Published CUSIP Number: 90291HAA9

Revolver CUSIP Number: 90291HAC5

Term Loan CUSIP Number: 90291HAB7

 

$900,000,000

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of January 17, 2018,

by and among

 

UBIQUITI NETWORKS, INC. ,

 

and

 

UBIQUITI INTERNATIONAL HOLDING COMPANY LIMITED ,

as Borrowers,

 

the Lenders referred to herein,

 

as Lenders,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Administrative Agent,

 

Swingline Lender and Issuing Lender,

 

WELLS FARGO SECURITIES, LLC ,

HSBC BANK USA, NATIONAL ASSOCIATION,

 

and

 

FIFTH THIRD BANK ,

 

as Joint Lead Arrangers and Joint Bookrunners,

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

PNC BANK, NATIONAL ASSOCIATION,

 

and

 

MUFG UNION BANK, N.A. ,

as Documentation Agents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE II CREDIT FACILITIES 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE III LETTER OF CREDIT FACILITY 

 

 

 

 

 

 

 

 

ARTICLE IV GENERAL LOAN PROVISIONS 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE V CONDITIONS OF CLOSING AND BORROWING 

 

 

 

ARTICLE VIREPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE VII AFFIRMATIVE COVENANTS 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE VIII NEGATIVE COVENANTS 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARTICLE IX DEFAULT AND REMEDIES 

 

 

 

 

 

 

 

ARTICLE X THE ADMINISTRATIVE AGENT 

 

 

 

 

 

 

 

 

 

 

SECTION 10.10Secured Hedge Agreements and Secured Cash Management Agreements 

 

ARTICLE XI MISCELLANEOUS 

 

 

 

 

 

 

 

 

 

 

SECTION 11.10 Treatment of Certain Information; Confidentiality 

 

SECTION 11.11 Performance of Duties 

 

SECTION 11.12 All Powers Coupled with Interest 

 

SECTION 11.13 Survival 

 

SECTION 11.14 Titles and Captions 

 

SECTION 11.15 Severability of Provisions 

 

SECTION 11.16Counterparts; Integration; Effectiveness; Electronic Execution 

 

SECTION 11.17 Term of Agreement 

 

SECTION 11.18 USA PATRIOT Act 

 

SECTION 11.19 Independent Effect of Covenants 

 

SECTION 11.20 No Advisory or Fiduciary Responsibility 

 

SECTION 11.21 Borrower Agent 

 

SECTION 11.22 Nature of Obligations 

 

SECTION 11.23 Judgment Currency 

 

SECTION 11.24 Inconsistencies with Other Documents 

 

SECTION 11.25 Amendment and Restatement; No Novation 

 

SECTION 11.26Acknowledgement and Consent to Bail-In of EEA Financial Institutions 

 

SECTION 11.27 Certain ERISA Matters 

 

 

 

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of January 17, 2018, is by and between UBIQUITI NETWORKS, INC., a Delaware corporation (the “ Parent Borrower ”) and UBIQUITI INTERNATIONAL HOLDING COMPANY LIMITED, an exempted company incorporated under the laws of the Cayman Islands (the “ Cayman Borrower ”), as Borrowers, the lenders who are party to this Agreement and the lenders who may become a party to this Agreement pursuant to the terms hereof, as Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders.

 

STATEMENT OF PURPOSE

 

The Borrowers, the lenders party thereto and the Administrative Agent have entered into that certain Amended and Restated Credit Agreement, dated as of March 3, 2015 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “ Existing Credit Agreement ”).

 

The Borrowers have requested, and subject to the terms and conditions set forth in this Agreement, the Administrative Agent and the Lenders have agreed to amend and restate the Existing Credit Agreement and extend certain credit facilities to the Borrowers.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

 ARTICLE I

DEFINITIONS

 

SECTION 1.1   Definitions . The following terms when used in this Agreement shall have the meanings assigned to them below:

 

“ Administrative Agent ” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 10.6 .

 

“ Administrative Agent’s Office ” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 11.1(c) .

 

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

 

“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“ Agent Parties ” has the meaning assigned thereto in Section 11.1(e) .

 

“ Agreement ” means this Credit Agreement.

 

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrowers or their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder .

 

“ Applicable Law ” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

“ Applicable Margin ” means the corresponding percentages per annum as set forth below based on the Consolidated Total Leverage Ratio:

 

 

Pricing Level	Consolidated Total Leverage Ratio	Commitment Fee	LIBOR +	Base Rate +
I	Less than 1.00 to 1.00	0.20%	1.50%	0.50%
II	Greater than or equal to 1.00 to 1.00, but less than 1.50 to 1.00	0.25%	1.75%	0.75%
III	Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00	0.30%	2.00%	1.00%
IV	Greater than or equal to 2.00 to 1.00	0.35%	2.25%	1.25%

 

The Applicable Margin shall be determined and adjusted quarterly on the date five (5) Business Days after the day on which the Parent Borrower provides an Officer’s Compliance Certificate pursuant to Section 7.2(a) for the most recently ended fiscal quarter of the Parent Borrower (each such date, a “ Calculation Date ”); provided that (a) the Applicable Margin shall be based on Pricing Level III   until the first Calculation Date occurring after the Closing Date and, thereafter the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Parent Borrower preceding the applicable Calculation Date, and (b) if the Borrower Agent fails to provide an Officer’s Compliance Certificate when due as required by Section 7.2(a) for the most recently ended fiscal quarter of the Parent Borrower preceding the applicable Calculation Date, the Applicable Margin from the date on which such Officer’s Compliance Certificate was required to have been delivered shall be based on Pricing Level IV until such time as such Officer’s Compliance Certificate is delivered, at which time the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Parent Borrower preceding such Calculation Date. The applicable Pricing Level shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Pricing Level shall be applicable to all Extensions of Credit then existing or subsequently made or issued.

 

Notwithstanding the foregoing, in the event that any financial statement or Officer’s Compliance Certificate delivered pursuant to Section 7.1 or 7.2(a) is shown to be inaccurate (regardless of whether (i) this Agreement is in effect, (ii) any Revolving Credit Commitments are in effect, or (iii) any Extension of Credit is outstanding when such inaccuracy is discovered or such financial statement or Officer’s Compliance Certificate was delivered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “ Applicable Period ”) than the Applicable Margin applied for such Applicable Period, then (A) the Borrower Agent shall promptly deliver to the Administrative Agent a corrected Officer’s Compliance Certificate for such Applicable Period, (B) the Applicable Margin for such Applicable Period shall be determined as if the Consolidated Total Leverage Ratio in the corrected Officer’s Compliance Certificate were applicable for such Applicable Period, and (C) each Borrower shall, within two (2) Business Days of demand thereof by the Administrative Agent, pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 4.4 . Nothing in this paragraph shall limit the rights of the Administrative Agent and Lenders with respect to Sections 4.1(b) and 9.2 nor any of their other rights under this Agreement or any other Loan Document. Each Borrower’s obligations under this paragraph shall survive the termination of the Revolving Credit Commitments and the repayment of all other Obligations hereunder.

 

“ Arrangers ” means Wells Fargo Securities, LLC, HSBC Bank USA, National Association and Fifth Third Bank, each in its capacity as a joint lead arranger and joint bookrunner.

 

“ Asset Disposition ” means the sale, transfer, license, lease or other disposition of any Property (including any disposition of Equity Interests and any sale-leaseback) by any Credit Party or any Subsidiary thereof, and any issuance of Equity Interests by any Subsidiary of the Parent Borrower   to any Person that is not a Credit Party or any Subsidiary thereof.

 

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.9 ), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form approved by the Administrative Agent.

 

“ Attributable Indebtedness ” means, on any date of determination, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

 

“ 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.

 

“ Base Rate ” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) LIBOR Rate for an Interest Period of one month plus 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR ( provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable).

 

“ Base Rate Loan ” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 4.1(a) .

 

“ 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”.

 

“ Borrower Agent ” has the meaning assigned thereto in Section 11.21 .

 

“ Borrower Materials ” has the meaning assigned thereto in Section 7.2 .

 

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

 

“ Business Day ” means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in San Francisco, California, Charlotte, North Carolina, the Cayman Islands and New York, New York, are open for the conduct of their commercial banking business and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, or any Base Rate Loan as to which the interest rate is determined by reference to LIBOR, any day that is a Business Day described in clause (a) and that is also a London Banking Day.

 

“ Calculation Date ” has the meaning assigned thereto in the definition of Applicable Margin.

 

“ Capital Expenditures ” means, with respect to the Parent Borrower and its Subsidiaries on a Consolidated basis, for any period, (a) the additions to property, plant and equipment and other capital expenditures that are (or would be) set forth in a consolidated statement of cash flows of such Person for such period prepared in accordance with GAAP and (b) Capital Lease Obligations during such period, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset which was destroyed or damaged, in whole or in part, to the extent financed by the proceeds of an insurance policy maintained by such Person.

 

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

 

“ Cash Collateralize ” means, to pledge and deposit with, or deliver to the Administrative Agent, or directly to the Issuing Lender, for the benefit of one or more of the Issuing Lender, the Swingline Lender or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations or Swingline Loans, cash or deposit account balances or, if the Administrative Agent and the applicable Issuing Lender and the Swingline Lender shall agree, in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent, the Issuing Lender and the Swingline Lender, as applicable. “ Cash Collateral ” shall have a meaning which correlates to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“ Cash Equivalents ” means, collectively, (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within one hundred twenty (120) days from the date of acquisition thereof, (b) commercial paper maturing no more than one hundred twenty (120) days from the date of creation thereof and currently having the highest rating obtainable from either Standard & Poor’s Financial Services LLC or Moody’s Investors Service, Inc., (c) certificates of deposit maturing no more than one hundred twenty (120) days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency; provided that the aggregate amount invested in such certificates of deposit shall not at any time exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for any one such bank, (d) time deposits maturing no more than thirty (30) days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder, (e) solely in the case of any Foreign Subsidiary, investments, instruments or securities equivalent to those referred to in clauses (a) through (d) of this definition denominated in any foreign currency that is the local currency of such Foreign Subsidiary or (f) any other investments (whether short term or long term) approved by the Parent Borrower’s board of directors (or a committee thereof) as part of its cash investment policy with the consent (such consent not to be unreasonably withheld) of the Administrative Agent.

 

“ Cash Management Agreement ” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables and purchasing cards), electronic funds transfer and other cash management arrangements.

 

“ Cash Management Bank ” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Credit Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent, or (b) at the time it (or its Affiliate) becomes a Lender or the Administrative Agent (including on the Closing Date), is a party to a Cash Management Agreement with a Credit Party, in each case in its capacity as a party to such Cash Management Agreement.

 

“ Cayman Borrower ” has the meaning assigned thereto in the introductory paragraph to this Agreement.

 

“ Cayman Obligations ” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans made to the Cayman Borrower under the Credit Facility and (b) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Foreign Credit Parties and each of their respective Subsidiaries to the Lenders, the Issuing Lender or the Administrative Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Foreign Credit Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“ Change in Control ” means the occurrence of one or more of the following events or series of events:

 

(a)           the Controlling Shareholder shall cease to own, beneficially and of record, either directly or indirectly, Equity Interests in the Parent Borrower representing more than 50% of the combined voting power of all of Equity Interests entitled to vote for members of the board of directors or equivalent governing body of the Parent Borrower on a fully-diluted basis (and taking into account all such Equity Interests that the Controlling Shareholder has the right to acquire, whether such right is exercisable immediately or only after the passage of time);

 

(b)           the Parent Borrower shall fail to control and directly own 100% of each class of outstanding Equity Interests of the Cayman Borrower; or

 

 

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

 

“ Closing Date ” means the date of this Agreement.

 

“ Code ” means the Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder.

 

“ Collateral ” means the collateral security for the Secured Obligations pledged or granted pursuant to the Security Documents.

 

“ Commitment Fee ” has the meaning assigned thereto in Section 4.3(a) .

 

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

 

“ 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 ” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

 

“ Consolidated EBITDA ” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Parent Borrower and its Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) income and franchise taxes, (ii) Consolidated Interest Expense, (iii) amortization, depreciation and other non-cash charges (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), (iv) extraordinary losses (excluding extraordinary losses from discontinued operations) and (v) non-cash compensation charges, including any such charges arising from stock options, restricted stock grants or other equity-incentive programs less (c) the sum of the following, without duplication, to the extent included in determining Consolidated Net Income for such period: (i) interest income, (ii) any extraordinary gains and (iii) non-cash gains or non-cash items increasing Consolidated Net Income. For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis.

 

“ Consolidated Interest Expense ” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Parent Borrower and its Subsidiaries in accordance with GAAP, interest expense (including, without limitation, interest expense attributable to Capital Lease Obligations and all net payment obligations pursuant to Hedge Agreements) for such period.

 

“ Consolidated Net Income ” means, for any period, the net income (or loss) of the Parent Borrower and its Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided , that in calculating Consolidated Net Income of the Parent Borrower and its Subsidiaries for any period, there shall be excluded (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the Parent Borrower or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Parent Borrower or any of its Subsidiaries by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Parent Borrower or any of its Subsidiaries or is merged into or consolidated with the Parent Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Parent Borrower or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a) , (c) the net income (if positive), of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Parent Borrower or any of its Subsidiaries of such net income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary and (d) any gain or loss from Asset Dispositions during such period.

