Exhibit 10.1

Execution Version

 

 

 

 

 

CREDIT AGREEMENT

 

Dated as of July 1, 2019 among

VICTORY CAPITAL HOLDINGS, INC.,

as Borrower,

 

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

 

BARCLAYS BANK PLC,

as Administrative Agent, Swingline Lender and an Issuing Bank,

 

BARCLAYS BANK PLC, RBC CAPITAL MARKETS*

and

BMO CAPITAL MARKETS CORP.,

as Joint Term Lead Arrangers and Joint Term Bookrunners,

 

BARCLAYS BANK PLC, RBC CAPITAL MARKETS,*

BMO CAPITAL MARKETS CORP., KEYBANK NATIONAL ASSOCIATION, JPMORGAN CHASE BANK, N.A., BOFA SECURITIES, INC.

and

MORGAN STANLEY SENIOR FUNDING, INC.,

as Joint Revolving Lead Arrangers and Joint Revolving Bookrunners, and

BARCLAYS BANK PLC,

as Syndication Agent

 

* RBC Capital Markets is a brand name for the capital markets activities of Royal Bank of Canada and its affiliates.

 

Table of Contents

 

 

 

 

Table of Contents

(Cont.)

 

 

 

 

Table of Contents

(Cont.)

 

 

 

 

Table of Contents (Cont.)

 

 

 

 

 

 

 

CREDIT AGREEMENT

 

CREDIT AGREEMENT, dated as of July 1, 2019 (this “ Agreement ”), by and among Victory Capital Holdings, Inc., a Delaware corporation (the “ Borrower ”), the Lenders from time to time party hereto and Barclays Bank PLC (“ Barclays ”), as administrative agent and collateral agent for the Secured Parties (in such capacities, together with its successors and assigns in such capacities, the “ Administrative Agent ”), a Swingline Lender and an Issuing Bank.

 

RECITALS

 

WHEREAS, pursuant to the terms and conditions of the Stock Purchase Agreement, dated as of November 6, 2018 (including the exhibits and schedules thereto, the “ Acquisition Agreement ”), by and among the Borrower, USAA Investment Corporation, a Delaware corporation, and, solely for the express purposes set therein, USAA Capital Corporation, a Delaware corporation, on the Closing Date the Borrower will acquire (the “ Acquisition ”) 100% of the outstanding equity interests of each of USAA Asset Management Company, a Delaware corporation (“ USAA Adviser ”), and USAA Transfer Agency Company, a Delaware corporation (“ USAA Transfer Agent ” and, together with USAA Adviser, the “ Targets ”) from the current equity-holders thereof (the “ Sellers ”);

 

WHEREAS, in connection therewith, the Borrower has requested that the Lenders extend credit to the Borrower in the form of (a) Initial Term Loans made on the Closing Date in an aggregate principal amount of up to $1,100,000,000, the proceeds of which shall be used to finance all or a portion of the Transactions, and (b) Revolving Credit Commitments in an aggregate principal amount of $100,000,000, the proceeds of which shall be used to finance the working capital needs and other general corporate purposes of the Borrower and the Restricted Subsidiaries;

 

WHEREAS, in order to facilitate the Acquisition, the Borrower has requested that the Lenders authorize and ratify the Administrative Agent’s actions to enter into the escrow arrangements contemplated by the Escrow Agreement prior to the Closing Date; and

 

WHEREAS, the Lenders are willing to extend credit to the Borrower as so requested, subject to the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE 1 DEFINITIONS

 

Section 1.01. Defined Terms. As used in this Agreement (including the preamble and the recitals above), the following terms have the meanings specified below:

 

“ ABR ”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Alternate Base Rate.

 

“ ABR Borrowing ” means any Borrowing at the Alternate Base Rate.

 

“ ABR Loan ” means a Loan that bears interest with reference to the Alternate Base Rate.

 

“ ABR Revolving Borrowing ” means any Borrowing of Revolving Loans at the Alternate Base

Rate.

 

“ ABR Revolving Loan ” means a Revolving Loan that bears interest with reference to the Alternate Base Rate.

 

“ Acceptable Compliance Certificate ” has the meaning assigned to such term in the definition of Applicable Rate.

 

“ Acceptable Intercreditor Agreement ” means an intercreditor agreement the terms of which are reasonably satisfactory to the Administrative Agent, the Required Lenders and the Borrower.

 

“ ACH ” means automated clearing house transfers.

 

“ Acquisition ” has the meaning assigned to such term in the recitals to this Agreement.

 

“ Acquisition Agreement ” has the meaning assigned to such term in the recitals to this Agreement.

 

“ Additional Agreement ” has the meaning assigned to such term in Article 8 .

 

“ Additional Commitment ” means any commitment hereunder added pursuant to Sections 2.22 ,   2.23 or 9.02(c) .

 

“ Additional Lender ” has the meaning assigned to such term in Section 2.22(b) .

