(b) | Promptly after receipt thereof, a copy of each audit (excluding routine audits by the Drug Enforcement Administration, the Centers for Disease Control and Prevention, the U.S. Department of Agriculture or the FDA) made by any Governmental Entity of the books and records of Borrower or any Subsidiary or of notice of any material noncompliance with any Applicable Law relating to Borrower or any Subsidiary, or its business; |
(c) | From time to time and promptly upon each written request by the Administrative Agent, such data, certificates, reports and further information regarding the business, assets, liabilities, financial position, and results of operations of the Borrower or any of its Subsidiaries, as the Administrative Agent or the Required Lenders (through the Administrative Agent) may request, including, but not limited to, an itemization of extraordinary or non-recurring non-cash charges and other non-cash charges in the calculation of Consolidated EBITDA; |
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(d) | Annually, certificates of insurance indicating that the requirements of Section 5.5 remain satisfied for such Fiscal Year, together with, upon the Administrative Agent’s request, copies of any new or replacement insurance policies obtained during such Fiscal Year; |
(e) | On or prior to the sixtieth (60th) day after each Fiscal Year end, commencing with the Fiscal Year ending December 31, 2020, the annual budget for the Borrower and its Subsidiaries for the then current Fiscal Year, including forecasts of the income statement, the balance sheet and a cash flow statement for such Fiscal Year, on a quarterly basis; |
(f) | Promptly upon receipt thereof, all agreements (and any amendment or modification thereto) between the Borrower or any of its Subsidiaries, on the one hand, and any Affiliate of the Borrower, on the other hand (other than transactions among the Borrower and its Subsidiaries) that could reasonably be expected to be material and adverse to the interests of the Lenders; |
(g) | Promptly after the sending or filing thereof, copies of each financial statement, report, notice or proxy statement sent by Borrower or any Subsidiary to its stockholders or other equity holders, and copies of each regular, periodic or special report, registration statement or prospectus (including all Form 10-K, Form 10-Q and Form 8-K reports) filed by Borrower or any Subsidiary with any securities exchange or the Securities and Exchange Commission or any successor agency; and |
(h) | Within ten (10) Business Days after the same are sent, a copy of any financial statement, report or notice which the Borrower or any of its Subsidiaries sends to any Person under or pursuant to or in connection with any Material Contract, in each case if such statement, report or notice relates to an event that has resulted or would reasonably be expected to result in an Event of Default or a Materially Adverse Effect; and, within ten (10) Business Days after the same are received by Borrower or any of its Subsidiaries, copies of all notices sent to any such Person under or pursuant to or in connection with any such agreement or instrument which notice relates to an event that has resulted or would reasonably be expected to result in a Default, an Event of Default or a Materially Adverse Effect. |
Section 6.5 Notice of Litigation and Other Matters. Notice specifying the nature and status of any of the following events, promptly, but in any event not later than five (5) Business Days after the occurrence of any of the following events becomes Known to the Borrower:
(a) | the commencement of all proceedings and investigations by or before any Governmental Entity which would reasonably be expected to have a Materially Adverse Effect and all actions and proceedings in any court or before any arbitrator against the Borrower or any of its Subsidiaries which would reasonably be expected to have a Materially Adverse Effect; |
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(b) | (i) any Default, (ii) any violation of any Applicable Law which, individually or in the aggregate, would reasonably be expected to have a Materially Adverse Effect; or (iii) the occurrence or non-occurrence of any event (A) which constitutes, or which with the passage of time or giving of notice or both would constitute a material default by the Borrower or any of its Subsidiaries under any Material Contract to which the Borrower or any of its Subsidiaries is party or by which any of their respective properties may be bound, in each case, which would reasonably be expected to have a Materially Adverse Effect, or (B) which would reasonably be expected to have a Materially Adverse Effect, giving, in each case a description thereof and specifying the action proposed to be taken with respect thereto; |
(c) | except, in each case, as would not reasonably be expected to have a Materially Adverse Effect: (i) the Borrower, any Subsidiary or to the extent Known to the Borrower, any ERISA Affiliate shall fail to make any payment or contribution when due and payable under any Plan or (ii) an ERISA Event occurs; and |
(d) | except, in each case, as would not reasonably be expected to have a Materially Adverse Effect: (i) the institution of a proceeding pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; (ii) that the Borrower or any Subsidiary of the Borrower may be directly or indirectly liable for a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person with respect to any Plan; or (iii) that the Borrower or any Subsidiary of the Borrower will or may incur any liability (including any indirect, contingent, or secondary liability) with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA. The Borrower will deliver to the Administrative Agent copies of any records, documents or other information that must be furnished to the PBGC by the Borrower or any Subsidiary of the Borrower with respect to any Plan pursuant to Section 4010 of ERISA. The Borrower will deliver to the Administrative Agent a copy of each funding waiver request or request for extension of amortization periods under applicable provisions of the Code or ERISA filed by the Borrower or any Subsidiary of the Borrower with the IRS or any other government agency with respect to any Plan and all written communications received by the Borrower, or any Subsidiary of the Borrower from the IRS or any other government agency with respect to each Plan. In addition to any certificates or notices delivered to the Administrative Agent pursuant to this Agreement, copies of any records, documents or other information required to be furnished to the PBGC or any other government agency by the Borrower or any Subsidiary of the Borrower (other than annual reporting on From 5500), and any material written notices received by the Borrower or any Subsidiary of the Borrower, in each case with respect to any Plan or Foreign Plan shall be delivered to the Administrative Agent no later than ten (10) days after the date such records, documents and/or information has been furnished to the PBGC or any other government agency by the Borrower or any Subsidiary of the Borrower or such notice has been received by the Borrower or any Subsidiary of the Borrower, as applicable; |
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(e) | any change in the information provided in the most recently delivered Beneficial Ownership Certification to the Administrative Agent along with an updated Beneficial Ownership Certification reflecting such change; |
(f) | any of the following if the same would reasonably be expected, individually or in the aggregate, to have a Materially Adverse Effect, (i) any failure of any products produced by the Borrower or any of its Subsidiaries or any packaging materials used in connection therewith, to comply with, or to have been produced in accordance with, any Food and Drug Laws or (ii) any non-routine inspection by any Governmental Entity of any facility of the Borrower or any of its Subsidiaries where any products made by the Borrower or any of its Subsidiaries are produced or assembled, together with copies of any notices with respect to such event that are required to be filed with any Governmental Entity and any notice delivered by a Governmental Entity to the Borrower or any of its Subsidiaries with respect to such events; |
(g) | any instance of reportable food as contemplated by Section 1005 of the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85); and |
(h) | any proposed voluntary or involuntary product recall or market withdrawal with respect to any Food Product of the Borrower or any of its Subsidiaries. |
Section 6.6 Environmental Disclosure. The Borrower will, and will cause the Borrower’s Subsidiaries to, deliver to Administrative Agent and Lenders:
(a) | within five (5) Business Days following receipt thereof, copies of all material and final reports from environmental audits and investigations prepared by independent consultants or Governmental Entities with respect to Environmental Claims or the Release of Hazardous Materials at any owned or leased real property of any Credit Party that, individually or in the aggregate would reasonably be expected to result in a Materially Adverse Effect; provided, however, the Borrower shall not be required to provide any such audit, investigation, analysis, or report where such disclosure would destroy any privilege applicable thereto; |
(b) | within five (5) Business Days after Borrower’s Knowledge of the occurrence thereof, written notice describing in reasonable detail (1) any Release required to be reported by the Borrower or any of its Subsidiaries to any Governmental Entity under any applicable Environmental Laws which would reasonably be expected to result in one or more Environmental Claims having individually, or in the aggregate, a Materially Adverse Effect, (2) any remedial action taken by the Borrower or any other Person in response to (A) any Hazardous Materials Activities the existence of which would reasonably be expected to result in one or more Environmental Claims having, individually or in the aggregate, a Materially Adverse Effect, or (B) any Environmental Claims that, individually or in the aggregate, would reasonably be expected to result in a Materially Adverse Effect, and (3) the Borrower’s Knowledge of any occurrence or condition on any real property adjoining or in the vicinity of any owned or leased real property of any Credit Party that would cause such Credit Party’s property or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws, in each case, that, individually or in the aggregate, would reasonably be expected to result in a Materially Adverse Effect; and |
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(c) | as soon as practicable following the sending or receipt thereof by an Authorized Signatory of the Borrower or any of the Borrower’s Subsidiaries, a copy of any and all material non-privileged written communications with respect to (1) any Environmental Claims that, individually or in the aggregate, would reasonably be expected to give rise to a Materially Adverse Effect, (2) any Release required to be reported by the Borrower or any of its Subsidiaries to any federal, state, foreign or local governmental or regulatory agency which would reasonably be expected to result in one or more Environmental Claims having individually or in the aggregate, a Materially Adverse Effect, and (3) any written request for information from any governmental agency stating that such agency is investigating whether the Borrower or any of its Subsidiaries may be potentially responsible for any Hazardous Materials Activity which would reasonably be expected to result in one or more Environmental Claims, having individually or in the aggregate, a Materially Adverse Effect. |
Section 6.7 Electronic Delivery of Documents. Documents required to be delivered pursuant to this Agreement may be delivered electronically and if so delivered, shall be deemed to have been delivered on the earlier of the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 11.1; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent including, without limitation, the Platform); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent for itself or for delivery to any Lender that requests in writing to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.
Section 6.8 Patriot Act; KYC Information. The Borrower shall furnish, and cause each of its Subsidiaries to furnish, all documentation and other information that is reasonably requested by Administrative Agent or any Lender from time to time for purposes of compliance with the Beneficial Ownership Regulation or applicable “know your customer” requirements and Anti-Money Laundering Laws, including the Patriot Act.
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Section 6.9 Lenders’ Meetings. Within fifteen (15) days after the delivery to Administrative Agent of financial statements pursuant to Section 6.1 or 6.2, the Borrower will, in each case to the extent requested by either Administrative Agent or any Lenders, conduct a telephonic meeting with Administrative Agent and Lenders to discuss the most recently reported financial results and the financial condition of Borrower and its Subsidiaries, at which shall be present such officers of the Credit Parties as may be reasonably requested to attend by Administrative Agent or Required Lenders, such request or requests to be made within a reasonable time prior to the scheduled date of such meeting; provided, that if the financial statements required pursuant to Section 6.1 or 6.2 are not provided, Administrative Agent or Required Lenders may request a lenders’ meeting pursuant to this Section 6.9 at any time after the date on which such statements were to be provided.
ARTICLE 7
Negative Covenants
Until Payment in Full, and unless the Required Lenders shall otherwise consent in writing:
Section 7.1 Indebtedness of the Borrower and its Subsidiaries. The Borrower shall not, and shall not permit any of its Subsidiaries to, create, assume, incur or otherwise become or remain obligated in respect of, or permit to be outstanding, any Indebtedness except that the Borrower and its Subsidiaries may incur the following Indebtedness:
(a) | the Obligations; |
(b) | Indebtedness of the Borrower or of any of its Subsidiaries owing to the Borrower or any other Subsidiary so long as such Indebtedness is (i) owing by a Credit Party to another Credit Party, (ii) owing by a non-Credit Party to a Credit Party to the extent permitted under Section 7.6, (iii) owing by a non-Credit Party to another non-Credit Party, or (iv) subordinated to the Obligations in a manner satisfactory to the Administrative Agent and the corresponding debt instruments, if any, held by the Borrower or a Guarantor are pledged to the Administrative Agent as security for the Obligations; |
(c) | Capital Lease Obligations and Indebtedness incurred to finance the purchase, construction or development of fixed assets and Indebtedness secured by purchase money Liens permitted under clause (f) of the definition of Permitted Liens not to exceed in the aggregate at any one time outstanding $10,000,000; |
(d) | (i) Guaranties by the Borrower of Indebtedness of a Subsidiary of the Borrower and Guaranties by a Subsidiary of the Borrower of Indebtedness of the Borrower or any other Subsidiary of the Borrower, in each case, to the extent such Indebtedness is permitted to be incurred pursuant to this Section 7.1; provided, that if the Indebtedness that is being Guaranteed is unsecured and/or subordinated to the Obligations, the Guaranty shall also be unsecured and/or subordinated; (ii) Guaranties incurred in the ordinary course of business and which are not Indebtedness for Money Borrowed; (iii) Guaranties permitted under Section 7.5 and (iv) Guaranties that are Investments permitted under Section 7.6. |
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(e) | (i) Interest Hedge Agreements entered into in order to manage existing or anticipated interest rate risks not for speculative purposes and (ii) Other Hedging Agreements entered into for bona fide hedging activities and not for speculative purposes; |
(f) | Guaranty obligations incurred in the ordinary course of business in respect of obligations of suppliers, customers, franchisees, lessors (including guaranties of real estate leases) and licensees of the Borrower and its Subsidiaries; |
(g) | Indebtedness outstanding on the date hereof and listed on Schedule 7.1 and Refinancing Indebtedness with respect thereto; |
(h) | Indebtedness of a Person at the time such Person was acquired pursuant to a Permitted Acquisition (so long as such Indebtedness was not incurred in anticipation of such Acquisition) in an aggregate principal amount not to exceed $15,000,000 in the aggregate for all such Persons at any one time outstanding; |
(i) | unsecured Indebtedness incurred by the Borrower or a Guarantor under customary agreements consisting of indemnification, seller notes, earn-outs, adjustment of purchase price or other similar obligations entered into in connection with Permitted Acquisitions and asset dispositions permitted hereunder; provided, however, that the aggregate principal amount of such seller notes or similar obligations outstanding (which for the avoidance of doubt does not include indemnification obligations, earn-outs, adjustments of purchase price or any other contingent obligations (whether or not such contingency has been satisfied subsequent to the consummation of such Permitted Acquisition)) shall not exceed $3,000,000 at any time; |
(j) | cash management obligations (including, credit cards, credit card processing, debit or purchase cards) and other Indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts; |
(k) | Indebtedness under performance bonds or reimbursement obligations with respect to letters of credit with respect to workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance of the Borrower or its Subsidiaries, in each case incurred in the ordinary course of business; |
(l) | Indebtedness of the Borrower and its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of business including those incurred to secure health, safety and environmental obligations in the ordinary course of business; |
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(m) | Indebtedness representing deferred compensation or reimbursable expenses owed to employees, officers, consultants and directors of the Borrower or any of its Subsidiaries in the ordinary course of business; |
(n) | Indebtedness of the Borrower or any of its Subsidiaries as an account party in respect of (i) trade letters of credit issued in the ordinary course of business, and (ii) trade accounts payable and accrued expenses incurred in the ordinary course of business; |
(o) | Indebtedness owed to an insurance company or an affiliate thereof for the financing of insurance premiums; |
(p) | Indebtedness of Foreign Subsidiaries in an aggregate principal amount not to exceed $5,000,000 at any time outstanding; provided that any such Indebtedness denominated in a currency other than U.S. Dollars will, for purposes of this clause (p), be deemed to be outstanding in an amount equal to the U.S. Dollar equivalent of the amount thereof at the time of incurrence; |
(q) | other Indebtedness of the Borrower and its Domestic Subsidiaries not to exceed in the aggregate principal amount at any one time outstanding the greater of (x) $10,000,000 and (y) 15% of Consolidated EBITDA; and |
(r) | Indebtedness incurred pursuant to a Receivables Facility permitted hereunder; provided that the Attributable Receivables Indebtedness thereunder, together with the aggregate face amount of Receivables sold for the most recently ended four (4) consecutive Fiscal Quarters pursuant to Factoring Transactions under Section 7.4(a)(vi), shall not exceed $20,000,000 at any time outstanding. |
Section 7.2 Limitation on Liens; Negative Pledge. The Borrower shall not, and shall not permit any of its Subsidiaries to:
(a) | create, assume, incur or permit to exist or to be created, assumed, incurred or permitted to exist any Lien on any of its properties or assets, whether now owned or hereafter acquired, except for Permitted Liens; or |
(b) | undertake, covenant or agree with any third party that it will not create, assume, incur or permit to exist any Lien in favor of the Administrative Agent or the Lenders securing the Obligations with respect to the Borrower and any of the Borrower’s Subsidiaries, on any of its assets or properties, whether now owned or hereafter acquired except in the case of this clause (b), (i) restrictions and conditions imposed by Applicable Law; (ii) customary restrictions and conditions contained in agreements relating to the sale of any asset or property or a Subsidiary pending such sale; provided that (x) such restrictions and conditions apply only to the asset, property or Subsidiary that is to be sold and such sale is permitted hereunder or (y) the Obligations will be Paid in Full upon the consummation of such sale; (iii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness; (iv) customary provisions in leases, licenses, permits and contracts permitted or not prohibited hereunder, including without limitation, customary provisions in leases, licenses, permits and contracts restricting the assignment, subletting or other transfer thereof; (v) restrictions contained in agreements existing at the time any Person becomes a Subsidiary, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary and applies only to such Person or its assets; and (vi) restrictions on cash and Cash Equivalents (or deposit containing such cash or Cash Equivalents) imposed by agreements entered into in the ordinary course of business. Anything to the contrary in the foregoing notwithstanding, the inclusion herein of Permitted Liens does not constitute, and shall not be deemed to constitute, an agreement by the Administrative Agent and the Lenders to subordinate or postpone the Security Interests securing the Obligations to any such Permitted Liens solely by designation hereunder as Permitted Liens, except as otherwise provided in the Loan Documents or as provided by Applicable Law. |
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Section 7.3 Amendment and Waiver. The Borrower shall not, and shall not permit its Subsidiaries to, (a) enter into any amendment, waiver or other modification of any of the provisions of its Organizational Documents or agreements, instruments or documents creating or evidencing Junior Debt or (b) amend or permit any amendments or other modifications to, or terminate or waive any provision of, any Material Contract, in each case in a manner adverse to the interests of Secured Parties in their capacities as such.
Section 7.4 Liquidation, Merger or Disposition of Assets.
(a) | Disposition of Assets. The Borrower shall not, and shall not permit any of its Subsidiaries to, at any time sell, lease, abandon, or otherwise dispose (as used herein, “dispose”; “dispositions” shall have the meaning correlative thereto) of any assets other than: |
(i) inventory disposed of in the ordinary course of business, or the disposition of obsolete, worn out, surplus or damaged assets and assets no longer used or useful in the conduct of its business;
(ii) property disposed of as a result of a casualty, condemnation, or expropriation;
(iii) the transfer or other disposition of assets by the Borrower or any wholly-owned Domestic Subsidiary of the Borrower or by any Subsidiary of the Borrower to the Borrower or to any other wholly-owned Domestic Subsidiary of the Borrower and the transfer or other disposition of assets by the Foreign Subsidiary of the Borrower to the Borrower or to any other Subsidiary of the Borrower;
(iv) (A) dispositions of assets permitted under Section 7.4(b) and (B) transactions permitted under Sections 7.6 and 7.7 to the extent such transactions are also dispositions of assets;
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(v) dispositions of equipment or real property in the ordinary course of business to the extent that (A) such Property is exchanged for credit against the purchase price of similar replacement Property or (B) the proceeds of such disposition are promptly applied to the purchase price of such replacement property;
(vi) the sale, transfer or other disposition of property or assets not otherwise permitted in this Section 7.4; provided that (A) the aggregate Net Proceeds (Asset Sales) of all property or assets sold, transferred, or otherwise disposed pursuant to this clause (vi) (but excluding the proceeds of any Sale-Leaseback Transaction and the sale of the Camden Facility) shall not exceed $2,000,000 during any four (4) Fiscal Quarter period, (B) such proceeds represent the fair market value for such property or assets, (C) no Default or Event of Default shall have occurred and be continuing or shall result therefrom, (D) not less than seventy-five percent (75%) of the sales price of such property or assets shall be cash and Cash Equivalents, and (E) all of the Net Proceeds (Asset Sales) of such sale or transfer are used to make a prepayment of the Loans pursuant to Section 2.8(d), if required, or otherwise reinvested as permitted hereunder;
(vii) the Borrower and its Subsidiaries may abandon, allow to lapse or otherwise dispose of intellectual property that the Borrower or such Subsidiary shall determine in its reasonable business judgment is immaterial to the conduct of the business of the Borrower or any of its Subsidiaries;
(viii) the Borrower and its Subsidiaries may lease, sublease, license or sublicense property (including, without limitation, intellectual property and real property) to other Persons in the ordinary course of business if such lease, sublease, license or sublicense does not interfere in any material respect with the use of the applicable property by Borrower or its Subsidiaries or any business of the Borrower or its Subsidiaries;
(ix) dispositions of cash and Cash Equivalents in the ordinary course of business;
(x) dispositions of Receivables in the ordinary course of business in connection with the collection or compromise thereof consistent with past practice and not as part of any Receivables Facility;
(xi) the unwinding pursuant to its terms of any Interest Hedge Agreement or any Other Hedging Agreements;
(xii) the Borrower or any of its Subsidiaries may surrender or waive contractual rights and settle or waive contractual or litigation claims in the ordinary course of business;
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(xiii) dispositions of non-core assets acquired in connection with Permitted Acquisitions or other permitted Investments, which, within 90 days of the date of the Acquisition, are designated in writing to the Administrative Agent as being held for sale and not for the continued operation of the Borrower and its Subsidiaries; provided that (i) the Net Proceeds (Asset Sales) received in connection with any such dispositions shall be applied and/or reinvested as (and to the extent) required by Section 2.8(d) and (ii) no Event of Default shall have occurred and be continuing on the date on which the definitive agreement governing the relevant disposition is executed;
(xiv) dispositions of Receivables pursuant to Factoring Transactions; provided that the aggregate face amount of Receivables sold for the most recently ended four (4) consecutive Fiscal Quarters, together with the Attributable Receivables Indebtedness incurred pursuant to the Receivables Facilities under Section 7.1(r), shall not exceed $20,000,000 at any time outstanding; and
(xv) dispositions of Receivables, or participations therein, and related assets pursuant to Receivables Facilities permitted hereunder.
(b) | Liquidation, Dissolution or Merger. The Borrower shall not, and shall not permit any of its Subsidiaries to, at any time liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up, or enter into any amalgamation, merger or consolidation, other than (i) an amalgamation, merger or consolidation among the Borrower and one or more of its Subsidiaries, provided the Borrower is the surviving entity, or (ii) an amalgamation, merger or consolidation between or among two or more Subsidiaries of the Borrower (other than an amalgamation, merger or consolidation between or among a non-Credit Party and a Credit Party, unless such Credit Party, is the surviving entity or the surviving entity becomes a Credit Party), or (iii) in connection with a Permitted Acquisition effected by a merger or amalgamation in which the Borrower or, in a merger or amalgamation in which the Borrower is not a party, a Credit Party is the surviving entity or the surviving entity becomes a Credit Party (or, to the extent such Permitted Acquisition involves the Acquisition of a Foreign Subsidiary effected by a merger or amalgamation with a Foreign Subsidiary, the Foreign Subsidiary is a direct or indirect Subsidiary of a Credit Party), or (iv) a liquidation, dissolution, amalgamation or otherwise of any Subsidiary of the Borrower into the Borrower or another Subsidiary of the Borrower (other than a Foreign Subsidiary), so long as the payment and performance of or guarantee of, as applicable, the Obligations under this Agreement and the other Loan Documents of the non-surviving Person, if any, are assumed by the surviving entity, or (v) a liquidation or dissolution of any Immaterial Subsidiary of the Borrower, so long as the payment and performance of the Obligations under this Agreement and the other Loan Documents of the non-surviving Person, if any, are assumed by the surviving entity. |
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(c) | Division. Notwithstanding anything herein or any other Loan Document to the contrary, no Credit Party that is a limited liability company may divide itself into two or more limited liability companies (pursuant to a “plan of division” as contemplated under the Delaware Limited Liability Company Act or otherwise) without the prior written notice to the Administrative Agent, and in the event that any Credit Party that is a limited liability company divides itself into two or more limited liability companies (with or without the prior consent of the Administrative Agent as required above), any limited liability companies formed as a result of such division (including all series thereof) shall be required to comply with the obligations set forth in this Agreement and the other Loan Documents and the further assurances obligations included in any Loan Document (including Section 5.13 above) and become a Borrower or Guarantor (as required by Administrative Agent). |
Section 7.5 Limitation on Guaranties. The Borrower shall not, and shall not permit any of its Subsidiaries to, at any time Guaranty, assume, be obligated with respect to, or permit to be outstanding any Guaranty of, any obligation of any other Person other than (i) a guaranty by endorsement of negotiable instruments for collection or deposit in the ordinary course of business, or (ii) Guaranties permitted pursuant to Section 7.1, or (iii) as may be contained in any Loan Document including, without limitation, any Subsidiary Guaranty, or (iv) Investments permitted under Section 7.6 in the form of Guaranties, or (v) Guaranties by the Borrower of obligations of its Subsidiaries (other than Indebtedness) not prohibited by this Agreement, or (vi) Guaranties by any Subsidiary of the Borrower of obligations of any other Subsidiary of the Borrower not prohibited hereunder, or (vii) Guaranties of Capital Leases and real property leases entered into by Borrower or any of its Subsidiaries.
Section 7.6 Investments and Acquisitions. The Borrower shall not own, directly or indirectly, any Subsidiary unless it owns 100% of the issued and outstanding Ownership Interests of such Subsidiary’s voting rights and economic interests (on a fully diluted basis); provided that the foregoing shall not prohibit, (x) in the case of any Foreign Subsidiary, the issuance of directors’ qualifying shares or other similar Ownership Interests to the extent required under the laws of the jurisdiction of such Subsidiary’s formation (and any such Foreign Subsidiary shall be treated for all purposes hereunder as a direct or indirect (as applicable) wholly-owned Subsidiary of the Borrower so long as it complies with this Section 7.6), (y) any Investments permitted under Sections 7.6(d), (k) and (m), or (z) the Borrower, directly or indirectly, owning not less than 50% of the issued and outstanding Ownership Interests of the voting rights and economic interests (on a fully diluted basis) of Merisant Sweetener (Philippines), Inc., other than pursuant to a sale or other disposition of all such Ownership Interest in a transaction permitted hereunder. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly make any Acquisition or Investment except:
(a) | cash or Cash Equivalents purchased or held by the Borrower and its Subsidiaries directly or through a brokerage account; |
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(b) | (i) Indebtedness permitted pursuant to Section 7.1(b)(i) and (iii); and (ii) Investments and capital contributions by the Borrower or any Subsidiary of the Borrower in a Credit Party; |
(c) | loans and advances to officers, directors, consultants and employees of the Borrower and its Subsidiaries for reasonable and customary business related travel, entertainment, relocation and analogous business purposes and advances of payroll payments to employees in the ordinary course of business, in an aggregate amount not to exceed $500,000 at any time outstanding; |
(d) | Investments (including debt obligations and extensions of credit) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; |
(e) | (i) Investments, Acquisitions or transactions permitted under Section 7.4(b) and (ii) Guaranties of the Borrower and the Borrower’s Subsidiaries permitted hereunder, in each case to the extent such Guaranty obligations also constitute Investments; |
(f) | deposits made in the ordinary course of business of the Borrower and its Subsidiaries to secure the performance of leases or in connection with bidding on government contracts; |
(g) | so long as no Default or Event of Default exists or is continuing at the time such Investment is made (or would result therefrom), additional Investments not otherwise permitted hereunder not to the greater of (A) $20,000,000 and (B) twenty-five percent (25)% of Consolidated EBITDA; |
(h) | Investments in existence on the Closing Date and listed on Schedule 7.6(h) and any refinancing, refunding, renewal or extension of any such Investment that does not increase the amount thereof; |
(i) | Investments constituting Permitted Acquisitions (including Investments of cash or Cash Equivalents by the Borrower and its Subsidiaries in one or more wholly-owned Foreign Subsidiaries for the purpose of consummating a substantially concurrent Investment by such Foreign Subsidiaries (or one or more wholly-owned Foreign Subsidiaries thereof) in (x) assets located outside the United States or (y) Ownership Interests in any Person organized in a jurisdiction outside the United States, in each case to the extent such Investment constitutes (or comprises part of) a Permitted Acquisition and in any event is permitted by clause (i) of the definition of “Permitted Acquisition” in Section 1.1); |
(j) | Investments constituting deposits or pledges permitted under Section 7.2; |
(k) | Investments constituting non-cash proceeds of sales, transfers and other dispositions of assets to the extent permitted by Section 7.4(a) and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; |
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(l) | Guaranties and other Indebtedness otherwise permitted under Sections 7.1 or 7.5; |
(m) | (i) Investments of any Credit Party in any non-Credit Party in an aggregate amount at any time outstanding not to exceed $10,000,000, (ii) Investments of any non-Credit Party in any other non-Credit Party and (iii) the creation of Subsidiaries, subject to Section 5.12; |
(n) | so long as (x) no Default or Event of Default exists or is continuing (or would result therefrom) and (y) compliance with a Consolidated Total Net Leverage Ratio of not more than 2.00:1.00, any Investment that when made did not exceed the then-applicable Cumulative Credit; |
(o) | Investments of the Borrower or any Credit Party made by the Borrower or any such Credit Party following a public or private sale after the Closing Date of common Ownership Interests (other than Disqualified Equity) in an amount equal to the aggregate Net Proceeds (Ownership Interests) received by the Borrower (whether directly, or indirectly through a contribution to common equity capital) in or from such sale; provided, however, any such Investment (x) must be made within thirty (30) days of the consummation of such sale and (y) such Net Proceeds (Ownership Interests) must be designated to the Administrative Agent (pursuant to a certificate of an Authorized Signatory of the Borrower on or promptly after the date of such public or private sale) for the purposes of this clause (o); and |
(p) | Investments in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any Person (including, without limitation, capital contributions of Receivables and related assets by a Subsidiary to a Receivables Subsidiary and subordinated Indebtedness of a Receivables Subsidiary owed to a Subsidiary), in each case, that, in the good faith determination of the Borrower are necessary or advisable to effect any Receivables Facility or any repurchases and customary indemnities in connection therewith. |
In determining the amount of Investments permitted under this Section 7.6, the amount of any Investment not constituting Indebtedness outstanding at any time shall be the aggregate cash Investment by the applicable Person, less all dividends or other distributions on equity or returns of capital (but, in each case, only to the extent received in cash or Cash Equivalents) received by such Person with respect to that particular Investment.