 

“ Consolidated Total Indebtedness ” means, as of any date of determination with respect to the Parent Borrower and its Subsidiaries on a Consolidated basis without duplication, the sum of all Indebtedness of the Parent Borrower and its Subsidiaries (excluding all letters of credit that are fully cash-collateralized; provided that the deduction for all such cash-collateralized letters of credit shall not exceed $10,000,000 in the aggregate at any time).

 

“ Consolidated Total Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness on such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date.

 

“ Continuing Directors ” means the directors of the Parent Borrower on the Closing Date and each other director of the Parent Borrower, if, in each case, such other director’s nomination for election to the board of directors (or equivalent governing body) of the Parent Borrower is recommended by at least 51% of the then Continuing Directors.

 

“ 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.

 

“ Controlling Shareholder ” means, collectively, Robert J. Pera, his estate, spouse, siblings, heirs and lineal descendants, any trust for the benefit of the foregoing and any successor-in-interest to any of the foregoing.

 

“ Credit Facility ” means, collectively, the Revolving Credit Facility, the Term Loan Facility, the Swingline Facility and the L/C Facility.

 

“ Credit Parties ” means, collectively, the US Credit Parties and the Foreign Credit Parties.

 

“ Debt Issuance ” means the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Subsidiaries.

 

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect (including, without limitation, Part V of the Companies Law (Revised) of the Cayman Islands and the Companies Winding Up Rules 2008 (as amended) of the Cayman Islands).

 

“ Default ” means any of the events specified in Section 9.1 which with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

 

“ Defaulting Lender ” means, subject to Section 4.14(b) , any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans, any Term Loan, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within two (2) Business Days of the date such Loans or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower Agent 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, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower Agent, the Administrative Agent, the Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower Agent, to confirm in writing to the Administrative Agent and the Borrower Agent that it will comply with its prospective funding obligations hereunder ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had 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 FDIC or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 4.14(b) ) upon delivery of written notice of such determination to the Borrower Agent, the Issuing Lender, the Swingline Lender and each Lender.

 

“ Disqualified Equity Interests ” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a)  mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Revolving Credit Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Revolving Credit Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash (other than the scheduled payment of dividends on common stock following the declaration of such dividends) or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the latest Revolving Credit Maturity Date or Term Loan Maturity Date, as applicable, at such time; provided that if such Equity Interests are issued pursuant to a plan for the benefit of the Parent Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Parent Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

“ Dollars ” or “ $ ” means, unless otherwise qualified, dollars in lawful currency of the United States.

 

“ Domestic Subsidiary ” means any Subsidiary organized under the laws of any political subdivision of the United States.

 

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

 

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

 

“ EEA Resolution Authority ” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any credit institution or investment firm established in any EEA Member Country.

 

“ Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 11.9(b)(iii) , (v) and (vi) (subject to such consents, if any, as may be required under Section 11.9(b)(iii) ).

 

“ Employee Benefit Plan ” means (a) any employee benefit plan within the meaning of Section 3(3) of ERISA that is maintained for employees of any Credit Party or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding seven (7) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliate.

 

“ Environmental Claims ” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to public health or the environment.

 

“ Environmental Laws ” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of public health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

 

“ Equity Interests ” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of an exempted company incorporated under the laws of the Cayman Islands, shares, (d) in the case of a partnership, partnership interests (whether general or limited), (e) in the case of a limited liability company, membership interests, (f) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (g) any and all warrants, rights or options to purchase any of the foregoing.

 

“ Equity Issuance ” means (a) any issuance by any Credit Party or any Subsidiary thereof of shares of its Equity Interests to any Person that is not a Credit Party (including, without limitation, in connection with the exercise of options or warrants or the conversion of any debt securities to equity) and (b) any capital contribution from any Person that is not a Credit Party into any Credit Party or any Subsidiary thereof. The term “Equity Issuance” shall not include (A) any Asset Disposition or (B) any Debt Issuance.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder.

 

“ ERISA Affiliate ” means any Person who together with any Credit Party or any of its Subsidiaries is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

 

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

 

“ Eurodollar Reserve Percentage ” means, for any day, the percentage which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“ Event of Default ” means any of the events specified in Section 9.1 ; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

 

“ Exchange Act ” means the Securities Exchange Act of 1934.

 

“ Excluded Swap Obligation ” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party). If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

 

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, United States federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Revolving Credit Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Revolving Credit Commitment (other than pursuant to an assignment request by the Borrowers under Section 4.12(b) )   or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 4.11 , amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.11(g) and (d) any United States federal withholding Taxes imposed under FATCA .

 

“ Existing Credit Agreement ” has the meaning assigned thereto in the Statement of Purpose.

 

“ Existing Letters of Credit ” means those letters of credit existing on the Closing Date and identified on Schedule 1.1 .

 

“ Extensions of Credit ” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding and (iv) the aggregate principal amount of the Term Loans made by such Lender then outstanding or (b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

 

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of Sections 1471 and 1474 of the Code, and any applicable laws, regulations and guidance notes implementing the obligations imposed by Sections 1471 through 1474 of the Code into the domestic legislative framework of the Cayman Islands.

 

“ FDIC ” means the Federal Deposit Insurance Corporation.

 

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that if such rate is not so published for any day which is a Business Day, such rate shall be determined based on the average of the quotation for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent. Notwithstanding the foregoing, if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“ Fiscal Year ” means the fiscal year of the Parent Borrower and its Subsidiaries ending on June 30.

 

“ Foreign Collateral Agreement ” means the Second Amended and Restated Foreign Collateral Agreement dated as of the date hereof executed by the Foreign Credit Parties (other than Ubiquiti Hong Kong) in favor of the Administrative Agent, for the ratable benefit of the Secured Parties.

 

“ Foreign Credit Parties ” means, collectively, (a) the Cayman Borrower, (b) Ubiquiti Hong Kong and (c) Ubiquiti Cayman.

 

“ Foreign Lender ” means (a) with respect to the Parent Borrower, a Lender that is not a U.S. Person, and (b) with respect to the Cayman Borrower, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Cayman Borrower is a resident for tax purposes.

 

“ Foreign Secured Obligations ” means, collectively, (a) the Cayman Obligations and (b) all existing or future payment and other obligations owing by any Foreign Credit Party under (i) any Secured Hedge Agreement (other than any Excluded Swap Obligation) and (ii) any Secured Cash Management Agreement. For the avoidance of doubt, Foreign Secured Obligations shall exclude any Obligations of the US Credit Parties.

 

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

 

“ Foreign Subsidiary Holdco ” means a Domestic Subsidiary whose assets substantially consist of Equity Interests in Foreign Subsidiaries.

 

“ Fronting Exposure ” means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by the Issuing Lender, other than such L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of outstanding Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“ GAAP ” means, at any time, generally accepted accounting principles in the United States of America as in effect at such time, applied in accordance with the consistency requirements thereof.

 

“ Governmental Approvals ” means all authorizations, consents, approvals, permits, licenses and exemptions of, and all registrations and filings with or issued by, any Governmental Authorities.

 

“ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, (d) as an applicant or issuer in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation or (e) for the purpose of assuming in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (whether in whole or in part).

 

“ Guarantors ” means, collectively, (a) the US Guarantors, (b) Ubiquiti Hong Kong, and (c) Ubiquiti Cayman.

 

“ Guaranty Agreements ” means (a) the Ubiquiti Hong Kong Guaranty, (b) the US Subsidiary Guaranty Agreement, (c) the Ubiquiti Cayman Guaranty and (d) any other unconditional guaranty agreement executed by any other Guarantor for the benefit of the Secured Parties.

 

“ Hazardous Materials ” means all pollutants, contaminants and other materials, substances and wastes which are hazardous, toxic, caustic, harmful or dangerous to human health or the environment, including petroleum and petroleum products and byproducts, radioactive materials, asbestos, polychlorinated biphenyls and all materials, substances and wastes which are classified or regulated as “hazardous,” “toxic” or similar descriptions under any Environmental Law.

 

“ Hedge Agreement ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

 

“ Hedge Bank ” means any Person that, (a) at the time it enters into a Hedge Agreement with a Credit Party permitted under Article VIII , is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent or (b) at the time it (or its Affiliate) becomes a Lender or the Administrative Agent (including on the Closing Date), is a party to a Hedge Agreement with a Credit Party, in each case in its capacity as a party to such Hedge Agreement.

 

“ Hedge Termination Value ” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge 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) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

 

“ Hong Kong ” means the Hong Kong Special Administrative Region of the People’s Republic of China.

 

“ Immaterial Foreign Subsidiaries ” means all Foreign Subsidiaries that are not Material Foreign Subsidiaries.

 

“ Increase Effective Date ” has the meaning assigned thereto in Section 2.7(c) .

 

“ Incremental Amendment ” has the meaning assigned thereto in Section 2.7(f) .

 

“ Incremental Increases ” has the meaning assigned thereto in Section 2.7(a) .

 

“ Incremental Lender ” has the meaning assigned thereto in Section 2.7(b) .

 

“ Incremental Term Loan ” has the meaning assigned thereto in Section 2.7(a) .

 

“ Indebtedness ” means, with respect to any Person at any date and without duplication, the sum of the following:

 

(a)   all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

 

(b)   all obligations to pay the deferred purchase price of property or services of any such Person (including, without limitation, all obligations under earn-out or similar agreements), except (i) trade payables arising in the ordinary course of business not more than ninety (90) days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person and (ii) intercompany charges, payments and/or obligations among the Credit Parties and Subsidiaries for support services, manufacturing services, licenses, intellectual property, research and development services, logistics services, distribution, procurement and other similar services consistent with past practices, in each case incurred in the ordinary course of business;

 

(c)   the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

 

(d)   all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

 

(e)   all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including Indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)   all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including, without limitation, any Reimbursement Obligation, and banker’s acceptances issued for the account of any such Person;

 

(g)   all obligations of any such Person in respect of Disqualified Equity Interests;

 

(h)   all net obligations of such Person under any Hedge Agreements; provided , in no event shall obligations under any Hedge Agreement be deemed “Indebtedness” for any calculation of the Consolidated Total Leverage Ratio unless such obligations relate to a transaction which has been terminated; and

 

(i)   all Guarantees of any such Person with respect to any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.

 

“ Indemnified Taxes ” means (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 clause (a) , Other Taxes.

 

“ Indemnitee ” has the meaning assigned thereto Section 11.3(b) .

 

“ Information ” has the meaning assigned thereto in Section 11.10 .

 

“ Initial Term Loan ” means the term loan made, or to be made, to the Parent Borrower by the Term Loan Lenders pursuant to Section 2.8 . The aggregate principal amount of the Initial Term Loan on the Closing Date shall be $500,000,000 and the principal amount of the Initial Term Loan amount of each Term Loan Lender as of the Closing Date is set forth opposite the name of such Term Loan Lender on Schedule 1.1(a) .

 

“ Insurance and Condemnation Event ” means the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective Property.

 

“ Intellectual Property ” shall have the meaning specified in the US Collateral Agreement.

 

“ Interest Period ” means, as to each LIBOR Rate Loan, the period commencing on the date such LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on the date one (1), two (2), three (3), or six (6) months thereafter, in each case as selected by the Borrower Agent, on behalf of itself or the Cayman Borrower, in its Notice of Borrowing or Notice of Conversion/Continuation and subject to availability; provided that:

 

(a)   the Interest Period shall commence on the date of advance of or conversion to any LIBOR Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires;

 

(b)   if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

 

(c)   any Interest Period with respect to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period;

 

(d)   no Interest Period shall extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable, and Interest Periods shall be selected by the Borrowers so as to permit the Borrowers to make mandatory reductions of the Revolving Credit Commitment pursuant to Section 2.5(b) and the quarterly principal installment payments pursuant to Section 2.10 without payment of any amounts pursuant to Section 4.9 ; and

 

(e)   there shall be no more than ten (10)   Interest Periods in effect at any time.

 

“ Investment ” has the meaning assigned thereto in Section 8.3 .

 

“ IRS ” means the United States Internal Revenue Service.

 

“ ISP98 ” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce Publication No. 590.

 

“ Issuing Lender ” means Wells Fargo, in its capacity as issuer of any Letters of Credit hereunder, or any successor thereto.

 

“ L/C Commitment ” means the lesser of (a) $10,000,000 and (b) the Revolving Credit Commitment.

 

“ L/C Facility ” means the letter of credit facility established pursuant to Article III .

 

“ L/C Obligations ” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5 .

 

“ L/C Participants ” means the collective reference to all the Revolving Credit Lenders other than the Issuing Lender.

 

“ Lender ” means each Person executing this Agreement as a Lender on the Closing Date and any other Person that shall have become a party to this Agreement as a Lender pursuant to an Assignment and Assumption or pursuant to Section 2.7 , other than any Person that ceases to be a party hereto as a Lender pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

“ Lending Office ” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

 

“ Letter of Credit Application ” means an application, in the form specified by the Issuing Lender from time to time, requesting the Issuing Lender to issue a Letter of Credit.

 

“ Letters of Credit ” means the collective reference to standby letters of credit issued pursuant to Section 3.1 and the Existing Letters of Credit.

 

“ LIBOR ” means, subject to the implementation of a Replacement Rate in accordance with Section 4.8(c) ,

 

(a)   for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent consistent with market practice, at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period. If, for any reason, such rate is not so published, then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period, and

 

(b)   for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for an Interest Period equal to one month (commencing on the date of determination of such interest rate) as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent consistent with market practice, at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day. If, for any reason, such rate is not so published, then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.

 

Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.