 

“ Additional Loans ” means any Additional Revolving Loans and any Additional Term Loans.

 

“ Additional Revolving Credit Commitments ” means any revolving credit commitment added pursuant to Sections 2.22 ,   2.23 or 9.02(c)(ii) .

 

“ Additional Revolving Credit Exposure ” means, with respect to any Lender at any time, the aggregate Outstanding Amount at such time of all Additional Revolving Loans of such Lender, plus the aggregate Outstanding Amount at such time of such Lender’s LC Exposure and Swingline Exposure attributable to its Additional Revolving Credit Commitment.

 

“ Additional Revolving Lender ” means any Lender with an Additional Revolving Credit Commitment or any Additional Revolving Credit Exposure.

 

“ Additional Revolving Loans ” means any revolving loan added hereunder pursuant to  Section 2.22 ,   2.23 or  9.02(c)(ii) .

 

“ Additional Term Lender ” means any Lender with an Additional Term Loan Commitment or an outstanding Additional Term Loan.

 

“ Additional Term Loan Commitment ” means any  term  commitment  added  pursuant  to Sections 2.22 ,   2.23 or 9.02(c)(i) .

 

“ Additional Term Loans ” means any term loan added pursuant to Section 2.22 ,   2.23 or  9.02(c)(i) .

 

“ Administrative Agent ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ Administrative Questionnaire ” has the meaning assigned to such term in Section 2.22(d) .

 

“ Advisers Act ” means the Investment Advisers Act of 1940.

 

“ Affiliate ” means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with, that Person. No Person shall be an “Affiliate” of the Borrower or any Subsidiary thereof solely because it is an unrelated portfolio company of any Sponsor and none of the Agents, any Lender (other than any Affiliated Lender or any Debt Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of the Borrower or any Subsidiary thereof.

 

“ Affiliated Lender ” means any Non-Debt Fund Affiliate, the Borrower or any Subsidiary.

 

“ Affiliated Lender Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Affiliated Lender (with the consent of any party whose consent is required by Section   9.05 ) and accepted by the Administrative Agent in the form of Exhibit A-2 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent and the Borrower.

 

“ Affiliated Lender Cap ” has the meaning assigned to such term in Section 9.05(g)(iv) .

 

“ Agents ” means, collectively, the Administrative Agent, the Lead Arrangers and the Syndication

Agent.

 

“ Agreement ” has the meaning assigned to such term in the preamble to this Credit Agreement.

 

“ Agreement Currency ” has the meaning assigned to such term in Section 9.22 .

 

“ Alternate Base Rate ” means, for any day, a fluctuating rate per annum equal to the highest of

 

“ Applicable Percentage ” means, (a) with respect to any Term Lender of any Class, a percentage equal to a fraction the numerator of which is the aggregate outstanding principal amount of the Term Loans and unused Additional Term Loan Commitments of such Term Lender under the applicable Class and the denominator of which is the aggregate outstanding principal amount of the Term Loans and unused Term Commitments of all Term Lenders under the applicable Class and (b) with respect to any Revolving Lender of any Class, the percentage of the aggregate amount of the Revolving Credit Commitments of such Class represented by such Lender’s Revolving Credit Commitment of such Class; provided that for purposes of Section 2.21  and otherwise herein, when there is a Defaulting Lender, such Defaulting Lender’s Revolving Credit Commitment shall be disregarded for any relevant calculation. In the case of  clause (b) , in the event that the Revolving Credit Commitments of any Class have expired or been terminated, the Applicable Percentage of any Revolving Lender of such Class shall be determined on the basis of the Revolving Credit Exposure of such Revolving Lender attributable to its Revolving Credit Commitment of such Class, giving effect to any assignment thereof.

 

“ Applicable Period ” has the meaning assigned to such term in the definition of Applicable Rate.

 

“ Applicable Rate ” means, for any day: (a) with respect to any Initial Term Loan (i) that is an ABR Loan, 2.25% per annum or (ii) that is a LIBO Rate Loan, 3.25% per annum; (b) with respect to any Initial Revolving Loan, that is an ABR Loan or a LIBO Rate Loan, the percentage per annum as set forth in the pricing grid below for the appropriate Level; provided ,   however , that until the delivery of the financial statements and related Compliance Certificate for the first full Fiscal Quarter ending after the Closing Date pursuant to  Section 5.01 , the Applicable Rate shall be the rate set forth in “Level 1” of the pricing grid

 

below; and (c) with respect to any Extended Term Loan or other Additional Term Loan of any Class or any Extended Revolving Loan or other Additional Revolving Loan of any Class, the rate or rates per annum specified in the applicable Refinancing Amendment, Incremental Facility Amendment or Extension Amendment.