Section 7.7 Restricted Payments and Restricted Purchases. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly declare or make any Restricted Payment or Restricted Purchase; provided, however, that,
(a) | the Borrower and its Subsidiaries may make dividends or distributions solely in the form of stock or other Ownership Interests; |
(b) | any Subsidiary of the Borrower may declare and make dividend payments or other distributions to the Borrower and its wholly-owned Subsidiaries; |
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(c) | so long as (x) no Default or Event of Default exists or is continuing (or would result therefrom) and (y) compliance on a Pro Forma Basis with a Consolidated Total Net Leverage Ratio of not more than 1.25:1.00, the Borrower and its Subsidiaries may make Restricted Payments or Restricted Purchases in an unlimited amount; |
(d) | so long as no Default or Event of Default exists or is continuing (or would result therefrom), the Borrower and its Subsidiaries may make Restricted Payments or Restricted Purchases in an aggregate amount not to exceed $20,000,000 in any Fiscal Year; |
(e) | so long as (x) no Default or Event of Default exists or is continuing (or would result therefrom) and (y) compliance with a Consolidated Total Net Leverage Ratio of not more than 2.00:1.00, the Borrower and its Subsidiaries may make any other Restricted Payments or Restricted Purchases that when made do not exceed the then-applicable Cumulative Credit; |
(f) | the Borrower may purchase, redeem or otherwise acquire Ownership Interests issued by it with the proceeds received from the substantially concurrent issue of new common Ownership Interests of the Borrower; |
(g) | so long as no Default or Event of Default exists or is continuing (or would result therefrom), the Borrower may pay dividends on the common Ownership Interests of the Borrower following a public offering after the Closing Date of such common Ownership Interests pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in gross cash proceeds of at least $50,000,000, in an amount not to exceed in any Fiscal Year six percent (6.00%) of the aggregate Net Proceeds (Ownership Interests) received by the Borrower (whether directly, or indirectly through a contribution to common equity capital) in or from such public offering, to the extent such Net Proceeds (Ownership Interests) are not applied (i) as consideration for a Permitted Acquisition under clause (i) of the definition thereof, (ii) to fund Investments pursuant to Section 7.6(o) or (iii) to fund Restricted Payments or Restricted Purchases pursuant to clause (h) below; |
(h) | Restricted Payments or Restricted Purchases made by the Borrower or any Credit Party following a public or private sale after the Closing Date of common Ownership Interests (other than Disqualified Equity) in an amount equal to the aggregate Net Proceeds (Ownership Interests) received by the Borrower (whether directly, or indirectly through a contribution to common equity capital) in or from such sale; provided, however, any such Restricted Payment or Restricted Purchase (x) must be made within thirty (30) days of the consummation of such sale and (y) such Net Proceeds (Ownership Interests) must be designated to the Administrative Agent (pursuant to a certificate of an Authorized Signatory of the Borrower on or promptly after the date of such public or private sale) for the purposes of this clause (h); and |
(i) | the Borrower and each Subsidiary may pay withholding or similar taxes payable by any future, present or former employee, director or officer (or any spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) in connection with any repurchases of Ownership Interests or the exercise of stock options in the ordinary course of business. |
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Section 7.8 Financial Covenants.
(a) | Consolidated Total Net Leverage Ratio. As of each Fiscal Quarter end (commencing with September 30, 2020), the Borrower shall not permit the Consolidated Total Net Leverage Ratio of it and its Subsidiaries, on a consolidated Pro Forma Basis, to exceed (a) with respect to each Fiscal Quarter ending on or before September 30, 2021, 4.00 to 1.00, and (b) with respect to each Fiscal Quarter thereafter, 3.75 to 1.00. |
(b) | Minimum Fixed Charge Coverage Ratio. As of each Fiscal Quarter end (commencing with September 30, 2020), the Borrower shall not permit the Fixed Charge Coverage Ratio of the Borrower and its Subsidiaries, on a consolidated Pro Forma Basis, to be less than 1.25 to 1.00. |
Section 7.9 ERISA. Except, in each case, as would not reasonably be expected to have a Materially Adverse Effect, the Borrower shall not, and shall not permit any of the its Subsidiaries to: (i) become a party to any Multiemployer Plan or Foreign Plan, other than any that is in existence on the Closing Date; (ii) fail to meet all of the applicable minimum funding requirements of ERISA and the Code, without regard to any waivers thereof; (iii) cause or permit to occur any event that could result in the imposition of a Lien under section 412 or 430 of the Code or section 302 or 4068 of ERISA; or (iv) cause or permit to occur an ERISA Event. The Borrower and its Subsidiaries shall not use “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Plans in connection with the Loans or the Commitments.
Section 7.10 Affiliate Transactions. The Borrower shall not, and shall not permit any of its Subsidiaries to, at any time engage in any material transaction with an Affiliate (other than the Borrower or a Subsidiary of the Borrower), or make an assignment or other transfer of any of its properties or assets to any such Affiliate, other than on terms substantially as favorable as would be obtainable in a comparable arm’s-length transaction with a Person other than an Affiliate, except (a) as specifically provided herein (including pursuant to Sections 7.4(a)(xv), 7.6(b), (c), (m) or (o), the payment of any sums permitted under Section 7.7 and any servicing arrangements, performance undertakings and other Affiliate transactions that are customary in connection with Receivables Facilities permitted hereunder), (b) as may be described on Schedule 2 attached hereto and (c) agreements related to, and payments of, Indebtedness permitted under Section 7.1(i), to the extent made with or paid to an Affiliate.
Section 7.11 Sale-Leaseback. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of property (whether real, personal or mixed), whether now owned or hereafter acquired, which the Borrower or such Subsidiary has sold or transferred to any other Person (other than the Borrower or its Subsidiaries) within a period of twelve (12) months prior to entering into such lease, guaranty or surety (the foregoing, a “Sale-Leaseback Transaction”) in any Fiscal Year in excess of $3,000,000.
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Section 7.12 Restrictive Agreements. The Borrower shall not, and the Borrower shall not permit any of its Subsidiaries to, as applicable, enter into or agree, or otherwise become bound, to any agreement, contract or other arrangement with any Person pursuant to the terms of which (i) such Subsidiary is or would be prohibited from declaring or paying any cash dividends or distributions on any class of its Ownership Interests owned directly or indirectly by the Borrower or any other Subsidiary of the Borrower, or from making any other distribution on account of any class of any such Ownership Interests owned directly or indirectly by the Borrower (herein referred to as “Upstream Dividends”); or (ii) the declaration or payment of Upstream Dividends by a Subsidiary to the Borrower or to another Subsidiary of the Borrower, on an annual or cumulative basis, is or would be otherwise limited or restricted; or (iii) such Subsidiary would be prohibited from Guaranteeing the Indebtedness of the Borrower or any of its Subsidiaries; or (iv) such Subsidiary would be prohibited from making loans or advances to the Borrower or repaying Indebtedness owed by such Subsidiary to the Borrower or any other Subsidiary of the Borrower; in each case except for (a) restrictions imposed by Applicable Law, (b) restrictions imposed by the Loan Documents, (c) restrictions and conditions imposed under Indebtedness permitted under Section 7.1, (d) any agreement in effect at the time any Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of Borrower, (e) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Borrower are necessary or advisable to effect such Receivables Facility and (f) customary restrictions and conditions contained in agreements relating to the sale of any asset or property or a Subsidiary pending such sale; provided that (x) such restrictions and conditions apply only to the asset, property or Subsidiary that is to be sold and such sale is permitted hereunder or (y) the Obligations will be Paid in Full upon the consummation of such sale.
Section 7.13 Changes in Lines of Business. The Borrower shall not, and the Borrower shall not permit any of its Subsidiaries to, materially change the line of business of any such Person from the lines of business of such Persons on the Closing Date (other than to conduct any businesses reasonably related, ancillary, complementary or incidental thereto or representing a reasonable expansion thereof).
Section 7.14 Control Agreements. Subject to Section 5.15, the Borrower shall not, and shall not permit any of its Subsidiaries that is a Credit Party to, create, maintain or deposit moneys into any deposit accounts, securities accounts or investment accounts unless the Borrower or such Subsidiary shall have delivered to the Administrative Agent, for the benefit of the Secured Parties, control agreements to such accounts on terms and conditions satisfactory to the Administrative Agent, other than for (a) trust accounts or accounts exclusively used for payroll, payroll taxes, employee benefits, (b) accounts which are swept no less than weekly into accounts with respect to which the Administrative Agent has control agreements, and (c) other accounts so long as at any time the balance in any such account does not exceed $250,000 and the aggregate balance in all such accounts does not exceed $500,000. Each of the deposit accounts, securities accounts and investment accounts of the Borrower and each other Credit Party as of the Closing Date are identified on Schedule 8.
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Section 7.15 Limitation on Changes in Fiscal Year. The Borrower shall not permit the Fiscal Year of the Borrower or any of its Subsidiaries to end on a day other than December 31.
Section 7.16 Use of Proceeds Covenant. The Borrower will not request any Advance or Letter of Credit, and the Borrower shall not use, and shall not permit its Subsidiaries and its or their respective directors, officers, employees and agents to use, the proceeds of any Advance or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else in value, to any Person in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person or in any Sanctioned Country, (c) in any manner that reasonably could result in the violation of Sanctions, or any manner that reasonably could cause any Person to be blocked or designated as a Sanctioned Person.
Section 7.17 Permitted Activities of the Borrower and Intermediate Holdco. Each of the Borrower and Intermediate Holdco shall not (a) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than the Obligations; (b) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired by it other than the Liens created under the Security Documents to which it is a party; (c) engage in any business or activity or own any assets other than (i)(A) in the case of the Borrower, holding 100% of the Ownership Interests of Intermediate Holdco and (B) in the case of Intermediate Holdco, holding the Ownership Interests of its direct Subsidiaries; (ii) performing its obligations and activities incidental thereto under the Loan Documents; (iii) making Restricted Payments, Restricted Purchases and Investments to the extent permitted by this Agreement; (iv) maintaining its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance; (v) to the extent applicable, participating in tax, accounting and other administrative matters as a member of the combined group of the Borrower and its Subsidiaries; (vi) incurring fees, costs and expenses relating to overhead and general operating including professional fees for legal, tax and accounting issues and paying taxes; (vii) providing indemnification to officers and directors and as otherwise permitted in this Agreement; (viii) activities incidental to the consummation of the Transactions; and (ix) activities incidental to the activities described in clauses (i) through (viii); (d) consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person; (e) in the case of the Borrower, sell or otherwise dispose of any Ownership Interests of Intermediate Holdco; (f) in the case of the Borrower, create or acquire any Subsidiary or make or own any Investment in any Person other than Intermediate Holdco; (g) issue any Disqualified Equity; or (h) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.
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ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any Governmental Entity or non-governmental body:
(a) | Any representation or warranty made in this Agreement or in any Loan Document shall prove incorrect in any material respect when made or deemed to be made pursuant to Section 4.2; or |
(b) | The Borrower shall default in the payment of: (i) any interest hereunder or under any of the Notes, or fees or other amounts payable to the Lenders and the Administrative Agent hereunder or under any of the Loan Documents, or any of them, when due, and such Default shall not be cured by payment in full of such past due amount within three (3) Business Days from the due date; or (ii) any principal under any of the Loans (or the Notes evidencing the Loans) or reimbursement obligations in respect of any Letter of Credit, when due; or |
(c) | the Borrower shall default in the performance or observance of any agreement or covenant contained in Sections 5.1(a) (solely with respect to the Borrower), 5.15, 6.1, 6.2, 6.3 or Article 7; or |
(d) | the Borrower shall default in the performance or observance of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 8.1 and such default shall not be cured within a period of thirty (30) days from the earlier of (i) an Authorized Signatory of the Borrower’s Knowledge of the occurrence of such default and (ii) receipt by the Borrower of written notice of such default from the Administrative Agent or any Lender; or |
(e) | There shall occur any default in the performance or observance of any agreement or covenant or breach of any representation or warranty contained in any of the Loan Documents (other than this Agreement or as otherwise provided in this Section 8.1) by the Borrower or any other Credit Party party thereto, or any other obligor thereunder, which shall not be cured within a period of thirty (30) days from the earlier of (i) an Authorized Signatory of or the Borrower’s Knowledge of the occurrence of such default or breach and (ii) receipt by the Borrower of written notice of such default or breach from the Administrative Agent or any Lender; or |
(f) | (i) A court of competent jurisdiction shall enter a decree or order for relief in respect of the Borrower or any Material Subsidiary in an involuntary case under Bankruptcy Laws or under any other Debtor Relief Laws, now or hereafter in effect, which decree or order is not dismissed or stayed within sixty (60) days; or any other similar relief shall be granted under any applicable federal, state or foreign law; or (ii) an involuntary case shall be commenced against any Credit Party under Bankruptcy Laws or under any other Debtor Relief Laws, now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, interim receiver, receiver and manager, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Credit Party, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, receiver, receiver and manager, trustee or other custodian of any Credit Party for all or a substantial part of its property, and any such event described in this clause (ii) shall continue for sixty (60) days without having been dismissed, stayed, bonded or discharged; or |
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(g) | (i) The Borrower or any Material Subsidiary shall commence a voluntary case under Bankruptcy Laws or under any other or Debtor Relief Laws, now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, interim receiver, receiver and manager, trustee or other custodian for all or a substantial part of its property; or any Credit Party shall make any general assignment for the benefit of creditors; or (ii) any Credit Party shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts generally as such debts become due; or the board of directors (or similar governing body) of any Credit Party (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in Section 8.1(f), or (iii) shall commit an intentional and voluntary act of bankruptcy for the purposes of Bankruptcy Laws; or |
(h) | There is entered by any court or arbitration panel against the Borrower or its Subsidiaries (i) a final, non-appealable monetary judgment, decree or award not covered by insurance or indemnification (where the indemnifying party has agreed to indemnify and is financially able to do so), for the payment of money which exceeds singly or in the aggregate with other such judgments, $10,000,000, or (ii) a warrant of attachment or execution or similar process shall be issued or levied against property of the Borrower or any of its Subsidiaries which, together with all other such property of the Borrower or any of its Subsidiaries subject to other such process, exceeds in value $10,000,000 in the aggregate, and if, in each case, within sixty (60) days after the entry, issue or levy thereof, such judgment, warrant or process shall not have been paid or discharged or stayed pending appeal or removed to bond, or if, after the expiration of any such stay, such judgment, warrant or process shall not have been paid or discharged or removed to bond; or |
(i) | An ERISA Event shall have occurred that when taken together with other ERISA Events that have occurred, results in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding $10,000,000; or |
(j) | There shall occur (i) any payment default under any instrument, document or agreement relating to any Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount exceeding $10,000,000, or (ii) any event or condition the occurrence of which would permit acceleration of such Indebtedness, or which, as a result of a failure to comply with the terms thereof, would make such Indebtedness otherwise due and payable, and in each case which event or condition has not been cured within any applicable notice, grace or cure period or waived in writing prior to any declaration of an Event of Default or acceleration of the Loans hereunder; provided that this clause (j) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness, if such Indebtedness is otherwise permitted hereunder and such secured Indebtedness is repaid when required under the documents providing for such Indebtedness; or |
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(k) | Any material provision of any Loan Document shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by the Borrower or any other Credit Party or by any Governmental Entity having jurisdiction over the Borrower or any other Credit Party seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or the Borrower or any other Credit Party shall contest the validity or enforceability of any Loan Document in writing or deny in writing that it has any liability or obligation for the payment of principal or interest purported to be created under any Loan Document to which it is a party; or |
(l) | Any Security Document shall for any reason, fail or cease (except by reason of lapse of time, operation of the terms thereof or action or inaction by the Administrative Agent) to create a valid and perfected and first-priority Lien (subject to Permitted Liens) on or Security Interest in any portion of the Collateral (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof); or |
(m) | Any Change of Control shall occur; or |
(n) | Any Guaranty of the Obligations shall be terminated or shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void or any Credit Party shall repudiate its obligations thereunder; or |
(o) | (i) Any failure of any products produced by any Credit Party or any Subsidiary of any Credit Party or any packaging materials used in connection therewith, to comply with, or to have been produced in accordance with, any Food and Drug Laws or (ii) any non-routine inspection by any federal, state, foreign or local regulatory agency of any facility of any Credit Party or any Subsidiary of any Credit Party where any products made by any Credit Party or any Subsidiary of any Credit Party are produced or assembled, together with copies of any notices with respect to such event that are required to be filed with any Governmental Entity and any notice delivered by a Governmental Entity to any Credit Party or any Subsidiary of any Credit Party with respect to such events, in each case if the same would reasonably be expected to result in, either individually or in the aggregate, liability in excess of $5,000,000; or |
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(p) | The occurrence of a product recall or market withdrawal, whether such product recall or market withdrawal is voluntary or by request or order of a Governmental Entity, with respect to one or more products manufactured by any Credit Party or any Subsidiary of any Credit Party that could reasonably be expected to result in a liability in excess of (x) $5,000,000 above the amount of insurance covering such recall or (y) $5,000,000 in the aggregate (without giving effect to insurance) and, within thirty (30) days of the occurrence of such recall, (i) such Person has not completed the recall of all such products in accordance with all conditions imposed by the applicable Governmental Entity, or (ii) such product has not been inspected by the applicable Governmental Entity; or |
(q) | Either (i) any Governmental Entity shall have taken any action which results in a partial or total suspension of the production or shipment of one or more products manufactured by the Borrower or any of its Subsidiaries, which suspension or partial suspension could reasonably be expected to result in liability in excess of $5,000,000, (ii) any Governmental Entity shall have imposed fines against the Borrower or any of its Subsidiaries in an aggregate amount greater than $500,000 or (iii) any Governmental Entity shall have taken any other action against the Borrower or any of its Subsidiaries based on an alleged failure to comply with any requirements of Applicable Law or otherwise which would reasonably be expected to result in (x) liability in excess of $5,000,000 or (y) a Materially Adverse Effect. |
Section 8.2 Remedies.
(a) | If an Event of Default specified in Section 8.1 (other than an Event of Default under Section 8.1(f) or Section 8.1(g)) shall have occurred and shall be continuing, the Administrative Agent, at the request of the Required Lenders, subject to Section 9.7(a), shall, upon written notice to Borrower, (i) (A) terminate the Commitments, and/or (B) declare the principal of and interest on the Loans and the Notes and all other amounts owed to the Lenders, the Issuing Bank and the Administrative Agent under this Agreement, the Notes and any other Loan Documents to be forthwith due and payable without presentment, demand, protest or other notice of any kind (other than notices required in the Loan Documents), all of which are hereby expressly waived, anything in this Agreement, the Notes or any other Loan Document to the contrary notwithstanding, and the Commitments shall thereupon forthwith terminate and (ii) require the Borrower to, and the Borrower shall thereupon, deposit in an interest bearing account with the Administrative Agent, as cash collateral for the Obligations, an amount equal to the maximum amount currently or at any time thereafter to be drawn on all outstanding Letters of Credit and the Borrower hereby pledges to the Administrative Agent, the Lenders and the Issuing Bank and grants to them a Security Interest in, all such cash as security for the Obligations. |
(b) | Upon the occurrence and continuance of an Event of Default specified in Section 8.1(f) or Section 8.1(g) (i) all principal, interest and other amounts due hereunder and under the Notes, and all other Obligations, shall thereupon and concurrently therewith automatically become due and payable and the Commitments shall forthwith automatically terminate and the principal amount of the Loans outstanding hereunder shall bear interest at the Default Rate, all without any action by the Administrative Agent, the Issuing Bank or the Lenders or the Required Lenders or any of them and without presentment, demand, protest or other notice of any kind (other than notices required in the Loan Documents), all of which are expressly waived, anything in this Agreement or in the other Loan Documents to the contrary notwithstanding and (ii) the Borrower shall deposit in a non-interest bearing account with the Administrative Agent, the Issuing Bank or a Lender or other financial institution as directed by the Administrative Agent, as cash collateral for the Obligations, an amount equal to the maximum amount currently or at any time thereafter to be drawn on all outstanding Letters of Credit and the Borrower hereby pledges to the Administrative Agent, the Lenders and the Issuing Bank and grants to them a Security Interest in, all such cash as security for the Obligations. |
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(c) | Upon the occurrence and continuance of an Event of Default, the Administrative Agent, the Issuing Bank and the Lenders shall have all of the post default rights granted to them, or any of them, as applicable under the Loan Documents and under Applicable Law (including, without limitation, under the UCC). |
(d) | Upon the occurrence and continuance of an Event of Default, the Administrative Agent, upon request of the Required Lenders, shall have the right to the appointment of a receiver for the properties and assets of the Borrower and its Subsidiaries, for itself and on behalf of its Subsidiaries, hereby consents to such rights and such appointment. The rights of the Administrative Agent under this Section 8.2(d) shall be subject to its prior compliance with Applicable Law to the extent applicable to the exercise of such rights. |
(e) | The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder shall be cumulative, and not exclusive. |
Section 8.3 Payments Subsequent to Declaration of Event of Default. Upon the occurrence and continuance of an Event of Default, payments and prepayments under this Agreement made to the Administrative Agent, the Issuing Bank and the Lenders or otherwise received by any of such Persons (from realization on Collateral for the Obligations or otherwise) shall be paid over to the Administrative Agent (if necessary) and distributed by the Administrative Agent as follows: first, to the Administrative Agent’s, and the Issuing Bank’s reasonable, documented, out-of-pocket costs and expenses, if any, incurred in connection with the collection of such payment or prepayment, including, without limitation, any reasonable costs incurred by it in connection with the sale or disposition of any Collateral for the Obligations and all amounts under Section 11.2(a) and (b); second, to the Issuing Bank in an amount equal to any Non-Reimbursed Amount, third, to the Issuing Bank, the Lenders or the Administrative Agent for any fees, expenses and indemnities hereunder or under any of the other Loan Documents then due and payable; fourth, to the Lenders pro rata on the basis of their respective unpaid principal amounts outstanding under the Loans (except as provided in Section 2.2(e)), to the payment of any unpaid interest which may have accrued on the Obligations; fifth, to the Lenders pro rata based on the unpaid principal amount of the Loans then outstanding until all Loans have been Paid in Full and all outstanding Letters of Credit have been cash collateralized in an amount equal to 103% of the Letters of Credit Obligations (and, for purposes of this clause, obligations under Interest Hedge Agreements, Bank Products Documents and Other Hedging Agreements constituting Obligations shall be paid on a pro rata basis with the Loans; provided, however, that no proceeds realized for any Guarantee or Collateral of a Credit Party who is not a Qualified ECP Guarantor shall be applied to the payment obligations due under any Interest Hedging Agreement); sixth, to the Lenders pro rata on the basis of their respective unpaid amounts, to the payment of any other unpaid Obligations; and seventh, to the Borrower or as otherwise required by Applicable Law.
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ARTICLE 9
The Administrative Agent
Section 9.1 Appointment and Authorization. Each Lender hereby irrevocably appoints and authorizes, and hereby agrees that it will require any transferee of any of its interest in its portion of the Loans and in its Notes irrevocably to appoint and authorize, the Administrative Agent to take such actions as its agent on its behalf and to exercise such powers hereunder and under the other Loan Documents as are delegated by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. None of the Administrative Agent nor any of its respective directors, officers, employees or agents, shall be liable for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction.
Section 9.2 Interest Holders. The Administrative Agent may treat each Lender, or the Person designated in the last notice filed with the Administrative Agent, as the holder of all of the interests of such Lender in its portion of the Loans and in its Notes until written notice of transfer, signed by such Lender (or the Person designated in the last notice filed with the Administrative Agent) and by the Person designated in such written notice of transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed with the Administrative Agent.
Section 9.3 Consultation with Counsel. The Administrative Agent may consult with Jones Day, special counsel to the Administrative Agent, or with other legal counsel selected by it and shall not be liable for any action taken or suffered by it in good faith in consultation with the Required Lenders and in reasonable reliance on such consultations.
Section 9.4 Documents. The Administrative Agent shall be under no duty to examine, inquire into, or pass upon the validity, effectiveness or genuineness of this Agreement, any Note, any other Loan Document, or any instrument, document or communication furnished pursuant hereto or in connection herewith, and the Administrative Agent shall be entitled to assume that they are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be.
Section 9.5 Administrative Agent and Affiliates. With respect to the Commitments and the Loans, the Administrative Agent as a Lender and any Lender which is an Affiliate of the Administrative Agent shall have the same rights and powers hereunder as any other Lender and the Administrative Agent and Affiliates of the Administrative Agent may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any of its Subsidiaries or any Affiliates of, or Persons doing business with, the Borrower, as if they were not the Administrative Agent or affiliated with the Administrative Agent and without any obligation to account therefor.
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Section 9.6 Responsibility of the Administrative Agent. The duties and obligations of the Administrative Agent under this Agreement are only those expressly set forth in this Agreement and shall not include by reason of this Agreement or any other Loan Document any fiduciary or trustee duties for any Lender (without limiting the generality of the foregoing, the use of the term “agent” in this Agreement and in the other Loan Documents with reference to the Administrative 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). The Administrative Agent shall be entitled to assume that no Default or Event of Default has occurred and is continuing unless it has actual knowledge, or has been notified in writing by the Borrower, of such fact, or has been notified by a Lender in writing that such Lender considers that a Default or an Event of Default has occurred and is continuing, and such Lender shall specify in detail the nature thereof in writing. The Administrative Agent shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties in this Agreement or any other Loan Document or any other document contemplated by this Agreement or any other Loan Document or the exercise of any of its rights or powers. The Administrative Agent shall not be required to qualify in any jurisdiction in which it is not presently qualified. The Administrative Agent shall not be liable hereunder for any action taken or omitted to be taken except for its own gross negligence, bad faith or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. The Administrative Agent shall provide each Lender with copies of such documents received from the Borrower as such Lender may reasonably request. The Administrative Agent’s duties under this Agreement or any other Loan Document or any other document contemplated by this Agreement or any other Loan Document are administrative only and it may, but shall not be required under any circumstances to exercise discretion in the performance of its duties under such documents.
Section 9.7 Action by the Administrative Agent.