 

Notwithstanding the foregoing, (x) in no event shall LIBOR (including, without limitation, any Replacement Rate with respect thereto) be less than 0% and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 4.8(c) , in the event that a Replacement Rate with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Replacement Rate.

 

“ LIBOR Rate ” means a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

LIBOR Rate =	LIBOR
	1.00-Eurodollar Reserve Percentage

 

“ LIBOR Rate Loan ” means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 4.1(a) .

 

“ Lien ” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease Obligation or other title retention agreement relating to such asset.

 

“ Liquidity ” means, as of any date of determination, the sum of (a) all Unrestricted cash and Cash Equivalents of the Credit Parties and (b) the principal amount that the Borrowers are permitted to draw under the Revolving Credit Facility (not to exceed $50,000,000) on such date. For purposes hereof, “ Unrestricted ” means that such cash and Cash Equivalents (i) do not appear or would not be required to appear as “restricted” on the financial statements of the Parent Borrower or any such Subsidiary (unless related to the Loan Documents or the Liens created thereunder), (ii) are not subject to a Lien (other than Liens permitted under Section 8.2(a) or (j) ) in favor of any Person other than the Administrative Agent under the Loan Documents, (iii) are not prohibited from being used by the Parent Borrower and its Subsidiaries for the payment of the Obligations and (iv) are not being held as cash collateral for any Indebtedness or other obligations (other than cash and Cash Equivalents constituting Collateral for the Obligations) or to Cash Collateralize outstanding letters of credit under the terms of this Agreement.

 

“ Loan Documents ” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Security Documents, the Guaranty Agreements and each other document, instrument, certificate and agreement executed and delivered by the Credit Parties or any of their respective Subsidiaries in favor of or provided to the Administrative Agent or any Secured Party in connection with this Agreement or otherwise referred to herein or contemplated hereby (excluding any Secured Hedge Agreement and any Secured Cash Management Agreement).

 

“ Loans ” means the collective reference to the Revolving Credit Loans, the Term Loans and the Swingline Loans, and “Loan” means any of such Loans.

 

“ London Banking Day ” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

 

“ Material Adverse Effect ” means, with respect to the Parent Borrower and its Subsidiaries, (a) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent) or financial condition of the Parent Borrower and its Subsidiaries, taken as a whole, (b) a material impairment of the ability of any Credit Party to perform its obligations under the Loan Documents to which it is a party, (c) a material adverse effect on the rights and remedies of the Administrative Agent or the Lenders under any Loan Document or (d) a material adverse effect on the legality, validity, binding effect or enforceability against any Credit Party of any Loan Document to which it is a party.

 

“ Material Contract ” means (a) any contract or agreement, written or oral, of any Credit Party or any of its Subsidiaries involving monetary liability of or to any such Person in an amount in excess of $25,000,000 per annum or (b) any other contract or agreement, written or oral, of any Credit Party or any of its Subsidiaries, the breach, non-performance, cancellation or failure to renew of which could reasonably be expected to have a Material Adverse Effect; provided that any contract or agreement solely among the Credit Parties and the Subsidiaries shall not be a “ Material Contract ” hereunder.

 

“ Material First-Tier Foreign Subsidiary ” means any Material Foreign Subsidiary that is directly owned by a US Credit Party.

 

“ Material Foreign Subsidiary ” means (a) the Cayman Borrower, (b) Ubiquiti Hong Kong, (c) Ubiquiti Cayman, (d) any Foreign Subsidiary or Foreign Subsidiary Holdco with assets or revenues that exceed 5% of the Consolidated assets or revenues of the Parent Borrower and its Subsidiaries, determined as of the end of the most recent Fiscal Year for which financial statements have been delivered and recalculated at the end of each Fiscal Year thereafter and (e) any Foreign Subsidiary required to be designated as a Material Foreign Subsidiary pursuant to Section 7.14(d) .  On the Closing Date, Foreign Subsidiaries organized in India, Lithuania, Poland, China, Latvia, Canada, Czech Republic and Ukraine do not meet the requirement set forth above and are not Material Foreign Subsidiaries.

 

“ Minimum Collateral Amount ” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of the sum of (i) the Fronting Exposure of the Issuing Lender with respect to Letters of Credit issued and outstanding at such time and (ii) the Fronting Exposure of the Swingline Lender with respect to all Swingline Loans outstanding at such time and (b) otherwise, an amount reasonably determined by the Administrative Agent and the Issuing Lender that is entitled to Cash Collateral hereunder at such time in their sole discretion.

 

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Credit Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding seven (7) years.

 

“ Net Cash Proceeds ” means, as applicable, (a) with respect to any Asset Disposition or Insurance and Condemnation Event, the gross proceeds received by any Credit Party or any of its Subsidiaries therefrom (including any cash, Cash Equivalents, deferred payment pursuant to, or by monetization of, a note receivable or otherwise, as and when received) less the sum of (i) in the case of an Asset Disposition, all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition, the amount of such excess shall constitute Net Cash Proceeds), (ii) all reasonable out-of-pocket fees and expenses incurred in connection with such transaction or event, (iii) the principal amount of, premium, if any, and interest on any Indebtedness secured by a Lien on the asset (or a portion thereof) disposed of, which Indebtedness is required to be repaid in connection with such transaction or event, and (b) with respect to any Equity Issuance or Debt Issuance, the gross cash proceeds received by any Credit Party or any of its Subsidiaries therefrom less (i) all reasonable out-of-pocket legal, underwriting and other fees and expenses incurred in connection therewith and (ii) all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction.

 

“ Non-Consenting Lender ” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (i) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.2 and (ii) has been approved by the Required Lenders.

 

“ Non-Credit Party ” means any Subsidiary of the Parent Borrower that is not a Credit Party.

 

“ Non-Defaulting Lender ” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“ Notes ” means the collective reference to the Revolving Credit Notes, the Swingline Note and the Term Loan Notes.

 

“ Notice of Account Designation ” has the meaning assigned thereto in Section 2.3(b) .

 

“ Notice of Borrowing ” has the meaning assigned thereto in Section 2.3(a) .

 

“ Notice of Conversion/Continuation ” has the meaning assigned thereto in Section 4.2 .

 

“ Notice of Prepayment ” has the meaning assigned thereto in Section 2.4(c) .

 

 

“ Officer’s Compliance Certificate ” means a certificate of the chief financial officer, the chief accounting officer or the controller of the Parent Borrower substantially in the form attached as Exhibit F .

 

“ Operating Lease ” means, as to any Person as determined in accordance with GAAP, any lease of Property (whether real, personal or mixed) by such Person as lessee which is not a capital lease.

 

“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“ Other Taxes ” means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4.12 ).

 

“ Parent Borrower ” has the meaning assigned thereto in the introductory paragraph to this Agreement.

 

“ Participant ” has the meaning assigned thereto in Section 11.9(d) .

 

“ Participant Register ” has the meaning assigned thereto in Section 11.9(d) .

 

“ PATRIOT Act ” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

“ PBGC ” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“ Pension Plan ” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate or (b) has at any time within the preceding seven (7) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliates.

 

“ Permitted Acquisition ” means any acquisition by the Parent Borrower or any Subsidiary in the form of the acquisition of all or substantially all of the assets, business or a line of business, or at least a majority of the outstanding Equity Interests which have the ordinary voting power for the election of directors of the board of directors (or equivalent governing body) (whether through purchase, merger or otherwise), of any other Person if each such acquisition meets all of the following requirements:

 

(a)   such acquisition shall be completed on a non-hostile basis;

 

(b)   the Person or business to be acquired shall be in a line of business permitted pursuant to Section 8.11 ;

 

(c)   if such transaction is a merger or consolidation involving a Borrower, such Borrower shall be the surviving Person;

 

 

(d)   if such transaction is a merger or consolidation involving a Guarantor, a Guarantor (or a Person that will become a Guarantor upon such merger or consolidation) shall be the surviving Person;

 

(e)   no later than ten (10) Business Days prior to the proposed closing date of such acquisition (or such shorter period as may be agreed to by the Administrative Agent), the Parent Borrower shall have delivered to the Administrative Agent an Officer’s Compliance Certificate for the most recent fiscal quarter end preceding such acquisition for which financial statements are available demonstrating, in form and substance reasonably satisfactory to the Administrative Agent, that the Parent Borrower is in compliance on a Pro Forma Basis (as of the date of the acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith) with (i) Section 8.13(b) and (ii) a Consolidated Total Leverage Ratio no greater than 3.00 to 1.00;

 

(f)   no later than ten (10) Business Days after the proposed closing date of such acquisition the Parent Borrower (or such longer period as may be agreed to by the Administrative Agent), to the extent requested by the Administrative Agent, shall have delivered to the Administrative Agent promptly upon the finalization thereof copies of substantially final documentation delivered in connection therewith;

 

(g)   no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such acquisition; and

 

(h)   the Administrative Agent and the Required Lenders shall have provided their written consent prior to the consummation of such acquisition if the aggregate amount of the purchase price, including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Equity Interests of a Borrower, to be paid in cash on a singular basis in connection with such acquisition (or series of related acquisitions), together with all other acquisitions consummated during the term of this Agreement exceeds $100,000,000 in the aggregate (excluding any portion of the acquisitions paid from any Equity Issuance).

 

“ Permitted Liens ” means the Liens permitted pursuant to Section 8.2 .

 

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“ Platform ” has the meaning assigned thereto in Section 7.2 .

 

“ Prime Rate ” means, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

 

“ Pro Forma Basis ” means, for purposes of calculating Consolidated EBITDA for any period during which one or more Specified Transactions occurs, that such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement (a) excluding all income statement items (whether positive or negative) attributable to the Property or Person that are subject to any such Specified Disposition made during such period, (b) including all income statement items (whether positive or negative) attributable to the Property or Person acquired pursuant to any such Permitted Acquisition (provided that such income statement items to be included are reflected in financial statements or other financial data reasonably acceptable to the Administrative Agent and based upon reasonable assumptions and calculations which are expected to have a continuous impact) and (c) without duplication of any other adjustments already included in clause (b) above or in the calculation of Consolidated EBITDA for such period, after giving effect to the pro forma adjustments with respect to such transaction; provided that in each case any such pro forma adjustments (i) are reasonably expected to be realized within twelve (12) months of such transaction as set forth in reasonable detail on a certificate of a Responsible Officer of the Parent Borrower delivered to the Administrative Agent and (ii) are calculated on a basis consistent with GAAP and Regulation S-X of the Exchange Act of 1934 (including with respect to pro forma adjustments for public company costs in connection with the Acquisition of any public company) and (iii) represent less than 10% of Consolidated EBITDA (determined without giving effect to this clause (iii )). For purposes of this definition, “ Specified Disposition ” means any disposition of all or substantially all of the assets or Equity Interests of any Subsidiary of the Parent Borrower or any division, business unit, product line or line of business and “ Specified Transaction ” means (x) any Specified Disposition and (y) any Permitted Acquisition.

 

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Equity Interests.

 

“ PTE ” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“ Public Lenders ” has the meaning assigned thereto in Section 7.2 .

 

“ Qualified Equity Interests ” means any Equity Interests that are not Disqualified Equity Interests.

 

“ Recipient ” means (a) the Administrative Agent, (b) any Lender and (c) the Issuing Lender, as applicable.

 

“ Register ” has the meaning assigned thereto in Section 11.9(c) .

 

“ Reimbursement Obligation ” means the obligation of the Parent Borrower to reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.

 

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, advisors and representatives of such Person and of such Person’s Affiliates.

 

“ Replacement Rate ” has the meaning assigned thereto in Section 4.8(c) .

 

“ Required Lenders ” means, at any date, any combination of two or more Lenders having Total Credit Exposures representing more than fifty percent (50%) of the Total Credit Exposures of all Lenders or, if the Revolving Credit Commitments have been terminated, any combination of two or more Lenders holding more than fifty percent (50%) of the Revolving Credit Exposure and outstanding Term Loans at such time. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

“ Required Revolving Credit Lenders ” means, at any date, any combination of Revolving Credit Lenders holding more than fifty percent (50%) of the sum of the aggregate amount of the Revolving Credit Commitment or, if the Revolving Credit Commitment has been terminated, any combination of Revolving Credit Lenders holding more than fifty percent (50%) of the aggregate Extensions of Credit under the Revolving Credit Facility; provided that the Revolving Credit Commitment of, and the portion of the Extensions of Credit under the Revolving Credit Facility, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Credit Lenders.

 

“ Responsible Officer ” means, as to any Person, the chief executive officer, president, chief financial officer, chief accounting officer, director, controller, vice president, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by the applicable Borrower and reasonably acceptable to the Administrative Agent. Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

 

“ Restricted Payment ” has the meaning assigned thereto in Section 8.6 .

 

“ Revolving Credit Commitment ” means (a) as to any Revolving Credit Lender, the obligation of such Revolving Credit Lender to make Revolving Credit Loans to, and to purchase participations in L/C Obligations and Swingline Loans for the account of, the applicable Borrower hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving Credit Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including, without limitation, Section 2.7 ) and (b) as to all Revolving Credit Lenders, the aggregate commitment of all Revolving Credit Lenders to make Revolving Credit Loans, as such amount may be modified at any time or from time to time pursuant to the terms hereof. The aggregate Revolving Credit Commitment of all the Revolving Credit Lenders on the Closing Date shall be $400,000,000. The initial Revolving Credit Commitment of each Revolving Credit Lender on the Closing Date is set forth opposite the name of such Revolving Credit Lender on Schedule 1.1(a) .