 

Level	First Lien Leverage Ratio	Applicable Rate for Initial Revolving Loans (ABR Rate Loans)	Applicable Rate for Initial Revolving Loans (LIBO Rate Loans)
1	Greater than 2.50:1.00	2.25%	3.25%
2	Less than or equal to 2.50:1.00 but greater than 2.00:1.00	2.00%	3.00%
3	Less than or equal to 2.00:1.00	1.75%	2.75%

 

The Applicable Rate shall be re-determined quarterly on the first day immediately following the date of delivery to the Administrative Agent of a Compliance Certificate containing a reasonably detailed calculation of the First Lien Leverage Ratio pursuant to Section 5.01 (an “ Acceptable Compliance   Certificate ”); provided that, if an Acceptable Compliance Certificate is not delivered to the Administrative Agent pursuant to  Section 5.01 , without constituting a waiver of any Default or Event of Default arising as a result thereof, then (i) the rate set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered but was not delivered and shall continue to so apply through but not including the date on which an Acceptable Compliance Certificate is delivered (and from and after delivery of such Acceptable Compliance Certificate, the pricing level shall be determined based on the First Lien Leverage Ratio set forth therein); provided ,   further , that, in the event that any calculation of the First Lien Leverage Ratio previously delivered pursuant to  Section 5.01  is at any time restated or otherwise revised or the information set forth therein otherwise proves to be false or incorrect such that the Applicable Rate would have been higher than was otherwise in effect during any period (an “ Applicable Period ”), then, without constituting a waiver of any Default or Event of Default arising as a result thereof, (i) the rate set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered and shall continue to so apply through but not including the date on which a corrected Acceptable Compliance Certificate is delivered and (ii) the Borrower shall, within five (5) Business Days of written demand thereof by the Administrative Agent, pay to the Administrative Agent (for the benefit of the Lenders in accordance with this Agreement) the accrued additional interest with respect to such Loans owing as a result of such increased Applicable Rate for such Applicable Period.

 

“ Applicable Revolving Credit Percentage ” means, with respect to any Revolving Lender at any time, the percentage of the Total Revolving Credit Commitment at such time represented by such Revolving Lender’s Revolving Credit Commitments at such time; provided that for purposes of Section 2.21 and otherwise herein, when there is a Defaulting Lender, any such Defaulting Lender’s Revolving Credit Commitment shall be disregarded in the relevant calculations. In the event that (x) the Revolving Credit Commitments of any Class have expired or been terminated in accordance with the terms hereof (other than pursuant to Article 7 ), the Applicable Revolving Credit Percentage shall be recalculated without giving effect to the Revolving Credit Commitments of such Class or (y) the Revolving Credit Commitments of all Classes have terminated (or the Revolving Credit Commitments of any Class have terminated pursuant to Article 7 ), the Applicable Revolving Credit Percentage shall be determined based upon the Revolving Credit Commitments (or the Revolving Credit Commitments of such Class) most recently in effect, giving effect to any assignments thereof.

 

“ Approved Fund ” means, with respect to any Lender, any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar

 

extensions of credit in the ordinary course of its activities and is administered, advised or managed by (a) such Lender, (b) any Affiliate of such Lender or (c) any entity or any Affiliate of any entity that administers, advises or manages such Lender.

 

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.05 ), and accepted by the Administrative Agent in substantially the form of Exhibit A-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent and the Borrower.

 

“ Available Amount ” means, at any time, an amount equal to, without duplication:

 

 

 

 

 

 

 

through and including such time in connection with the Disposition to any Person (other than the Borrower or any Restricted Subsidiary) of any Investment made pursuant to  clause

(r) of the definition of Permitted Investment (in an amount not to exceed the original amount of such Investment made in reliance on the Available Amount); plus

 

 

(r) of the definition of Permitted Investment) that has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or is liquidated, wound up or dissolved into, the Borrower or any Restricted Subsidiary and (B) the fair market value (as determined by the Borrower in good faith) of the assets of any Unrestricted Subsidiary that have been transferred, conveyed or otherwise distributed (in an amount not to exceed the original amount of the Investment in such Unrestricted Subsidiary made pursuant to clause (r) of the definition of Permitted Investment) to the Borrower or any Restricted Subsidiary, in each case, during the period from and including the day immediately following the Closing Date through and including such time;  plus

 

 

 

(b) an amount equal to the sum of (i) Restricted Payments made  pursuant  to Section 6.04(a)(iii) ,   plus (ii) Restricted Debt Payments made pursuant to Section 6.04(b)(vi) ,  plus

(iii) Investments made pursuant to  clause (r)  of the definition of Permitted Investment, in each case, after the Closing Date and prior to such time or contemporaneously therewith.

 

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

 

“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the

 

implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“ Banking Services ” means each and any of the following bank services: commercial credit cards, stored value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling services, operational foreign exchange management, current account facilities and any arrangements or services similar to any of the foregoing or otherwise in connection with Cash management and Deposit Accounts.