(a) | The Administrative Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Agreement, unless the Administrative Agent shall have been instructed by the Required Lenders to exercise or refrain from exercising such rights or to take or refrain from taking such action; provided that the Administrative Agent shall not exercise any rights under Section 8.2(a) of this Agreement without the request of the Required Lenders (or, where expressly required, all of the Lenders) unless time is of the essence, in which case, such action can be taken at the discretion of the Administrative Agent. The Administrative Agent shall incur no liability under or in respect of this Agreement with respect to anything which it may do or refrain from doing in the reasonable exercise of its judgment or which may seem to it to be necessary or desirable in the circumstances, except for its gross negligence, bad faith or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. |
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(b) | The Administrative Agent shall not be liable to the Lenders or to any Lender or the Borrower or any of its Subsidiaries in acting or refraining from acting under this Agreement or any other Loan Document in accordance with the instructions of the Required Lenders (or, where expressly required, all of the Lenders), and any action taken or failure to act pursuant to such instructions shall be binding on all Lenders, except for its gross negligence or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. The Administrative Agent shall not be obligated to take any action which is contrary to law or which would in its reasonable opinion subject it to liability. |
Section 9.8 Notice of Default or Event of Default. In the event that the Administrative Agent or any Lender shall acquire actual knowledge, or shall have been notified, of any Default or Event of Default, the Administrative Agent or such Lender shall promptly notify the Lenders (provided failure to give such notice shall not result in any liability on the part of such Lender or Administrative Agent), and the Administrative Agent shall take such action and assert such rights under this Agreement and the other Loan Documents as the Required Lenders shall request in writing, and the Administrative Agent shall not be subject to any liability by reason of its acting pursuant to any such request. If the Required Lenders shall fail to request the Administrative Agent to take action or to assert rights under this Agreement or any other Loan Documents in respect of any Default or Event of Default within ten (10) days after their receipt of the notice of any Default or Event of Default from the Administrative Agent or any Lender, or shall request inconsistent action with respect to such Default or Event of Default, the Administrative Agent may, but shall not be required to, take such action and assert such rights (other than rights under Article 8) as it deems in its discretion to be advisable for the protection of the Lenders, except that, if the Required Lenders have instructed the Administrative Agent not to take such action or assert such right, in no event shall the Administrative Agent act contrary to such instructions unless time is of the essence, in which case, the Administrative Agent may act in accordance with its reasonable discretion.
Section 9.9 Responsibility Disclaimed. The Administrative Agent shall not be under any liability or responsibility whatsoever in its capacity as Administrative Agent:
(a) | To the Borrower or any other Person as a consequence of any failure or delay in performance by, or any breach by, any Lender or Lenders of any of its or their obligations under this Agreement; |
(b) | To any Lender or Lenders, as a consequence of any failure or delay in performance by, or any breach by, (i) the Borrower of any of its obligations under this Agreement or the Notes or any other Loan Document, or (ii) any Subsidiary of the Borrower or any other obligor under any other Loan Document; |
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(c) | To any Lender or Lenders, for any statements, conditions, representations or warranties in this Agreement, or any other document contemplated by this Agreement or any information provided pursuant to this Agreement, any other Loan Document, or any other document contemplated by this Agreement, or for the validity, effectiveness, enforceability or sufficiency of this Agreement, the Notes, any other Loan Document, or any other document contemplated by this Agreement; |
(d) | To any Person for any act or omission other than that arising from gross negligence, bad faith or willful misconduct of the Administrative Agent as determined by a final, non-appealable judicial order of a court of competent jurisdiction; or |
(e) | To any Person for any failure or delay in the performance of its obligations under this Agreement or any other Loan Document or any other document contemplated by this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; business interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action. |
Section 9.10 Indemnification. The Lenders agree to indemnify the Administrative Agent, in its capacity as such (to the extent not reimbursed by the Borrower) pro rata according to their respective Commitment Ratios at the time that any such actions referred to in this Section 9.10 arise, from and against any and all liabilities, obligations, losses (other than the loss of principal and interest hereunder in the event of a bankruptcy or out-of-court “work out” of the Loans), damages, penalties, actions, judgments, suits, costs, expenses (including fees and expenses of experts, agents, consultants and counsel), or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of this Agreement, any Letter of Credit, or any other document contemplated by this Agreement or any other Loan Document or any action taken or omitted by the Administrative Agent under this Agreement, any Letter of Credit, any other Loan Document, or any other document contemplated by this Agreement, except that no Lender shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent as determined by a final, non-appealable judicial order of a court of competent jurisdiction. If any indemnity in favor of the Administrative Agent shall be or become in its determination inadequate, the Administrative Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.
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Section 9.11 Credit Decision. Each Lender agrees with each other and the Administrative Agent that:
(a) | In making its decision to enter into this Agreement and to make its portion of the Loans it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Borrower and that it has made an independent credit judgment, and that it has not relied upon the Administrative Agent or information provided by the Administrative Agent (other than information provided to the Administrative Agent by the Borrower and forwarded by the Administrative Agent to the Lenders); |
(b) | So long as any portion of the Loans remains outstanding or such Lender has an obligation to make its portion of Advances hereunder, it will continue to make its own independent evaluation of the financial condition and affairs of the Borrower; and |
(c) | None of the Administrative Agent and the Joint Lead Arrangers and Joint Bookrunners are undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans or the Commitments for an amount less than the amount being paid for an interest in the Loans or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing. |
Section 9.12 Successor Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time for cause by the Required Lenders upon notice in writing to Borrower. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent which appointment, so long as no Event of Default has occurred and is then continuing under Section 8.1(b), (f) or (g), shall be subject to the consent of the Borrower, acting reasonably. (a) If no successor Administrative Agent shall have been so appointed by the Required Lenders or (b) if appointed, no successor Administrative Agent shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gave notice of resignation or the Required Lenders removed the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be any Lender or a commercial bank organized under the laws of the United States of America or any political subdivision thereof which has combined capital and reserves in excess of $250,000,000, so long as no Event of Default has occurred and is then continuing under Section 8.1(b), (f) or (g), shall be subject to the consent of the Borrower, acting reasonably. Upon the acceptance of any such appointment as Administrative Agent hereunder by a successor Administrative Agent such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, duties and obligations of the retiring Administrative Agent and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent the provisions of this Article and all other indemnity and exculpatory provisions contained herein or in the other Loan Documents shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent or thereafter taken by it with respect to any transfer of agency. The fees payable by Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor. In the event that the Administrative Agent or any of its respective Affiliates ceases to be a Lender hereunder, such Person shall resign its agency hereunder.
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Section 9.13 Delegation of Duties. The Administrative Agent may execute any of its duties under the Loan Documents by or through agents or attorneys selected by it using reasonable care, and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects so long as such selection was made without gross negligence, bad faith or willful misconduct.
Section 9.14 Security Documents. The Administrative Agent is hereby authorized to act on behalf of the Lenders, in its own capacity and through other agents and sub-agents appointed by it, under the Security Documents; provided, however, that the Administrative Agent shall not agree to the release of, or subordination of Administrative Agent’s Lien in, any Collateral, or any property encumbered by any mortgage, pledge or Security Interest, or any Guaranty of the Obligations, except upon Payment in Full, in compliance with Section 11.22, in compliance with Section 11.12, or as otherwise permitted by this Agreement, any Security Document or the applicable Loan Document.
Section 9.15 Collateral Actions. Each of the parties hereto acknowledges and agrees that all provisions herein and under any Security Document relating to rights and remedies under any Security Document shall be exercised only upon the direction of the Required Lenders (except as expressly set forth in Section 9.7), and that the provisions of this Section 9.15 may not be amended except with the consent of the Required Lenders (or, where expressly required, all the Lenders).
Section 9.16 Other Agents. None of the Lenders, the Joint Lead Arrangers and Joint Bookrunners, or other persons identified on the facing page of this Agreement as a “syndication agent” or “documentation agent” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those specifically set forth herein and otherwise those applicable to all Lenders. Without limiting the foregoing, none of the Lenders or other persons so identified shall have or be deemed to have any fiduciary relationship with any Lender.
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Section 9.17 Certain ERISA Matters.
(a) | Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true: |
(i) | such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement, |
(ii) | the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, |
(iii) | (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84- 14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or |
(iv) | such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender. |
(b) | In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto). |
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Section 9.18 Interest Hedge Agreements, Other Hedging Agreements and Bank Products Documents. No Secured Party that is a counterparty to an Interest Hedge Agreement, Other Hedging Agreement or Bank Products Document, in its capacity as such, that obtains the benefits of Article 9, any Guaranty of the Obligations or any Collateral by virtue of the provisions hereof or of any Guaranty or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as the Administrative Agent, as the Issuing Bank or as a Lender, as the case may be, and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Agreement to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under any Interest Hedge Agreement, Other Hedging Agreement or Bank Products Document unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Secured Party. Each Secured Party that is a counterparty to an Interest Hedge Agreement, Other Hedging Agreement or Bank Products Document, in its capacity as such, agrees to be bound by this Article 9 to the same extent as a Lender hereunder.
ARTICLE 10
Change in Circumstances Affecting Advances
Section 10.1 LIBOR Basis Determination Inadequate or Unfair. If the Administrative Agent shall reasonably determine in good faith that on any date for determining LIBOR, due to any circumstance affecting the London interbank market or any market disruption (limited to circumstances generally affecting the banking market), adequate and fair means do not exist for ascertaining such rate on the basis provided herein or if any Lender shall notify the Administrative Agent that LIBOR does not adequately and fairly reflect the cost to that Lender of funding any requested Loan, and, in each case, the provisions of Section 10.6 are not applicable, then the Administrative Agent shall promptly notify the Borrower of such determination. Until the Administrative Agent notifies the Borrower that such circumstance no longer exists, the obligation of the Lenders to make LIBOR Advances or shall be suspended, and no further Loans may be Converted into or Continued as LIBOR Advances. Upon receipt of notice of the suspension of LIBOR in accordance herewith, Borrower may revoke any pending requests for a LIBOR Advance or Conversion to or Continuation of LIBOR Advances (to the extent of the affected LIBOR Advances or Interest Periods) or, failing that, will be deemed to have Converted such request into a request for a Base Rate Advance in the amount specified therein.
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Section 10.2 Illegality. If after the date hereof, the adoption of any Applicable Law, or any change in any Applicable Law (whether adopted before or after the Closing Date), or any change in interpretation or administration thereof by any Governmental Entity, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any directive (whether or not having the force of law) of any such authority, central bank or comparable agency, shall make it unlawful or impossible for any Lender to make, maintain or fund its portion of LIBOR Advances, such Lender shall so notify the Administrative Agent, and the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrower. Before giving any notice to the Administrative Agent pursuant to this Section 10.2, such Lender shall designate a different lending office if such designation will avoid the need for giving such notice and will not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Upon receipt of such notice, notwithstanding anything contained in Article 2, the Borrower shall repay in full the then outstanding principal amount of such Lender’s portion of each affected LIBOR Advance, together with accrued interest thereon, on either (a) the last day of the then current Interest Period applicable to such affected LIBOR Advances if such Lender may lawfully continue to maintain and fund its portion of such LIBOR Advance to such day or (b) immediately if such Lender may not lawfully continue to fund and maintain its portion of such affected LIBOR Advances to such day. Concurrently with repaying such portion of each affected LIBOR Advance, the Borrower may borrow a Base Rate Advance from such Lender, whether or not it would have been entitled to effect such borrowing and such Lender shall make such Advance, if so requested, in an amount such that the outstanding principal amount of the affected Advance made by such Lender shall equal the outstanding principal amount of such Advance immediately prior to such repayment. The obligation of such Lender to make LIBOR Advances is suspended only until such time as it is once more possible and legal for such Lender to fund and maintain LIBOR Advances.
Section 10.3 Increased Costs.
(a) | If after the date hereof, any Change in Law: |
(i) shall subject any Lender to any Tax (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes), with respect to its obligation to make its portion of LIBOR Advances, or its portion of existing Advances, or shall change the basis of taxation of payments to any Lender of the principal of or interest on its portion of LIBOR Advances or in respect of any other amounts due under this Agreement, in respect of its portion of LIBOR Advances or its obligation to make its portion of LIBOR Advances (except for changes in the rate or method of calculation of Excluded Taxes of such Lender); or
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(ii) shall impose, modify or deem applicable any reserve (excluding any reserve requirement imposed by the Board of Governors or any other applicable Governmental Entity reflected in LIBOR Basis), special deposit, compulsory loan, insurance charge or similar requirement (other than with respect to Taxes) against assets of, deposits with or for the account of, or commitments or credit extended by, any Lender or shall impose on any Lender or the London interbank borrowing market any other condition (other than with respect to Taxes) affecting its obligation to make its portion of such LIBOR Advances or its portion of existing Advances;
and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining any of its portion of LIBOR Advances, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under its Note with respect thereto, then, within ten (10) Business Days after demand by such Lender (which shall include the certificate referred to in Section 10.3(b)), the Borrower agrees to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased costs. Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 10.3 and will designate a different lending office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole reasonable judgment of such Lender made in good faith, be otherwise disadvantageous to such Lender.
(b) | Any Lender claiming compensation under this Section 10.3 shall provide the Borrower with a written certificate setting forth the additional amount or amounts to be paid to it hereunder and calculations therefor in reasonable detail. Such certificate shall be presumptively correct absent manifest error. Notwithstanding the foregoing, the Borrower shall only be obligated to compensate such Lender for any amount under this subsection arising or occurring during (i) in the case of each such request for compensation, any time or period commencing not more than ninety (90) days prior to the date on which such Lender submits such request and (ii) any other time or period during which, because of the unannounced retroactive application of such law, regulation, interpretation, request or directive, such Lender could not have known that the resulting reduction in return might arise. In determining such amount, such Lender may use any reasonable averaging and attribution methods. If any Lender demands compensation under this Section 10.3, the Borrower may at any time, upon at least three (3) Business Days’ prior notice to such Lender, prepay in full such Lender’s portion of the then outstanding LIBOR Advances, together with accrued interest thereon to the date of prepayment, along with any reimbursement required under Section 2.11. Concurrently with prepaying such portion of LIBOR Advances the Borrower may, whether or not then entitled to make such borrowing, borrow a Base Rate Advance, or a LIBOR Advance not so affected, from such Lender, and such Lender shall, if so requested, make such Advance in an amount such that the outstanding principal amount of the affected Note or Notes held by such Lender shall equal the outstanding principal amount of such Note or Notes immediately prior to such prepayment. |
(c) | Notwithstanding anything to the contrary contained in this Section 10.3, increased costs may be imposed on the Credit Parties by the Administrative Agent on behalf of each Lender only if such increased costs are generally being imposed by such Lenders on similarly situated borrowers (as reasonably determined by such Lenders). |
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Section 10.4 Effect On Other Advances. If notice has been given pursuant to Sections 10.1, 10.2 or 10.3 suspending the obligation of any Lender to make its portion of any type of LIBOR Advance, or requiring such Lender’s portion of LIBOR Advances to be repaid or prepaid, then, unless and until such Lender notifies the Borrower that the circumstances giving rise to such repayment no longer apply, all amounts which would otherwise be made by such Lender as its portion of LIBOR Advances shall, unless otherwise notified by the Borrower, be made instead as Base Rate Advances. In the event of suspension of LIBOR under Sections 10.1 or 10.2, the interest rate on which Base Rate Advances of the applicable Lender shall, if necessary to avoid the situation giving rise to the suspension, be determined by the Administrative Agent without reference to the LIBOR component of the Base Rate.
Section 10.5 Claims for Increased Costs and Taxes. In the event that any Lender shall decline to make LIBOR Advances pursuant to Sections 10.1 or 10.2 or shall have notified the Borrower that it is entitled to claim compensation pursuant to Sections 10.3, 2.10(b) through (d), 2.11 or 2.13 or is unable to complete the form required or subject to withholding as provided in Section 2.14 (each such lender being an “Affected Lender”), the Borrower at its own cost and expense may designate a Replacement Lender to assume the Commitment and the obligations of any such Affected Lender hereunder, and to purchase the outstanding Loans of such Affected Lender and such Affected Lender’s rights hereunder and with respect thereto, and within ten (10) Business Days after such designation the Affected Lender shall (a) sell to such Replacement Lender, without recourse upon, warranty by or expense to such Affected Lender, by way of an Assignment and Assumption Agreement substantially in the form of Exhibit A attached hereto, for a purchase price equal to (unless such Lender agrees to a lesser amount) the outstanding principal amount of the Loans of such Affected Lender, plus all interest accrued and unpaid thereon and all other amounts owing to such Affected Lender hereunder, including without limitation, any amount which would be payable to such Affected Lender pursuant to Section 2.11, and (b) assign the Commitments of such Affected Lender, and upon such assumption and purchase by the Replacement Lender and subject to acceptance and recording of such Assignment and Assumption Agreement by the Administrative Agent pursuant to Section 11.5(d), such Replacement Lender shall be deemed to be a “Lender” for purposes of this Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement and shall no longer have any obligations or rights hereunder (other than any obligations or rights which according to this Agreement shall survive the termination of the Commitments).
Section 10.6 Effect of Benchmark Transition Event.
(a) | Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 P.M. on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders of each type. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Required Lenders of each type have delivered to the Administrative Agent written notice that such Required Lenders accept such amendment. No replacement of LIBOR with a Benchmark Replacement pursuant to this Section 10.6 will occur prior to the applicable Benchmark Transition Start Date. |
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(b) | Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement. |
(c) | Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or Lenders pursuant to this Section 10.6, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 10.6. |
(d) | Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for an Advance of, Conversion to or Continuation of LIBOR Advances to be made, Converted or Continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have Converted any such request into a request for an Advance of or Conversion to Base Rate Advances. During any Benchmark Unavailability Period, the component of Base Rate based upon LIBOR will not be used in any determination of Base Rate. |
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ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) | Except as otherwise expressly provided herein, all notices and other communications under this Agreement and the other Loan Documents (unless otherwise specifically stated therein) shall be in writing and shall be deemed to have been given three (3) Business Days after deposit in the mail, designated as certified mail, return receipt requested, postage-prepaid, or one (1) Business Day after being entrusted to a reputable commercial overnight delivery service for next day delivery, or when sent on a Business Day prior to 5:00 P.M. (New York, New York time) by telecopy addressed to the party to which such notice is directed at its address determined as provided in this Section 11.1. All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses: |
(i) If to the Borrower or its Borrower’s Subsidiaries, to it at:
Whole Earth Brands, Inc.
125 S. Wacker Drive
Suite 3150
Chicago, IL 60606
Attention: Andy Rusie
Email: Andy.Rusie@Merisant.com
with a copy to:
Whole Earth Brands, Inc.
125 S. Wacker Drive
Suite 3150
Chicago, IL 60606
Attention: Ira Schlussel
Email: Ira.Schlussel@Merisant.com
with a copy (which shall not constitute notice) to:
DLA Piper LLP (US)
1251 Avenue of the Americas
27th Floor
New York, NY 10020
Attention: Jamie Knox
Email: jamie.knox@dlapiper.com
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(ii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas) LLC
222 Bay Street
15th Floor
Toronto, Ontario M5K 1A2
Canada
Attention: | TDSAgencyadmin@tdsecurities.com | |
Telecopy: | (416) 982-5535 |
with a copy (which shall not constitute notice to the Administrative Agent) to:
TD Securities (USA) LLC
31 West 52nd Street
New York, NY 10019-6101
Attention: Ronald Davis
Email: TDSUSA-Agency@tdsecurities.com
with a copy to (which shall not constitute notice to the Administrative Agent):
Jones Day
250 Vesey Street
New York, NY 10281-1047
Attention: | I. Lewis H. Grimm, Esq. | |
Email: | lgrimm@jonesday.com | |
Telecopy: | (212) 755-7306 |
(iii) If to Issuing Bank, to it at:
c/o Toronto Dominion (Texas) LLC
222 Bay Street
15th Floor
Toronto, Ontario M5K 1A2
Attention: | TDSAgencyadmin@tdsecurities.com | |
Telecopy: | (416) 982-5535 |
with a copy (which shall not constitute notice) to:
TD Securities (USA) LLC
31 West 52nd Street
New York, NY 10019-6101
Attention: Ronald Davis
Email: TDSUSA-Agency@tdsecurities.com
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with an additional copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, NY 10281-1047
Attention: | I. Lewis H. Grimm, Esq. | |
Email: | lgrimm@jonesday.com | |
Telecopy: | (212) 755-7306 |
(iv) If to the Lenders, to them at the addresses on file with the Administrative Agent.
The failure to provide copies shall not affect the validity of the notice given to the primary recipient.
(b) | Any party hereto may change the address to which notices shall be directed under this Section 11.1 from time to time by giving prior written notice of such change to the other parties. |
(c) | Electronic Communications. |
(i) Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including email and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant to Article 2 if such Lender or the Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (x) notices and other communications sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (y) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (x) of notification that such notice or communication is available and identifying the website address therefor.
(ii) The Borrower understands that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and agrees and assumes the risks associated with such electronic distribution, except to the extent caused by the willful misconduct, bad faith or gross negligence of the Administrative Agent as determined by a final, non-appealable judgment of a court of competent jurisdiction.
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(iii) The Platform and any Approved Electronic Communications are provided “as is” and “as available.” Neither of the Administrative Agent nor any of its officers, directors, employees, agents, advisors or representatives warrant the accuracy, adequacy, or completeness of the Approved Electronic Communications or the Platform and each expressly disclaims liability for errors or omissions in the Platform and the Approved Electronic Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects is made by the Affiliates of the Administrative Agent in connection with the Platform or the Approved Electronic Communications.
(iv) Each of the Credit Parties, the Lenders and the Issuing Banks agree that Administrative Agent may, but shall not be obligated to, store any Approved Electronic Communications on the Platform in accordance with Administrative Agent’s customary document retention procedures and policies.
(d) | Each Lender hereby notifies the Borrower that pursuant to the requirements of the Patriot Act and the Beneficial Ownership Regulation, it may be required to (x) obtain, verify and record information that identifies the Borrower and each Guarantor, which information includes the name, address, tax identification number and other information regarding the Borrower and each Guarantor that will allow such Lender to identify the Borrower and such Guarantor in accordance with the Patriot Act and (y) obtain a Beneficial Ownership Certification from the Borrower and each Guarantor, which certification shall be substantially similar in form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association. This notice is given in accordance with the requirements of the Patriot Act and is effective as to each Lender. |
Section 11.2 Indemnity; Expenses; Limitation of Liabilities.
(a) | The Borrower agrees to indemnify and hold harmless each Lender, the Issuing Bank, the Administrative Agent, the Joint Lead Arranger and Joint Bookrunners, the Syndication Agent, each Documentation Agent and each of their respective Affiliates, employees, representatives, shareholders, officers, directors, trustees, agents and advisors (any of the foregoing shall be an “Indemnitee”) from and against any and all claims (whether or not such Indemnitee shall be designated a party thereto and whether or not such proceeding is brought by the Borrower or any third party), liabilities, losses, damages, actions, reasonable out-of-pocket attorneys’ fees and expenses (as such fees and expenses are incurred and documented; provided that reimbursement of attorneys’ fees and expenses shall be limited to fees and expenses of one external counsel (which may be Jones Day), one local counsel in each applicable jurisdiction (which may be a single local counsel acting in multiple jurisdictions) and one regulatory counsel for each relevant area of expertise for all such Indemnitees (and, in the event of any unwaivable conflict of interest, one external counsel, one local counsel in each applicable jurisdiction (which may be a single local counsel acting in multiple jurisdictions) and one regulatory counsel for each relevant area of expertise for each party subject to such conflict)) and demands by any party, including the reasonable and documented out-of-pocket costs of investigating and defending such claims, resulting from (i) any breach or alleged breach by the Borrower or any other Credit Party of any representation or warranty made hereunder by such party; (ii) the use, handling, Release, emission, discharge, transportation, storage, treatment or disposal of any Hazardous Materials at any property owned or leased by the Borrower or any of its Subsidiaries during or prior to such ownership or lease; (iii) any violation of, non-compliance with or any liability under any Environmental Laws by or of the Borrower or any of its Subsidiaries with respect to conditions at any property owned or leased by the Borrower or any of its Subsidiaries or the operations conducted thereon; (iv) the direct or indirect disposal of Hazardous Materials by the Borrower or any of its Subsidiaries or their respective predecessors at any offsite locations; or (v) or otherwise arising out of (A) the Commitments, the Loans or otherwise under this Agreement, any Letter of Credit, any Loan Document or any transaction contemplated hereby or thereby, including, without limitation, the use of the proceeds of Loans hereunder in any fashion by the Borrower or the performance of their respective obligations under the Loan Documents to which it is a party by the Borrower or any other Credit Party, (B) allegations of any participation by the Lenders, the Issuing Bank, the Administrative Agent, or any of them, in the affairs of the Borrower or any of its Subsidiaries, or allegations that any of them has any joint liability with the Borrower or any of its Subsidiaries for any reason, (C) any claims against the Lenders, the Issuing Bank, the Administrative Agent, or any of them, by the Borrower or any of its Subsidiaries, by any shareholder or other investor in or lender to the Borrower or any of its Subsidiaries, by any brokers or finders or investment advisers or investment bankers retained by the Borrower or by any other third party, arising out of the Commitments or otherwise under this Agreement; provided, further (x) that if and to the extent that the Person seeking indemnification hereunder or any of Affiliates is determined in such case to have acted with gross negligence, bad faith or willful misconduct, or to have materially breached its (or such Affiliate’s) obligations hereunder or under the other Loan Documents, in any case, by a final, non-appealable judicial order of a court of competent jurisdiction, such Person shall not be entitled to any amounts which directly resulted from any such gross negligence, bad faith, willful misconduct or material breach as determined by a final, non-appealable judicial order of a court of competent jurisdiction and (y) the Borrower shall not have indemnification obligations hereunder with respect to claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements, which relate to disputes solely among Persons entitled to indemnification hereunder (other than a claim against the Administrative Agent acting in its capacity as such). The obligations of the Borrower under this Section 11.2(a) are in addition to, and shall not otherwise limit, any liabilities which the Borrower might otherwise have in connection with any warranties or similar obligations of the Borrower in any other Loan Document. This Section 11.2(a) shall not apply with respect to Taxes other than Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. |
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(b) | The Borrower will promptly pay, or reimburse: |
(i) | all reasonable and documented out-of-pocket expenses (as such expenses are incurred) of the Administrative Agent and the Issuing Bank in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents, and the transactions contemplated hereunder and thereunder and the making of the initial Advance hereunder (whether or not such Advance is made) and the issuance of any Letter of Credit, and any waivers, amendments or consents relating thereto, whether or not executed, including, but not limited to, the reasonable and documented fees and out-of-pocket disbursements (as such expenses are incurred) of legal counsel; |
(ii) | all reasonable and documented out-of-pocket expenses of the Administrative Agent, the Issuing Bank and Lenders in connection with the maintenance of the Platform and the restructuring and “work out” of the transactions contemplated in this Agreement, including, but not limited to, the reasonable and documented fees and disbursements of any experts, agents or consultants and of counsel for the Administrative Agent, the Issuing Bank and the Lenders; and |
(iii) | all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the Issuing Bank and the Lenders of enforcement under this Agreement or the other Loan Documents and all reasonable and documented out-of-pocket costs and expenses of collection if an Event of Default occurs, which, in each case shall include reasonable and documented out of pocket fees and expenses of counsel for the Administrative Agent, the Issuing Bank and the Lenders; |
provided that in the case of the foregoing clauses (b)(i), (ii) and (iii), reimbursement of legal fees and legal expenses shall be limited to fees and expenses of one external counsel (which may be Jones Day), one local counsel in each applicable jurisdiction (which may be a single local counsel acting in multiple jurisdictions) and one regulatory counsel for each relevant area of expertise for all of the Administrative Agent, the Issuing Bank and the Lenders (and, in the event of any unwaivable conflict of interest, one external counsel, one local counsel in each jurisdiction and/or one regulatory counsel for each relevant area of expertise for each party subject to such conflict).
Section 11.3 Waivers. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies which they would otherwise have. No failure or delay by the Administrative Agent, the Issuing Bank, the Required Lenders, or the Lenders, or any of them, in exercising any right, shall operate as a waiver of such right. The Administrative Agent, the Issuing Bank and the Lenders expressly reserve the right to require strict compliance with the terms of this Agreement in connection with any future funding of a Request for Advance. In the event the Lenders decide to fund a Request for Advance or the Issuing Bank decides to fund a Letter of Credit at a time when the Borrower is not in strict compliance with the terms of this Agreement, such decision by the Lenders or the Issuing Bank shall not be deemed to constitute an undertaking by the Lenders to fund any further Request for Advance or the Issuing Bank to issue any further Letters of Credit or preclude the Lenders, the Issuing Bank or the Administrative Agent from exercising any rights available under the Loan Documents or at law or equity. Any waiver or indulgence granted by the Administrative Agent, the Issuing Bank the Lenders, or the Required Lenders, shall not constitute a modification of this Agreement or any other Loan Document, except to the extent expressly provided in such waiver or indulgence, or constitute a course of dealing at variance with the terms of this Agreement or any other Loan Document such as to require further notice of their intent to require strict adherence to the terms of this Agreement or any other Loan Document in the future.