 

“ Revolving Credit Commitment Percentage ” means, with respect to any Revolving Credit Lender at any time, the percentage of the total Revolving Credit Commitments of all the Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment. If the Revolving Credit Commitments have terminated or expired, the Revolving Credit Commitment Percentages shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments. The initial Revolving Credit Commitment Percentage of each Revolving Credit Lender on the Closing Date is set forth opposite the name of such Revolving Credit Lender on Schedule 1.1(a) .

 

“ Revolving Credit Exposure ” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations and Swingline Loans at such time.

 

“ Revolving Credit Facility ” means the revolving credit facility established pursuant to Article II (including any increase in such revolving credit facility established pursuant to Section 2.7 ).

 

“ Revolving Credit Facility Increase ” has the meaning assigned thereto in Section 2.7(a) .

 

“ Revolving Credit Lender ” means a Lender with a Revolving Credit Commitment.

 

“ Revolving Credit Loan ” means any revolving loan made to the Borrowers pursuant to Section 2.1 , including any Revolving Credit Facility Increases, and all such revolving loans collectively as the context requires.

 

“ Revolving Credit Maturity Date ” means the earliest to occur of (a) January 17, 2023, (b) the date of termination of the entire Revolving Credit Commitment by the Borrowers pursuant to Section 2.5 , or (c) the date of termination of the Revolving Credit Commitment pursuant to Section 9.2(a) .

 

“ Revolving Credit Note ” means a promissory note made by the Borrowers in favor of a Revolving Credit Lender evidencing the Revolving Credit Loans made by such Revolving Credit Lender, (i) for the Parent Borrower, substantially in the form attached as Exhibit A-1 and (ii) for the Cayman Borrower, substantially in the form attached as Exhibit A-2 , and, in each case, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“ Revolving Credit Outstandings ” means the sum of (a) with respect to Revolving Credit Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swingline Loans, as the case may be, occurring on such date; plus (b) with respect to any L/C Obligations on any date, the aggregate outstanding amount thereof on such date after giving effect to the issuance of or drawing under any Letters of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

“ Sanctions ” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC), the European Union, Her Majesty’s Treasury, the United Nations Security Council or other relevant sanctions authority.

 

“ Sanctioned Country ” means at any time, a country or territory which is itself the subject or target of any Sanctions (including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and the Crimea region).

 

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b).

 

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“ Secured Cash Management Agreement ” means any Cash Management Agreement between or among any Credit Party and any Cash Management Bank.

 

“ Secured Hedge Agreement ” means any Hedge Agreement between or among any Credit Party and any Hedge Bank.

 

“ Secured Obligations ” means, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Credit Party under (i) any Secured Hedge Agreement (other than an Excluded Swap Obligation) and (ii) any Secured Cash Management Agreement; provided that the “Secured Obligations” of a Credit Party shall exclude any Excluded Swap Obligations with respect to such Credit Party.

 

“ Secured Parties ” means, collectively, the Administrative Agent, the Lenders, the Issuing Lender, the Swingline Lender, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 10.5 , any other holder from time to time of any of any Secured Obligations and, in each case, their respective successors and permitted assigns.

 

“ Security Documents ” means the collective reference to the US Collateral Agreement, the Foreign Collateral Agreement, the Ubiquiti Hong Kong Share Mortgage, the Ubiquiti International Cayman Share Charge, the Ubiquiti Cayman Share Charge, the Ubiquiti Hong Kong Charge over Accounts and each other agreement or writing pursuant to which any Credit Party pledges or grants a security interest in any Property or assets securing any Secured Obligations or Foreign Secured Obligations, as applicable.

 

“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“ Subordinated Indebtedness ” means the collective reference to any Indebtedness incurred by the Parent Borrower or any of its Subsidiaries that is subordinated in right and time of payment to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent.

 

“ Subsidiary ” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Parent Borrower.

 

“ Swap Obligation ” means, with respect to any Credit Party, any obligation 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.

 

“ Swingline Commitment ” means the lesser of (a) $25,000,000 and (b) the Revolving Credit Commitment.

 

“ Swingline Facility ” means the swingline facility established pursuant to Section 2.2 .

 

“ Swingline Lender ” means Wells Fargo, in its capacity as swingline lender hereunder or any successor thereto.

 

“ Swingline Loan ” means any swingline loan made by the Swingline Lender to the Parent Borrower pursuant to Section 2.2 , and all such swingline loans collectively as the context requires.

 

“ Swingline Note ” means a promissory note made by the Parent Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-3 , and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“ Synthetic Lease ” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

 

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“ Term Loan Facility ” means the term loan facility established pursuant to Article II (including any Incremental Term Loans established pursuant to Section 2.7 ).

 

“ Term Loan Lender ” means any Lender holding outstanding Term Loans.

 

“ Term Loan Maturity Date ” means (a) with regard to the Initial Term Loans, the first to occur of (i) January 17, 2023, and (ii) the date of acceleration of the Obligations pursuant to Section 9.2(a) and (b) with regard to any Incremental Term Loan, the earlier of (i) the maturity date thereof as determined by the applicable Lenders pursuant to Section 2.7(f) and (ii) the acceleration of the Obligations pursuant to Section 9.2(a) .

 

“ Term Loan Note ” means a promissory note made by the Parent Borrower in favor of a Term Loan Lender evidencing the portion of the Term Loans made by such Term Loan Lender, substantially in the form attached as Exhibit A-4 , and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“ Term Loans ” means the Initial Term Loans and any Incremental Term Loan, and “ Term Loan ” means any of such Term Loans.

 

“ Termination Event ” means the occurrence of any of the following which, individually or in the aggregate, has resulted or could reasonably be expected to result in liability of the Borrowers in an aggregate amount in excess of the Threshold Amount: (a) a “Reportable Event” described in Section 4043 of ERISA for which the thirty (30) day notice requirement has not been waived by the PBGC, or (b) the withdrawal of any Credit Party or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien pursuant to Section 430(k) of the Code or Section 303 of ERISA, or (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or plan in endangered or critical status with the meaning of Sections 430, 431 or 432 of the Code or Sections 303, 304 or 305 of ERISA or (h) the partial or complete withdrawal of any Credit Party or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by such plan, or (i) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (j) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA, or (k) 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 any Credit Party or any ERISA Affiliate.

 

“ Threshold Amount ” means $25,000,000.

 

“ Total Credit Exposure ” means, as to any Lender at any time, the unused Revolving Credit Commitments, Revolving Credit Exposure and outstanding Term Loans of such Lender at such time.

 

“ Transactions ” means, collectively, (a) the refinancing of all Indebtedness outstanding under the Existing Credit Agreement, (b) the initial Extensions of Credit and (c) the payment of costs and expenses incurred in connection with the foregoing.

 

“ Ubiquiti Cayman ” means Ubiquiti Cayman Limited, an exempted company incorporated under the laws of the Cayman Islands.

 

“ Ubiquiti Cayman Guaranty ” means the Second Amended and Restated Cayman Subsidiary Guaranty Agreement dated as of the date hereof, executed by Ubiquiti Cayman in favor of the Administrative Agent, for the ratable benefit of the Secured Parties.

 

“ Ubiquiti Cayman Share Charge ” means the equitable charge over shares dated as of May 5, 2014, pursuant to which the Administrative Agent, for the benefit of the Secured Parties, is granted a security interest (or the equivalent under Cayman Islands law) in one-hundred percent (100%) of the Equity Interests of Ubiquiti Cayman.

 

“ Ubiquiti Hong Kong ” means Ubiquiti Networks International Limited, a company formed under the laws of Hong Kong.

 

“ Ubiquiti Hong Kong Guaranty ” means the unconditional guarantee and indemnity governed by the laws of Hong Kong dated as of May 5, 2014 executed by Ubiquiti Hong Kong in favor of the Administrative Agent, for the ratable benefit of the Secured Parties.

 

“ Ubiquiti Hong Kong Share Mortgage ” means the share mortgage governed by the laws of Hong Kong dated as of May 5, 2014 executed by the Cayman Borrower in favor of the Administrative Agent, pursuant to which the Administrative Agent, for the benefit of the Secured Parties, is granted a security interest (or the equivalent under Hong Kong law) in one-hundred percent (100%) of the Equity Interests of Ubiquiti Hong Kong.

 

“ Ubiquiti Hong Kong Charge over Accounts ” means the charge over accounts and securities governed by the laws of Hong Kong dated as of May 5, 2014 executed by Ubiquiti Hong Kong in favor of the Administrative Agent pursuant to which the Administrative Agent, for the benefit of the Secured Parties, is granted a security interest (or the equivalent under Hong Kong law) in all deposit accounts, securities accounts and similar accounts and all cash and cash equivalents held therein.

 

“ Ubiquiti International Cayman Share Charge ” means the equitable charge over shares dated as of May 5, 2014, pursuant to which the Administrative Agent, for the benefit of the Secured Parties, is granted a security interest (or the equivalent under Cayman Islands law) in sixty-five percent (65%) of the Equity Interests of the Cayman Borrower.

 

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York.

 

“ United States ” means the United States of America.

 

“ US Collateral Agreement ” means the Second Amended and Restated US Collateral Agreement dated as of the date hereof executed by the US Credit Parties in favor of the Administrative Agent, for the ratable benefit of the Secured Parties.

 

“ US Credit Parties ” means the Parent Borrower and the US Guarantors.

 

“ US Guarantors ” all direct and indirect Domestic Subsidiaries of the Parent Borrower in existence on the Closing Date or which become a party to the US Subsidiary Guaranty Agreement pursuant to Section 7.14 (other than (a) a direct or indirect Domestic Subsidiary of a Foreign Subsidiary or (b) a Foreign Subsidiary Holdco).

 

“ US Obligations ” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans made to the Parent Borrower under the Credit Facility and (b) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the US Credit Parties and each of their respective Subsidiaries to the Lenders, the Issuing Lender or the Administrative Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any US Credit Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“ US Subsidiary Guaranty Agreement ” means that certain Amended and Restated US Subsidiary Guaranty Agreement of even date herewith executed by certain Domestic Subsidiaries of the Parent Borrower in favor of the Administrative Agent, for the benefit of the Secured Parties.

 

“ U.S. Person ” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

 

“ U.S. Tax Compliance Certificate ” has the meaning assigned thereto in Section 4.11(g) .

 

“ Wells Fargo ” means Wells Fargo Bank, National Association, a national banking association.

 

“ Wholly-Owned ” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Parent Borrower and/or one or more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Parent Borrower and/or one or more of its Wholly-Owned Subsidiaries).

 

“ Withholding Agent ” means the Parent Borrower, Cayman Borrower and the Administrative Agent.

 

“ Write-Down and Conversion Powers ” means, 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.

 

SECTION 1.2   Other Definitions and Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form, (j) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including” and (k) section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

SECTION 1.3   Accounting Terms .

 

(a)   All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 7.1(a) , except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Parent Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(b)   If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and the Borrower Agent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower Agent shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent 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.

 

 

SECTION 1.4   UCC Terms . Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

 

SECTION 1.5   Rounding . Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

SECTION 1.6   References to Agreement and Laws . Unless otherwise expressly provided herein, (a) any definition or reference to formation documents, governing documents, agreements (including the Loan Documents) and other contractual documents or instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not expressly prohibited by any Loan Document; and (b) any definition or reference to any Applicable Law, including, without limitation, the Code, the Commodity Exchange Act, ERISA, the Exchange Act, the PATRIOT Act, the Securities Act of 1933, the UCC, the Investment Company Act of 1940, the Interstate Commerce Act, the Trading with the Enemy Act of the United States or any of the foreign assets control regulations of the United States Treasury Department, shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

 

SECTION 1.7   Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

 

SECTION 1.8   Letter of Credit Amounts . Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor (at the time specified therefor in such applicable Letter of Credit or Letter of Credit Application and as such amount may be reduced by (a) any permanent reduction of such Letter of Credit or (b) any amount which is drawn, reimbursed and no longer available under such Letter of Credit).

 

SECTION 1.9   Guarantees and Non-Recourse Indebtedness . Unless otherwise specified, (i) the amount of any Guarantee shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

 

SECTION 1.10   Covenant Compliance Generally . For purposes of determining compliance under Sections 8.1 , 8.2 , 8.3 , 8.5, 8.6 and 8.12 , any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating Consolidated Net Income in the most recent annual financial statements of the Parent Borrower and its Subsidiaries delivered pursuant to Section 7.1(a) . Notwithstanding the foregoing, for purposes of determining compliance with Sections 8.1 , 8.2, 8.3 and 8.12 , with respect to any amount of Indebtedness, Investment or Capital Expenditure in a currency other than Dollars, no breach of any basket contained in such sections shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness, Investment or Capital Expenditure is incurred; provided that for the avoidance of doubt, the foregoing provisions of this Section 1.10 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or Investment may be incurred at any time under such Sections.

 

SECTION 1.11   Rates . The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBOR”.

 

 

 

 

 ARTICLE II

CREDIT FACILITIES

 

SECTION 2.1   Revolving Credit Loans . Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, each Revolving Credit Lender severally agrees to make Revolving Credit Loans to the Cayman Borrower and/or the Parent Borrower in Dollars from time to time from the Closing Date to, but not including, the Revolving Credit Maturity Date as requested by the Borrower Agent in accordance with the terms of Section 2.3 ; provided , that (a) the Revolving Credit Outstandings shall not exceed the Revolving Credit Commitment of all the Revolving Credit Lenders and (b) the Revolving Credit Exposure of any Revolving Credit Lender shall not at any time exceed such Revolving Credit Lender’s Revolving Credit Commitment. Each Revolving Credit Loan by a Revolving Credit Lender shall be in a principal amount equal to such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion. Subject to the terms and conditions hereof, the Cayman Borrower and the Parent Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.