 

“ Banking Services Obligations ” means any and all obligations of any Loan Party, whether absolute or contingent and however and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) (a) under any arrangement that is in effect on the Closing Date between any Loan Party and a counterparty that is (or is an Affiliate of) any Lender or Agent as of the Closing Date or (b) under any arrangement that is entered into after the Closing Date by any Loan Party with any counterparty that is (or is an Affiliate of) any Lender or Agent at the time such arrangement is entered into, in each case in connection with Banking Services that have been designated to the Administrative Agent in writing by the Borrower as being Banking Services Obligations for the purposes of the Loan Documents, it being understood that each counterparty thereto shall be deemed (A) to appoint the Administrative Agent as its agent under the applicable Loan Documents and (B) to agree to be bound by the provisions of Article 8 ,   Section 9.03 and Section 9.10 and any Acceptable Intercreditor Agreement as if it were a Lender.

 

“ Bankruptcy Code ” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.).

 

“ Barclays ” has the meaning assigned to such term in the preamble to this Agreement.

 

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

 

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

 

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

 

“ Board ” means the Board of Governors of the Federal Reserve System of the U.S.

 

“ Borrower ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ Borrower Tax Refund Receivable ” means a receivable of the Borrower in respect of a refund of

U.S. federal income taxes for the taxable year ended December 31, 2013.

 

“ Borrowing ” means any Loans of the same Type and Class made, converted or continued on the same date and, in the case of LIBO Rate Loans, as to which a single Interest Period is in effect.

 

“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03  and substantially in the form attached hereto as  Exhibit B  or such other form that is reasonably acceptable to the Administrative Agent and the Borrower (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent).

 

“ Broker-Dealer Licenses and Memberships ” means (a) the memberships of each Broker-Dealer Subsidiary with FINRA and (b) the licenses with Governmental Authorities of each Broker-Dealer Subsidiary, in each case, to the extent necessary and material to the normal conduct of the business of the applicable Broker-Dealer Subsidiary as a Registered Broker-Dealer or Introducing Broker, as applicable.

 

“ Broker-Dealer Registrations ” means the registrations of each Broker-Dealer Subsidiary with the SEC and all other Governmental Authorities which require registration and have jurisdiction over such Broker-Dealer Subsidiary, in each case, to the extent necessary and material to the normal conduct of the business of the applicable Broker-Dealer Subsidiary as a Registered Broker-Dealer or Introducing Broker, as applicable.

 

“ Broker-Dealer Subsidiary ” means (a) the Restricted Subsidiaries of the Borrower listed on Schedule 1.01(f) and any other Restricted Subsidiary of the Borrower that becomes a broker-dealer registered under the Exchange Act or associated persons thereof, as defined therein (a “Registered Broker- Dealer”), after the Closing Date and (b) the Restricted Subsidiaries listed on  Schedule 1.01(g)  and any other Restricted Subsidiary that is an introducing broker (“ Introducing Broker ”) that is required to register under the Commodity Exchange Act after the Closing Date.

 

“ Builder Basket ” has the meaning assigned to such term in clause (a)(ii) of the definition of “Available Amount.”

 

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and, if the applicable Business Day relates to notices, determinations, fundings or payments in connection with the LIBO Rate or any LIBO Rate Loans, a day on which dealings in Dollar deposits are also carried on in the London interbank market.

 

“ Capital Expenditures ” means, with respect to the Borrower and the Restricted Subsidiaries for any period, the aggregate amount, without duplication, of (x) all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) that would, in accordance with GAAP, be included as additions to property, plant and equipment, (y) other capital expenditures of such Person for such period (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) that are reported in the Borrower’s consolidated statement of cash flows for such period and (z) other capital expenditures of such Person for such period (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases).

 

“ Capital Lease ” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of such Person.

 

“ Capital Stock ” means any and all shares, interests, participations, preferred equity certificates, convertible preferred equity certificates or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests (whether general or limited), and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing, but excluding for the avoidance of doubt any Indebtedness convertible into or exchangeable for any of the foregoing.

 

“ Captive Insurance Subsidiary ” means any Restricted Subsidiary that is subject to regulation as an insurance company (or any Restricted Subsidiary thereof).

 

“ Cash ” means money, currency or a credit balance in any Deposit Account, in each case determined in accordance with GAAP.