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Section 11.4 Set-Off. In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon the occurrence of an Event of Default and during the continuation thereof and the exercise of remedies (including the remedy hereunder) by the Administrative Agent in accordance with Section 8.2, the Administrative Agent and each of the Lenders are hereby authorized by the Borrower at any time or from time to time, with notice to the Borrower or to any other applicable Person (provided, that failure to give such notice shall not affect the validity of such set-off and application), to set off and to appropriate and to apply any and all deposits (general or special, time or demand, including, but not limited to, Indebtedness evidenced by certificates of deposit, in each case whether matured or unmatured) and any other Indebtedness at any time held or owing by any Lender or the Administrative Agent, to or for the credit or the account of the Borrower or any of its Subsidiaries, against and on account of the obligations and liabilities of the Borrower to the Lenders and the Administrative Agent, including, but not limited to, all Obligations arising out of or connected with this Agreement, the Notes or any other Loan Document, irrespective of whether (a) any Lender or the Administrative Agent shall have made any demand hereunder (except as required herein) or (b) any Lender or the Administrative Agent shall have declared the principal of and interest on the Loans and other amounts due hereunder to be due and payable as permitted by Section 8.2 and although such obligations and liabilities or any of them shall be contingent or unmatured; provided, in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.2(e)(iii) through (v) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Upon direction by the Administrative Agent with the consent of all of the Lenders each Lender holding deposits of the Borrower or any of its Subsidiaries shall exercise its set off rights as so directed, with notice to the Borrower or to any other applicable Person (provided, that failure to give such notice shall not affect the validity of such set-off and application).
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Section 11.5 Successors and Assigns.
(a) | The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of clause (b) of this Section 11.5, (ii) by way of participation in accordance with the provisions of clause (e) of this Section 11.5, and (iii) by way of pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction over such Lender in accordance with the provisions of clause (g) of this Section 11.5 (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (e) of this Section 11.5 and, to the extent expressly contemplated hereby, the Affiliates of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. |
(b) | Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that: |
(i) | except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitments (which for purposes of this Section 11.5(b)(i) includes Loans outstanding thereunder, respectively) or, if none of the Commitments are then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption Agreement with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption Agreement, as of the Trade Date) shall not be less than $1,000,000, and no such assignment shall be less than $1,000,000 (unless the Administrative Agent and, subject to clause (iii) below, the Borrower, otherwise consents or unless such assignment constitutes all of such Lender’s Commitments and Loans hereunder); |
(ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitments assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among the Commitments, on a non pro rata basis;
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(iii) any assignment of a Commitment by a Lender must be approved by the Administrative Agent and the Issuing Bank (if the assignment involves an assignment of any portion of the Revolving Commitment) and, unless an Event of Default under Section 8.1(b), (f) or (g) exists or with respect to any assignment made in respect of the primary syndication of the Loans and Commitments by the initial Lenders under this Agreement, the Borrower (which approval by the Administrative Agent, the Issuing Bank and the Borrower shall not be unreasonably withheld or delayed and, in the case of the Borrower, shall be deemed given if no objection is made within ten (10) Business Days after notice of the proposed assignment is delivered to the Borrower), unless the Person that is the proposed assignee is a Lender or an Affiliate or Approved Fund of such Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); provided that if such Affiliate or Approved Fund of such Lender cannot perform the obligations of a Lender holding a Commitment hereunder, the assigning Lender shall perform such obligations on behalf of such Affiliate or Approved Fund;
(iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption Agreement in the form of Exhibit A attached hereto, with such assignment becoming effective upon written acknowledgement and acceptance by the Administrative Agent, together with an administrative fee of $3,500 (other than for assignments to Lenders or Affiliates (including any Approved Fund) of Lenders), and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
(v) each assignee under an Assignment and Assumption Agreement shall represent and warrant that it is not a Disqualified Institution. No Person (other than the assignee or purchaser) shall have any liability whatsoever for any assignment or sale of a participation to a Disqualified Institution of the Borrower if the assignee or purchaser has represented that it is not a Disqualified Institution of the Borrower. Any such assignment or participation to a Disqualified Institution of the Borrower in violation hereof shall not affect the validity of the obligations so assigned or in which such participation is granted;
(vi) each Lender agrees to provide the Administrative Agent and the Borrower prompt written notice of any assignments of its interests hereunder;
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(vii) each Lender shall provide to the Administrative Agent and the Borrower the forms required to be provided under Section 2.14;
(viii) after giving effect to such assignment, the assigning Lender shall have Commitments and Loans outstanding in an aggregate amount no less than $1,000,000, unless the assignment is to a Lender or an Affiliate (including any Approved Fund) of a Lender or otherwise agreed to by the Borrower and the Administrative Agent or unless such assignment constitutes all of such Lender’s Commitments and Loans hereunder;
(ix) no such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof; and
(x) in connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Bank and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its applicable percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(c) | Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (d) of this Section 11.5, from and after the effective date specified in each Assignment and Assumption Agreement, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.10(b) through (d), 2.11, 2.13, 2.14, 10.3, 11.2 and 11.24 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (e) of this Section 11.5. |
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(d) | The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in Toronto, Ontario, a copy of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of and stated interest on the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Administrative Agent, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. |
(e) | Any Lender may at any time, without the consent of, or notice to, the Borrower, the Administrative Agent or the Issuing Bank sell participations to any Person (other than a natural person) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to the right to approve or disapprove decreases in the interest rate, increases in the principal amount of the Loans participated in by such Participant, decreases in fees, extensions of any Maturity Date, or other dates of the scheduled principal repayments of the Term Loans set forth in Section 2.8(a), (g) or (h) and any release of all or substantially all of the Collateral for the Loans (other than Payment in Full and Collateral disposed of in accordance with the provisions of this Agreement). Subject to clause (f) of this Section 11.5, the Borrower agrees that each Participant shall be entitled to Sections 2.10(b) through (d), 2.11, 2.13, 2.14 and 10.3 (subject to the requirements and limitations therein and provided that such Participant agrees to be subject to the provisions of Sections 2.18 and 10.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section 11.5) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section 11.5. Each Lender, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a register for the recordation of the names and addresses of its Participants, and the principal amounts of and stated interest on each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register. |
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(f) | A Participant shall not be entitled to receive any greater payment under Sections 2.10(b) through (d), 2.11, 2.13, 2.14 and 10.3 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless (a) the sale of the participation to such Participant is made with the Borrower’s prior written consent or at the Borrower’s request (and in either case Borrower shall have expressly agreed to such greater payments) and such Participant has complied with the terms of such provisions as if it were a Lender or (b) such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Notwithstanding the foregoing, each Participant shall be required to comply with the provisions of Section 2.14 as if it were a Lender (it being understood that the documentation required under Section 2.14 shall be required to be delivered to the participating Lender). Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Sections 2.2(e)(iv), 2.18, 10.5 and 11.12(b) with respect to any Participant. |
(g) | Notwithstanding anything to the contrary contained in this Section 11.5 or any other provision of this Agreement (though without limitation of Section 11.5(d)), so long as no Default or Event of Default has occurred and is continuing or would result therefrom, each Lender shall have the right at any time to sell, assign or transfer a portion of its Term Loans owing to it to the Borrower on a non-pro rata basis (provided, however, that each assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any applicable Term Loan), subject to the following limitations: |
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(i) | The Borrower may conduct one or more modified Dutch auctions (each, an “Auction”) to repurchase all or any portion of the Term Loans, provided that, (A) notice of the Auction shall be made to all Term Loan Lenders and (B) the Auction shall be conducted pursuant to such procedures as the Auction Manager may establish which are consistent with this Section 11.5(g) and are otherwise reasonably acceptable to the Borrower, the Auction Manager and the Administrative Agent; |
(ii) | With respect to all repurchases made by the Borrower pursuant to this Section 11.5(g), (A) the Borrower shall deliver to the Auction Manager a certificate of an Authorized Signatory of the Borrower stating that (1) no Default or Event of Default has occurred and is continuing or would result from such repurchase and (2) as of the launch date of the related Auction and the effective date of any Affiliate Assignment Agreement, neither it, its Affiliates nor any of their respective directors or officers, is in possession of any information regarding the Borrower, its Subsidiaries or its Affiliates, or their assets, the Borrower’s ability to perform its Obligations or any other matter that may be material to a decision by any Lender to participate in any Auction or enter into any Affiliate Assignment Agreement or any of the transactions contemplated thereby that has not previously been disclosed to the Auction Manager, Administrative Agent and the Lenders, (B) the Borrower shall not use the proceeds of any Revolving Loans to acquire such Term Loans and (C) the assigning Lender and the Borrower shall execute and deliver to the Auction Manager an Affiliate Assignment Agreement; |
(iii) | Following repurchase by the Borrower pursuant to this Section 11.5(g), the Term Loans so repurchased shall, without further action by any Person, be deemed cancelled for all purposes and no longer outstanding (and may not be resold by the Borrower), for all purposes of this Agreement and all other Loan Documents, including, but not limited to (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Loan Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Loan Document or (C) the determination of Required Lenders, or for any similar or related purpose, under this Agreement or any other Loan Document. In connection with any Term Loans repurchased and cancelled pursuant to this Section 11.5(g), the Administrative Agent is authorized to make appropriate entries in the Register to reflect any such cancellation; and |
(iv) | The aggregate principal amount of all Term Loans and Incremental Facility Loans purchased pursuant to this Section 11.5(g) may not exceed 10% of the outstanding principal amount of all Term Loans and Incremental Facility Loans at any time. |
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(h) | Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender upon written notice thereof to the Borrower (provided, that such written notice shall not be required with respect to any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction over such Lender), including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction over such Lender; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. |
The provisions of this Section 11.5 shall not apply to any purchase of participations among the Lenders pursuant to Section 2.12.
A Lender may furnish any information concerning the Borrower and/or any of its Subsidiaries in the possession of such Lender from time to time to assignees, Participants and pledgees (including prospective assignees, Participants and pledgees) subject, however, to and so long as the recipient (other than a Federal Reserve Bank or a central bank having jurisdiction over such Lender) agrees in writing to be bound by the provisions of Section 11.19. In addition, the Administrative Agent may furnish any information concerning the Borrower or any of its Subsidiaries in the Administrative Agent’s possession to any Affiliate of Administrative Agent, subject, however, to the provisions of Section 11.19.
Section 11.6 Accounting Principles. All references in this Agreement to GAAP shall be to such principles as in effect from time to time. In the event that any Accounting Change (as defined below) shall occur and such change results in a change in the method of calculation of such financial covenants, then, upon request by either the Borrower or the Required Lenders, the Borrower and Administrative Agent and the Lenders agree to enter into negotiations in order to amend, subject to Required Lender approval, such provisions of this Agreement so as to equitably reflect such Accounting Change with the desired result that the criteria for evaluating the Borrower’s and its Subsidiaries’ financial condition and results of operations shall be the same after such Accounting Change as if such Accounting Change had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, (a) all financial covenants shall continue to be calculated or construed as if such Accounting Change had not occurred and (b) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP, provided that the Borrower shall be obligated to do so only once. Any change in GAAP occurring after the date hereof that would require operating leases to be treated as Capital Leases shall be disregarded for the purposes of determining Indebtedness and any financial ratio or compliance requirement in any Loan Document. “Accounting Change” refers to any change in GAAP, including, without limitation, changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board, or the adoption by the Borrower of International Financial Reporting Standards. All accounting terms used herein without definition shall be used as defined under GAAP.
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Section 11.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page to this Agreement by facsimile, PDF or other electronic transmission shall be as effective as delivery of an original executed counterpart of this Agreement.
Section 11.8 Governing Law. This Agreement, any Notes and each other Loan Document shall be construed in accordance with and governed by the laws of the State of New York. If any action or proceeding shall be brought by any of the parties hereto hereunder or under any other Loan Document in order to enforce any right, each of the parties hereby consents to and will submit to, the exclusive jurisdiction of any state or federal court of competent jurisdiction sitting in the borough of Manhattan, or, if that court does not have subject matter jurisdiction, in any state court located in the city and county of New York and the appellate courts therefrom. By executing and delivering this Agreement, each party hereto, for itself and in connection with its properties, irrevocably (i) accepts generally and unconditionally the exclusive (subject to the penultimate sentence below) jurisdiction and venue of such courts and (ii) waives any defense of forum non conveniens. Each of the parties hereto hereby agrees that, to the extent permitted by Applicable Law, service of the summons and complaint and all other process which may be served in any such suit, action or proceeding may be effected by mailing by registered mail a copy of such process to the offices of such Person at the address given in Section 11.1 and that personal service of process shall not be required. Each of the parties hereto agrees that the Administrative Agent, Issuing Bank, and Lenders retain the right to serve process in any other manner permitted by Applicable Law or to bring proceedings against any Credit Party in the courts of any other jurisdiction in connection with the exercise of any rights under any Loan Document or against any Collateral or the enforcement of any judgment, and hereby submits to the jurisdiction of, and consents to venue in, any such court. Each of the parties hereto agrees that final judgment in such suit, action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by Applicable Law.
Section 11.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.
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Section 11.10 Interest.
(a) | In no event shall the amount of interest due or payable hereunder or under the Notes exceed the maximum rate of interest allowed by Applicable Law, and in the event any such payment is inadvertently made by the Borrower or inadvertently received by the Administrative Agent or any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the Administrative Agent or such Lender, in writing, that it elects to have such excess sum returned forthwith. If the maximum lawful interest rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily rate equal to the maximum lawful rate divided by the number of days in the year in which such calculation is made. It is the express intent hereof that the Borrower not pay and the Administrative Agent and the Lenders not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may legally be paid by the Borrower under Applicable Law. |
(b) | Notwithstanding the use by the Lenders of the Base Rate and LIBOR as reference rates for the determination of interest on the Loans, the Lenders shall be under no obligation to obtain funds from any particular source in order to charge interest to the Borrower at interest rates related to such reference rates. |
Section 11.11 Table of Contents and Headings. The Table of Contents and the headings of the various subdivisions used in this Agreement are for convenience only and shall not in any way modify or amend any of the terms or provisions hereof, nor be used in connection with the interpretation of any provision hereof.
Section 11.12 Amendment and Waiver.
(a) | Neither this Agreement nor any Loan Document nor any term hereof or thereof may be amended orally, nor may any provision hereof or thereof be waived orally but only by an instrument in writing signed by or at the direction of the Required Lenders and, in the case of an amendment (or in the case of a waiver by a Credit Party), by the Borrower (with respect to this Agreement) or by each Credit Party party to such Loan Document, as applicable; provided, however, except as expressly set forth herein, without the prior written consent of each Lender that would be directly affected thereby, no amendment, waiver or consent shall be effective if the effect thereof would cause: (i) any increase in the amount of any Lender’s portion of the Commitments, (ii) any delay or extension in the terms of the scheduled repayments of the Term Loans provided in Section 2.8(a), (g) or (h), or the final maturity of any of the Loans or waiver of any of the foregoing, (iii) any reduction in principal, interest or fees due hereunder or postponement or waiver of the payment thereof without a corresponding payment of such principal, interest or fee amount by the Borrower (except that (A) the application or waiver of Default Rate interest, (B) amendments to the financial covenants in Section 7.8 and related definitions, or (C) waiver of any mandatory prepayments under Section 2.8(b), (d), (e) or (f) may be waived or amended, respectively, by the Required Lenders), (iv) any release of all, or subordination of Administrative Agent’s Lien on, or substantially all of the Collateral for the Loans, which shall be deemed to affect all Lenders (other than upon Payment in Full or release of Collateral permitted herein), (v) any release of any material Guaranty of all or any portion of the Obligations (other than a Guaranty provided by a Subsidiary that is sold (or otherwise disposed of), liquidated or dissolved in accordance with the provisions of this Agreement), which shall be deemed to affect all Lenders, (vi) any amendment to (A) the pro rata treatment of the Lenders set forth in Section 2.12 or (B) the pro rata treatment of the Lenders or the application of payments set forth in Section 8.3, which shall be deemed to affect all Lenders, or (vii) any amendment of this Section 11.12, Sections 11.4 and 11.5(a) (in each case with respect to the consent rights of all Lenders specified therein), or of the percentage in the definition of Required Lenders which shall be deemed to affect all Lenders and any such amendment or waiver or consent may be made only by an instrument in writing signed by each of the Lenders affected thereby and, in the case of an amendment, by the Borrower. Notwithstanding anything to the contrary, only the written consent of the Required Revolving Lenders shall be required to amend the conditions for Advances or issuance of Letters of Credit set forth in Sections 3.2 and 3.3. In addition to, and not in derogation of, Section 2.16 and this Section 11.12(a), the parties hereto hereby agree that (a) the provisions of Section 2.16 may be modified or waived only by a writing signed by the Issuing Bank, (b) the terms “Revolving Commitment” and “Available Revolving Commitment” may only be modified or amended by a writing signed by the Required Revolving Lenders and such other Persons as determined in accordance with this Section 11.12 and (c) the provisions of any Section herein to the extent that such Section requires action by all Lenders may only be modified amended or waived by all Lenders. Any amendment to any provision hereunder governing the rights, obligations, or liabilities of the Administrative Agent in its capacity as such, may be made only by an instrument in writing signed by the Administrative Agent. Notwithstanding the foregoing, the parties hereto agree that the terms of this Agreement may be amended in accordance with Section 2.17 by the Administrative Agent and the Borrower. |
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(b) | In the event that any Lender (a “Non-Consenting Lender”) fails to consent to any proposed amendment, modification, termination, waiver or consent with respect to any provision hereof or of any other Loan Document that requires the unanimous approval of all of the Lenders or the approval of all of the Lenders directly affected thereby, in each case in accordance with the terms of this Section, the Borrower shall be permitted to (i) so long as no Default or Event of Default then exists, repay in full all outstanding Obligations owed to such Lender and terminate in full all Revolving Commitments held by such Non-Consenting Lenders, or (ii) require such Non-Consenting Lender to assign its Term Loans or Loans, as applicable, to a financial institution reasonably satisfactory to the Administrative Agent, so long as the consent of the Required Lenders shall have been obtained with respect to such amendment, modification, termination, waiver or consent; provided that (1) such assignment does not conflict with any Applicable Law, (2) the assignee shall purchase, at par, all Obligations with respect to the Term Loans or Loans, as applicable, owing to the Non-Consenting Lender pursuant to the Loan Documents on or prior to the date of such assignment, (3) the assignee shall approve the proposed amendment, modification, termination, waiver or consent, (4) the Non-Consenting Lender shall be obligated to make such assignment in accordance with the provisions of Section 11.5(b) (provided that the Borrower shall be obligated to pay the administrative fee referred to in Section 11.5(b)(iv)), and (5) until such time as such assignment shall be consummated, the Borrower shall pay to the Non-Consenting Lender all additional amounts (if any) required pursuant to Article 10, as the case may be. With respect to clauses (i) and (ii) above, (1) the Borrower shall provide at least three Business Days’ prior notice to the Non-Consenting Lender of such repayment or assignment, (2) the Borrower shall be liable to the Non-Consenting Lender for any costs incurred by such Lender under Section 2.11 and (3) any such repayment or assignment shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the Non-Consenting Lender. In the event any Non-Consenting Lender fails to execute the agreements required under Section 11.5 in connection with an assignment pursuant to this Section, the Borrower may, upon two (2) Business Days’ prior notice to the Non-Consenting Lender, execute such agreements on behalf of the Non-Consenting Lender, and each such Lender hereby grants to the Borrower an irrevocable power of attorney (which shall be coupled with an interest) for such purpose. |
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(c) | Notwithstanding anything to the contrary contained in this Section 11.12, if at any time the Administrative Agent and the Borrower shall have jointly identified an obvious error (including, but not limited to, an incorrect cross-reference) or any error or omission of a technical or immaterial nature, in each case, in any provision of this Agreement or any other Loan Document (including, for the avoidance of doubt, any exhibit, schedule or other attachment to any Loan Document), then the Administrative Agent (acting in its sole discretion) and the Borrower or any other relevant Credit Party shall be permitted to amend such provision. The Administrative Agent shall notify the Lenders of such amendment and such amendment shall become effective five (5) Business Days after such notification unless the Required Lenders object to such amendment in writing delivered to the Administrative Agent prior to such time. |
Section 11.13 Entire Agreement. This Agreement, the Loan Documents and the Fee Letters embody the entire agreement and understanding among the parties hereto and thereto and supersede all prior agreements and understandings relating to the subject matter hereof and thereof.
Section 11.14 Other Relationships.
(a) | No relationship created hereunder or under any other Loan Document shall in any way affect the ability of the Administrative Agent and each Lender to enter into or maintain business relationships with the Borrower or any of its Affiliates beyond the relationships specifically contemplated by this Agreement and the other Loan Documents. |
(b) | In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Credit Party acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Credit Parties and their Affiliates, on the one hand, and the Lenders, on the other hand, (B) each Credit Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Credit Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender has any obligation to any Credit Party or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender has any obligation to disclose any of such interests to any Credit Party or its Affiliates. To the fullest extent permitted by Applicable Law, each Credit Party hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby. |
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Section 11.15 Directly or Indirectly. If any provision in this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision.
Section 11.16 Reliance on and Survival of Various Provisions. All covenants, agreements, statements, representations and warranties made herein or in any certificate delivered pursuant hereto (i) shall be deemed to have been relied upon by the Administrative Agent and each of the Lenders notwithstanding any investigation heretofore or hereafter made by them, and (ii) shall survive the execution and delivery of the Notes and shall continue in full force and effect until Payment in Full. Any right to indemnification hereunder, including, without limitation, rights pursuant to Sections 2.10(b) through (d), 2.11, 10.3, 11.2, and 11.24 shall survive the termination of this Agreement and the payment and performance of all Obligations.
Section 11.17 Senior Debt. The Obligations are secured by the Security Documents and are intended by the parties hereto to be on parity with the Interest Hedge Agreements issued by, the Bank Products with, and the Other Hedging Agreements issued by, a Lender (or its Affiliates) and senior in right of payment to all subordinated Indebtedness of the Borrower.
Section 11.18 Obligations Several. The obligations of the Administrative Agent and each of the Lenders hereunder are several, not joint.
Section 11.19 Confidentiality. The Administrative Agent, each Lender and the Issuing Bank agrees to keep confidential all information received from or on behalf of the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries, any of their respective Affiliates or any of their respective businesses obtained by it in connection with the transaction described herein or pursuant hereto and the other Loan Documents in accordance with such Person’s customary practices and agrees that it will only use such information in connection with the transactions contemplated by this Agreement and not disclose any of such information other than (a) to such Person’s employees, representatives, directors, attorneys, auditors, agents, professional advisors, trustees or affiliates who are informed of the confidentiality of such information, or to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provision of this Section 11.19), (b) to the extent such information presently is or hereafter becomes available to such Person on a non-confidential basis from any source (other than the Borrower or any of its Subsidiaries) of such information that is in the public domain at the time of disclosure (through no fault of such Person receiving the disclosure), (c) to the extent disclosure is required by Applicable Law (including applicable securities laws) or requested or required by bank, securities, insurance or investment company regulators, examiners or auditors or any administrative entity or Governmental Entity (including the Securities Valuation Office of the National Association of Insurance Commissioners) having appropriate jurisdiction; provided that notice of such requirement, order or request shall be promptly furnished to the Borrower unless such notice is legally prohibited and other than in connection with routine or ordinary course audits or bank oversight, (d) to any rating agency to the extent required in connection with any rating to be assigned to such Lender, (e) to pledgees referred to in Section 11.5(h) or permitted assignees or Participants or prospective permitted assignees or Participants who agree to be bound by the provisions of this Section 11.19, (f) to the extent required in connection with any litigation or in connection with any enforcement rights between any obligor and any Lender with respect to the Loans or this Agreement and the other Loan Documents, (g) to the extent (but not more than is) necessary and customary with respect to lending transactions to similarly-situated credit parties, for purposes of submission for league table measurements, or (h) with the Borrower’s prior written consent. Notwithstanding the foregoing, until Payment in Full (at which time such license shall be automatically revoked), each Lender and its Affiliates shall have the right to (i) list the Borrower’s name and logo, as provided by the Borrower from time to time, solely in connection with generally describing the transaction (without use of material non-public information except as otherwise agreed to by Borrower) that is the subject of this Agreement in their marketing materials and (ii) post such information, including, without limitation, a customary “tombstone”, on their website. Any goodwill associated with such use shall inure solely to the benefit of the Borrower.
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Section 11.20 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) | the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and |
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(b) | the effects of any Bail-In Action on any such liability, including, if applicable: |
(i) | a reduction in full or in part or cancellation of any such liability; |
(ii) | a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or |
(iii) | the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority. |
Section 11.21 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for swap contracts or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States) that in the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
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Section 11.22 Release of Collateral; Guarantors. Upon Payment in Full, all Liens created hereunder or under any Loan Document to the extent they secure the Obligations shall be automatically released and terminated and the Administrative Agent and the Lenders shall, upon the request of the Borrower (at the Borrower’s expense), promptly take all necessary action to evidence such release and termination, including, without limitation, executing and delivering any and all UCC termination statements and such other documents reasonably requested by the Credit Parties in connection herewith. Upon the disposition of any item of Collateral that is permitted by this Agreement, the Security Interest in such Collateral that is subject of such disposition, and the guaranty obligations under any Loan Document of any Credit Party being disposed of in such disposition, if any, shall in each case be automatically released and terminated and the Administrative Agent and the Lenders shall, upon the request of Borrower (and at the Borrower’s expense), promptly take all necessary action to evidence such release and termination, including, without limitation, executing and delivering any and all UCC partial release statements and such other documents reasonably requested by the Credit Parties in connection herewith. The Administrative Agent shall be permitted to release any Guarantor from its obligations under the Loan Documents to which it is a party (including, without limitation, the pledge of any Ownership Interests in such Guarantor) if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents or becomes an Immaterial Subsidiary. Upon Payment in Full, the Guarantors shall no longer be deemed “Guarantors” or “Credit Parties” as such terms are defined herein and used in the Loan Documents, in each case without need for further action by any Person.
Section 11.23 Electronic Execution of Assignments and Loan Documents. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption Agreement or any other Loan Document shall in each case be deemed to include electronic signatures, signatures exchanged by electronic transmission, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided, that Administrative Agent may request, and upon any such request the Credit Parties shall be obligated to provide, manually executed “wet ink” signatures to any Loan Document.
Section 11.24 Judgment Currency. In respect of any judgment or order given or made for any amount due under this Agreement or any other Loan Document that is expressed and paid in a currency (the “judgment currency”) other than U.S. Dollars, the Credit Parties will indemnify the Administrative Agent, the Issuing Bank and any Lender against any loss incurred by them as a result of any variation as between (i) the rate of exchange at which the U.S. Dollar amount is converted into the judgment currency for the purpose of such judgment or order and (ii) the rate of exchange, as quoted by the Administrative Agent or by a known dealer in the judgment currency that is designated by the Administrative Agent, at which the Administrative Agent, the Issuing Bank or such Lender is able to purchase U.S. Dollars with the amount of the judgment currency actually received by the Administrative Agent, the Issuing Bank or such Lender. The foregoing indemnity shall constitute a separate and independent obligation of the Credit Parties and shall survive any termination of this Agreement and the other Loan Documents, and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into U.S. Dollars.
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Section 11.25 Waiver of Sovereign Immunity. Each of the Credit Parties, in respect of itself, its Subsidiaries, its process agents, and its properties and revenues, hereby irrevocably agrees that, to the extent that the Borrower or any of its Subsidiaries or any of their respective properties has or may hereafter acquire any right of immunity, whether characterized as sovereign immunity or otherwise, from any legal proceedings, whether in the United States or elsewhere, to enforce or collect upon the Loans or any Loan Document or any other liability or obligation of the Borrower or any of its Subsidiaries related to or arising from the transactions contemplated by any of the Loan Documents, including, without limitation, immunity from service of process, immunity from jurisdiction or judgment of any court or tribunal, immunity from execution of a judgment, and immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, the Borrower, for itself and on behalf of its respective Subsidiaries, hereby expressly waive, to the fullest extent permissible under Applicable Law, any such immunity, and agree not to assert any such right or claim in any such proceeding, whether in the U.S. or elsewhere. Without limiting the generality of the foregoing, the Borrower further agrees that the waivers set forth in this Section 11.25 shall have the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the U.S. and are intended to be irrevocable for purposes of such Act.
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ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial; Waiver of Special, Exemplary, Punitive or Consequential Damages. BORROWER, FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES, AND THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS, HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF BORROWER’S SUBSIDIARIES, ANY OF THE LENDERS, THE ADMINISTRATIVE AGENT OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION 12.1. EXCEPT AS PROHIBITED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (other than any special, exemplary, punitive or consequential damages that otherwise represent indemnification obligations of any Credit Party UNDER ANY LOAN DOCUMENT (including under Section 11.2) arising from a claim by a third party unaffiliated with THE APPLICABLE Lender, Issuing Bank, Administrative Agent, Joint Lead Arranger and Joint Bookrunners, Syndication Agent, Documentation Agent or any of their respective Affiliates, employees, representatives, shareholders, officers, directors, trustees, agents and advisors) OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND SUCH PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed by their duly authorized officers, all as of the day and year first above written.