 

SECTION 2.2   Swingline Loans .

 

(a)   Availability . Subject to the terms and conditions of this Agreement and the other Loan Documents, including, without limitation, Section 5.2(d) of this Agreement, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, the Swingline Lender may, in its sole discretion, make Swingline Loans to the Parent Borrower in Dollars from time to time from the Closing Date to, but not including, the Revolving Credit Maturity Date; provided , that (a) after giving effect to any amount requested, the Revolving Credit Outstandings shall not exceed the Revolving Credit Commitment and (b) the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested) shall not exceed the Swingline Commitment.

 

(b)   Refunding .

 

(i)   Swingline Loans shall be refunded by the Revolving Credit Lenders on demand by the Swingline Lender. Such refundings shall be made by the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Revolving Credit Lenders on the books and records of the Administrative Agent. Each Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than 1:00 p.m. on the next succeeding Business Day after such demand is made. No Revolving Credit Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by any other Revolving Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased as a result of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment Percentage of a Swingline Loan.

 

(ii)   The Parent Borrower shall pay to the Swingline Lender on demand the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, the Parent Borrower hereby authorizes the Administrative Agent to charge any account maintained by the Parent Borrower with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Parent Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages (unless the amounts so recovered by or on behalf of the Parent Borrower pertain to a Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Administrative Agent has received notice in the manner required pursuant to Section 10.3 and which such Event of Default has not been waived by the Required Lenders or the Lenders, as applicable).

 

(iii)   Each Revolving Credit Lender acknowledges and agrees that its obligation to refund Swingline Loans in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article V . Further, each Revolving Credit Lender agrees and acknowledges that if prior to the refunding of any outstanding Swingline Loans pursuant to this Section, one of the events described in Section 9.1(i) or (j) shall have occurred, each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been made, purchase an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Swingline Loan. Each Revolving Credit Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount. Whenever, at any time after the Swingline Lender has received from any Revolving Credit Lender such Revolving Credit Lender’s participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s participating interest was outstanding and funded).

 

(c)   Defaulting Lenders . Notwithstanding anything to the contrary contained in this Agreement, this Section 2.2 shall be subject to the terms and conditions of Section 4.13 and Section 4.14 .

 

SECTION 2.3   Procedure for Advances of Revolving Credit Loans and Swingline Loans .

 

(a)   Requests for Borrowing . The Borrower Agent, on behalf of itself or the Cayman Borrower, shall give the Administrative Agent irrevocable prior written notice substantially in the form of Exhibit B (a “ Notice of Borrowing ”) not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (z) with respect to Swingline Loans in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, (E) whether such Loan will be made to the Parent Borrower or the Cayman Borrower and (F) in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto. If the Borrower Agent fails to specify a type of Loan in a Notice of Borrowing, then the applicable Loans shall be made as Base Rate Loans. If the Borrower Agent requests a Borrowing of LIBOR Rate Loans in any such Notice of Borrowing, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. A Notice of Borrowing received after 11:00 a.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the Revolving Credit Lenders of each Notice of Borrowing.

 

(b)   Disbursement of Revolving Credit and Swingline Loans . Not later than 1:00 p.m. on the proposed borrowing date, (i) each Revolving Credit Lender will make available to the Administrative Agent, for the account of the Parent Borrower or the Cayman Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Parent Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date. Each Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section in immediately available funds by crediting or wiring such proceeds to the deposit account of the Parent Borrower or the Cayman Borrower, as applicable, identified in the most recent notice substantially in the form attached as Exhibit C (a “ Notice of Account Designation ”) delivered by the Borrower Agent to the Administrative Agent or as may be otherwise agreed upon by the Borrower Agent, on behalf of itself or the Cayman Borrower, and the Administrative Agent from time to time. Subject to Section 4.7 hereof, the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section to the extent that any Revolving Credit Lender has not made available to the Administrative Agent its Revolving Credit Commitment Percentage of such Loan. Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Revolving Credit Lenders as provided in Section 2.2(b) .

 

 

SECTION 2.4   Repayment and Prepayment of Revolving Credit and Swingline Loans .

 

(a)   Repayment on Termination Date . (i) Each Borrower hereby agrees to repay the outstanding principal amount of all Revolving Credit Loans made to such Borrower in full on the Revolving Credit Maturity Date, and (ii) the Parent Borrower agrees to repay the outstanding principal amount of all Swingline Loans in accordance with Section 2.2(b) (but, in any event, no later than the Revolving Credit Maturity Date), together, in each case, with all accrued but unpaid interest thereon.

 

(b)   Mandatory Prepayments . If at any time the Revolving Credit Outstandings exceed the Revolving Credit Commitment, the Parent Borrower and Cayman Borrower, as applicable, agree to repay promptly upon notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Revolving Credit Lenders, Revolving Credit Outstandings in an amount equal to such excess with each such repayment applied first , if such repayment is made by the Parent Borrower, to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Credit Loans and third , with respect to any Letters of Credit then outstanding, if such repayment is made by the Parent Borrower, a payment of Cash Collateral into a Cash Collateral account opened by the Administrative Agent, for the benefit of the Revolving Credit Lenders, in an amount equal to such excess (such Cash Collateral to be applied in accordance with Section 9.2(b) ).

 

(c)   Optional Prepayments . The Parent Borrower and the Cayman Borrower may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, without premium or penalty (other than pursuant to Section 4.9 ), with irrevocable prior written notice to the Administrative Agent substantially in the form attached as Exhibit D (a “ Notice of Prepayment ”) given not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, specifying the date and amount of prepayment and whether the prepayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Revolving Credit Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans and $500,000 or a whole multiple of $100,000 in excess thereof with respect to Swingline Loans. A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof. Notwithstanding the foregoing, any Notice of Prepayment delivered in connection with any refinancing of all of the Credit Facility or other transaction, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or other transaction and may be revoked by the Borrowers in the event such refinancing is not consummated (provided that the failure of such contingency shall not relieve the Borrowers from their respective obligations in respect thereof under Section 4.9).

 

(d)   Limitation on Prepayment of LIBOR Rate Loans . The Borrowers may not prepay any LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

 

SECTION 2.5   Permanent Reduction of the Revolving Credit Commitment .

 

(a)   Voluntary Reduction . The Borrowers shall have the right at any time and from time to time, upon at least five (5) Business Days prior irrevocable written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment, from time to time, in an aggregate principal amount not less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof. Any reduction of the Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Revolving Credit Commitment Percentage. All Commitment Fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination. Notwithstanding the foregoing, any notice to reduce the Revolving Credit Commitment delivered in connection with any refinancing of all of the Revolving Credit Facility or other transaction, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or other transaction and may be revoked by the Borrowers in the event such refinancing is not consummated (provided that the failure of such contingency shall not relieve the Borrowers from their respective obligations in respect thereof under Section 4.9).

 

(b)   Corresponding Payment . Each permanent reduction permitted pursuant to this Section shall be accompanied by a payment of principal sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as applicable, after such reduction to the Revolving Credit Commitment as so reduced, and if the aggregate amount of all outstanding Letters of Credit exceeds the Revolving Credit Commitment as so reduced, the applicable Borrower shall be required to deposit Cash Collateral in a Cash Collateral account opened by the Administrative Agent in an amount equal to such excess. Such Cash Collateral shall be applied in accordance with Section 9.2(b) . Any reduction of the Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans and Swingline Loans (and furnishing of Cash Collateral satisfactory to the Administrative Agent for all L/C Obligations) and shall result in the termination of the Revolving Credit Commitment and the Swingline Commitment and the Revolving Credit Facility. If the reduction of the Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

 

SECTION 2.6   Termination of Revolving Credit Facility . The Revolving Credit Facility and the Revolving Credit Commitments shall terminate on the Revolving Credit Maturity Date.

 

SECTION 2.7   Increase in Revolving Credit Commitments; Incremental Loans .

 

(a)   Request for Increase . At any time after the Closing Date, upon written notice to the Administrative Agent, the Borrower Agent may from time to time request (i) one or more incremental term loans (each, an “ Incremental Term Loan ”) or (ii) one or more increases in the Revolving Credit Commitments (each, a “ Revolving Credit Facility Increase ” and all such Revolving Credit Facility Increases, together with the initial principal amount of the Incremental Term Loans, the “ Incremental Increases ”); provided that (A) the aggregate principal amount for all such Incremental Increases shall not exceed $300,000,000 and (B) any such request for an increase shall be in a minimum amount of $10,000,000 or, if less, the remaining amount permitted pursuant to the foregoing clause (A) .

 

(b)   Incremental Lenders . Each notice from the Borrower Agent pursuant to this Section shall set forth the requested amount and proposed terms of the relevant Incremental Increase. Incremental Increases may be provided by any existing Lender or by any other Persons (each, an “ Incremental Lender ”); provided that the Administrative Agent, the Issuing Lender and the Swingline Lender, as applicable, shall have consented (such consent not to be unreasonably withheld, conditioned or delayed) to such Incremental Lender’s providing such Incremental Increase to the extent any such consent would be required under Section 11.9(b) for an assignment of Loans or Revolving Credit Commitments, as applicable, to such Incremental Lender. At the time of sending such notice, the Borrower Agent (in consultation with the Administrative Agent) shall specify the time period within which each Incremental Lender is requested to respond, which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the proposed Incremental Lenders. Each proposed Incremental Lender may elect or decline, in its sole discretion, and shall notify the Administrative Agent within such time period whether it agrees, to provide an Incremental Increase and, if so, whether by an amount equal to, greater than or less than requested. Any Person not responding within such time period shall be deemed to have declined to provide an Incremental Increase.

 

(c)   Increase Effective Date and Allocations . The Administrative Agent and the Borrower Agent shall determine the effective date (the “ Increase Effective Date ”) and the final allocation of such Incremental Increase (limited in the case of the Incremental Lenders to their own respective allocations thereof). The Administrative Agent shall promptly notify the Borrower Agent and the Incremental Lenders of the final allocation of such Incremental Increases and the Increase Effective Date.

 

(d)   Conditions to Effectiveness of Increase . Any Incremental Increase shall become effective as of such Increase Effective Date, provided that:

 

(i)   no Default or Event of Default shall exist on such Increase Effective Date immediately prior to or after giving effect to (A) such Incremental Increase or (B) the making of any Extensions of Credit pursuant thereto; and

 

(ii)   the Parent Borrower is in pro forma compliance with the financial covenants set forth in Section 8.13 based on the financial statements most recently delivered pursuant to Section 7.1 after giving effect to such Incremental Increase (assuming that the entire applicable Incremental Term Loan and/or Revolving Credit Facility Increase is fully funded on the effective date thereof).

 

(e)   Terms of Revolving Credit Facility Increases .

 

(i)   Revolving Credit Loans made with respect to the Revolving Credit Facility Increase shall mature on the Revolving Credit Maturity Date and shall be subject to the same terms and conditions as the other Revolving Credit Loans;

 

(ii)   the outstanding Revolving Credit Loans and Revolving Credit Commitment Percentages of Swingline Loans and L/C Obligations will be reallocated by the Administrative Agent on the applicable Increase Effective Date among the Revolving Credit Lenders (including the Incremental Lenders providing such Revolving Credit Facility Increase) in accordance with their revised Revolving Credit Commitment Percentages (and the Revolving Credit Lenders (including the Incremental Lenders providing such Revolving Credit Facility Increase) agree to make all payments and adjustments necessary to effect such reallocation and the Borrowers shall pay any and all costs required pursuant to Section 4.9 in connection with such reallocation as if such reallocation were a repayment);

 

(iii)   the terms and conditions applicable to such Revolving Credit Facility Increase shall, except to the extent otherwise provided in this Section 2.7 , be identical to the terms and conditions applicable to the Revolving Credit Facility;

 

(iv)   each Revolving Credit Facility Increase shall constitute US Obligations or Cayman Obligations, as applicable, of the applicable Borrower and shall be secured and guaranteed with the other Extensions of Credit on a pari passu basis; and

 

(v)   any Incremental Lender with a Revolving Credit Facility Increase shall be entitled to the same voting rights as the existing Revolving Credit Lenders under the Revolving Credit Facility and any Extensions of Credit made in connection with each Revolving Credit Facility Increase shall receive proceeds of prepayments on the same basis as the other Revolving Credit Loans made hereunder.

 

(f)   Terms of Incremental Term Loans .

 

(i)   the maturity date and principal amortization for each Incremental Term Loan shall be determined by the applicable Incremental Lenders and the Borrower Agent on the applicable Increase Effective Date; provided that no Incremental Term Loan will have a shorter weighted average life to maturity than the remaining weighted average life to maturity of the Initial Term Loan or a maturity date earlier than the Term Loan Maturity Date;

 

(ii)   the Applicable Margin and pricing grid, if applicable, for each Incremental Term Loan shall be determined by the applicable Incremental Lenders and the Borrower Agent on the applicable Increase Effective Date and shall be reasonably acceptable to the Administrative Agent;

 

(iii)   except as provided in this Section 2.7 , all other terms and conditions applicable to any Incremental Term Loan shall be consistent with the terms and conditions applicable to the Initial Term Loan; and

 

(iv)   each Incremental Term Loan shall constitute US Obligations or Cayman Obligations, as applicable, of the applicable Borrower and shall be secured and guaranteed with the other Extensions of Credit on a pari passu basis.