 

“ Cash Equivalents ” means, as at any date of determination, (a) readily marketable securities

(i) issued or directly and unconditionally guaranteed or insured as to interest and principal by the U.S. government or (ii) issued by any agency or instrumentality of the U.S. the obligations of which are backed by the full faith and credit of the U.S., in each case maturing within one year after such date and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (b) readily marketable direct obligations issued by any state of the U.S. or any political subdivision of any such state or any public instrumentality thereof or by any foreign government, 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-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (c) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (d) deposits, money market deposits, time deposit accounts, certificates of deposit or bankers’ acceptances (or similar instruments) maturing within one year after such date and issued or accepted by any Lender or by any bank organized under, or authorized to operate as a bank under, the laws of the U.S., any state thereof or the District of Columbia or any political subdivision thereof or any foreign bank or its branches or agencies and that has capital and surplus of not less than $100,000,000 and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (e) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank having capital and surplus of not less than $100,000,000; (f) shares of any investment fund that has (i) substantially all of its assets invested in the types of investments referred to in clauses (a) through (e) above, (ii) net assets of not less than $250,000,000 and (iii) a rating of at least A-2 from S&P or at least P-2 from Moody’s (or, if at any time either S&P or Moody’s are not rating such fund, an equivalent rating from another nationally recognized statistical rating agency); and (g) solely with respect to any Captive Insurance Subsidiary, any investment that such Captive Insurance Subsidiary is not prohibited to make in accordance with applicable law. The term “Cash Equivalents” shall also include (x) Investments of the type and maturity described in clauses (a) through (g) above in foreign obligors, which Investments or obligors (or the parent companies thereof) have the ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (y) other short-term Investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in Investments analogous to the Investments described in  clauses

 

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

 

“ CFTC ” means the Commodity Futures Trading Commission.

 

“ Change in Law ” means (a) the adoption or taking effect of any law, rule, regulation or treaty after the Closing Date, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority after the Closing Date or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation

 

thereof and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case described in  clauses (a) ,  (b)  and  (c)  above, be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented.

 

“ Change of Control ” means the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), including any group acting for the purpose of acquiring, holding or disposing of Securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act, but excluding any employee benefit plan or Person acting as the trustee, agent or other fiduciary or administrator therefor), other than one or more Permitted Holders, of Capital Stock representing more than the greater of (x) 35.0% of the total voting power of all of the outstanding voting Capital Stock of the Borrower and (y) the percentage of the total voting power of all of the outstanding voting Capital Stock of the Borrower owned, directly or indirectly, beneficially by the Permitted Holders, unless, in the case of each of clauses (x) and (y) above, one or more Permitted Holders has, at such time, the right or the ability, by voting power, contract or otherwise, to elect or designate for election at least a majority of the board of directors (or comparable governing body or managers) of the Borrower. Notwithstanding the foregoing, the right to acquire voting Capital Stock (so long as such Person does not have the right to direct the voting of the Capital Stock subject to such right) or any veto power in connection with the acquisition or disposition of voting Capital Stock will not cause a party to be a beneficial owner.

 

“ Charge ” means any charge, loss, expense, cost, accrual or reserve of any kind.

 

“ Charged Amounts ” has the meaning assigned to such term in Section 9.19 .

 

“ Class ”, when used with respect to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Initial Term Loans, Additional Term Loans of any series established as a separate “Class” pursuant to Section 2.22 ,   2.23 or 9.02(c)(i) , Initial Revolving Loans or Additional Revolving Loans of any series established as a separate “Class” pursuant to  Section 2.22 ,  2.23  or  9.02(c)(ii) ,

 

“ Closing Date ” means the date on which (a) the Escrow Funding Date shall have occurred, and (b) the Escrow Release Conditions shall have been met, which date shall have occurred on July 1, 2019.

 

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

 

“ Collateral ” means any and all property of any Loan Party subject to a Lien under any Collateral Document and any and all other property of any Loan Party, now existing or hereafter acquired, that is or becomes subject to a Lien pursuant to any Collateral Document to secure the Secured Obligations. For the avoidance of doubt, in no event shall “Collateral” include any Excluded Asset.

 

“ Collateral and Guarantee Requirement ” means, at any time, subject to (x) the applicable limitations set forth in this Agreement or any other Loan Document, (y) the time periods (and extensions thereof) set forth in Section 5.11 and (z) the terms of any Acceptable Intercreditor Agreement, the requirement that:

 

U.S. registrations of or U.S. applications to register Patents, Trademarks (excluding any intent-to- use applications for the registration of any Trademarks or similar applications) or Copyrights that constitute Collateral, an Intellectual Property Security Agreement in substantially the form attached as Exhibit J-1 ,   Exhibit J-2 or Exhibit J-3 , as applicable, (D) a completed Perfection Certificate (or, with respect to information provided after the Closing Date, a completed Perfection Certificate Supplement) and (E) Uniform Commercial Code financing statements in appropriate form for filing in such jurisdictions as the Administrative Agent may reasonably request;

 

 

 

 

 

 

“ Collateral Documents ” means, collectively, (i) the Security Agreement, (ii) each Mortgage, (iii) each Intellectual Property Security Agreement, (iv) any supplement to any of the foregoing delivered to the Administrative Agent pursuant to the definition of “Collateral and Guarantee Requirement” and (v) each of the other instruments and documents pursuant to which any Loan Party grants a Lien on any Collateral as security for payment of the Secured Obligations.