BORROWER: | WHOLE EARTH BRANDS, INC., a Delaware corporation | |
By: | /s/ Andrew Rusie | |
Name: | Andrew Rusie | |
Title: | Chief Financial Officer |
ADMINISTRATIVE AGENT: | TORONTO DOMINION (TEXAS) LLC, as Administrative Agent | |
By: | /s/ Wallace Wong | |
Name: | Wallace Wong | |
Title: | Authorized Signatory |
ISSUING BANK: | THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as Issuing Bank | |
By: | /s/ Wallace Wong | |
Name: | Wallace Wong | |
Title: | Authorized Signatory |
SWING LINE LENDER: | THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as Swing Line Lender | |
By: | /s/ Wallace Wong | |
Name: | Wallace Wong | |
Title: | Authorized Signatory |
LENDER: | THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as a Lender |
By: | /s/ Wallace Wong | |
Name: | Wallace Wong | |
Title: | Authorized Signatory |
LENDER: | BANK OF AMERICA NA, as a Lender |
By: | /s/ Jana L. Baker | |
Name: | Jana L. Baker | |
Title: | Senior Vice President |
LENDER: | BMO Harris Bank N.A., as a Lender |
By: | /s/ Corey Noland | |
Name: | Corey Noland | |
Title: | Director |
LENDER: | Truist Bank, as a Lender |
By: | /s/ Matthew J. Davis | |
Name: | Matthew J. Davis | |
Title: | Senior Vice President |
LENDER: | CoBank, ACB, as a Lender |
By: | /s/ LaTonya Keaton | |
Name: | LaTonya Keaton | |
Title: | Vice President, Senior Relationship Manager |
Exhibit 10.5
WHOLE EARTH BRANDS, INC.
2020 LONG-TERM INCENTIVE PLAN
Table of Contents
Page
1. | History; Effective Date | 1 |
2. | Purposes of the Plan | 1 |
3. | Terminology | 1 |
4. | Administration | 1 |
(a) | Administration of the Plan | 1 |
(b) | Powers of the Administrator | 1 |
(c) | Delegation of Administrative Authority | 3 |
(d) | Non-Uniform Determinations | 3 |
(e) | Limited Liability; Advisors | 3 |
(f) | Indemnification | 3 |
(g) | Effect of Administrator’s Decision | 3 |
5. | Shares Issuable Pursuant to Awards | 3 |
(a) | Initial Share Pool | 3 |
(b) | Adjustments to Share Pool | 3 |
(c) | ISO Limit | 4 |
(d) | Source of Shares | 4 |
6. | Participation | 4 |
7. | Awards | 4 |
(a) | Awards, In General | 4 |
(b) | Minimum Restriction Period for Awards | 5 |
(c) | Stock Options | 5 |
(d) | Limitation on Reload Options | 5 |
(e) | Stock Appreciation Rights | 6 |
(f) | Repricing | 6 |
(g) | Stock Awards | 6 |
(h) | Stock Units | 7 |
(i) | Performance Shares and Performance Units | 8 |
(j) | Other Stock-Based Awards | 9 |
(k) | Awards to Participants Outside the United States | 9 |
(l) | Limitation on Dividend Reinvestment and Dividend Equivalents | 9 |
8. | Withholding of Taxes | 10 |
9. | Transferability of Awards | 10 |
10. | Adjustments for Corporate Transactions and Other Events | 11 |
(a) | Mandatory Adjustments | 11 |
(b) | Discretionary Adjustments | 11 |
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Table of Contents
(continued)
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(c) | Adjustments to Performance Goals | 11 |
(d) | Statutory Requirements Affecting Adjustments | 12 |
(e) | Dissolution or Liquidation | 12 |
11. | Change in Control Provisions | 12 |
(a) | Termination of Awards | 12 |
(b) | Continuation, Assumption or Substitution of Awards | 13 |
(c) | Other Permitted Actions | 13 |
(d) | Section 409A Savings Clause | 13 |
12. | Substitution of Awards in Mergers and Acquisitions | 13 |
13. | Compliance with Securities Laws; Listing and Registration | 13 |
14. | Section 409A Compliance | 14 |
15. | Plan Duration; Amendment and Discontinuance | 15 |
(a) | Plan Duration | 15 |
(b) | Amendment and Discontinuance of the Plan | 15 |
(c) | Amendment of Awards | 15 |
16. | General Provisions | 15 |
(a) | Non-Guarantee of Employment or Service | 15 |
(b) | No Trust or Fund Created | 16 |
(c) | Status of Awards | 16 |
(d) | Subsidiary Employees | 16 |
(e) | Governing Law and Interpretation | 16 |
(f) | Use of English Language | 16 |
(g) | Recovery of Amounts Paid | 16 |
17. | Glossary | 17 |
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1. History; Effective Date.
WHOLE EARTH BRANDS, INC., a Delaware corporation (“Whole Earth Brands”), has established the WHOLE EARTH BRANDS, INC. 2020 LONG-TERM INCENTIVE PLAN, as set forth herein, and as the same may be amended from time to time (the “Plan”). The Plan was adopted by the Board of Directors of Whole Earth Brands (the “Board”) on June 24, 2020. The Plan shall become and is effective as of the date that it is approved by the stockholders of Whole Earth Brands (the “Effective Date”).
2. Purposes of the Plan.
The Plan is designed to:
(a) promote the long-term financial interests and growth of Whole Earth Brands and its Subsidiaries (together, the “Company”) by attracting and retaining management and other personnel and key service providers with the training, experience and ability to enable them to make a substantial contribution to the success of the Company’s business;
(b) motivate management personnel by means of growth-related incentives to achieve long-range goals; and
(c) further the alignment of interests of Participants with those of the stockholders of Whole Earth Brands through opportunities for increased stock or stock-based ownership in Whole Earth Brands.
Toward these objectives, the Administrator may grant stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan.
3. Terminology.
Except as otherwise specifically provided in an Award Agreement, capitalized words and phrases used in the Plan or an Award Agreement shall have the meaning set forth in the glossary at Section 17 of the Plan or as defined the first place such word or phrase appears in the Plan.
4. Administration.
(a) Administration of the Plan. The Plan shall be administered by the Administrator.
(b) Powers of the Administrator. The Administrator shall, except as otherwise provided under the Plan, have plenary authority, in its sole and absolute discretion, to grant Awards pursuant to the terms of the Plan to Eligible Individuals and to take all other actions necessary or desirable to carry out the purpose and intent of the Plan. Among other things, the Administrator shall have the authority, in its sole and absolute discretion, subject to the terms and conditions of the Plan to:
(i) determine the Eligible Individuals to whom, and the time or times at which, Awards shall be granted;
(ii) determine the types of Awards to be granted any Eligible Individual;
(iii) determine the number of shares of Common Stock to be covered by or used for reference purposes for each Award or the value to be transferred pursuant to any Award;
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(iv) determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (A) the purchase price of any shares of Common Stock, (B) the method of payment for shares purchased pursuant to any Award, (C) the method for satisfying any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of shares of Common Stock, (D) subject to Section 7(b), the timing, terms and conditions of the exercisability, vesting or payout of any Award or any shares acquired pursuant thereto, (E) the Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (F) the time of the expiration of any Award, (G) the effect of the Participant’s Termination of Service on any of the foregoing, and (H) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto as the Administrator shall consider to be appropriate and not inconsistent with the terms of the Plan;
(v) subject to Sections 7(f) and 15, modify, amend or adjust the terms and conditions of any Award;
(vi) subject to Section 7(b), accelerate or otherwise change the time at or during which an Award may be exercised or becomes payable and waive or accelerate the lapse, in whole or in part, of any restriction, condition or risk of forfeiture with respect to such Award; provided, however, that, except in connection with death, disability or a Change in Control, no such change, waiver or acceleration shall be made to any Award that is considered “deferred compensation” within the meaning of Section 409A of the Code if the effect of such action is inconsistent with Section 409A of the Code;
(vii) determine whether an Award will be paid or settled in cash, shares of Common Stock, or in any combination thereof and whether, to what extent and under what circumstances cash or shares of Common Stock payable with respect to an Award shall be deferred either automatically or at the election of the Participant;
(viii) for any purpose, including but not limited to, qualifying for preferred or beneficial tax treatment, accommodating the customs or administrative challenges or otherwise complying with the tax, accounting or regulatory requirements of one or more jurisdictions, adopt, amend, modify, administer or terminate sub-plans, appendices, special provisions or supplements applicable to Awards regulated by the laws of a particular jurisdiction, which sub-plans, appendices, supplements and special provisions may take precedence over other provisions of the Plan, and prescribe, amend and rescind rules and regulations relating to such sub-plans, supplements and special provisions;
(ix) establish any “blackout” period, during which transactions affecting Awards may not be effectuated, that the Administrator in its sole discretion deems necessary or advisable;
(x) determine the Fair Market Value of shares of Common Stock or other property for any purpose under the Plan or any Award;
(xi) administer, construe and interpret the Plan, Award Agreements and all other documents relevant to the Plan and Awards issued thereunder, and decide all other matters to be determined in connection with an Award;
(xii) establish, amend, rescind and interpret such administrative rules, regulations, agreements, guidelines, instruments and practices for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable;
(xiii) correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent the Administrator shall consider it desirable to carry it into effect; and
(xiv) otherwise administer the Plan and all Awards granted under the Plan.
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(c) Delegation of Administrative Authority. The Administrator may designate officers or employees of the Company to assist the Administrator in the administration of the Plan and, to the extent permitted by applicable law and stock exchange rules, the Administrator may delegate to officers or other employees of the Company the Administrator’s duties and powers under the Plan, subject to such conditions and limitations as the Administrator shall prescribe, including without limitation the authority to execute agreements or other documents on behalf of the Administrator; provided, however, that such delegation of authority shall not extend to the granting of, or exercise of discretion with respect to, Awards to Eligible Individuals who are officers under Section 16 of the Exchange Act.
(d) Non-Uniform Determinations. The Administrator’s determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Award Agreements evidencing such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not be uniform and may be made by the Administrator selectively among Awards or persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.
(e) Limited Liability; Advisors. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. The Administrator may employ counsel, consultants, accountants, appraisers, brokers or other persons. The Administrator, Whole Earth Brands, and the officers and directors of Whole Earth Brands shall be entitled to rely upon the advice, opinions or valuations of any such persons.
(f) Indemnification. To the maximum extent permitted by law, by Whole Earth Brands’s charter and by-laws, and by any directors’ and officers’ liability insurance coverage which may be in effect from time to time, the members of the Administrator and any agent or delegate of the Administrator who is a director, officer or employee of Whole Earth Brands or an Affiliate shall be indemnified by Whole Earth Brands against any and all liabilities and expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan.
(g) Effect of Administrator’s Decision. All actions taken and determinations made by the Administrator on all matters relating to the Plan or any Award pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion, unless in contravention of any express term of the Plan, including, without limitation, any determination involving the appropriateness or equitableness of any action. All determinations made by the Administrator shall be conclusive, final and binding on all parties concerned, including Whole Earth Brands, its stockholders, any Participants and any other employee, consultant, or director of Whole Earth Brands and its Affiliates, and their respective successors in interest. No member of the Administrator, nor any director, officer, employee or representative of Whole Earth Brands shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Awards.
5. Shares Issuable Pursuant to Awards.
(a) Initial Share Pool. As of the Effective Date, the number of shares of Common Stock issuable pursuant to Awards that may be granted under the Plan (the “Share Pool”) shall be equal to 9,300,000 shares.
(b) Adjustments to Share Pool. On and after the Effective Date, the Share Pool shall be adjusted, in addition to any adjustments to be made pursuant to Section 10 of the Plan, as follows:
(i) The Share Pool shall be reduced, on the date of grant, by one share for each share of Common Stock made subject to an Award granted under the Plan;
(ii) The Share Pool shall be increased, on the relevant date, by the number of unissued shares of Common Stock underlying or used as a reference measure for any Award or portion of an Award that is cancelled, forfeited, expired, terminated unearned or settled in cash, in any such case without the issuance of shares;
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(iii) The Share Pool shall be increased, on the forfeiture date, by the number of shares of Common Stock that are forfeited back to Whole Earth Brands after issuance due to a failure to meet an Award contingency or condition with respect to any Award or portion of an Award;
For the avoidance of doubt, the Share Pool shall not be increased by (A) shares of Common Stock used as a reference measure for any Award granted under this Plan that are not issued upon settlement of such Award due to a net settlement, (B) shares of Common Stock withheld by or surrendered (either actually or through attestation) to Whole Earth Brands in payment of the exercise price of any Award, (C) shares of Common Stock withheld by or surrendered (either actually or through attestation) to Whole Earth Brands in payment of the Tax Withholding Obligation that arises in connection with any Award, or (D) shares of Common Stock have been reacquired by the Company in the open market using the proceeds of amounts received upon the exercise of stock options.
(c) ISO Limit. Subject to adjustment pursuant to Section 10 of the Plan, the maximum number of shares of Common Stock that may be issued pursuant to stock options granted under the Plan that are intended to qualify as Incentive Stock Options within the meaning of Section 422 of the Code shall be equal to the number of shares in the Share Pool as of the Effective Date of the Plan.
(d) Source of Shares. The shares of Common Stock with respect to which Awards may be made under the Plan shall be shares authorized for issuance under Whole Earth Brand’s charter but unissued, or issued and reacquired, including without limitation shares purchased in the open market or in private transactions.
6. Participation.
Participation in the Plan shall be open to all Eligible Individuals, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to Eligible Individuals in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for Whole Earth Brands or a Subsidiary; provided, however, that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.
7. Awards.
(a) Awards, In General. The Administrator, in its sole discretion, shall establish the terms of all Awards granted under the Plan consistent with the terms of the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards. All Awards are subject to the terms and conditions provided in the Award Agreement, which shall be delivered to the Participant receiving such Award upon, or as promptly as is reasonably practicable following, the grant of such Award. Unless otherwise specified by the Administrator, in its sole discretion, or otherwise provided in the Award Agreement, an Award shall not be effective unless the Award Agreement is signed or otherwise accepted by Whole Earth Brands and the Participant receiving the Award (including by electronic delivery and/or electronic signature).
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(b) Minimum Restriction Period for Awards. Except as provided below and notwithstanding any provision of the Plan to the contrary, each Award granted under the Plan shall be subject to a minimum Restriction Period of 12 months from the date of grant if vesting of or lapse of restrictions on such Award is based on the Participant’s satisfaction of specified service requirements with the Company or performance conditions. Except as provided below and notwithstanding any provision of the Plan to the contrary, the Administrator shall not have discretionary authority to waive the minimum Restriction Period applicable to an Award, except in the case of death, disability, retirement, termination of employment, or a Change in Control. Notwithstanding any provision of the Plan to the contrary, the provisions of this Section 7(b) shall not apply and/or may be waived, in the Administrator’s discretion, with respect to up to the number of Awards that is equal to five percent (5%) of the aggregate Share Pool as of the Effective Date.
(c) Stock Options.
(i) Grants. A stock option means a right to purchase a specified number of shares of Common Stock from Whole Earth Brands at a specified price during a specified period of time. The Administrator may from time to time grant to Eligible Individuals Awards of Incentive Stock Options or Nonqualified Options; provided, however, that Awards of Incentive Stock Options shall be limited to employees of Whole Earth Brands or of any current or hereafter existing “parent corporation” or “subsidiary corporation,” as defined in Sections 424(e) and 424(f) of the Code, respectively, of Whole Earth Brands, and any other Eligible Individuals who are eligible to receive Incentive Stock Options under the provisions of Section 422 of the Code. No stock option shall be an Incentive Stock Option unless so designated by the Administrator at the time of grant or in the applicable Award Agreement.
(ii) Exercise. Stock options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that Awards of stock options may not have a term in excess of ten years’ duration unless required otherwise by applicable law. The exercise price per share subject to a stock option granted under the Plan shall not be less than the Fair Market Value of one share of Common Stock on the date of grant of the stock option, except as provided under applicable law or with respect to stock options that are granted in substitution of similar types of awards of a company acquired by Whole Earth Brands or a Subsidiary or with which Whole Earth Brands or a Subsidiary combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) to preserve the intrinsic value of such awards.
(iii) Termination of Service. Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock options are not vested and exercisable, a Participant’s stock options shall be forfeited upon his or her Termination of Service.
(iv) Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock options, provided they are not inconsistent with the Plan.
(d) Limitation on Reload Options. The Administrator shall not grant stock options under this Plan that contain a reload or replenishment feature pursuant to which a new stock option would be granted automatically upon receipt of delivery of Common Stock to Whole Earth Brands in payment of the exercise price or any tax withholding obligation under any other stock option.
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(e) Stock Appreciation Rights.
(i) Grants. The Administrator may from time to time grant to Eligible Individuals Awards of stock appreciation rights. A stock appreciation right entitles the Participant to receive, subject to the provisions of the Plan and the Award Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Award Agreement, times (ii) the number of shares specified by the stock appreciation right, or portion thereof, which is exercised. The base price per share specified in the Award Agreement shall not be less than the lower of the Fair Market Value on the date of grant or the exercise price of any tandem stock option to which the stock appreciation right is related, or with respect to stock appreciation rights that are granted in substitution of similar types of awards of a company acquired by Whole Earth Brands or a Subsidiary or with which Whole Earth Brands or a Subsidiary combines (whether in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) such base price as is necessary to preserve the intrinsic value of such awards.
(ii) Exercise. Stock appreciation rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator; provided, however, that stock appreciation rights granted under the Plan may not have a term in excess of ten years’ duration unless required otherwise by applicable law. The applicable Award Agreement shall specify whether payment by Whole Earth Brands of the amount receivable upon any exercise of a stock appreciation right is to be made in cash or shares of Common Stock or a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination prior to or upon the exercise of the stock appreciation right. If upon the exercise of a stock appreciation right a Participant is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.
(iii) Termination of Service. Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock appreciation rights are not vested and exercisable, a Participant’s stock appreciation rights shall be forfeited upon his or her Termination of Service.
(iv) Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock appreciation rights, provided they are not inconsistent with the Plan.
(f) Repricing. Notwithstanding anything herein to the contrary, except in connection with a corporate transaction involving Whole Earth Brands (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of options and stock appreciation rights granted under the Plan may not be amended, after the date of grant, to reduce the exercise price of such options or stock appreciation rights, nor may outstanding options or stock appreciation rights be canceled in exchange for (i) cash, (ii) options or stock appreciation rights with an exercise price or base price that is less than the exercise price or base price of the original outstanding options or stock appreciation rights, or (iii) other Awards, unless such action is approved by Whole Earth Brand’s stockholders.
(g) Stock Awards.
(i) Grants. The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted Common Stock or Restricted Stock (collectively, “Stock Awards”) on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Stock Awards shall be evidenced in such manner as the Administrator may deem appropriate, including via book-entry registration.
(ii) Vesting. Restricted Stock shall be subject to such vesting, restrictions on transferability and other restrictions, if any, and/or risk of forfeiture as the Administrator may impose at the date of grant or thereafter. The Restriction Period to which such vesting, restrictions and/or risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator may determine. Subject to the provisions of the Plan and the applicable Award Agreement, during the Restriction Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock.
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(iii) Rights of a Stockholder; Dividends. Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder of Common Stock including, without limitation, the right to vote Restricted Stock. Cash dividends declared payable on Common Stock shall be paid, with respect to outstanding Restricted Stock, either as soon as practicable following the dividend payment date or deferred for payment to such later date as determined by the Administrator, and shall be paid in cash or as unrestricted shares of Common Stock having a Fair Market Value equal to the amount of such dividends or may be reinvested in additional shares of Restricted Stock as determined by the Administrator; provided, however, that dividends declared payable on Restricted Stock that is granted as a Performance Award shall be held by Whole Earth Brands and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such shares of Restricted Stock. Stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Common Stock or other property has been distributed. As soon as is practicable following the date on which restrictions on any shares of Restricted Stock lapse, Whole Earth Brands shall deliver to the Participant the certificates for such shares or shall cause the shares to be registered in the Participant’s name in book-entry form, in either case with the restrictions removed, provided that the Participant shall have complied with all conditions for delivery of such shares contained in the Award Agreement or otherwise reasonably required by Whole Earth Brands.
(iv) Termination of Service. Except as provided in the applicable Award Agreement, upon Termination of Service during the applicable Restriction Period, Restricted Stock and any accrued but unpaid dividends that are at that time subject to restrictions shall be forfeited; provided that, subject to the limitations set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock.
(v) Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Restricted Stock, provided they are not inconsistent with the Plan.
(h) Stock Units.
(i) Grants. The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted stock Units or Restricted Stock Units on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Restricted Stock Units represent a contractual obligation by Whole Earth Brands to deliver a number of shares of Common Stock, an amount in cash equal to the Fair Market Value of the specified number of shares subject to the Award, or a combination of shares of Common Stock and cash, in accordance with the terms and conditions set forth in the Plan and any applicable Award Agreement.
(ii) Vesting and Payment. Restricted Stock Units shall be subject to such vesting, risk of forfeiture and/or payment provisions as the Administrator may impose at the date of grant. The Restriction Period to which such vesting and/or risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator may determine. Shares of Common Stock, cash or a combination of shares of Common Stock and cash, as applicable, payable in settlement of Restricted Stock Units shall be delivered to the Participant as soon as administratively practicable, but no later than 30 days, after the date on which payment is due under the terms of the Award Agreement provided that the Participant shall have complied with all conditions for delivery of such shares or payment contained in the Award Agreement or otherwise reasonably required by Whole Earth Brands, or in accordance with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.
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(iii) No Rights of a Stockholder; Dividend Equivalents. Until shares of Common Stock are issued to the Participant in settlement of stock Units, the Participant shall not have any rights of a stockholder of Whole Earth Brands with respect to the stock Units or the shares issuable thereunder. The Administrator may grant to the Participant the right to receive Dividend Equivalents on stock Units, on a current, reinvested and/or restricted basis, subject to such terms as the Administrator may determine provided, however, that Dividend Equivalents payable on stock Units that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such stock Units.
(iv) Termination of Service. Upon Termination of Service during the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery of shares of Common Stock or cash to which such Restricted Stock Units relate, all Restricted Stock Units and any accrued but unpaid Dividend Equivalents with respect to such Restricted Stock Units that are then subject to deferral or restriction shall be forfeited; provided that, subject to the limitations set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock Units will be waived in whole or in part in the event of termination resulting from specified causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock Units.
(v) Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of stock Units, provided they are not inconsistent with the Plan.
(i) Performance Shares and Performance Units.
(i) Grants. The Administrator may from time to time grant to Eligible Individuals Awards in the form of Performance Shares and Performance Units. Performance Shares, as that term is used in this Plan, shall refer to shares of Common Stock or Units that are expressed in terms of Common Stock, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period. Performance Units, as that term is used in this Plan, shall refer to dollar-denominated Units valued by reference to designated criteria established by the Administrator, other than Common Stock, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period. The applicable Award Agreement shall specify whether Performance Shares and Performance Units will be settled or paid in cash or shares of Common Stock or a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination prior to or at the payment or settlement date.
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(ii) Performance Criteria. The Administrator shall, prior to or at the time of grant, condition the grant, vesting or payment of, or lapse of restrictions on, an Award of Performance Shares or Performance Units upon (A) the attainment of Performance Goals during a Performance Period or (B) the attainment of Performance Goals and the continued service of the Participant. The length of the Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained shall be conclusively determined by the Administrator in the exercise of its absolute discretion. Performance Goals may include minimum, maximum and target levels of performance, with the size of the Award or payout of Performance Shares or Performance Units or the vesting or lapse of restrictions with respect thereto based on the level attained. Performance Goals may be applied on a per share or absolute basis and relative to one or more Performance Metrics, or any combination thereof, and may be measured pursuant to U.S. generally accepted accounting principles (“GAAP”), non-GAAP or other objective standards in a manner consistent with Whole Earth Brands’ or its Subsidiary’s established accounting policies, all as the Administrator shall determine at the time the Performance Goals for a Performance Period are established. The Administrator may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to the manner in which one or more of the Performance Goals is to be calculated or measured to take into account, or ignore, one or more of the following: (1) items related to a change in accounting principle; (2) items relating to financing activities; (3) expenses for restructuring or productivity initiatives; (4) other non-operating items; (5) items related to acquisitions; (6) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (7) items related to the sale or disposition of a business or segment of a business; (8) items related to discontinued operations that do not qualify as a segment of a business under U.S. generally accepted accounting principles; (9) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (10) any other items of significant income or expense which are determined to be appropriate adjustments; (11) items relating to unusual or extraordinary corporate transactions, events or developments, (12) items related to amortization of acquired intangible assets; (13) items that are outside the scope of the Company’s core, on-going business activities; (14) changes in foreign currency exchange rates; (15) items relating to changes in tax laws; (16) certain identified expenses (including, but not limited to, cash bonus expenses, incentive expenses and acquisition-related transaction and integration expenses); (17) items relating to asset impairment charges; (18) items relating to gains or unusual or nonrecurring events or changes in applicable law, accounting principles or business conditions; or (19) other adjustment as determined by the Administrator. An Award of Performance Shares or Performance Units shall be settled as and when the Award vests or at a later time specified in the Award Agreement or in accordance with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.
(iii) Additional Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions, and/or limitations, if any, of any Award of Performance Shares or Performance Units, provided they are not inconsistent with the Plan.
(j) Other Stock-Based Awards. The Administrator may from time to time grant to Eligible Individuals Awards in the form of Other Stock-Based Awards. Other Stock-Based Awards in the form of Dividend Equivalents may be (A) awarded on a free-standing basis or in connection with another Award other than a stock option or stock appreciation right, (B) paid currently or credited to an account for the Participant, including the reinvestment of such credited amounts in Common Stock equivalents, to be paid on a deferred basis, and (C) settled in cash or Common Stock as determined by the Administrator; provided, however, that Dividend Equivalents payable on Other Stock-Based Awards that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject to forfeiture at least until achievement of the applicable Performance Goal related to such Other Stock-Based Awards. Any such settlements, and any such crediting of Dividend Equivalents, may be subject to such conditions, restrictions and contingencies as the Administrator shall establish.
(k) Awards to Participants Outside the United States. The Administrator may grant Awards to Eligible Individuals who are foreign nationals, who are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause Whole Earth Brands or a Subsidiary to be subject to) tax, legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable in order that any such Award shall conform to laws, regulations, and customs of the country or jurisdiction in which the Participant is then resident or primarily employed or to foster and promote achievement of the purposes of the Plan.
(l) Limitation on Dividend Reinvestment and Dividend Equivalents. Reinvestment of dividends in additional Restricted Stock at the time of any dividend payment, and the payment of shares of Common Stock with respect to dividends to Participants holding Awards of stock Units, shall only be permissible if sufficient shares are available under the Share Pool for such reinvestment or payment (taking into account then outstanding Awards). In the event that sufficient shares are not available under the Share Pool for such reinvestment or payment, such reinvestment or payment shall be made in the form of a grant of stock Units equal in number to the shares of Common Stock that would have been obtained by such payment or reinvestment, the terms of which stock Units shall provide for settlement in cash and for Dividend Equivalent reinvestment in further stock Units on the terms contemplated by this Section 7(j).
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8. Withholding of Taxes.
Participants and holders of Awards shall pay to Whole Earth Brands or its Affiliate, or make arrangements satisfactory to the Administrator for payment of, any Tax Withholding Obligation in respect of Awards granted under the Plan no later than the date of the event creating the tax or social insurance contribution liability. The obligations of Whole Earth Brands under the Plan shall be conditional on such payment or arrangements. Unless otherwise determined by the Administrator, Tax Withholding Obligations may be settled in whole or in part with shares of Common Stock, including unrestricted outstanding shares surrendered to Whole Earth Brands and unrestricted shares that are part of the Award that gives rise to the Tax Withholding Obligation, having a Fair Market Value on the date of surrender or withholding equal to the statutory minimum amount required, (or such greater amount permitted under FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, for equity-classified awards) to be withheld for tax or social insurance contribution purposes, all in accordance with such procedures as the Administrator establishes. Whole Earth Brands or its Affiliate may deduct, to the extent permitted by law, any such Tax Withholding Obligations from any payment of any kind otherwise due to the Participant or holder of an Award.