 

 

(g)   Incremental Amendment . Each such Incremental Increase shall be effected pursuant to an amendment (an “ Incremental Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, the Administrative Agent and the applicable Incremental Lenders, which Incremental Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.7 .

 

SECTION 2.8   Initial Term Loan . Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, each Term Loan Lender severally agrees to make the Initial Term Loan to the Parent Borrower on the Closing Date in a principal amount equal to the amount of such Lender’s Initial Term Loan commitment as set forth on Schedule 1.1(a) . Any obligation of the Term Loan Lenders to fund the Initial Term Loan shall terminate upon funding of the Initial Term Loan on the Closing Date.

 

SECTION 2.9   Procedure for Advance of Term Loans .

 

(a)   Initial Term Loan . The Parent Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing prior to 11:00 a.m. on the Closing Date requesting that the Term Loan Lenders make the Initial Term Loan as a Base Rate Loan on such date (provided that the Parent Borrower may request, no later than three (3) Business Days prior to the Closing Date, that the Term Loan Lenders make the Initial Term Loan as a LIBOR Rate Loan if the Parent Borrower has delivered to the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 4.9 of this Agreement). Upon receipt of such Notice of Borrowing from the Parent Borrower, the Administrative Agent shall promptly notify each Term Loan Lender thereof. Not later than 1:00 p.m. on the Closing Date, each Term Loan Lender will make available to the Administrative Agent for the account of the Parent Borrower, at the Administrative Agent’s Office in immediately available funds, the amount of such Initial Term Loan to be made by such Term Loan Lender on the Closing Date. The Parent Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of the Initial Term Loan in immediately available funds by wire transfer to such Person or Persons as may be designated by the Parent Borrower in writing.

 

(b)   Incremental Term Loans . Any Incremental Term Loans shall be borrowed pursuant to, and in accordance with Section 2.7 .

 

SECTION 2.10   Repayment of Term Loans .

 

(a)   Initial Term Loan . The Parent Borrower shall repay the aggregate outstanding principal amount of the Initial Term Loan in consecutive quarterly installments on the last Business Day of each of March, June, September and December commencing March 31, 2018 as set forth below, except as the amounts of individual installments may be adjusted pursuant to Section 2.11 hereof:

 

 

If not sooner paid, the Initial Term Loan shall be paid in full, together with accrued interest thereon, on the Term Loan Maturity Date.

 

(b)   Incremental Term Loans . The Parent Borrower shall repay the aggregate outstanding principal amount of any Incremental Term Loan as determined pursuant to, and in accordance with, Section 2.7 .

 

SECTION 2.11   Prepayments of Term Loans .

 

(a)   Optional Prepayments . The Parent Borrower shall have the right at any time and from time to time, without premium or penalty, to prepay the Term Loans, in whole or in part, upon delivery to the Administrative Agent of a Notice of Prepayment not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, specifying the date and amount of repayment, whether the repayment is of LIBOR Rate Loans or Base Rate Loans or a combination thereof, and if a combination thereof, the amount allocable to each and whether the repayment is of the Initial Term Loan, an Incremental Term Loan or a combination thereof, and if a combination thereof, the amount allocable to each. Each partial prepayment of the Term Loans hereunder shall be in an aggregate principal amount of at least $3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate Loans, $5,000,000 or any whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans and shall be applied, on a pro rata basis, to the outstanding principal installments of the Initial Term Loan and, if applicable, any Incremental Term Loans as directed by the Parent Borrower. Each repayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 . A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the applicable Term Loan Lenders of each Notice of Prepayment.

 

(b)   Mandatory Prepayments .

 

 

(i)   Debt Issuances . The Parent Borrower shall make mandatory principal prepayments of the Term Loans in the manner set forth in clause (v) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Debt Issuance not otherwise permitted pursuant to Section 8.1 . Such prepayment shall be made within three (3) Business Days after the date of receipt of the Net Cash Proceeds of any such Debt Issuance.

 

(ii)   Equity Issuances . The Parent Borrower shall make mandatory principal prepayments of the Term Loans in the manner set forth in clause (v) below in an amount equal to fifty-percent (50%) of the aggregate Net Cash Proceeds from any Equity Issuance other than the exercise price on stock options issued as part of employee compensation; provided , that so long as no Event of Default has occurred and is continuing, no prepayments shall be required from the Net Cash Proceeds from Equity Issuances among the Credit Parties and their Subsidiaries, including Equity Issuances the proceeds of which are used to finance a Permitted Acquisition. Such prepayment shall be made within three (3) Business Days after the date of receipt of the Net Cash Proceeds of any such Equity Issuance.

 

(iii)   Asset Dispositions and Insurance and Condemnation Events . The Parent Borrower shall make mandatory principal prepayments of the Term Loans in the manner set forth in clause (v) below in amounts equal to one hundred percent (100%)   of the aggregate Net Cash Proceeds from (A) any Asset Disposition (other than any Asset Disposition permitted pursuant to clauses (a) through (l) of Section 8.5 ) made by a US Credit Party or (B) any Insurance and Condemnation Event of a US Credit Party, to the extent that the aggregate amount of such Net Cash Proceeds, in the case of each of clauses (A) and (B), respectively, exceed $5,000,000 during any Fiscal Year. Such prepayments shall be made within three (3) Business Days after the date of receipt of the Net Cash Proceeds; provided that, so long as no Event of Default has occurred and is continuing, no prepayment shall be required under this Section 2.11(b)(iii) with respect to such portion of such Net Cash Proceeds that the Parent Borrower shall have given prompt written notice to the Administrative Agent of its intent to reinvest in accordance with Section 2.11(b)(iv) .

 

(iv)   Reinvestment Option . With respect to any Net Cash Proceeds realized or received with respect to any Asset Disposition or any Insurance and Condemnation Event by any Credit Party of any Subsidiary thereof (in each case, only to the extent contemplated pursuant to Section 2.11(b)(iii) ), at the option of the Parent Borrower, the Credit Parties or their Subsidiaries may reinvest all or any portion of such Net Cash Proceeds in assets used or useful for the business of the Credit Parties and their Subsidiaries within twelve (12) months following receipt of such Net Cash Proceeds (or, if a commitment for such reinvestment has been made within such twelve (12) month period, within 90 days after the end of such twelve (12) month period); provided that if any Net Cash Proceeds are no longer intended to be or cannot be so reinvested at any time after delivery of a notice of reinvestment election, an amount equal to any such Net Cash Proceeds shall be applied within three (3) Business Days after the applicable Credit Party reasonably determines that such Net Cash Proceeds are no longer intended to be or cannot be so reinvested to the prepayment of the Term Loans as set forth in this Section 2.11(b) ;.  Pending the final application of any such Net Cash Proceeds, the applicable Credit Party may invest an amount equal to such Net Cash Proceeds in any manner that is not prohibited by this Agreement.

 

(v)   Notice; Manner of Payment . Upon the occurrence of any event triggering the prepayment requirement under clauses (i) through and including (iv) above, the Parent Borrower shall promptly deliver a Notice of Prepayment to the Administrative Agent and upon receipt of such notice, the Administrative Agent shall promptly so notify the Lenders. Each prepayment of the Loans under this Section shall be applied ratably between the Initial Term Loans and any Incremental Term Loans which such prepayment to be applied to reduce the remaining scheduled principal installments of the Initial Term Loans and any Incremental Term Loans (including the bullet payment due at maturity) on a pro rata basis.

 

(vi)   Prepayment of LIBOR Rate Loans . Each prepayment shall be accompanied by any amount required to be paid pursuant to Section 4.9 ; provided that, so long as no Event of Default shall have occurred and be continuing, if any prepayment of LIBOR Rate Loans is required to be made under this Section 2.11(b) prior to the last day of the Interest Period therefor, in lieu of making any payment pursuant to this Section 2.11(b) in respect of any such LIBOR Rate Loan prior to the last day of the Interest Period therefor, the Parent Borrower may, in its sole discretion, deposit an amount sufficient to make any such prepayment otherwise required to be made thereunder together with accrued interest to the last day of such Interest Period into an account held at, and subject to the sole control of, the Administrative Agent until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Parent Borrower or any other Credit Party) to apply such amount to the prepayment of such Term Loans in accordance with this Section 2.11(b) .  Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Parent Borrower or any other Credit Party) to apply such amount to the prepayment of the outstanding Term Loans in accordance with the relevant provisions of this Section 2.11(b) .

 

(vii)   No Reborrowings . Amounts prepaid under the Term Loan pursuant to this Section may not be reborrowed.

 

ARTICLE III

 

LETTER OF CREDIT FACILITY

 

SECTION 3.1   L/C Facility .

 

(a)   Availability . Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving Credit Lenders set forth in Section 3.4(a) , agrees to issue standby Letters of Credit in an aggregate amount not to exceed its L/C Commitment for the account of the Parent Borrower (which may support the obligations of any Subsidiary of the Parent Borrower) on any Business Day from the Closing Date to, but not including, the thirtieth (30 th ) Business Day prior to the Revolving Credit Maturity Date in such form as may be approved from time to time by the Issuing Lender; provided , that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the Revolving Credit Outstandings would exceed the Revolving Credit Commitment. Each Letter of Credit shall (i) be denominated in Dollars in a minimum amount of $100,000 (or such lesser amount as agreed to by the Issuing Lender), (ii) be a standby letter of credit issued to support the obligations of the Parent Borrower or any of its Subsidiaries, contingent or otherwise, incurred in the ordinary course of business and (iii) expire on a date no more than twelve (12) months after the date of issuance or last renewal of such Letter of Credit subject to automatic renewal for additional one (1) year periods pursuant to the terms of the Letter of Credit Application or other documentation acceptable to the applicable Issuing Lender), which date shall be no later than the fifth (5th) Business Day prior to the Revolving Credit Maturity Date and (iv) be subject to the ISP98, as set forth in the Letter of Credit Application or as determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of New York. The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any Applicable Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to letters of credit generally or such Letter of Credit in particular any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense that was not applicable, in effect as of the Closing Date and that the Issuing Lender in good faith deems material to it, (B) the conditions set forth in Section 5.2 are not satisfied, or (C) the beneficiary of such Letter of Credit is a Sanctioned Person. References herein to “issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any outstanding Letters of Credit, unless the context otherwise requires. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issued and outstanding hereunder.

 

(b)   Defaulting Lenders . Notwithstanding anything to the contrary contained in this Agreement, Article III shall be subject to the terms and conditions of Section 4.13 and Section 4.14 .

 

 

SECTION 3.2   Procedure for Issuance of Letters of Credit . The Parent Borrower may from time to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at the Administrative Agent’s Office a Letter of Credit Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may request. Upon receipt of any Letter of Credit Application, the Issuing Lender shall process such Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to Section 3.1 and Article V , promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Letter of Credit Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Parent Borrower. The Issuing Lender shall promptly furnish to the Borrower Agent a copy of such Letter of Credit and shall promptly notify each Revolving Credit Lender of the issuance and upon request by any Revolving Credit Lender, furnish to such Lender a copy of such Letter of Credit and the amount of such Revolving Credit Lender’s participation therein.

 

SECTION 3.3   Commissions and Other Charges .

 

(a)   Letter of Credit Commissions . Subject to Section 4.14(a)(iii)(B) , the Parent Borrower shall pay to the Administrative Agent, for the account of the applicable Issuing Lender and the L/C Participants, a letter of credit commission with respect to each Letter of Credit in the amount equal to the daily amount available to be drawn under such standby Letters of Credit times the Applicable Margin with respect to Revolving Credit Loans that are LIBOR Rate Loans (determined on a per annum basis). Such commission shall be payable quarterly in arrears on the last Business Day of each calendar quarter, on the Revolving Credit Maturity Date and thereafter on demand of the Administrative Agent. The Administrative Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and the L/C Participants all commissions received pursuant to this Section 3.3 in accordance with their respective Revolving Credit Commitment Percentages.

 

(b)   Issuance Fee . In addition to the foregoing commission, the Parent Borrower shall pay directly to the Issuing Lender, for its own account, an issuance fee with respect to each Letter of Credit at a rate equal to 0.125% per annum, computed on the daily amount available to be drawn under such Letter of Credit. Such issuance fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter commencing with the first such date to occur after the issuance of a Letter of Credit, on a the Revolving Credit Maturity Date and thereafter on demand of the Issuing Lender. For the avoidance of doubt, such issuance fee shall be applicable to and paid upon each of the Existing Letters of Credit.

 

(c)   Other Costs . In addition to the foregoing fees and commissions, the Parent Borrower shall pay or reimburse the Issuing Lender for such normal and customary fees, costs, charges and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit.

 

SECTION 3.4   L/C Participations .

 

(a)   The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Credit Commitment Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Parent Borrower through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

 

(b)   Upon becoming aware of any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each L/C Participant of the amount and due date of such required payment and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due date. If any such amount is paid to the Issuing Lender after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section, if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be due on the following Business Day.