 

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

 

“ Commercial Tort Claim ” has the meaning set forth in Article 9 of the UCC.

 

“ Commitment ” means, with respect to each Lender, such Lender’s Initial Term Loan Commitment, Initial Revolving Credit Commitment and Additional Commitment, as applicable, in effect as of such time.

 

“ Commitment Fee Rate ” means, for any day: (a) with respect to the Initial Revolving Credit Commitments, the rate per annum as set forth in the pricing grid below for the appropriate Level;  provided ,   however , that until the delivery of the financial statements and related Compliance Certificate for the first full Fiscal Quarter ending after the Closing Date pursuant to Section 5.01 , the Commitment Fee Rate shall be the rate set forth in “Level 1” of the pricing grid below; and (b) with respect to Additional Revolving Credit Commitments of any Class, the rate or rates per annum specified in the applicable Refinancing Amendment, Incremental Facility Amendment or Extension Amendment.

 

Level	First Lien Leverage Ratio	Commitment Fee Rate
1	Greater than 2.50:1.00	0.50%
2	Less than or equal to 2.50:1.00 but greater than 2.00:1.00	0.375%
3	Less than or equal to 2.00:1.00	0.25%

 

The Commitment Fee Rate shall be re-determined quarterly on the first day immediately following the date of delivery to the Administrative Agent of a Compliance Certificate containing a reasonably detailed, certified calculation of the First Lien Leverage Ratio pursuant to Section 5.01 ;   provided that, if such certification is not provided in accordance with Section 5.01 , without constituting a waiver of any Default or Event of Default arising as a result thereof, then (i) the pricing set forth in “Level 1” shall apply as of the first day after the date on which a Compliance Certificate was required to have been delivered but was not delivered, and shall continue to so apply through but not including the date on which such Compliance Certificate is so delivered (and therefrom, the pricing level shall be based off of the reasonably detailed calculations of the First Lien Leverage Ratio certified by the Borrower in such Compliance Certificate); provided ,  further , that, in the event that the certified calculation of the First Lien Leverage Ratio previously delivered pursuant to Section 5.01 is at any time restated or otherwise revised or the information set forth in such certification otherwise proves to be false or incorrect such that the Commitment Fee Rate would have been higher than was otherwise in effect during any Applicable Period, then, without constituting a waiver of any Default or Event of Default arising as a result thereof, (i) the pricing level set forth in “Level 1” shall apply as of the first day after which such Compliance Certificate was required to have been delivered pursuant to Section 5.01 and shall continue to so apply through but not including the date on which the correct certified calculation of the First Lien Leverage Ratio for such Applicable Period in a

 

Compliance Certificate is so delivered and (ii) the Borrower shall, within five (5) Business Days of written demand thereof by the Administrative Agent, pay to the Administrative Agent (for the benefit of the Lenders in accordance with this Agreement) the accrued additional interest with respect to such Loans owing as a result of such increased Commitment Fee Rate for such Applicable Period.

 

“ Commitment Schedule ” means the Schedule attached hereto as Schedule 1.01(a) reflecting the Commitments in effect on the Closing Date.

 

“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

“ Company ” has the meaning assigned to such term in the preamble to this Agreement.

 

“ Company Competitor ” means any Person that is a direct competitor of the Borrower or any of its Subsidiaries.

 

“ Competitor Debt Fund Affiliate ” means, with respect to any Company Competitor or any Affiliate thereof, any debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is (i) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business and (ii) managed, sponsored or advised by any person that is Controlling, Controlled by or under common Control with the relevant Company Competitor or Affiliate thereof, but only to the extent that no personnel involved with the investment in the relevant Company Competitor makes (or has the right to make or participate with others in making) investment decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity with respect to decisions involving any investment in debt of the Borrower or any of its Subsidiaries.

 

“ Compliance Certificate ” means a Compliance Certificate substantially in the form of Exhibit C .

 

“ Compliance Date ” means the last day of any applicable Fiscal Quarter (commencing with the first full Fiscal Quarter ending after the Closing Date) if as of such date the aggregate Outstanding Amount of the Revolving Credit Exposure (excluding (i) for the first four full Fiscal Quarters ending after the Closing Date, any Revolving Loans funded on the Closing Date to fund any original issue discount or upfront fees implemented pursuant to the “market flex” provisions of the Fee Letter, (ii) any Letters of Credit under the Initial Revolving Facility, any Incremental Revolving Facility and any Replacement Revolving Facility that have been cash collateralized or otherwise backstopped in an amount equal to at least 103.0% of the Stated Amount thereof ( minus  any amount then on deposit in any cash collateral account established for the benefit of the relevant Issuing Bank) or otherwise cash collateralized in a manner reasonably satisfactory to the relevant Issuing Bank and (iii) non-cash collateralized or backstopped Letters of Credit in an aggregate outstanding amount not exceeding $2,500,000) exceeds an amount equal to 35.0% of the Total Revolving Credit Commitment.