9. Transferability of Awards.
(a) General Nontransferability Absent Administrator Permission. Except as otherwise determined by the Administrator, and in any event in the case of an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive Stock Option, no Award granted under the Plan shall be transferable by a Participant otherwise than by will or the laws of descent and distribution. The Administrator shall not permit any transfer of an Award for value. An Award may be exercised during the lifetime of the Participant, only by the Participant or, during the period the Participant is under a legal disability, by the Participant’s guardian or legal representative, unless otherwise determined by the Administrator. Awards granted under the Plan shall not be subject in any manner to alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance, except as otherwise determined by the Administrator; provided, however, that the restrictions in this sentence shall not apply to the shares of Common Stock received in connection with an Award after the date that the restrictions on transferability of such shares set forth in the applicable Award Agreement have lapsed. Nothing in this paragraph shall be interpreted or construed as overriding the terms of any Whole Earth Brands stock ownership or retention policy, now or hereafter existing, that may apply to the Participant or shares of Common Stock received under an Award.
(b) Administrator Discretion to Permit Transfers Other Than For Value. Except as otherwise restricted by applicable law, the Administrator may, but need not, permit an Award, other than an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive Stock Option, to be transferred to a Participant’s Family Member (as defined below) as a gift or pursuant to a domestic relations order in settlement of marital property rights. The Administrator shall not permit any transfer of an Award for value. For purposes of this Section 9, “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests. The following transactions are not prohibited transfers for value: (i) a transfer under a domestic relations order in settlement of marital property rights; and (ii) a transfer to an entity in which more than fifty percent of the voting interests are owned by Family Members (or the Participant) in exchange for an interest in that entity.
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10. Adjustments for Corporate Transactions and Other Events.
(a) Mandatory Adjustments. In the event of a merger, consolidation, stock rights offering, statutory share exchange or similar event affecting Whole Earth Brands (each, a “Corporate Event”) or a stock dividend, stock split, reverse stock split, separation, spinoff, reorganization, extraordinary dividend of cash or other property, share combination or subdivision, or recapitalization or similar event affecting the capital structure of Whole Earth Brands (each, a “Share Change”) that occurs at any time after adoption of this Plan by the Board (including any such Corporate Event or Share Change that occurs after such adoption and coincident with or prior to the Effective Date), the Administrator shall make equitable and appropriate substitutions or proportionate adjustments to (i) the aggregate number and kind of shares of Common Stock or other securities on which Awards under the Plan may be granted to Eligible Individuals, (ii) the maximum number of shares of Common Stock or other securities that may be issued with respect to Incentive Stock Options granted under the Plan, (iii) the number of shares of Common Stock or other securities covered by each outstanding Award and the exercise price, base price or other price per share, if any, and other relevant terms of each outstanding Award, and (iv) all other numerical limitations relating to Awards, whether contained in this Plan or in Award Agreements; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated.
(b) Discretionary Adjustments. In the case of Corporate Events, the Administrator may make such other adjustments to outstanding Awards as it determines to be appropriate and desirable, which adjustments may include, without limitation, (i) the cancellation of outstanding Awards in exchange for payments of cash, securities or other property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Administrator in its sole discretion (it being understood that in the case of a Corporate Event with respect to which stockholders of Whole Earth Brands receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Administrator that the value of a stock option or stock appreciation right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each share of Common Stock pursuant to such Corporate Event over the exercise price or base price of such stock option or stock appreciation right shall conclusively be deemed valid and that any stock option or stock appreciation right may be cancelled for no consideration upon a Corporate Event if its exercise price or base price equals or exceeds the value of the consideration being paid for each share of Common Stock pursuant to such Corporate Event), (ii) the substitution of securities or other property (including, without limitation, cash or other securities of Whole Earth Brands and securities of entities other than Whole Earth Brands) for the shares of Common Stock subject to outstanding Awards, and (iii) the substitution of equivalent awards, as determined in the sole discretion of the Administrator, of the surviving or successor entity or a parent thereof (“Substitute Awards”).
(c) Adjustments to Performance Goals. The Administrator may, in its discretion, adjust the Performance Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in Whole Earth Brand’s consolidated financial statements, notes to the consolidated financial statements, management’s discussion and analysis or other Whole Earth Brands filings with the Securities and Exchange Commission. If the Administrator determines that a change in the business, operations, corporate structure or capital structure of Whole Earth Brands or the applicable subsidiary, business segment or other operational unit of Whole Earth Brands or any such entity or segment, or the manner in which any of the foregoing conducts its business, or other events or circumstances, render the Performance Goals to be unsuitable, the Administrator may modify such Performance Goals or the related minimum acceptable level of achievement, in whole or in part, as the Administrator deems appropriate and equitable.
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(d) Statutory Requirements Affecting Adjustments. Notwithstanding the foregoing: (A) any adjustments made pursuant to Section 10 to Awards that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (B) any adjustments made pursuant to Section 10 to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (1) continue not to be subject to Section 409A of the Code or (2) comply with the requirements of Section 409A of the Code; (C) in any event, the Administrator shall not have the authority to make any adjustments pursuant to Section 10 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the date of grant to be subject thereto; and (D) any adjustments made pursuant to Section 10 to Awards that are Incentive Stock Options shall be made in compliance with the requirements of Section 424(a) of the Code.
(e) Dissolution or Liquidation. Unless the Administrator determines otherwise, all Awards outstanding under the Plan shall terminate upon the dissolution or liquidation of Whole Earth Brands.
11. Change in Control Provisions.
(a) Termination of Awards. Notwithstanding the provisions of Section 11(b), in the event that any transaction resulting in a Change in Control occurs, outstanding Awards will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the issuance therefor of Substitute Awards of, the surviving or successor entity or a parent thereof. Solely with respect to Awards that will terminate as a result of the immediately preceding sentence and except as otherwise provided in the applicable Award Agreement:
(i) the outstanding Awards of stock options and stock appreciation rights that will terminate upon the effective time of the Change in Control shall, immediately before the effective time of the Change in Control, become fully exercisable and the holders of such Awards will be permitted, immediately before the Change in Control, to exercise the Awards;
(ii) the outstanding shares of Restricted Stock the vesting or restrictions on which are then solely time-based and not subject to achievement of Performance Goals shall, immediately before the effective time of the Change in Control, become fully vested, free of all transfer and lapse restrictions and free of all risks of forfeiture;
(iii) the outstanding shares of Restricted Stock the vesting or restrictions on which are then subject to and pending achievement of Performance Goals shall, immediately before the effective time of the Change in Control and unless the Award Agreement provides for vesting or lapsing of restrictions in a greater amount upon the occurrence of a Change in Control, become vested, free of transfer and lapse restrictions and risks of forfeiture in such amounts as if the applicable Performance Goals for the unexpired Performance Period had been achieved at the target level set forth in the applicable Award Agreement;
(iv) the outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting, earning or settlement of which is then solely time-based and not subject to or pending achievement of Performance Goals shall, immediately before the effective time of the Change in Control, become fully earned and vested and shall be settled in cash or shares of Common Stock (consistent with the terms of the Award Agreement after taking into account the effect of the Change in Control transaction on the shares) as promptly as is practicable, subject to any applicable limitations imposed thereon by Section 409A of the Code; and
(v) the outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting, earning or settlement of which is then subject to and pending achievement of Performance Goals shall, immediately before the effective time of the Change in Control and unless the Award Agreement provides for vesting, earning or settlement in a greater amount upon the occurrence of a Change in Control, become vested and earned in such amounts as if the applicable Performance Goals for the unexpired Performance Period had been achieved at the target level set forth in the applicable Award Agreement and shall be settled in cash or shares of Common Stock (consistent with the terms of the Award Agreement after taking into account the effect of the Change in Control transaction on the shares) as promptly as is practicable, subject to any applicable limitations imposed thereon by Section 409A of the Code.
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Implementation of the provisions of this Section 11(a) shall be conditioned upon consummation of the Change in Control.
(b) Continuation, Assumption or Substitution of Awards. The administrator may specify, on or after the date of grant, in an award agreement or amendment thereto, the consequences of a Participant’s Termination of Service that occurs coincident with or following the occurrence of a Change in Control, if a Change in Control occurs under which provision is made in connection with the transaction for the continuation or assumption of outstanding Awards by, or for the issuance therefor of Substitute Awards of, the surviving or successor entity or a parent thereof.
(c) Other Permitted Actions. In the event that any transaction resulting in a Change in Control occurs, the Administrator may take any of the actions set forth in Section 10 with respect to any or all Awards granted under the Plan.
(d) Section 409A Savings Clause. Notwithstanding the foregoing, if any Award is considered to be a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, this Section 11 shall apply to such Award only to the extent that its application would not result in the imposition of any tax or interest or the inclusion of any amount in income under Section 409A of the Code.
12. Substitution of Awards in Mergers and Acquisitions.
Awards may be granted under the Plan from time to time in substitution for assumed awards held by employees, officers, consultants or directors of entities who become employees, officers, consultants or directors of Whole Earth Brands or a Subsidiary as the result of a merger or consolidation of the entity for which they perform services with Whole Earth Brands or a Subsidiary, or the acquisition by Whole Earth Brands of the assets or stock of the such entity. The terms and conditions of any Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the Awards to the provisions of the assumed awards for which they are substituted and to preserve their intrinsic value as of the date of the merger, consolidation or acquisition transaction. To the extent permitted by applicable law and marketplace or listing rules of the primary securities market or exchange on which the Common Stock is listed or admitted for trading, any available shares under a stockholder-approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards granted pursuant to this Section 12 and, upon such grant, shall not reduce the Share Pool.
13. Compliance with Securities Laws; Listing and Registration.
(a) The obligation of Whole Earth Brands to sell or deliver Common Stock with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal, state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign (non-United States) securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Common Stock under the Plan would or may violate the rules of any exchange on which Whole Earth Brand’s securities are then listed for trade, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery would not violate such rules. If the Administrator determines that the exercise or nonforfeitability of, or delivery of benefits pursuant to, any Award would violate any applicable provision of securities laws or the listing requirements of any stock exchange upon which any of Whole Earth Brand’s equity securities are listed, then the Administrator may postpone any such exercise, nonforfeitability or delivery, as applicable, but Whole Earth Brands shall use all reasonable efforts to cause such exercise, nonforfeitability or delivery to comply with all such provisions at the earliest practicable date.
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(b) Each Award is subject to the requirement that, if at any time the Administrator determines, in its absolute discretion, that the listing, registration or qualification of Common Stock issuable pursuant to the Plan is required by any securities exchange or under any state, federal or foreign (non-United States) law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Common Stock, no such Award shall be granted or payment made or Common Stock issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.
(c) In the event that the disposition of Common Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended (the “Securities Act”), and is not otherwise exempt from such registration, such Common Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Administrator may require a person receiving Common Stock pursuant to the Plan, as a condition precedent to receipt of such Common Stock, to represent to Whole Earth Brands in writing that the Common Stock acquired by such person is acquired for investment only and not with a view to distribution and that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign securities laws and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable Federal, state or foreign securities laws.
14. Section 409A Compliance.
It is the intention of Whole Earth Brands that any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code shall comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code, and the terms of each such Award shall be construed, administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither Whole Earth Brands nor any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will be liable for any taxes, penalties or interest imposed on any Participant or other person with respect to any amounts paid or payable (whether in cash, shares of Common Stock or other property) under any Award, including any taxes, penalties or interest imposed under or as a result of Section 409A of the Code. Any payments described in an Award that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. For purposes of any Award, each amount to be paid or benefit to be provided to a Participant that constitutes deferred compensation subject to Section 409A of the Code shall be construed as a separate identified payment for purposes of Section 409A of the Code. For purposes of Section 409A of the Code, the payment of Dividend Equivalents under any Award shall be construed as earnings and the time and form of payment of such Dividend Equivalents shall be treated separately from the time and form of payment of the underlying Award. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, any payments (whether in cash, shares of Common Stock or other property) to be made with respect to the Award that become payable on account of the Participant’s separation from service, within the meaning of Section 409A of the Code, while the Participant is a “specified employee” (as determined in accordance with the uniform policy adopted by the Administrator with respect to all of the arrangements subject to Section 409A of the Code maintained by Whole Earth Brands and its Affiliates) and which would otherwise be paid within six months after the Participant’s separation from service shall be accumulated (without interest) and paid on the first day of the seventh month following the Participant’s separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of the Participant’s estate following the Participant’s death. Notwithstanding anything in the Plan or an Award Agreement to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4).
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15. Plan Duration; Amendment and Discontinuance.
(a) Plan Duration. The Plan shall remain in effect, subject to the right of the Board or the Compensation Committee to amend or terminate the Plan at any time, until the earlier of (a) the earliest date as of which all Awards granted under the Plan have been satisfied in full or terminated and no shares of Common Stock approved for issuance under the Plan remain available to be granted under new Awards or (b) June 24, 2030. No Awards shall be granted under the Plan after such termination date. Subject to other applicable provisions of the Plan, all Awards made under the Plan on or before June 24, 2030, or such earlier termination of the Plan, shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.
(b) Amendment and Discontinuance of the Plan. The Board or the Compensation Committee may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which would materially impair the rights of a Participant with respect to a previously granted Award without such Participant’s consent, except such an amendment made to comply with applicable law or rule of any securities exchange or market on which the Common Stock is listed or admitted for trading or to prevent adverse tax or accounting consequences to Whole Earth Brands or the Participant. Notwithstanding the foregoing, no such amendment shall be made without the approval of Whole Earth Brand’s stockholders to the extent such amendment would (A) materially increase the benefits accruing to Participants under the Plan, (B) materially increase the number of shares of Common Stock which may be issued under the Plan or to a Participant, (C) materially expand the eligibility for participation in the Plan, (D) eliminate or modify the prohibition set forth in Section 7(f) on repricing of stock options and stock appreciation rights, (E) lengthen the maximum term or lower the minimum exercise price or base price permitted for stock options and stock appreciation rights, or (F) modify the prohibition on the issuance of reload or replenishment options. Except as otherwise determined by the Board or Compensation Committee, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
(c) Amendment of Awards. Subject to Section 7(f), the Administrator may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall materially impair the rights of any Participant with respect to an Award without the Participant’s consent, except such an amendment made to cause the Plan or Award to comply with applicable law, applicable rule of any securities exchange on which the Common Stock is listed or admitted for trading, or to prevent adverse tax or accounting consequences for the Participant or the Company or any of its Affiliates. For purposes of the foregoing sentence, an amendment to an Award that results in a change in the tax consequences of the Award to the Participant shall not be considered to be a material impairment of the rights of the Participant and shall not require the Participant’s consent.
16. General Provisions.
(a) Non-Guarantee of Employment or Service. Nothing in the Plan or in any Award Agreement thereunder shall confer any right on an individual to continue in the service of Whole Earth Brands or any Affiliate or shall interfere in any way with the right of Whole Earth Brands or any Affiliate to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest or become payable; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under any Award or the Plan. No person, even though deemed an Eligible Individual, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. To the extent that an Eligible Individual who is an employee of a Subsidiary receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that Whole Earth Brands is the Participant’s employer or that the Participant has an employment relationship with Whole Earth Brands.
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(b) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between Whole Earth Brands and a Participant or any other person. To the extent that any Participant or other person acquires a right to receive payments from Whole Earth Brands pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of Whole Earth Brands.
(c) Status of Awards. Awards shall be special incentive payments to the Participant and shall not be taken into account in computing the amount of salary or compensation of the Participant for purposes of determining any pension, retirement, death, severance or other benefit under (a) any pension, retirement, profit-sharing, bonus, insurance, severance or other employee benefit plan of Whole Earth Brands or any Affiliate now or hereafter in effect under which the availability or amount of benefits is related to the level of compensation or (b) any agreement between (i) Whole Earth Brands or any Affiliate and (ii) the Participant, except as such plan or agreement shall otherwise expressly provide.
(d) Subsidiary Employees. In the case of a grant of an Award to an Eligible Individual who provides services to any Subsidiary, Whole Earth Brands may, if the Administrator so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Subsidiary, for such lawful consideration as the Administrator may specify, upon the condition or understanding that the Subsidiary will transfer the shares of Common Stock to the Eligible Individual in accordance with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled after such issue or transfer of shares to the Subsidiary shall revert to Whole Earth Brands.
(e) Governing Law and Interpretation. The validity, construction and effect of the Plan, of Award Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Award Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable United States federal laws and the laws of the State of Delaware without regard to its conflict of laws principles. The captions of the Plan are not part of the provisions hereof and shall have no force or effect. Except where the context otherwise requires: (i) the singular includes the plural and vice versa; (ii) a reference to one gender includes other genders; (iii) a reference to a person includes a natural person, partnership, corporation, association, governmental or local authority or agency or other entity; and (iv) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them.
(f) Use of English Language. The Plan, each Award Agreement, and all other documents, notices and legal proceedings entered into, given or instituted pursuant to an Award shall be written in English, unless otherwise determined by the Administrator. If a Participant receives an Award Agreement, a copy of the Plan or any other documents related to an Award translated into a language other than English, and if the meaning of the translated version is different from the English version, the English version shall control.
(g) Recovery of Amounts Paid. Except as otherwise provided by the Administrator, Awards granted under the Plan shall be subject to any and all policies, guidelines, codes of conduct, or other agreement or arrangement adopted by the Board or Compensation Committee with respect to the recoupment, recovery or clawback of compensation (collectively, the “Recoupment Policy”) and/or to any provisions set forth in the applicable Award Agreement under which Whole Earth Brands may recover from current and former Participants any amounts paid or shares of Common Stock issued under an Award and any proceeds therefrom under such circumstances as the Administrator determines appropriate. The Administrator may apply the Recoupment Policy to Awards granted before the policy is adopted to the extent required by applicable law or rule of any securities exchange or market on which shares of Common Stock are listed or admitted for trading, as determined by the Administrator in its sole discretion.
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17. Glossary.
Under this Plan, except where the context otherwise indicates, the following definitions apply:
“Administrator” means the Compensation Committee, or such other committee(s) or officer(s) duly appointed by the Board or the Compensation Committee to administer the Plan or delegated limited authority to perform administrative actions under the Plan, and having such powers as shall be specified by the Board or the Compensation Committee; provided, however, that at any time the Board may serve as the Administrator in lieu of or in addition to the Compensation Committee or such other committee(s) or officer(s) to whom administrative authority has been delegated. With respect to any Award to which Section 16 of the Exchange Act applies, the Administrator shall consist of either the Board or a committee of the Board, which committee shall consist of two or more directors, each of whom is intended to be, to the extent required by Rule 16b-3 of the Exchange Act, a “non-employee director” as defined in Rule 16b-3 of the Exchange Act and an “independent director” to the extent required by the rules of the national securities exchange that is the principal trading market for the Common Stock; provided, that with respect to Awards made to a member of the Board who is not an employee of the Company, “Administrator” means the Board. Any member of the Administrator who does not meet the foregoing requirements shall abstain from any decision regarding an Award and shall not be considered a member of the Administrator to the extent required to comply with Rule 16b-3 of the Exchange Act.
“Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, Whole Earth Brands or any successor to Whole Earth Brands. For this purpose, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”) shall mean ownership, directly or indirectly, of 50% or more of the total combined voting power of all classes of voting securities issued by such entity, or the possession, directly or indirectly, of the power to direct the management and policies of such entity, by contract or otherwise.
“Award” means any stock option, stock appreciation right, stock award, stock unit, Performance Share, Performance Unit, and/or Other Stock-Based Award, whether granted under this Plan.
“Award Agreement” means the written document(s), including an electronic writing acceptable to the Administrator, and any notice, addendum or supplement thereto, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.
“Board” means the Board of Directors of Whole Earth Brands.
“Cause” means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement (i) the Participant’s plea of guilty or nolo contendere to, or conviction of, (A) a felony (or its equivalent in a non-United States jurisdiction) or (B) other conduct of a criminal nature that has or is likely to have a material adverse effect on the reputation or standing in the community of Whole Earth Brands, any of its Affiliates or a successor to Whole Earth Brands or an Affiliate, as determined by the Administrator in its sole discretion, or that legally prohibits the Participant from working for Whole Earth Brands, any of its Subsidiaries or a successor to Whole Earth Brands or a Subsidiary; (ii) a breach by the Participant of a regulatory rule that adversely affects the Participant’s ability to perform the Participant’s employment duties to Whole Earth Brands, any of its Subsidiaries or a successor to Whole Earth Brands or a Subsidiary, in any material respect; or (iii) the Participant’s failure, in any material respect, to (A) perform the Participant’s employment duties, (B) comply with the applicable policies of Whole Earth Brands, or of its Subsidiaries, or a successor to Whole Earth Brands or a Subsidiary, or (C) comply with covenants contained in any contract or Award Agreement to which the Participant is a party; provided, however, that the Participant shall be provided a written notice describing in reasonable detail the facts which are considered to give rise to a breach described in this clause (iii) and the Participant shall have 30 days following receipt of such written notice (the “Cure Period”) during which the Participant may remedy the condition and, if so remedied, no Cause for Termination of Service shall exist.
“Change in Control” means the first of the following to occur: (i) a Change in Ownership of Whole Earth Brands, (ii) a Change in Effective Control of Whole Earth Brands, or (iii) a Change in the Ownership of Assets of Whole Earth Brands, as described herein and construed in accordance with Code section 409A.
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(i) A “Change in Ownership of Whole Earth Brands” shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire, ownership of the capital stock of Whole Earth Brands that, together with the stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the capital stock of Whole Earth Brands. However, if any one Person is, or Persons Acting as a Group are, considered to own more than 50%, on a fully diluted basis, of the total fair market value or total voting power of the capital stock of Whole Earth Brands, the acquisition of additional stock by the same Person or Persons Acting as a Group is not considered to cause a Change in Ownership of Whole Earth Brands or to cause a Change in Effective Control of Whole Earth Brands (as described below). An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction in which Whole Earth Brands acquires its stock in exchange for property will be treated as an acquisition of stock.
(ii) A “Change in Effective Control of Whole Earth Brands” shall occur on the date either (A) a majority of members of Whole Earth Brand’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of Whole Earth Brand’s Board before the date of the appointment or election, or (B) any one Person, or Persons Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of Whole Earth Brands possessing 50% or more of the total voting power of the stock of Whole Earth Brands.
(iii) A “Change in the Ownership of Assets of Whole Earth Brands” shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons), assets from Whole Earth Brands that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of Whole Earth Brands immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of Whole Earth Brands, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
The following rules of construction apply in interpreting the definition of Change in Control:
(A) A “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by Whole Earth Brands and by entities controlled by Whole Earth Brands or an underwriter, initial purchaser or placement agent temporarily holding the capital stock of Whole Earth Brands pursuant to a registered public offering.
(B) Persons will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a Person owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a Group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.
(C) A Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock of Whole Earth Brands.
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(D) For purposes of the definition of Change in Control, Section 318(a) of the Code applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and guidance.
“Common Stock” means shares of common stock of Whole Earth Brands, par value $0.0001 per share, and any capital securities into which they are converted.
“Company” means Whole Earth Brands and its Subsidiaries, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Whole Earth Brands.
“Compensation Committee” means the Compensation Committee of the Board.
“Dividend Equivalent” means a right, granted to a Participant, to receive cash, Common Stock, stock Units or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock.
“Effective Date” means the date on which adoption of the Plan is approved by the stockholders of Whole Earth Brands.
“Eligible Individuals” means (i) officers and employees of, and other individuals, including non-employee directors, who are natural persons providing bona fide services to or for, Whole Earth Brands or any of its Subsidiaries, provided that such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for Whole Earth Brands’s securities, and (ii) prospective officers, employees and service providers who have accepted offers of employment or other service relationship from Whole Earth Brands or a Subsidiary.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section of the Exchange Act shall be deemed to include such regulations and guidance issued thereunder, as well as any successor section, regulations and guidance.
“Fair Market Value” means, on a per share basis as of any date, unless otherwise determined by the Administrator:
(i) if the principal market for the Common Stock (as determined by the Administrator if the Common Stock is listed or admitted to trading on more than one exchange or market) is a national securities exchange or an established securities market, the official closing price per share of Common Stock for the regular market session on that date on the principal exchange or market on which the Common Stock is then listed or admitted to trading or, if no sale is reported for that date, on the last preceding day on which a sale was reported, all as reported by such source as the Administrator may select;
(ii) if the principal market for the Common Stock is not a national securities exchange or an established securities market, but the Common Stock is quoted by a national quotation system, the average of the highest bid and lowest asked prices for the Common Stock on that date as reported on a national quotation system or, if no prices are reported for that date, on the last preceding day on which prices were reported, all as reported by such source as the Administrator may select; or
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(iii) if the Common Stock is neither listed or admitted to trading on a national securities exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good faith by the reasonable application of a reasonable valuation method, which method may, but need not, include taking into account an appraisal of the fair market value of the Common Stock conducted by a nationally recognized appraisal firm selected by the Administrator.
Notwithstanding the preceding, for foreign, federal, state and local income tax reporting purposes and for such other purposes as the Administrator deems appropriate, the Fair Market Value shall be determined by the Administrator in accordance with uniform and nondiscriminatory standards adopted by it from time to time.
“Full Value Award” means an Award that results in Whole Earth Brands transferring the full value of a share of Common Stock under the Award, whether or not an actual share of stock is issued. Full Value Awards shall include, but are not limited to, stock awards, stock units, Performance Shares, Performance Units that are payable in Common Stock, and Other Stock-Based Awards for which Whole Earth Brands transfers the full value of a share of Common Stock under the Award, but shall not include Dividend Equivalents.
“Incentive Stock Option” means any stock option that is designated, in the applicable Award Agreement or the resolutions of the Administrator under which the stock option is granted, as an “incentive stock option” within the meaning of Section 422 of the Code and otherwise meets the requirements to be an “incentive stock option” set forth in Section 422 of the Code.
“Nonqualified Option” means any stock option that is not an Incentive Stock Option.
“Other Stock-Based Award” means an Award of Common Stock or any other Award that is valued in whole or in part by reference to, or is otherwise based upon, shares of Common Stock, including without limitation Dividend Equivalents and convertible debentures.
“Participant” means an Eligible Individual to whom one or more Awards are or have been granted pursuant to the Plan and have not been fully settled or cancelled and, following the death of any such person, his successors, heirs, executors and administrators, as the case may be.
“Performance Award” means a Full Value Award, the grant, vesting, lapse of restrictions or settlement of which is conditioned upon the achievement of performance objectives over a specified Performance Period and includes, without limitation, Performance Shares and Performance Units.
“Performance Goals” means the performance goals established by the Administrator in connection with the grant of Awards based on Performance Metrics or other performance criteria selected by the Administrator.
“Performance Metrics” means criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more business units, divisions, or Affiliates, or on a company-wide basis, and in absolute terms, relative to a base period, or relative to the performance of one or more comparable companies, peer groups, or an index covering multiple companies:
(i) Earnings or Profitability Metrics: any derivative of revenue; earnings/loss (gross, operating, net or adjusted, earnings per share (basic or diluted); earnings/loss before interest and taxes (“EBIT”); earnings/loss before interest, taxes, depreciation and amortization (“EBITDA”); profit margins; operating margins; expense levels or ratios; provided that any of the foregoing metrics may be adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments or investment losses, legal settlements, early extinguishment of debt or stock-based compensation expense;
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(ii) Return Metrics: any derivative of return on investment, assets, equity or capital (total or invested);
(iii) Investment Metrics: relative risk-adjusted investment performance; investment performance of assets under management;
(iv) Cash Flow Metrics: any derivative of operating cash flow; cash flow sufficient to achieve financial ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash provided by operating activities; cash flow per share; working capital; return on sales; costs, reductions in costs and cost control measure;
(v) Liquidity Metrics: any derivative of debt leverage (including debt to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios);
(vi) Stock Price and Equity Metrics: any derivative of return on stockholders’ equity; total stockholder return; stock price; stock price appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after taxes); and/or
(vii) Strategic Metrics: regulatory achievements or compliance; implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, or strategic milestones or developments; acquisition of new customers, including institutional accounts; market share; economic value or economic value added models; division, group or corporate financial goals; customer satisfaction/growth; customer service; employee satisfaction; recruitment and maintenance of personnel; human resources management; supervision of litigation and other legal matters; strategic partnerships and transactions; completion of an identified special project.
“Performance Period” means that period established by the Administrator during which any Performance Goals specified by the Administrator with respect to such Award are to be measured.
“Performance Shares” means a grant of stock or stock Units the issuance, vesting or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period.
“Performance Units” means a grant of dollar-denominated Units the value, vesting or payment of which is contingent on performance against predetermined objectives over a specified Performance Period.