 

(c)   Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its Revolving Credit Commitment Percentage of such payment in accordance with this Section, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Parent Borrower or otherwise), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided , that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

 

SECTION 3.5   Reimbursement Obligation of the Parent Borrower . In the event of any drawing under any Letter of Credit, the Parent Borrower agrees to reimburse (either with the proceeds of a Revolving Credit Loan as provided for in this Section or with funds from other sources), in same day funds, the Issuing Lender on each date on which the Issuing Lender notifies the Parent Borrower of the date and amount of a draft paid under any Letter of Credit for the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in connection with such payment. Unless the Parent Borrower shall immediately notify the Issuing Lender that the Parent Borrower intends to reimburse the Issuing Lender for such drawing from other sources or funds, the Parent Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting that the Revolving Credit Lenders make a Revolving Credit Loan as a Base Rate Loan on such date in the amount of (i) such draft so paid and (ii) any amounts referred to in Section 3.3(c) incurred by the Issuing Lender in connection with such payment, and the Revolving Credit Lenders shall make a Revolving Credit Loan as a Base Rate Loan in such amount, the proceeds of which shall be applied to reimburse the Issuing Lender for the amount of the related drawing and such fees and expenses. Each Revolving Credit Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section to reimburse the Issuing Lender for any draft paid under a Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Section 2.3(a) or Article V . If the Parent Borrower has elected to pay the amount of such drawing with funds from other sources and shall fail to reimburse the Issuing Lender as provided above, the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then overdue from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full.

 

SECTION 3.6   Obligations Absolute . The Parent Borrower’s obligations under this Article III (including, without limitation, the Reimbursement Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Parent Borrower may have or have had against the Issuing Lender or any beneficiary of a Letter of Credit or any other Person. The Parent Borrower also agrees that the Issuing Lender and the L/C Participants shall not be responsible for, and the Parent Borrower’s Reimbursement Obligation under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Parent Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Parent Borrower against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or

 

 

advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Lender’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final non-appealable judgment. The Parent Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct or a breach in bad faith of its obligations under the Loan Documents, in each case as determined by a court of competent jurisdiction by final non-appealable judgment, shall be binding on the Parent Borrower and shall not result in any liability of the Issuing Lender or any L/C Participant to the Parent Borrower. The responsibility of the Issuing Lender to the Parent Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment substantially conforms to the requirements under such Letter of Credit.

 

SECTION 3.7   Effect of Letter of Credit Application . To the extent that any provision of any Letter of Credit Application related to any Letter of Credit is inconsistent with the provisions of this Article III , the provisions of this Article III shall apply.

 

 

ARTICLE IV

 

GENERAL LOAN PROVISIONS

 

SECTION 4.1   Interest .

 

(a)   Interest Rate Options . Subject to the provisions of this Section, at the election of the Borrowers, (i) Revolving Credit Loans and the Term Loans shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin ( provided that the LIBOR Rate shall not be available until three (3) Business Days after the Closing Date unless the Borrower Agent, on behalf of itself and the Cayman Borrower, has delivered to the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 4.9 of this Agreement) and (ii) any Swingline Loan shall bear interest at the Base Rate plus the Applicable Margin. The Borrowers shall select the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of Borrowing is given or at the time a Notice of Conversion/Continuation is given pursuant to Section 4.2 .

 

(b)   Default Rate . Subject to Section 9.3 , (i) immediately upon the occurrence and during the continuance of an Event of Default under Section 9.1(a) , (b) , (i) or (j) , or (ii) at the election of the Required Lenders (or the Administrative Agent at the direction of the Required Lenders), upon the occurrence and during the continuance of any other Event of Default, (A) the Borrowers shall no longer have the option to request LIBOR Rate Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans, (C) all outstanding Base Rate Loans, Swingline Loans and other Obligations arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans or such other Obligations arising hereunder or under any other Loan Document and (D) all accrued and unpaid interest shall be due and payable on demand of the Administrative Agent. Interest shall continue to accrue on the Obligations after the filing by or against either Borrower of any petition seeking any relief in bankruptcy or under any Debtor Relief Law.

 

(c)   Interest Payment and Computation . Interest on each Base Rate Loan shall be due and payable in arrears on the last Business Day of each calendar quarter commencing March 31, 2018; and interest on each LIBOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end of each three (3) month interval during such Interest Period. All computations of interest for Base Rate Loans when the Base Rate is determined by the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365/366-day year).

 

(d)   Maximum Rate . In no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative Agent’s option (i) promptly refund to the applicable Borrower any interest received by the Lenders in excess of the maximum lawful rate or (ii) apply such excess to the principal balance of the Obligations. It is the intent hereof that the Borrowers not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the applicable Borrower under Applicable Law.

 

SECTION 4.2   Notice and Manner of Conversion or Continuation of Loans . Provided that no Default or Event of Default has occurred and is then continuing, the Borrower Agent, on behalf of itself and the Cayman Borrower, shall have the option to (a) convert at any time following the third Business Day after the Closing Date all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a principal amount equal to $3,000,000 or a whole multiple of $1,000,000 in excess thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever either Borrower desires to convert or continue Loans as provided above, the Borrower Agent, on behalf of itself or the Cayman Borrower, shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a “ Notice of Conversion/Continuation ”) not later than 11:00 a.m. three (3) Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan. If the Borrower Agent fails to give a timely Notice of Conversion/Continuation prior to the end of the Interest Period for any LIBOR Rate Loan, then the applicable LIBOR Rate Loan shall be converted to a Base Rate Loan. Any such automatic conversion to a Base Rate Loan shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loan. If the Borrower Agent requests a conversion to, or continuation of, LIBOR Rate Loans, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swingline Loan may not be converted to a LIBOR Rate Loan. The Administrative Agent shall promptly notify the affected Lenders of such Notice of Conversion/Continuation.

 

SECTION 4.3   Fees .

 

(a)   Commitment Fee . Commencing on the Closing Date, subject to Section 4.14(a)(iii)(A) , the Borrowers shall pay to the Administrative Agent, for the account of the Revolving Credit Lenders, a non-refundable commitment fee (the “ Commitment Fee ”) at a rate per annum equal to the Applicable Margin on the average daily unused portion of the Revolving Credit Commitment of the Revolving Credit Lenders (other than the Defaulting Lenders, if any); provided , that the amount of outstanding Swingline Loans shall not be considered usage of the Revolving Credit Commitment, and outstanding L/C Obligations shall be considered usage of the Revolving Credit Commitment, for the purpose of calculating the Commitment Fee. The Commitment Fee shall be payable in arrears on the last Business Day of each calendar quarter during the term of this Agreement commencing March 31, 2018 and ending on the date upon which all Obligations (other than contingent indemnification obligations not then due) arising under the Revolving Credit Facility shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements with respect thereto have been made that are satisfactory to the Issuing Lender) and the Revolving Credit Commitment has been terminated. The Commitment Fee shall be distributed by the Administrative Agent to the Revolving Credit Lenders (other than any Defaulting Lender) pro rata in accordance with such Revolving Credit Lenders’ respective Revolving Credit Commitment Percentages.

 

(b)   Other Fees . The Borrowers shall pay to Wells Fargo Securities, LLC, the Administrative Agent and the Lenders, for their own respective accounts, fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.

 

SECTION 4.4   Manner of Payment . Each payment by the Borrowers on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement shall be made not later than 1:00 p.m. 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 entitled to such payment in Dollars, in immediately available funds and shall be made without any setoff, counterclaim or deduction whatsoever. Any payment received after such time but before 2:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 9.1 , but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 2:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each such Lender at its address for notices set forth herein its pro rata share in respect of the relevant Credit Facility (or other applicable share as provided herein) of such payment and shall wire advice of the amount of such credit to each Lender. Each payment to the Administrative Agent on account of the principal of or interest on the Swingline Loans or of any fee, commission or other amounts payable to the Swingline Lender shall be made in like manner, but for the account of the Swingline Lender. Each payment to the Administrative Agent of the Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of the Issuing Lender or the L/C Participants, as the case may be. Each payment to the Administrative Agent of Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 4.9 , 4.10 , 4.11 or 11.3 shall be paid to the Administrative Agent for the account of the applicable Lender. Subject to the definition of Interest Period, if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day and such extension of time shall in such case be included in computing any interest if payable along with such payment. Notwithstanding the foregoing, if there exists a Defaulting Lender each payment by the Borrowers to such Defaulting Lender hereunder shall be applied in accordance with Section 4.14(a)(ii) .

 

SECTION 4.5   Evidence of Indebtedness .

 

(a)   Extensions of Credit . The Extensions of Credit made by each Lender and the Issuing Lender shall be evidenced by one or more accounts or records maintained by such Lender or the Issuing Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender or the Issuing Lender shall be conclusive absent manifest error of the amount of the Extensions of Credit made by the Lenders or the Issuing Lender to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender or the Issuing Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Credit Note, Term Loan Note and/or Swingline Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans, Term Loan Note and/or Swingline Loans, as applicable, in addition to such accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

(b)   Participations . In addition to the accounts and records referred to in subsection (a) , each Revolving Credit Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Revolving Credit Lender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Revolving Credit Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

 

SECTION 4.6   Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment 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 its Loans and accrued interest thereon or other such obligations (other than pursuant to Sections 4.9 , 4.10 , 4.11 or 11.3 ) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

 

(i)   if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

 

(ii)   the provisions of this paragraph shall not be construed to apply to (A) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 4.13 or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or participant, other than to the Parent Borrower or any of its Subsidiaries or Affiliates (as to which the provisions of this paragraph shall apply).

 

Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

 

SECTION 4.7   Administrative Agent’s Clawback .

 

(a)   Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender (i) in the case of Base Rate Loans, not later than 12:00 noon on the date of any proposed borrowing and (ii) otherwise, prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Sections 2.3(b) and 2.9 and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period. If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment by either Borrower shall be without prejudice to any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(b)   Payments by the Borrowers; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower Agent prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders, the Issuing Lender or the Swingline Lender hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the Issuing Lender or the Swingline Lender, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders, the Issuing Lender or the Swingline Lender, as the case maybe, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, Issuing Lender or the Swingline Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(c)   Nature of Obligations of Lenders Regarding Extensions of Credit . The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. The failure of any Lender to make available its pro rata share of any Loan requested by either Borrower shall not relieve it or any other Lender of its obligation, if any, hereunder to make its pro rata share of such Loan available on the borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its pro rata share of such Loan available on the borrowing date.

 

SECTION 4.8   Changed Circumstances .

 

(a)   Circumstances Affecting LIBOR Rate Availability . Unless and until a Replacement Rate is implemented in accordance with clause (c) below, in connection with any request for a LIBOR Rate Loan or a conversion to or continuation thereof or otherwise, if for any reason (i) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Loan, (ii) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for the ascertaining the LIBOR Rate for such Interest Period with respect to a proposed LIBOR Rate Loan or (iii) the Required Lenders shall determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of making or maintaining such Loans during such Interest Period, then the Administrative Agent shall promptly give notice thereof to the Borrower Agent. Thereafter, until the Administrative Agent notifies the Borrower Agent that such circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of either Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and each Borrower shall either (A) repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Rate Loan together with accrued interest thereon (subject to Section 4.1(d) ), on the last day of the then current Interest Period applicable to such LIBOR Rate Loan; or (B) convert the then outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.

 

(b)   Laws Affecting LIBOR Rate Availability . If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to the Borrower Agent and the other Lenders. Thereafter, until the Administrative Agent notifies the Borrower Agent that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans, and the right of the Borrowers to convert any Loan to a LIBOR Rate Loan or continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrowers may select only Base Rate Loans and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of the then current Interest Period applicable thereto, the applicable Loan shall immediately be converted to a Base Rate Loan for the remainder of such Interest Period.

 

(c)   Alternative Rate of Interest . Notwithstanding anything to the contrary in Section 4.8(a) above, if the Administrative Agent has made the determination (such determination to be conclusive absent manifest error) that (i) the circumstances described in Section 4.8(a)(i) or (a)(ii) have arisen and that such circumstances are unlikely to be temporary, (ii) any applicable interest rate specified herein is no longer a widely recognized benchmark rate for newly originated loans in the U.S. syndicated loan market in the applicable currency or (iii) the applicable supervisor or administrator (if any) of any applicable interest rate specified herein or any Governmental Authority having, or purporting to have, jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which any applicable interest rate specified herein shall no longer be used for determining interest rates for loans in the U.S. syndicated loan market in the applicable currency, then the Administrative Agent may, to the extent practicable (with the Borrower’s consent, and as determined by the Administrative Agent to be generally in accordance with similar situations in other transactions in which it is serving as administrative agent or otherwise consistent with market practice generally), establish a replacement interest rate (the “ Replacement Rate ”), in which case, the Replacement Rate shall, subject to the next two sentences, replace such applicable interest rate for all purposes under the Loan Documents unless and until (A) an event described in Section 4.8(a)(i) , (a)(ii) , (c)(i) , (c)(ii) or (c)(iii) occurs with respect to the Replacement Rate or (B) the Administrative Agent (or the Required Lenders through the Administrative Agent) notifies the Borrower that the Replacement Rate does not adequately and fairly reflect the cost to the Lenders of funding the Loans bearing interest at the Replacement Rate. In connection with the establishment and application of the Replacement Rate, this Agreement and the other Loan Documents shall be amended solely with the consent of the Administrative Agent and the Borrower, as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 4.8(c) . Notwithstanding anything to the contrary in this Agreement or the other Loan Documents (including, without limitation, Section 11.2 ), such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the delivery of such amendment to the Lenders, written notices from such Lenders that in the aggregate constitute Required Lenders, with each such notice stating that such Lender objects to such amendment (which such notice shall note with specificity the particular provisions of the amendment to which such Lender objects). To the extent the Replacement Rate is approved by the Administrative Agent in connection with this clause (c), the Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for the Administrative Agent, such Replacement Rate shall be applied as otherwise reasonably determined by the Administrative Agent (it being understood that any such modification by the Administrative Agent shall not require the consent of, or consultation with, any of the Lenders).