 

“ Confidential Information ” has the meaning assigned to such term in Section 9.13 .

 

“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“ Consolidated Adjusted EBITDA ” means, with respect to any Person on a consolidated basis for any period, the sum of:

 

 

 

 

 

 

 

 

 

 

(C) above, the relevant Person in good faith expects to receive reimbursement for such Charge within the next four Fiscal Quarters (it being understood that to the extent any reimbursement amount is not actually received within such Fiscal Quarters, to the extent previously added back to Consolidated Net Income in determining Consolidated Adjusted EBITDA for a prior Fiscal Quarter, such reimbursement amount so added back but not so received shall be deducted in calculating Consolidated Adjusted EBITDA for the Fiscal Quarter immediately following such four Fiscal Quarter period pursuant to clause (i)(i) below) and (D) Public Company Costs;

 

 

 

 

costs), any systems implementation Charge, any severance Charge, any Charge relating to entry into a new market, any Charge relating to any strategic initiative, any consulting Charge, any signing Charge, any retention or completion bonus, any expansion or relocation Charge, any Charge associated with any modification to any pension and post- retirement employee benefit plan, any software development Charge, any Charge associated with new systems design, any implementation Charge, any project startup Charge, any Charge in connection with new operations, any Charge relating to a new contract, any consulting Charge or any corporate development Charge; and

 

 

 

 

 

 

 

 

 

 

“ Consolidated First Lien Debt ” means, as to any Person at any date of determination, the aggregate principal amount of Consolidated Total Debt outstanding on such date that is secured by a first priority Lien on the Collateral.

 

“ Consolidated Interest Expense ” means, with respect to any Person for any period, the sum of

 

“ Consolidated Net Income ” means, in respect of any period and as determined for any Person (the “ Subject Person ”) on a consolidated basis, an amount equal to the net income (loss) of such Subject Person and its Subsidiaries, determined in accordance with GAAP, but excluding, without duplication:

 

 

of the Restricted Subsidiaries has contributed cash or Cash Equivalents to such Person in respect of such loss during such period or (iii) the income or loss of any Unrestricted Subsidiary,

 

 

 

 

 

 

 

 

accounting principles or policies made in such period in accordance with GAAP which affect Consolidated Net Income,

 

 

 

 

 

There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in the applicable period.

 

“ Consolidated Secured Debt ” means, as to any Person at any date of determination, the aggregate principal amount of Consolidated Total Debt outstanding on such date that is secured by a Lien on the Collateral.

 

“ Consolidated Total Assets ” means, at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the applicable Person at such date.

 

“ Consolidated Total Debt ” means, as to any Person at any date of determination, the aggregate principal amount of all third party debt for borrowed money and the outstanding principal balance of all Indebtedness of such Person represented by notes, bonds, debentures and similar instruments, Capital Leases and purchase money Indebtedness (excluding, for the avoidance of doubt, undrawn letters of credit); provided  that “Consolidated Total Debt” shall be calculated (i) net of the Unrestricted Cash Amount (to the extent the Unrestricted Cash Amount is greater than zero) and (ii) excluding any obligation, liability or indebtedness of such Person if, upon or prior to the maturity thereof, such Person has irrevocably deposited with the proper Person in trust or escrow the necessary funds (or evidences of indebtedness) for the payment, redemption or satisfaction of such obligation, liability or indebtedness, and thereafter such funds and evidences of such obligation, liability or indebtedness or other security so deposited are not included in the calculation of the Unrestricted Cash Amount.

 

“ Consolidated Working Capital ” means, as at any date of determination, the excess of Current Assets over Current Liabilities.

 

“ Contractual Obligation ” means, as applied to any Person, any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

 

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

 

“ Copyright ” means the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright whether published or unpublished, copyright registrations and copyright applications; (b) all renewals of any of the foregoing; and (c) all rights corresponding to any of the foregoing.

 

“ Credit Extension ” means each of (i) the making of a Revolving Loan or (ii) the issuance, amendment, modification, renewal or extension of any Letter of Credit (other than any such amendment, modification, renewal or extension that does not increase the Stated Amount of the relevant Letter of Credit).

 

“ Credit Facilities ” means the Revolving Facility and the Term Facility.

 

“ Cure Amount ” has the meaning assigned to such term in Section 6.14(b) .

 

“ Cure Period ” has the meaning assigned to such term in Section 6.14(b) .

 

“ Cure Right ” has the meaning assigned to such term in Section 6.14(b) .

 

“ Current Assets ” means, at any date, all assets of the Borrower and the Restricted Subsidiaries which under GAAP would be classified as current assets (excluding any (i) Cash or Cash Equivalents (including Cash and Cash Equivalents held on deposit for third parties by the Borrower or any Restricted Subsidiary), (ii) permitted loans to third parties, (iii) deferred bank fees and derivative financial instruments related to Indebtedness, (iv) the current portion of current and deferred Taxes and (v) management fees receivables).