“Plan” means this Whole Earth Brands, Inc. 2020 Long-Term Incentive Plan, as set forth herein and as it may be amended from time to time.
“Restricted Stock” means an Award of shares of Common Stock to a Participant that may be subject to certain transferability and other restrictions and to a risk of forfeiture (including by reason of not satisfying certain Performance Goals).
“Restricted Stock Unit” means a right granted to a Participant to receive shares of Common Stock or cash at the end of a specified deferral period, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain Performance Goals).
“Restriction Period” means, with respect to Awards, the period commencing on the date of grant of such Award to which vesting or transferability and other restrictions and a risk of forfeiture apply and ending upon the expiration of the applicable vesting conditions, transferability and other restrictions and lapse of risk of forfeiture and/or the achievement of the applicable Performance Goals (it being understood that the Administrator may provide that vesting shall occur and/or restrictions shall lapse with respect to portions of the applicable Award during the Restriction Period in accordance with Section 7(b)).
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“Subsidiary” means any corporation or other entity in an unbroken chain of corporations or other entities beginning with Whole Earth Brands if each of the corporations or other entities, or group of commonly controlled corporations or other entities, other than the last corporation or other entity in the unbroken chain then owns stock or other equity interests possessing 50% or more of the total combined voting power of all classes of stock or other equity interests in one of the other corporations or other entities in such chain or otherwise has the power to direct the management and policies of the entity by contract or by means of appointing a majority of the members of the board or other body that controls the affairs of the entity; provided, however, that solely for purposes of determining whether a Participant has a Termination of Service that is a “separation from service” within the meaning of Section 409A of the Code or whether an Eligible Individual is eligible to be granted an Award that in the hands of such Eligible Individual would constitute a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code , a “Subsidiary” of a corporation or other entity means all other entities with which such corporation or other entity would be considered a single employer under Sections 414(b) or 414(c) of the Code.
“Tax Withholding Obligation” means any federal, state, local or foreign (non-United States) income, employment or other tax or social insurance contribution required by applicable law to be withheld in respect of Awards.
“Termination of Service” means the termination of the Participant’s employment or consultancy with, or performance of services for, Whole Earth Brands and its Subsidiaries. Temporary absences from employment because of illness, vacation or leave of absence and transfers among Whole Earth Brands and its Subsidiaries shall not be considered Terminations of Service. With respect to any Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code, “Termination of Service” shall mean a “separation from service” as defined under Section 409A of the Code to the extent required by Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code. A Participant has a separation from service within the meaning of Section 409A of the Code if the Participant terminates employment with Whole Earth Brands and all Subsidiaries for any reason. A Participant will generally be treated as having terminated employment with Whole Earth Brands and all Subsidiaries as of a certain date if the Participant and the entity that employs the Participant reasonably anticipate that the Participant will perform no further services for Whole Earth Brands or any Subsidiary after such date or that the level of bona fide services that the Participant will perform after such date (whether as an employee or an independent contractor) will permanently decrease to no more than 20 percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for fewer than 36 months); provided, however, that the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or, if longer, so long as the Participant retains the right to reemployment with Whole Earth Brands or any Subsidiary.
“Total and Permanent Disability” means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement, that a Participant is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last until the Participant’s death or result in death, or (ii) determined to be totally disabled by the Social Security Administration or other governmental or quasi-governmental body that administers a comparable social insurance program outside of the United States in which the Participant participates and which conditions the right to receive benefits under such program on the Participant being unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to last until the Participant’s death or result in death. The Administrator shall have sole authority to determine whether a Participant has suffered a Total and Permanent Disability and may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition.
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“Unit” means a bookkeeping entry used by Whole Earth Brands to record and account for the grant of the following types of Awards until such time as the Award is paid, cancelled, forfeited or terminated, as the case may be: stock units, Restricted Stock Units, Performance Units, and Performance Shares that are expressed in terms of units of Common Stock.
“Whole Earth” means Whole Earth Brands, Inc., a Delaware corporation.
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Exhibit 10.21
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2020, by and among Whole Earth Brands, Inc. (f/k/a Act II Global Acquisition Corp.), a Delaware corporation (“Purchaser”), Act II Global LLC, a Delaware limited liability company (“Purchaser Sponsor”), and Continental Stock Transfer & Trust Company, a New York corporation (the “Escrow Agent”). Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such term in the Purchase Agreement (as defined below).
WHEREAS, Purchaser and Flavors Holdings Inc., a Delaware corporation (“Flavors Holdings”), MW Holdings I LLC, a Delaware limited liability company (“MW Holdings I”), MW Holdings III, a Delaware limited liability company (“MW Holdings III,” and together with MW I Holdings, the “MW Holdings Entities”), Mafco Foreign Holdings, Inc., a Delaware corporation (“Mafco Foreign Holdings,” and together with Flavors Holdings and the MW Holdings Entities, “Sellers”), and for purposes of Amendment No. 2 and Amendment No. 3 to the Purchase Agreement, Project Taste Intermediate Holdco LLC, a Delaware limited liability company, entered into that certain Purchase Agreement dated as of December 19, 2019, as amended by that certain Amendment No. 1 to Purchase Agreement dated as of February 12, 2020, Amendment No. 2 to Purchase Agreement dated as of May 8, 2020, and Amendment No. 3 to Purchase Agreement dated June 15, 2020 (collectively, as it may be further amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”), pursuant to which Purchaser (or its designee) directly or indirectly acquired all of the issues and outstanding equity interests of the Acquired Companies and the Transferred Assets and Liabilities from Sellers in exchange for an amount equal to the Purchase Price, subject to the terms and conditions set forth therein;
WHEREAS, immediately prior to the Closing, Purchaser effected (a) a deregistration under the Cayman Islands Companies Law (2020 Revision) and (b) a domestication under Section 388 of the Delaware General Corporation Law (collectively, the “Domestication”), pursuant to which, among other things, (i) Purchaser’s jurisdiction of incorporation transferred by way of continuation from the Cayman Islands to the State of Delaware and (ii) Purchaser’s name changed from “Act II Global Acquisition Corp.” to “Whole Earth Brands, Inc.”;
WHEREAS, the Purchase Agreement contemplates that, immediately following the Closing, the parties hereto will enter into this Agreement, pursuant to which three million (3,000,000) shares of common stock of Whole Earth Brands, Inc. (which was converted at Closing from Class B ordinary shares of Act II Global Acquisition Corp.) (the “Escrowed Sponsor Shares”) held by Purchaser Sponsor shall be held subject to this Agreement, and all share certificates (if any) in respect of the Escrowed Sponsor Shares shall be deposited into an escrow account (the “Sponsor Escrow”) as established and maintained by the Escrow Agent in accordance with the terms of this Agreement; and
WHEREAS, the Escrow Agent is willing to administer the Sponsor Escrow under the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and agreements of the parties and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and of the mutual covenants hereinafter set forth, and intending to be legally bound, the parties hereto agree as follows:
1. Appointment. Purchaser and Purchaser Sponsor hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment and agrees to perform the duties of their escrow agent under the terms and conditions set forth herein.
2. Escrowed Sponsor Shares.
(a) Purchaser Sponsor agrees to deposit with the Escrow Agent the Escrowed Sponsor Shares on the date hereof. The Escrow Agent shall hold the Escrowed Sponsor Shares as a book-entry position registered in the name of Continental Stock Transfer and Trust Company as Escrow Agent for the benefit of Purchaser Sponsor.
(b) Except as otherwise provided herein, Purchaser Sponsor shall retain all of its rights as a shareholder of Purchaser during the Effective Period (as defined in Section 3(b)), including, without limitation, the right to vote such shares.
(i) Any dividends, distributions, or other proceeds paid with respect to the Escrowed Sponsor Shares shall be (A) deemed part of the Sponsor Escrow and (B) delivered to the Escrow Agent each to be held in a bank account and be deposited in a non-interest-bearing account to be maintained by the Escrow Agent in the name of the Escrow Agent.
(ii) In the event of any share subdivision, share capitalization, share consolidation, merger, consolidation, recapitalization, restructuring or other change in Purchaser’s equity securities from and after the date hereof, the amounts of Escrowed Sponsor Shares shall be equitably adjusted to reflect such changes in accordance with the terms not otherwise inconsistent with the Purchase Agreement.
(c) During the Effective Period, the Escrow Agent shall hold the Escrowed Sponsor Shares in the Sponsor Escrow, and shall not sell, transfer, dispose of, lend or otherwise subject to a lien any of the Escrowed Sponsor Shares except until and to the extent that they are disbursed in accordance with Section 3.
3. Disposition and Termination
(a) The Escrow Agent shall administer the Escrowed Sponsor Shares in accordance with written instructions provided by Purchaser Sponsor to the Escrow Agent from time to time (an “Instruction”) directing the Escrow Agent to pay or release the Escrowed Sponsor Shares, or any portion thereof, as set forth in such Instruction. The Escrow Agent shall make distributions of the Escrowed Sponsor Shares only in accordance with an Instruction, which Instruction shall comport to the requirements set forth below:
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(i) During the period between the date of Closing but on or prior to the fifth (5th) anniversary of Closing (the “Escrow Period”), subject to the terms and conditions set forth herein and in the Purchase Agreement:
(A) Upon the earlier to occur of (such occurrence, a “Trigger Event”) (x) the volume weighted-average per-share trading price of Common Stock being at or above $20.00 per share for twenty (20) trading days in any thirty (30)-day continuous trading period during the Escrow Period, (y) a Change in Control, and (z) the expiration of the Escrow Period, the Escrow Agent shall release the Escrowed Sponsor Shares to Purchaser Sponsor from the Sponsor Escrow; provided, that in the case of a Trigger Event that is a Change in Control, the Escrow Agent shall release the Escrowed Sponsor Shares immediately prior to the consummation of such Change in Control).
(ii) In no event will the Escrow Agent make any distribution of the Escrowed Sponsor Shares unless such Instruction is signed by both an authorized representative designated in Exhibit 1 of Purchaser and Purchaser Sponsor.
(b) Upon the delivery of all of the Escrowed Sponsor Shares by the Escrow Agent in accordance with the terms of this Agreement (including this Section 3), this Agreement shall terminate (the period of time commencing on the date hereof until the termination of this Agreement, the “Effective Period”).
4. Escrow Agent
(a) The Escrow Agent shall have only those duties as are specifically provided herein, and no other duties shall be implied. The Escrow Agent shall neither be responsible for, nor have any requirements to comply with, the terms and conditions of any other agreement or document between the other parties hereto and any other person or entity in connection herewith, if any, including without limitation the Purchase Agreement, nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement.
(b) In the event of any conflict between the terms and provisions of this Agreement, those of the Purchase Agreement, any schedule or exhibit attached to this Agreement, or any other agreement among Purchaser and Purchaser Sponsor, or any other person or entity, the terms and conditions of this Agreement shall control.
(c) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith other than expenses or losses arising from the gross negligence, fraud or willful misconduct of the Escrow Agent.
5. Succession. The Escrow Agent may resign and be discharged from its duties or obligations hereunder (i) if so requested at any time by all of the other parties hereto; or (ii) by giving forty-five (45) days’ advance notice in writing of such resignation to all of the other parties hereto, specifying a date when such resignation shall take effect; provided, that such resignation shall not take effect until a successor escrow agent has been appointed in accordance with this Section 5. If Purchaser has failed to appoint a successor escrow agent prior to the expiration of thirty (30) days following receipt of the notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto.
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6. Compensation and Reimbursement. Subject to Section 13 below, the Escrow Agent shall be entitled to compensation for services rendered by it as Escrow Agent under this Agreement, and to be paid or reimbursed for reasonable, documented out-of-pocket costs and expenses, including reasonable documented out-of-pocket attorneys’ fees, incurred or paid in connection with carrying out its duties hereunder, such amounts to be paid by Purchaser.
7. Indemnity. Subject to Section 13 below, the Escrow Agent shall be indemnified and held harmless by Purchaser and Purchaser Sponsor from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, other than expenses or losses arising from the gross negligence, fraud or willful misconduct of the Escrow Agent or any of its officers, directors, employees and agents. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent may commence an action in the nature of interpleader in the any state or federal court located in New York County, State of New York. This Section 7 shall survive in the event the Escrow agent resigns or is discharged pursuant to Section 5.
8. Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.
9. USA PATRIOT Act. Purchaser Sponsor agrees to provide the Escrow Agent with the information reasonably requested by the Escrow Agent to verify and record its identity pursuant to the Escrow Agent’s procedures for compliance with the U.S. Patriot Act and any other applicable laws.
10. Notices. All communications hereunder shall be in writing, and all notices and communications hereunder shall be deemed to have been duly given and made if in writing and if (i) served by personal delivery upon the party for whom it is intended, (ii) delivered by registered or certified mail, return receipt requested, or by Federal Express or similar overnight courier, or (iii) sent by facsimile or email, provided that the receipt of such facsimile or email is promptly confirmed, by telephone, electronically or otherwise, to the party at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such party:
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Any party may from time to time change its address for the purpose of notices to that party by a similar notice specifying a new address, but no such change shall be deemed to have been given until it is actually received by the party sought to be charged with its contents. All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 10 if delivered personally or courier, shall be effective upon delivery; if sent by facsimile, shall be delivered upon receipt of proof of transmission. If any notice or other document is required to be delivered to the Escrow Agent and any other person, the Escrow Agent may assume without inquiry that notice or other document was received by such other person on the date on which it was received by the Escrow Agent.
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11. Security Procedures.
(a) Notwithstanding anything to the contrary as set forth in Section 8, any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution, including but not limited to any transfer instructions that may otherwise be set forth in a written instruction permitted pursuant to Section 3, may be given to the Escrow Agent only by confirmed facsimile or other electronic transmission (including e-mail) and no instruction for or related to the transfer or distribution of the Escrowed Sponsor Shares, or any portion thereof, shall be deemed delivered and effective unless the Escrow Agent actually shall have received such instruction by facsimile or other electronic transmission (including e-mail) at the number or e-mail address provided by the Escrow Agent in accordance with Section 10 and as further evidenced by a confirmed transmittal to that number.
(b) In the event transfer instructions are so received by the Escrow Agent by facsimile or other electronic transmission (including e-mail), the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 1 hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized representatives identified in Schedule 1, the Escrow Agent is hereby authorized both to receive written instructions from and seek confirmation of such instructions by officers of Whole Earth Brands, Inc. (collectively, the “Senior Officers”), as the case may be, which shall include the titles of Chief Executive Officer, General Counsel, Chief Financial Officer, President or Executive Vice President, as the Escrow Agent may select. Such Senior Officer shall deliver to the Escrow Agent a fully executed incumbency certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer.
12. Compliance with Court Orders. In the event that any order, judgment or decree shall be made or entered by any court order affecting the Escrowed Sponsor Shares deposited under this Agreement, the Escrow Agent may comply with such order, judgment or decree so entered or issued; provided, that is advised by opinion of legal counsel of its own choosing that such order, judgment, or decree is binding upon the Escrow Agent, whether with or without jurisdiction. In the event that the Escrow Agent reasonably complies with any such order, judgment or decree, it shall not be liable to any of the parties hereto by reason of such compliance.
13. Waiver. The Escrow Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement dated as of April 25, 2019, by and between Purchaser and the Escrow Agent (as trustee thereunder)) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to its laws relating to choice-of-law) applicable to contracts between residents of that State and executed in and to be performed entirely within that State.
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15. Jurisdiction and Venue. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, OR IF THE COURTS OF THE STATE OF NEW YORK LACKS JURISDICTION, ANY OTHER FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK AND THE APPROPRIATE APPELLATE COURTS THEREFROM (the “Chosen Courts”), for any Action arising out of, or relating to, this Agreement, and each party agrees not to commence any Action relating hereto or thereto except in such court. Each party (i) waives any objection to laying venue in any such Action in the Chosen Courts, (ii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iii) without limiting other means of service of process permissible under applicable Law, agrees that service of process upon such party in any such Action will be effective if notice is given in accordance with Section 10.
16. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN SECTIONS 14, 15 and 16.
17. Amendment; Waiver. Except for changes to transfer instructions as provided in Section 9, this Agreement may not be modified or amended except by an instrument or instruments in writing and mutually signed by each of the parties hereto. Each party may, only by an instrument in writing, waive compliance by any other party with any term or provision of this Agreement on the part of such other party to be performed or complied with. The waiver by a party of a breach of any term or provision of this Agreement by another party shall not be construed as a waiver of any subsequent breach. No failure or delay on the part of any party hereto in the exercise of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor will any single or partial exercise of any such right preclude any other (or further) exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive to or exclusive of, any rights or remedies otherwise available to a party hereunder.
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18. Successors and Assigns. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any of the parties without the prior written consent of each of the parties hereto, and any purported assignment without such consent shall be null and void ab initio.
19. Miscellaneous.
(a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.
(b) This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.
(c) This Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile or other means of electronic transmission shall be sufficient to bind the parties to the terms and conditions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.
PURCHASER: | ||
WHOLE EARTH BRANDS, INC. | ||
By: | /s/ Andrew Rusie | |
Name: Andrew Rusie | ||
Title: Chief Financial Officer | ||
PURCHASER SPONSOR: | ||
ACT II GLOBAL LLC | ||
By: | /s/ John Carroll | |
Name: John Carroll | ||
Title: Managing Member |
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.
ESCROW AGENT: | ||
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY | ||
By: | /s/ Isaac Kagan | |
Name: Isaac Kagan | ||
Title: Vice President |
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Exhibit 14.1
WHOLE EARTH BRANDS, INC.
CODE OF ETHICS
As adopted on June 24, 2020
Conducting the business affairs of Whole Earth Brands, Inc. (together with its subsidiaries, the “Company”) in accordance with the highest ethical standards and in compliance with legal requirements aligns directly with our mission of providing quality solutions to our customers. A reputation for ethical conduct, market leadership and business success builds the bond between employees, officers, members of the Board of Directors of the Company (the “Board”), shareholders, vendors, consultants and all business partners to satisfy the demands of customers. The integrity of the Company provides a foundation for this mission.
The Board has adopted this Code of Ethics (this “Code”) in order to deter wrongdoing and promote:
1. | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
2. | full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; |
3. | compliance with applicable governmental laws, rules and regulations; |
4. | the protection of Company assets, including corporate opportunities and confidential information; |
5. | fair dealing practices; |
6. | deter wrongdoing; |
7. | the prompt internal reporting of violations of this Code to an appropriate person or persons identified in this Code; and |
8. | accountability for adherence to this Code. |
Nothing in this Code is intended to require any action contrary to law. If the Code conflicts with any law, you must comply with the law. Nothing in the Code is intended or will be considered (i) to amend the certificate of incorporation or bylaws of the Company, (ii) to change the legal duties imposed under state, federal and other applicable statutes, rules and regulations, (iii) to expand liabilities beyond applicable law, (iv) to create or imply an employment contract or term of employment or (v) to affect any rights available under state and other applicable law or the Company’s certificate of incorporation or bylaws.
All directors, officers and employees are required to be familiar with this Code, comply with its provisions and report any suspected violations as described below.
HONEST AND ETHICAL CONDUCT
The Company’s policy is to promote high standards of integrity by conducting its affairs honestly and ethically.
Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.
CONFLICTS OF INTEREST
A conflict of interest occurs when an individual’s private interest (or the interest of a member of his or her family) interferes, or even appears to interfere, with the interests of the Company as a whole. A conflict of interest can arise when an employee, officer or director (or a member of his or her family) takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee, officer or director (or a member of his or her family) receives improper personal benefits as a result of his or her position in the Company.
Loans by the Company to, or guarantees by the Company of, obligations of directors, officers, employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of, obligations of any director or executive officer or their family members are expressly prohibited.
Whether or not a conflict of interest exists or will exist can be unclear. Conflicts of interest should be avoided unless specifically authorized as described in the paragraph below.
Persons other than directors and executive officers who have questions about a potential conflict of interest or who become aware of an actual or potential conflict should discuss the matter with, and seek a determination and prior authorization or approval from, their supervisor or the Legal Department. A supervisor may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the Legal Department with a written description of the activity and seeking the Legal Department’s written approval. If the supervisor is himself involved in the potential or actual conflict, the matter should instead be discussed directly with the Legal Department.
Directors and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from the Audit Committee.
CORPORATE OPPORTUNITIES
All directors, officers and employees owe a duty to the Company to advance its interests when the opportunity to do so arises. Directors, officers and employees are prohibited from taking for themselves personally opportunities that are discovered through the use of Company property, information or position. Directors, officers and employees may not use Company property, information or position for personal gain. In addition, no director, officer or employee may compete with the Company.
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CONFIDENTIALITY
Directors, officers and employees should maintain the confidentiality of information entrusted to them by the Company or by its customers, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that might be of use to the Company’s competitors, or harmful to the Company or its customers, suppliers or partners if disclosed.
FAIR DEALING
Each director, officer and employee should endeavor to deal fairly with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job. No director, officer or employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of facts or any other unfair dealing practice.
PROTECTION AND PROPER USE OF COMPANY ASSETS
All directors, officers and employees should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company's profitability and are prohibited.
All Company assets should be used only for legitimate business purposes. Any suspected incident of fraud or theft should be reported for investigation immediately.
The obligation to protect Company assets includes the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business and marketing plans, engineering and manufacturing ideas, designs, databases, records and any non-public financial data or reports. Unauthorized use or distribution of this information is prohibited and could also be illegal and result in civil or criminal penalties.
COMPLIANCE
Directors, officers and employees should comply, both in letter and spirit, with all applicable laws, rules and regulations in the cities, states and countries in which the Company operates.
The Company’s operations are subject to laws and regulations both in the United States and in other countries. Our core values demand that we ensure diligent adherence to the requirements of all applicable laws, rules and regulations. Significant areas of law that could be applicable to the activities of the Company include, but are not limited to (i) privacy and data security/protection laws; (ii) patent and trademarks laws; (iii) anti-trust laws governing free and open competition; (iv) health, safety and environmental laws; (v) federal securities laws; and (vi) federal and state laws and regulations related to healthcare and health insurance industries.
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In addition to the areas addressed above, the Company requires full compliance with the Foreign Corrupt Practices Act (“FCPA”), which makes illegal any corrupt offer, payment, promise to pay, or authorization to pay any money, gift, or anything of value to any foreign official, or any foreign political party, candidate or official, for the purpose of (i) influencing any act or failure to act, in the official capacity of that foreign official or party or (ii) inducing the foreign official or party to use influence to affect a decision of a foreign government or agency; in order to obtain or retain business for anyone, or direct business to anyone. All Company employees, officers and directors, whether located in the United States or abroad, are responsible for FCPA compliance and the procedures to ensure FCPA compliance.
Although not all directors, officers and employees are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Questions about compliance should be addressed to the Legal Department.
Insider trading is unethical, illegal and a violation of the Company’s Insider Trading Policy.
DISCLOSURE
The Company’s periodic reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and the applicable rules and regulations promulgated by the SEC.
Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel.
Each director, officer and employee who is involved in the Company’s disclosure process must:
1. | be familiar with and comply with the Company’s disclosure controls and procedures and its internal control over financial reporting; and |
2. | take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure. |
REPORTING AND INVESTIGATION OF VIOLATIONS
Actions prohibited by this Code involving directors or executive officers must be reported to the Audit Committee.
Actions prohibited by this Code involving anyone other than a director or executive officer must be reported to the reporting person’s supervisor or the Legal Department.
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After receiving a report of an alleged prohibited action, the Audit Committee, the Legal Department or the relevant supervisor must promptly take all appropriate actions necessary to investigate.
All directors, officers and employees are expected to cooperate in any internal investigation of misconduct.
PROHIBITION ON RETALIATION
The Company does not tolerate acts of retaliation against any director, officer or employee who makes a good faith report of known or suspected acts of misconduct or other violations of this Code, and any such retaliation may be a violation of the Company’s Whistleblower Policy.
ENFORCEMENT AND AMENDMENT
The Company must ensure prompt and consistent action against violations of this Code.
If, after investigating a report of an alleged prohibited action by a director or executive officer, the Audit Committee determines that a violation of this Code has occurred, the Audit Committee will report such determination to the Board.
If, after investigating a report of an alleged prohibited action by any other person, the relevant supervisor determines that a violation of this Code has occurred, the supervisor will report such determination to the Legal Department.
Upon receipt of a determination that there has been a violation of this Code, the Board or the Legal Department will take such preventative or disciplinary action as it deems appropriate, including, but not limited to, reassignment, demotion, dismissal and, in the event of criminal conduct or other serious violations of the law, notification of appropriate governmental authorities.
This Code may be amended, modified or waived by the Nominating and Corporate Governance Committee of the Board.
WAIVERS
The Board (in the case of a violation by a director or executive officer) or the Legal Department (in the case of a violation by any other person) may, in its discretion, waive any violation of this Code.
Any waiver for a director or an executive officer shall be disclosed as required by SEC and Nasdaq rules.
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Exhibit 16.1
June 30, 2020
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Commissioners:
We have read the statements made by Whole Earth Brands Inc. (formerly known as Act II Global Acquisition Corp.) under Item 4.01 of its Form 8-K filed on June 30, 2020. We agree with the statements concerning our Firm in such Form 8-K; we are not in a position to agree or disagree with other statements of Whole Earth Brands Inc. (formerly known as Act II Global Acquisition Corp.) contained therein.
Very truly yours,
/s/ Marcum llp
Marcum llp
Exhibit 21.1
Legal Name | Jurisdiction | |
Merisant Spain SL | Spain | |
Merisant Company 2, Sarl | Switzerland | |
Merisant Company | Delaware | |
Merisant Luxembourg, Sarl | Switzerland | |
Extraits Vegetaux et Derives, SAS | France | |
Zhang Jiangang Free Trade Zone Mafco Biotech Co., Ltd. | China | |
Mafco Worldwide LLC | Delaware |
Exhibit 99.1
Whole Earth Brands, Inc. Announces Closing of Business Combination
Whole Earth Brands, Inc. is expected to be a global leader in healthy, natural and zero-calorie foods and ingredients
Shares of common stock and warrants of Whole Earth Brands, Inc. now trade on Nasdaq under the ticker symbols FREE and FREEW, respectively
Whole Earth Brands, Inc. to leverage its experienced management team, strong and stable free cash flow and global footprint to accelerate growth and capitalize on powerful consumer trends
NEW YORK & CHICAGO--Whole Earth Brands, Inc. (NASDAQ: FREE), formerly known as Act II Global Acquisition Corp., announced today the completion of its business combination transaction with Flavors Holdings Inc. subsidiaries Merisant Company (“Merisant”), one of the world’s leading manufacturers of calorie-FREE and low-calorie sugar substitutes, and MAFCO Worldwide LLC (“MAFCO”), the world’s leading manufacturer of natural licorice products. As of June 25, 2020, shares of common stock and warrants of Whole Earth Brands trade on Nasdaq under the ticker symbols FREE and FREEW, respectively.
The combined business will leverage the deep experience of its management team, global leadership in fast growing consumer packaged goods categories and an enhanced capital structure to accelerate growth through increased innovation and distribution across its global platform.
Irwin Simon, Executive Chairman of Whole Earth Brands commented, “I am enthusiastic about the opportunity to create Whole Earth Brands and help craft its strategy in the industry where I spent my entire career and built powerful brands. We have created a global, industry leading platform, focused on food products and ingredients in rapidly growing categories driven by powerful macro trends that we believe are permanently changing the way food is consumed. We have an accomplished team capable of strengthening our leadership in our core markets as the shift away from sugar accelerates and demand for natural ingredients intensifies. With the overwhelming support of our public and PIPE investors, we closed the transaction at highly attractive leverage levels, giving us the flexibility to use our financial position to accelerate organic and strategic growth in the areas that we have identified.”
Albert Manzone, Chief Executive Officer of Whole Earth Brands added ”We are very pleased to complete the formation of Whole Earth Brands through this business combination. We have two strong franchises and a significant industry tailwind. We continue to be impressed by the scaleable platform our business offers with significant operating leverage. We now have the financial resources to expand through strategic consolidation, grow in adjacent markets and enter into on-trend branded health and wellness categories. Our team recognizes the opportunity this transaction has presented. We are ready to seize the moment.”
Whole Earth Brands will be led by Flavors Holdings’ existing management team, including Chief Executive Officer of Flavors Holdings, Albert Manzone, who has been named CEO of Whole Earth Brands; Chief Financial Officer of Flavors Holdings and Merisant Andy Rusie, who has been named Chief Financial Officer of Whole Earth Brands; President of MAFCO, Lucas Bailey, who has been named President of Whole Earth Brands’ Flavors and Ingredients Division and Act II Chairman Irwin D. Simon, who will serve as Executive Chairman of Whole Earth Brands.
Following the closing, there are 35,426,669 shares of common stock outstanding1.
1Excludes 3.0 million shares issued to Act II’s sponsor that will be held in escrow. For more details on the escrow terms please refer to the definitive proxy statement/prospectus of Act II filed with the SEC.
About Whole Earth Brands
Following the closing, the combined company will be rebranded as Whole Earth Brands. Whole Earth Brands will look to expand its branded products platform through investment opportunities in the natural alternatives and clean label categories across the global consumer product industry. Over time, Whole Earth Brands will look to become a portfolio of brands that Open a World of Goodness™ to consumers and their families. Whole Earth Brands shares of common stock and warrants are listed on NASDAQ. www.wholeearthbrands.com
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements, such as projected financial information, may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “will,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements about our beliefs and expectations contained herein. Such forward-looking statements with respect to strategies, prospects and other aspects of the business of Whole Earth Brands are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: (1) potential adverse effects of the ongoing global COVID-19 pandemic; (2) the ability to comply with Nasdaq listing standards following the consummation of the business combination; (3) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with suppliers, obtain adequate supply of products and retain its management and key employees; (4) costs related to the business combination; (5) changes in applicable laws or regulations; (6) the possibility that Whole Earth Brands may be adversely affected by other economic, business, and/or competitive factors; (7) the inability to achieve estimates of expenses and profitability; (8) the impact of foreign currency exchange rates and interest rate fluctuations on results; and (9) other risks and uncertainties indicated from time to time in the definitive proxy statement/prospectus of Act II Global Acquisition Corp., including those under “Risk Factors” therein, and other documents filed (or furnished) or to be filed (or furnished) with the Securities and Exchange Commission by Act II (including the supplement to the definitive proxy statement/prospectus) and Whole Earth Brands. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Whole Earth Brands undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contacts
Scott Van Winkle / Cory Ziskind
ICR
646-277-1200
scott.vanwinkle@icrinc.com; cory.ziskind@icrinc.com
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On June 25, 2020, Whole Earth Brands, Inc. (f/k/a Act II Global Acquisition Corp. (“Act II”)) and Flavors Holdings Inc. (“Flavors Holdings”), MW Holdings I LLC (“MW Holdings I”), MW Holdings III LLC (“MW Holdings III”), and Mafco Foreign Holdings, Inc. (“Mafco Foreign Holdings,” and together with Flavors Holdings, MW Holdings I, and MW Holdings II, the “Sellers”), announced the consummation of the transactions contemplated by that certain Purchase Agreement entered into as of December 19, 2019, which was subsequently amended on each of February 12, 2020, May 8, 2020, and June 15, 2020 (as amended, the “Purchase Agreement,” and the transactions contemplated therein, the “Business Combination”), by and among Act II, the Sellers and for the purposes of Amendments No. 2 and 3 to the Purchase Agreement, Project Taste Intermediate LLC (as amended or supplemented from time to time, the “Purchase Agreement”). In connection with the closing of the Business Combination, the registrant changed its name from “Act II Global Acquisition Corp.” to “Whole Earth Brands, Inc.” (the “Company”).
Refer to the definitive proxy statement/prospectus filed by Act II on May 13, 2020 (the “Proxy Statement/Prospectus”) and the supplement thereto filed by Act II on June 18, 2020 (the “Supplement”), for further details, including capitalized terms not otherwise defined in the Current Report on Form 8-K12B to which the unaudited pro forma condensed combined financial information is incorporated.
The unaudited pro forma condensed combined income statement for the year ended December 31, 2019 was derived from Merisant and MAFCO’s audited combined income statement for the year ended December 31, 2019 and Act II’s audited income statement for the year ended December 31, 2019. The unaudited pro forma condensed combined balance sheet and income statement as of and for the three months ended March 31, 2020 were derived from Merisant and MAFCO’s unaudited condensed combined financial statements as of and for the three months ended March 31, 2020 and Act II’s unaudited condensed financial statements as of and for the three months ended March 31, 2020.
The unaudited pro forma condensed combined income statements for the year ended December 31, 2019 and for the three months ended March 31, 2020 give pro forma effect to the Business Combination as if it had occurred on January 1, 2019. The unaudited pro forma condensed combined balance sheet as of March 31, 2020 gives effect to the Business Combination as if it was completed on March 31, 2020.
This information should be read together with Merisant and MAFCO’s and Act II’s respective financial statements and the related notes, “Act II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Merisant and MAFCO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the Supplement in the appendices titled “Act II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended March 31, 2020 and 2019,” “Merisant and MAFCO’s Management’s Discussion and Analysis for the Three Months Ended March 31, 2020 and 2019,” and the other financial information included elsewhere in the Proxy Statement/Prospectus and Supplement.
The unaudited pro forma condensed combined financial statements give effect to the Business Combination in accordance with the acquisition method of accounting for business combinations, with the Company deemed to be the accounting acquirer because, among other reasons:
· | cash consideration was transferred from the Company to the Sellers; and |
· | the Company’s public shareholders, PIPE Investors and the Sponsor, own, in the aggregate, 89.85% of the shares of Whole Earth Brands, Inc. common stock, which represents a controlling interest in Whole Earth Brands, Inc., immediately after giving effect to the Business Combination. |
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The unaudited pro forma condensed combined financial statements reflect adjustments to the historical financial information that are expected to have a continuing impact on the results of the combined company, factually supportable and directly attributable to the following events and transactions:
· | the Business Combination; |
· | the payment of the cash consideration to the Sellers; |
· | the closing of the Private Placement; |
· | the conversion of each Act II Class A Share into one fully paid and non-assessable share of Whole Earth Brands, Inc. common stock; |
· | each Act II public warrant becoming exercisable for one-half of one share of Whole Earth Brands, Inc. common stock, on the same terms and conditions as those applicable to the Act II public warrants (after giving effect to the Warrant Amendment); |
· | the cancellation of 3,000,000 of Act II Class B Shares, and the remaining 4,500,000 Act II Class B Shares being converted into 4,500,000 shares of Whole Earth Brands, Inc. common stock; and |
· | the redemption of 3,573,331 Act II Class A Shares by Act II’s public shareholders, in accordance with Act II’s Cayman Constitutional Documents. |
Act II provided its public shareholders with the opportunity to redeem, upon the closing of the Business Combination, each Act II Class A Share then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of June 22, 2020, two business days prior to the Shareholders Meeting) in the trust account, which held the proceeds (including interest, net of taxes payable) of the Act II IPO.
Based on funds in the trust account of $305,363,912.64 as of June 22, 2020, the per share redemption price was approximately $10.179.
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PRO FORMA CONDENSED COMBINED INCOME STATEMENT
For the Three Months Ended March 31, 2020
(Dollars in thousands, except per share amounts)
COMBINED
MERISANT/ MAFCO |
ACT II |
ADJUSTMENTS
DEBIT (CREDIT) |
ADJ. # | PRO FORMA | ||||||||||||||
Product revenues | $ | 66,000 | $ | 66,000 | ||||||||||||||
Cost of goods sold | 39,900 | 39,900 | ||||||||||||||||
GROSS PROFIT | 26,100 | 26,100 | ||||||||||||||||
Selling, general & administrative expenses . | 15,900 | $ | 575 | $ | 290 | g | 16,765 | |||||||||||
Restructuring and other non-recurring expenses | 400 | 400 | ||||||||||||||||
Asset impairment charges | 40,600 | $ | (40,600 | ) | f | |||||||||||||
Amortization of intangibles | 2,500 | (98 | ) | a | 2,402 | |||||||||||||
OPERATING INCOME (LOSS) | (33,300 | ) | (575 | ) | (40,408 | ) | 6,533 | |||||||||||
Interest expense on bank debt | 1,976 | c | 1,976 | |||||||||||||||
Interest (income) | (754 | ) | 754 | b | ||||||||||||||
Other (income) expense, net | (1,700 | ) | (1,700) | |||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (31,600 | ) | 179 | (37,678 | ) | 6,257 | ||||||||||||
(Benefit) provision for income taxes | (3,100 | ) | 4,414 | d | 1,314 | |||||||||||||
NET INCOME (LOSS) | $ | (28,500 | ) | $ | 179 | $ | (33,264 | ) | $ | 4,943 |
(Loss) Earnings Per Share:
HISTORICAL | PRO FORMA | |||||||
Weighted Average number of shares | 8,997,643 | (1) | 38,426,669 | |||||
Basic and diluted | $ | (0.06 | )(2) | $ | 0.13 |
(1) | Excludes an aggregate of 28,449,516 shares subject to possible redemption at March 31, 2020. |
(2) | Net loss per share — basic and diluted excludes income attributable to shares subject to possible redemption of $715,207 for the three months ended March 31, 2020. |
(3) | See “Notes to Unaudited Pro Forma Condensed Combined Financial Information” for description of adjustments. |
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PRO FORMA CONDENSED COMBINED INCOME STATEMENT
For the Year Ended December 31, 2019
(Dollars in thousands, except per share amounts)
COMBINED
MERISANT/ MAFCO |
ACT II |
ADJUSTMENTS
DEBIT (CREDIT) |
ADJ. # | PRO FORMA | ||||||||||||||
Product revenues | $ | 272,200 | $ | 272,200 | ||||||||||||||
Cost of goods sold | 163,600 | 163,600 | ||||||||||||||||
GROSS PROFIT | 108,600 | 108,600 | ||||||||||||||||
Selling, general & administrative expenses | 65,900 | $ | 351 | $ | 1,160 | g | 67,411 | |||||||||||
Restructuring and other non-recurring expenses | 2,200 | 2,200 | ||||||||||||||||
Amortization of intangibles | 10,700 | (1,090 | ) | a | 9,610 | |||||||||||||
OPERATING INCOME | 29,800 | (351 | ) | (70 | ) | 29,379 | ||||||||||||
Interest expense on bank debt | 7,903 | c | 7,903 | |||||||||||||||
Interest income | (4,255 | ) | 4,255 | b | 0 | |||||||||||||
Unrealized gain on Trust Account investments | (28 | ) | 28 | b | 0 | |||||||||||||
Foreign exchange (gain)/loss | 0 | |||||||||||||||||
Other expense, net | 1,400 | 1,400 | ||||||||||||||||
INCOME BEFORE INCOME TAXES | 28,400 | 3,932 | 12,256 | 20,076 | ||||||||||||||
(Benefit) provision for incomes taxes | (2,500 | ) | 6,716 | d | 4,216 | |||||||||||||
NET INCOME | $ | 30,900 | $ | 3,932 | $ | 18,972 | $ | 15,860 |
(Loss) Earnings Per Share:
HISTORICAL | PRO FORMA | |||||||
Weighted Average number of shares | 8,410,915 | (1) | 38,426,669 | |||||
Basic and diluted | $ | (0.02 | )(2) | $ | 0.41 |
(1) | Excludes an aggregate of 28,502,357 shares subject to possible redemption at December 31, 2019. |
(2) | Net loss per share — basic and diluted excludes income attributable to shares subject to possible redemption of $4,069,302 for the year ended December 31, 2019. |
(3) | See “Notes to Unaudited Pro Forma Condensed Combined Financial Information” for description of adjustments. |
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PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2020
(Dollars in thousands, except per share data)
(Unaudited)
Combined
Merisant/MAFCO |
Act II | Adjustments | Adj # | |||||||||||||||
ASSETS | ||||||||||||||||||
Current Assets | ||||||||||||||||||
Cash and cash equivalents | $ | 10,500 | $ | 583 | $ | 42,571 | a | $ | 53,654 | |||||||||
Accounts receivable – net | 53,100 | 53,100 | ||||||||||||||||
Inventories | 116,400 | 116,400 | ||||||||||||||||
Prepaid expenses and other current assets | 6,800 | 104 | 1,678 | k | 8,582 | |||||||||||||
TOTAL CURRENT ASSETS | 186,800 | 687 | 44,249 | 231,736 | ||||||||||||||
Marketable securities held in Trust Account | 305,037 | (305,037 | ) | a | 0 | |||||||||||||
Property, plant and equipment – net | 20,200 | 20,200 | ||||||||||||||||
Right of use asset | 267 | 267 | ||||||||||||||||
Goodwill | 113,100 | (63,363 | ) | c | 49,737 | |||||||||||||
Other intangible assets – net | 225,900 | 2,800 | b | 228,700 | ||||||||||||||
Other assets | 3,700 | 38 | 3,738 | |||||||||||||||
TOTAL ASSETS | $ | 549,700 | $ | 306,029 | $ | (321,351 | ) | $ | 534,378 | |||||||||
LIABILITIES
AND EQUITY
|
||||||||||||||||||
Current Liabilities | ||||||||||||||||||
Accounts payable | $ | 27,200 | $ | 195 | $ | 27,395 | ||||||||||||
Current portion of bank debt | $ | 5,250 | c | 5,250 | ||||||||||||||
Operating lease liability | 217 | 217 | ||||||||||||||||
Accrued expenses and other current liabilities | 21,600 | 21,600 | ||||||||||||||||
TOTAL CURRENT LIABILITIES | 48,800 | 412 | 5,250 | 54,462 | ||||||||||||||
Bank debt, net of current portion | 127,611 | c | 127,611 | |||||||||||||||
Operating lease liability, net of current portion | 65 | 65 | ||||||||||||||||
Deferred underwriting fee payable | 11,280 | (11,280 | ) | e | 0 | |||||||||||||
Due to related party | 6,900 | (6,900 | ) | j | 0 | |||||||||||||
Deferred tax liabilities, net | 30,900 | 30,900 | ||||||||||||||||
Other liabilities | 18,100 | (5,900 | ) | j | 12,200 | |||||||||||||
TOTAL LIABILITIES | 104,700 | 11,757 | 108,781 | 225,238 | ||||||||||||||
Ordinary shares subject to redemption | 289,272 | (289,272 | ) | f | ||||||||||||||
Net parent investment | 445,000 | (445,000 | ) | g | ||||||||||||||
Class A ordinary Shares, $0.0001 par value; 200,000,000 sharesauthorized; 1,550,484 shares issued and outstanding (excluding 28,449,516 shares subject to possible redemption) historically and 42,000,000 shares and 29,147,355 shares proforma | 3 | 3 | ||||||||||||||||
Class B ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 7,500,000 shares issued and outstanding historically and none pro forma | 1 | (1 | ) | 0 | ||||||||||||||
Additional capital | 888 | 316,686 | i | 317,574 | ||||||||||||||
Retained earnings | 4,111 | (12,548 | ) | d | (8,437 | ) | ||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 445,000 | 5,000 | (140,860 | ) | 309,140 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 549,700 | $ | 306,029 | $ | (321,351 | ) | $ | 534,378 |
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Notes to Unaudited Pro Forma Combined Financial Information
1. Basis of Pro Forma Presentation
Overview
The unaudited pro forma condensed combined financial statements have been prepared assuming the Business Combination is accounted for using the acquisition method of accounting with Act II as the acquiring entity and Merisant and MAFCO as the acquiree. Under the acquisition method of accounting, Act II’s assets and liabilities will retain their carrying amounts and the assets and liabilities of Merisant and MAFCO will be recorded at their fair values measured as of the acquisition date. The excess of the purchase price over the estimated fair values of net assets acquired will be recorded as goodwill. The pro forma adjustments have been prepared as if the Business Combination and the other related transactions had taken place on December 31, 2019 in the case of the unaudited pro forma condensed combined balance sheet and on January 1, 2019 in the case of the unaudited pro forma condensed combined income statements.
The acquisition method of accounting is based on Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 805, Business Combinations (“ASC 805”), and uses the fair value concepts defined in FASB ASC 820, Fair Value Measurements (“ASC 820”). ASC 805 requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date by Act II, who was determined to be the accounting acquirer.
Under ASC 805, acquisition-related transaction costs are not included as a component of consideration transferred but are accounted for as expenses in the periods in which such costs are incurred, or if related to the issuance of debt, capitalized as debt issuance costs. Acquisition-related transaction costs expected to be incurred as part of the business combination, include estimated fees related to the issuance of long-term debt, as well as advisory, legal and accounting fees.
The unaudited pro forma condensed combined financial statements should be read in conjunction with (i) Act II’s historical financial statements and related notes for the year ended December 31, 2019 and for the three months ended March 31, 2020, as well as “Act II’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in the Definitive Proxy Statement and this Supplement, (ii) Merisant and MAFCO’s historical financial statements and related notes for the year ended December 31, 2019 and for the three months ended March 31, 2020 , as well as “Merisant and MAFCO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included elsewhere in the Definitive Proxy Statement and this Supplement.
The pro forma adjustments represent management’s estimates based on information available as of the date of this Supplement and are subject to change as additional information becomes available and additional analyses are performed. The unaudited pro forma condensed combined financial statements do not reflect possible adjustments related to restructuring or integration activities that have yet to be determined or transaction or other costs following the Business Combination that are not expected to have a continuing impact. In addition, the unaudited pro forma condensed combined financial statements do not reflect additional costs and expenses that Whole Earth Brands, Inc. may incur as a public company (other than those incurred by Act II and reflected in the unaudited pro forma condensed combined financial statements). Further, one-time transaction-related expenses anticipated to be incurred prior to, or concurrent with, closing the Business Combination and the other related transactions are not included in the unaudited pro forma condensed combined income statements. However, the impact of such transaction expenses is reflected in the unaudited pro forma condensed combined balance sheet as a decrease to retained earnings and a decrease to cash, unless otherwise noted.
2. Preliminary Allocation of Purchase Price
The total purchase consideration for the Business Combination has been allocated to the assets acquired, liabilities assumed, for purposes of the unaudited pro forma condensed combined financial information based on their estimated relative fair values. The allocation of the purchase consideration herein is preliminary. The final allocation of the purchase consideration for the Business Combination will be determined after the completion of a thorough analysis to determine the fair value of all assets acquired, liabilities assumed and non-controlling interest but in no event later than one year following the completion of the Business Combination.
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Accordingly, the final acquisition accounting adjustments could differ materially from the preliminary amounts presented in these unaudited pro forma condensed combined financial statements.
Any increase or decrease in the fair value of the assets acquired, liabilities assumed, as compared to the information shown herein, could also change the portion of the purchase consideration allocable to goodwill and could impact the operating results of Whole Earth Brands, Inc. following the Business Combination due to differences in the allocation of the purchase consideration, depreciation and amortization related to some of these assets and liabilities. The purchase consideration was preliminarily allocated as follows:
Cash paid to selling shareholder | $ | 386,737 | ||
Accounts receivable | $ | 53,100 | ||
Inventories | 116,400 | |||
Prepaids expenses and other current assets | 6,800 | |||
Property, plant and equipment | 20,200 | |||
Other assets | 3,700 | |||
Intangible assets | 228,700 | |||
Goodwill | 49,737 | |||
Accounts payable | (27,200 | ) | ||
Accrued expenses and other current liabilities | (21,600 | ) | ||
Deferred tax liabilities | (30,900 | ) | ||
Other liabilities | (12,200 | ) | ||
$ | 386,737 |
The preliminary allocation of the purchase consideration to identifiable intangibles and property and equipment was based on the estimated fair value of such assets. Amortization of identifiable intangibles and depreciation expense for property and equipment was preliminarily estimated based on a straight-line methodology, which approximates the remaining weighted useful life of such underlying assets. The fair value of the inventory was determined through use of the replacement cost approach.
The amount that will ultimately be allocated to these identified intangible assets, property and equipment and inventory and the related amount of amortization and depreciation, may differ materially from this preliminary allocation.
Goodwill represents the excess of the total purchase consideration over the fair value of the underlying net assets, largely arising from the workforce and extensive efficient distribution network that has been established by Merisant and MAFCO.
3. Pro Forma Adjustments and Assumptions
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and other transactions described above and has been prepared for informational purposes only. The unaudited pro forma condensed combined income statements are not necessarily indicative of what the actual results of operations would have been had the Business Combination taken place on the date indicated, nor is it indicative of the future consolidated results of operations of the combined company. The unaudited pro forma condensed combined financial information is based upon the historical financial statements of Act II and Merisant and MAFCO and should be read in conjunction with their historical financial statements included elsewhere in the Definitive Proxy Statement.
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The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the Business Combination, the Private Placement and the Debt Financing, (2) factually supportable, and (3) with respect to the income statements, expected to have a continuing impact on the results of Whole Earth Brands, Inc.
There were no intercompany balances or transactions between Act II and Merisant and MAFCO as of the dates and for the periods of these unaudited pro forma combined financial statements.
The pro forma combined consolidated provision for income taxes does not necessarily reflect the amounts that would have resulted had the companies filed consolidated income tax returns during the periods presented.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined income statements are based upon the number of Whole Earth Brands, Inc.’s shares outstanding, assuming the Business Combination and Private Placement occurred on January 1, 2019.
Pro Forma Adjustments to Income Statements:
(a) | Intangible assets were valued based upon a preliminary valuation exercise, which will be updated upon applying the final purchase price allocation. Trademarks and trade names, and product formulations were preliminarily valued using an income approach, more specifically the relief from royalty method. Customer relationships were preliminarily valued using the multi-period excess earnings method or the distributor method, depending on the selling practice of the geographic market served. The adjustments to intangible assets to reflect values and the amortization expense are as follows: |
Preliminary
Fair Value |
Estimated
Useful Life in Years |
Amortization
Expense for the Year Ended December 31, 2019 |
Amortization
Expense for the Three Months Ended March 31, 2020 |
|||||||||||||
Trademarks and trade names | $ | 116,700 | 25 | $ | 4,668 | $ | 1,167 | |||||||||
Customer relationships | 93,900 | 19 | 4,942 | 1,235 | ||||||||||||
Product formulations | 18,100 | Indefinite | — | — | ||||||||||||
Total | 228,700 | 9,610 | 2,402 | |||||||||||||
Less: Merisant/Mafco historical intangibles and amortization expense | 225,900 | 10,700 | 2,500 | |||||||||||||
Pro forma adjustments | $ | 2,800 | $ | (1,090 | ) | $ | (98 | ) |
(1) | Historical useful lives utilized by Merisant and MAFCO have been applied on a preliminary basis pending a final purchase price allocation which will be based on a full valuation. |
(b) | Represents the adjustment to eliminate the historical interest income and unrealized gains of Act II associated with the funds that were held in the Trust Account, which will be used to fund portions of the aggregate cash obligations (as defined under the Purchase Agreement) in connection with the Business Combination. |
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(c) | In connection with the Business Combination, Whole Earth Brands, Inc. entered into (x) a first lien term loan facility of $140,000,000 that matures in five years and (y) a first lien revolving loan facility of up to $50,000,000 that matures in five years. Loans outstanding under the first lien term loan facility and the first lien revolving loan facility will accrue interest at a rate per annum equal to LIBOR plus a margin ranging from 2.25% to 3.00% depending on the achievement of certain leverage ratios, and undrawn amounts under the first lien revolving loan facility will accrue a commitment fee at a rate per annum of 0.40% on the average daily undrawn portion of the commitments thereunder, with step downs to 0.30% upon achievement of certain leverage ratios. Principal payments on the first lien term loan facility will be due quarterly, in amounts equal to (i) 1.25% of the original principal amount of the first lien term loan facility during the first through third years after the closing date of the credit facilities, (ii) 2.5% of the original principal amount of the first lien term loan facility during the fourth and fifth years after the closing date of the credit facilities and (iii) the balance of original principal amount of the first lien term loan facility maturity date of the credit facilities. No drawdowns under the revolving credit facility were made at closing. |
Pro forma interest expense assumes a weighted average interest rate of approximately 6%. Each 1% change in the assumed rate would create a $1,400,000 change in annual interest expense and a $350,000 change in quarterly interest expense. |
Included in the adjustments to interest expense is amortization of deferred financing costs of $1,160,000 for the year ended December 31, 2019 and $290,000 for the three months ended March 31, 2020. |
Excluded from the adjustments to interest expense is the effect of any interest rate hedging activities. (d) This adjustment represents the estimated income tax effect of the pro-forma adjustments to reflect income taxes at an estimated 21% rate. |
(e) | Pro forma basic earnings per share was computed by dividing pro forma net income attributable to shares of Whole Earth Brands, Inc. common stock by the weighted average of Act II Class A Shares, as if such shares were issued and outstanding as of January 1, 2019. Basic shares outstanding were calculated based on the following ordinary shares outstanding: |
Shares
Outstanding |
% | |||||||
Shares held by Act II Sponsor | 4,500,000 | 11.71 | % | |||||
Shares held by Seller | 600,000 | 1.56 | % | |||||
Shares held by PIPE investors | 7,500,000 | 19.52 | % | |||||
Shares held by Dicalite Management Group, Inc | 3,300,000 | 8.59 | % | |||||
Shares held by public | 22,526,669 | 58.62 | % | |||||
Total common shares o/s | 38,426,669 | 100.00 | % |
Pro forma dilutive earnings per share was computed using the “treasury stock buyback” method to determine the potential dilutive effect of its outstanding options. The currently outstanding Act II public warrants with an exercise price of $11.50 per share will become exercisable for one share of Whole Earth Brands, Inc. common stock. The Act II public warrants are not dilutive on a pro forma basis; however, the potential dilutive impact will ultimately be recognized based on the actual market price on the date of measurement.
For further details, see “Updated Beneficial Ownership Table of Whole Earth Brands, Inc. Securities” herein.
(f) | To eliminate the Seller’s asset impairment charge. |
(g) | Represents incremental insurance expense. |
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Pro Forma Adjustments to the Balance Sheet:
(a) | Represents the net adjustment to cash associated with Act II’s payment of cash consideration in the Business Combination: |
Pro forma net adjustment to cash associated with purchase adjustments:
Act II cash previously in trust as of March 31, 2020(1) | $ | 305,037,000 | ||
Proceeds from PIPE(2) | 75,000,000 | |||
Proceeds from new bank debt(3) | 132,861,000 | |||
Shareholder redemptions(4) | 36,334,000 | |||
Cash retained by seller | (10,500,000 | ) | ||
Repurchase of warrants(5) | (11,250,000 | ) | ||
Cash consideration(6) | (386,737,000 | ) | ||
Payment of transaction costs(7) | (23,828,000 | ) | ||
Expenses prepaid at closing | (1,678,000 | ) | ||
$ | 42,571,000 |
(1) | Represents the adjustment related to the reclassification of the cash equivalents held in the Trust Account in form of investments to cash and cash equivalents to reflect the fact that these investments were used in connection with the Business Combination, the payment for shares redeemed and the payment of a portion of the aggregate cash obligations (as defined under the Purchase Agreement). |
(2) | Represents the shares and warrants Act II sold to the PIPE Investors for gross proceeds of approximately $75,000,000. |
(3) | Represents additional funds raised through the new loan. Financing fees of $7,139,000 have been deducted from the bank debt as presented on the accompanying pro forma balance sheet. |
(4) | Represents cash paid for redemptions of Act II Class A Shares. |
(5) | Represents the cash paid to repurchase the warrants. |
(6) | Represents the cash consideration portion of the total consideration paid to effectuate the Business Combination net of preliminary adjustments. |
(7) | Reflects the impact of preliminary transaction costs of $23,828,000. This amount excludes financing fees, which are reflected in footnote (3) above, related to the new bank debt. |
(b) | Represents the adjustment to intangible assets to reflect their estimated fair values on the preliminary purchase price allocation (see Note a — Pro Forma Adjustments to the Income Statement). |
(c) | Represents the adjustment to goodwill based on the preliminary purchase price allocation (see Note 2). |
(d) | Represents the transaction cost expense at closing going against retained earnings. |
(e) | Represents the elimination of deferred underwriting costs. |
(f) | Represents an adjustment to reflect that at the time of issuance, certain Act II ordinary shares were subject to a possible redemption and, as such, an amount of $289,272,046 was classified as redeemable equity in Act II’s historical balance sheet as of March 31, 2020. |
(g) | Represents the elimination of the Seller’s Net Parent Investment in Merisant and MAFCO, and the elimination of the amount due to a related party. |
(h) | Represents the cancellation of 3,000,000 of Act II Class B Shares and the remaining 4,500,000 Act II Class B Shares being converted into 4,500,000 shares of Whole Earth Brands, Inc. common stock. |
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(i) | Represents the pro forma adjustments to additional paid-in capital. |
Conversion of redeemable shares held by Act II public shareholders to APIC net of par value amount | $ | 252,936,000 | ||
Increase in APIC attributable to stock issued to PIPE investors | 74,999,250 | |||
Decrease in APIC as the result of the repurchase of warrants | (11,250,000 | ) | ||
Cancellation of Act II Sponsor shares | 300 | |||
$ | 316,685,550 |
(j) | Represents the elimination of Seller liabilities not assumed in the Business Combination. |
(k) | Represents insurance premiums prepaid at closing. |
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