 

“ Current Liabilities ” means, at any date, all liabilities of the Borrower and the Restricted Subsidiaries which under GAAP would be classified as current liabilities, other than (i) current maturities of long term debt, (ii) outstanding revolving loans and letter of credit exposure, (iii) accruals of Consolidated Interest Expense (excluding Consolidated Interest Expense that is due and unpaid),

(iv) obligations in respect of derivative financial instruments related to Indebtedness, (v) the current portion of current and deferred Taxes, (vi) liabilities in respect of unpaid earnouts, (vii) accruals relating to restructuring reserves, (viii) liabilities in respect of funds of third parties on deposit with the Borrower or any Restricted Subsidiary, (ix) management fees payables, (x) the current portion of any Capital Lease obligation, (xi) the current portion of any other long term liability for borrowed money, (xii) any liabilities that are not Indebtedness and will not be settled in cash or Cash Equivalents during the next succeeding 12- month period after such date, (xiii) the effects from applying purchase accounting, (xiv) any accrued professional liability risks, (xv) restricted marketable securities and (xvi) the current portion of deferred revenue.

 

“ Debt Fund Affiliate ” means any Affiliate of any Sponsor (other than a natural Person) that is a bona fide debt fund or investment vehicle (in each case with one or more bona fide investors to whom its managers owe fiduciary duties independent of their fiduciary duties to such Sponsor) primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course of its activities and for which the personnel making the primary investment decisions are not personnel primarily engaged in making investment decisions in respect of any equity fund which has a direct or indirect equity investment in the Borrower or the Restricted Subsidiaries (“ Equity Personnel ”) or personnel controlled by such Equity Personnel.

 

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

 

“ Declined Proceeds ” has the meaning assigned to such term in Section 2.11(b)(vi) .

 

“ Default ” means any event or condition which, upon notice, lapse of time or both, would become an Event of Default.

 

“ Defaulting Lender ” means, subject to Section 2.21(f) , any Lender that has (a) defaulted in its payment obligations under this Agreement, including to make a Loan within two Business Days of the date required to be made by it hereunder or to fund its participation in a Letter of Credit or Swingline Loan required to be funded by it hereunder within two Business Days of the date such obligation arose or such Loan, Letter of Credit was required to be made or funded unless such Lender, acting in good faith, notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied,

 

hereunder; provided that no Lender shall be deemed to be a Defaulting Lender solely by virtue of (I) the ownership or acquisition of any Capital Stock in such Lender or its parent by any Governmental Authority or (II) in the case of any Lender or parent company which is a solvent Person, the precautionary appointment of an administrator, guardian, custodian or other similar official by a Governmental Authority under or based on the law of the country where such Person is subject to home jurisdiction supervision if applicable Requirements of Law require that such appointment not be made public; provided that such ownership interest or action does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contract or agreement to which such Lender is a party. 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 2.21(f) ) upon delivery of written notice of such determination to the Borrower, the Swingline Lender, each Issuing Bank and each Lender.

 

“ Deposit Account ” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, excluding, for the avoidance of doubt, any investment property (within the meaning of the UCC) or any account evidenced by an instrument (within the meaning of the UCC).

 

“ Derivative Transaction ” means (a) any interest-rate transaction, including any interest-rate swap, basis swap, forward rate agreement, interest rate option (including a cap, collar or floor), and any other instrument linked to interest rates that gives rise to similar credit risks (including when-issued securities and forward deposits accepted), (b) any exchange-rate transaction, including any cross-currency interest- rate swap, any forward foreign-exchange contract, any currency option, and any other instrument linked to exchange rates that gives rise to similar credit risks, (c) any equity derivative transaction, including any equity-linked swap, any equity-linked option, any forward equity-linked contract, and any other instrument linked to equities that gives rise to similar credit risk and (d) any commodity (including precious metal) derivative transaction, including any commodity-linked swap, any commodity-linked option, any forward commodity-linked contract, and any other instrument linked to commodities that gives rise to similar credit risks; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees, members of management, managers or consultants of the Borrower or its Subsidiaries shall constitute a Derivative Transaction.

 

“ Designated Non-Cash Consideration ” means the fair market value (as determined by the Borrower in good faith) of non-Cash consideration received by the Borrower or any Restricted Subsidiary in connection with any Disposition pursuant to Section 6.07(h) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation (which amount will be reduced by the amount of Cash or Cash Equivalents received in connection with a subsequent sale or conversion of such Designated Non-Cash Consideration to Cash or Cash Equivalents). A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise Disposed of in compliance with Section 6.07 .

 

“ Disposition ” or “ Dispose ” means the sale, lease, sublease, or other disposition of any property of any Person.

 

“ Disqualified Capital Stock ” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event,