 

SECTION 4.9   Indemnity . The Borrowers, jointly and severally (subject to the limitations of Section 11.22 ), hereby indemnify each of the Lenders against any loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR Rate Loan or from fees payable to terminate the deposits from which such funds were obtained) which may arise or be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by either Borrower to make any payment when due of any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of a Borrower to borrow or continue a LIBOR Rate Loan or convert to a LIBOR Rate Loan on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a date other than the last day of the Interest Period therefor. The amount of such loss or expense shall be determined, in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its LIBOR Rate Loans in the London interbank market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to the Borrower Agent through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

 

SECTION 4.10   Increased Costs .

 

(a)   Increased Costs Generally . If any Change in Law shall:

 

(i)   impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or any Issuing Lender;

 

(ii)   subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)   impose on any Lender or the Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender, the Issuing Lender or such other Recipient of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, the Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, the Issuing Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, the Issuing Lender or other Recipient, the Borrowers shall promptly pay to any such Lender, the Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)   Capital Requirements . If any Lender or the Issuing Lender determines that any Change in Law affecting such Lender or the Issuing Lender or any Lending Office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy or liquidity), then from time to time upon written request of such Lender or the Issuing Lender the Borrowers shall promptly pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered.

 

(c)   Certificates for Reimbursement . A certificate of a Lender, the Issuing Lender or such other Recipient setting forth the amount or amounts necessary to compensate such Lender or the Issuing Lender, such other Recipient or any of their respective holding companies, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower Agent, shall be conclusive absent manifest error. The Borrowers shall pay such Lender, the Issuing Lender or such other Recipient, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)   Delay in Requests . Failure or delay on the part of any Lender, the Issuing Lender or such other Recipient to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s, the Issuing Lender’s or such other Recipient’s right to demand such compensation; provided that the Borrowers shall not be required to compensate any Lender, the Issuing Lender or any other Recipient pursuant to this Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender, the Issuing Lender or such other Recipient, as the case may be, notifies the Borrower Agent of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s, the Issuing Lender’s or such other Recipient’s intention to claim compensation therefor (except that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

 

SECTION 4.11   Taxes .

 

(a)   Defined Terms . For purposes of this Section 4.11 , the term “Lender” includes the Issuing Lender and the term “Applicable Law” includes FATCA.

 

(b)   Payments Free of Taxes . Any and all payments by or on account of any obligation of any Credit Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Credit Party shall be increased as necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(c)   Payment of Other Taxes by the Credit Parties . The Credit Parties shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(d)   Indemnification by the Credit Parties . The Credit Parties shall jointly and severally indemnify each Recipient (subject to the limitations of Section 11.22 ), within ten (10) days after 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) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Agent by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)   Indemnification by the Lenders . Each Lender and each Issuing Lender shall severally indemnify the Administrative Agent and the Credit Parties (with respect to clauses (ii) and (iii) below), within ten (10) Business Days after written 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 11.9(d) 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 or any Credit Party, as the case may be, 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 Authority. 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 setoff 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) . The agreements in this paragraph (e) shall survive the resignation and/or replacement of the Administrative Agent.

 

(f)   Evidence of Payments . As soon as practicable after any payment of Taxes by any Credit Party to a Governmental Authority pursuant to this Section 4.11 , such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(g)   Status of Lenders .

 

(i)   Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Agent and the Administrative Agent, at the time or times reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrowers or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers 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 4.11(g)(ii)(A) , (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)   Without limiting the generality of the foregoing:

 

(A)   (i) Any Lender that is a U.S. Person shall deliver to the Borrower Agent 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 Agent or the Administrative Agent), executed originals or copies of IRS Form W-9 certifying that such Lender is exempt from United States federal backup withholding tax and (ii) if the Administrative Agent is a U.S. Person, it shall deliver to the Borrower Agent on or prior to the date on which the Administrative Agent becomes the Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Agent) an executed original or copy of IRS Form W-9 certifying that the Administrative Agent is exempt from United States federal backup withholding tax;

 

(B)   any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Agent 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 Agent or the Administrative Agent), whichever of the following is applicable:

 

(1)           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 originals or copies of IRS Form W-8BEN-E (or any successor form), as applicable, establishing an exemption from, or reduction of, United States 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-E (or any successor form), establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)           executed originals or copies of IRS Form W-8ECI;

 

(3)           in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect 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 either 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 originals or copies of IRS Form W-8BEN-E (or any successor form),; or

 

(4)           to the extent a Foreign Lender is not the beneficial owner, executed originals or copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or any successor form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3 , 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 substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner;

 

(C)   any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Agent 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 Agent or the Administrative Agent), executed originals or copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax, or if applicable, any foreign withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D)   if a payment made to a Lender under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if such Lender 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 shall deliver to the Borrower Agent and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers or the Administrative Agent such documentation 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 Borrowers or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D) , “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

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 Agent and the Administrative Agent in writing of its legal inability to do so.

 

(h)   Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.11 (including by the payment of additional amounts pursuant to this Section 4.11 ), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h) , in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax 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.

 

(i)   Survival . Each party’s obligations under this Section 4.11 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Credit Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

SECTION 4.12   Mitigation Obligations; Replacement of Lenders .

 

(a)   Designation of a Different Lending Office . If any Lender requests compensation under Section 4.10 , or requires either Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11 , then such Lender shall, at the request of the Borrowers, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.10 or Section 4.11 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)   Replacement of Lenders . If any Lender requests compensation under Section 4.10 , or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11 , and, in each case, such Lender has declined or is unable to designate a different Lending Office in accordance with Section 4.12(a) , or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.9 ), all of its interests, rights (other than its existing rights to payments pursuant to Section 4.10 or Section 4.11 ) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

 

(i)   the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.9 ;

 

(ii)   such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 4.9 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

 

(iii)   in the case of any such assignment resulting from a claim for compensation under Section 4.10 or payments required to be made pursuant to Section 4.11 , such assignment will result in a reduction in such compensation or payments thereafter;

 

(iv)   such assignment does not conflict with Applicable Law; and

 

(v)   in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

(c)   Selection of a Lending Office . Subject to Section 4.12(a) , each Lender may make any Loan to a Borrower through any Lending Office; provided that the exercise of this option shall not affect the obligations of such Borrower to repay the Loan in accordance with the terms of this Agreement or otherwise alter the rights of the parties hereto.

 

 

SECTION 4.13   Cash Collateral . At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Issuing Lender or the Swingline Lender, the Borrowers shall Cash Collateralize the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, with respect to such Defaulting Lender (determined after giving effect to Section 4.14(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

(a)   Grant of Security Interest . The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the Swingline Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans, to be applied pursuant to subsection (b) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, the Issuing Lender and the Swingline Lender as herein provided (other than pursuant to Section 8.2(j) ), or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(b)   Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 4.13 or Section 4.14 in respect of Letters of Credit and Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(c)   Termination of Requirement . Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, shall no longer be required to be held as Cash Collateral pursuant to this Section 4.13 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent, the Issuing Lender and the Swingline Lender that there exists excess Cash Collateral; provided that, subject to Section 4.14 , the Person providing Cash Collateral, the Issuing Lender and the Swingline Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; and provided further that to the extent that such Cash Collateral was provided by the Borrowers, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

 

SECTION 4.14   Defaulting Lenders .

 

(a)   Defaulting Lender Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

 

(i)   Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 11.2 .

 

(ii)   Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.4 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lender or the Swingline Lender hereunder; third , to Cash Collateralize the Fronting Exposure of the Issuing Lender and the Swingline Lender with respect to such

 

 

Defaulting Lender in accordance with Section 4.13 ; fourth , as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan or funded participation in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrowers, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (B) Cash Collateralize the Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 4.13 ; sixth , to the payment of any amounts owing to the Lenders, the Issuing Lender or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to either Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or funded participations in Letters of Credit or Swingline Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit or Swingline Loans were issued at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and funded participations in Letters of Credit or Swingline Loans owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or funded participations in Letters of Credit or Swingline Loans owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Revolving Credit Commitments under the applicable Revolving Credit Facility without giving effect to Section 4.14(a)(iv) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 4.14(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)   Certain Fees .

 

(A)   No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(B)   Each Defaulting Lender shall be entitled to receive letter of credit commissions pursuant to Section 3.3 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 4.13 .

 

(C)   With respect to any Commitment Fee or letter of credit commission not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to the Issuing Lender and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.

 

 

(iv)   Reallocation of Participations to Reduce Fronting Exposure . All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Credit Commitment Percentages (calculated without regard to such Defaulting Lender’s Revolving Credit Commitment) but only to the extent that (x) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation (and, unless the Borrower Agent shall have otherwise notified the Administrative Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. Subject to Section 11.26 , no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)   Cash Collateral, Repayment of Swingline Loans . If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first , repay Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure and (y) second , Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures set forth in Section 4.13 .

 

(b)   Defaulting Lender Cure . If the Borrowers, the Administrative Agent, the Issuing Lender and the Swingline Lender 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 (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Revolving Credit Commitments and outstanding Term Loans (without giving effect to Section 4.14(a)(iv) ), 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 Borrowers 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 Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

ARTICLE V

 

CONDITIONS OF CLOSING AND BORROWING

 

SECTION 5.1   Conditions to Closing and Initial Extensions of Credit . The obligation of the Lenders to close this Agreement and to make the initial Loans or issue or participate in the initial Letter of Credit, if any, is subject to the satisfaction of each of the following conditions:

 

(a)   Executed Loan Documents . This Agreement, a Revolving Credit Note in favor of each Revolving Credit Lender requesting a Revolving Credit Note, a Term Loan Note in favor of each Term Loan Lender requesting a Term Loan Note, a Swingline Note in favor of the Swingline Lender (in each case, if requested thereby), the Security Documents and the Guaranty Agreements, together with any other applicable Loan Documents, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in full force and effect and no Default or Event of Default shall exist hereunder or thereunder.

 

(b)   Closing Certificates; Etc. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

 

(i)   Officer’s Certificate . A certificate from a Responsible Officer of the Parent Borrower in form and substance reasonably satisfactory to the Administrative Agent.

 

(ii)   Certificate of Secretary of each Credit Party . A certificate of a Responsible Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing any applicable Loan Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (A) the articles or certificate of incorporation or formation (or equivalent), as applicable, of such Credit Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation, organization or formation (or equivalent), as applicable, (B) the bylaws or other governing document of such Credit Party as in effect on the Closing Date, (C) resolutions duly adopted by the board of directors (or other governing body) of such Credit Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and any other applicable Loan Documents to which it is a party, and (D) each certificate required to be delivered pursuant to Section 5.1(b)(iii) .

 

(iii)   Certificates of Good Standing . To the extent applicable, certificates as of a recent date of the good standing of each Credit Party under the laws of its jurisdiction of incorporation, organization or formation (or equivalent), as applicable.

 

(iv)   Opinions of Counsel . Opinions of counsel to the Credit Parties addressed to the Administrative Agent and the Lenders with respect to the Credit Parties, the applicable Loan Documents and such other matters as the Administrative Agent shall reasonably request.

 

(c)   Personal Property Collateral .

 

(i)   Filings and Recordings . The Administrative Agent shall have received all filings and recordations that are necessary to perfect the security interests of the Administrative Agent, on behalf of the Secured Parties, in the Collateral, to the extent such security interests can be perfected by filing or recordation, and the Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens thereon (subject to Permitted Liens).

 

(ii)   Pledged Collateral . To the extent required by the Security Documents, the Administrative Agent shall have received (A) original stock certificates or other certificates evidencing the certificated Equity Interests pledged pursuant to the Security Documents, together with an undated stock power for each such certificate duly executed in blank by the registered owner thereof and (B) each original promissory note pledged pursuant to the Security Documents together with an undated allonge for each such promissory note duly executed in blank by the holder thereof.

 

(iii)   Register of Mortgages and Charges . The Administrative Agent shall have received a true, correct and complete copy of the register of mortgages and charges for each of the Cayman Borrower and Ubiquiti Cayman which shall include details of all Security Documents entered into by each of the Cayman Borrower and Ubiquiti Cayman.

 

(iv)   Lien Search . The Administrative Agent shall have received the results of a Lien search (including a search as to judgments, bankruptcy and tax matters), in form and substance reasonably satisfactory thereto, made against the Credit Parties under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in all assets of such Credit Party, indicating among other things that the assets of each such Credit Party are free and clear of any Lien (except for Permitted Liens).

 

(v)   Property and Liability Insurance . The Administrative Agent shall have received, in each case in form and substance reasonably satisfactory to the Administrative Agent, evidence of property, business interruption and liability insurance covering each Credit Party, evidence of payment of all insurance premiums for the current policy year of each policy (with appropriate endorsements naming the Administrative Agent as lender’s loss payee on all policies for property hazard insurance and as additional insured on all policies for liability insurance), and if requested by the Administrative Agent, copies of such insurance policies.

 

(vi)   Other Collateral Documentation . The Administrative Agent shall have received any documents reasonably requested thereby or as required by the terms of the Security Documents to evidence its security interest in the Collateral (including, without limitation, any landlord waivers or collateral access agreements).

 

(d)   Consents; Defaults .

 

(i)   Governmental and Third Party Approvals . The Credit Parties shall have received all material governmental, shareholder and third party consents and approvals necessary in connection with the Transactions and any other transaction contemplated in any other Loan Document.

 

(ii)   No Material Litigation. The absence of any action, suit, investigation or proceeding pending or, to the knowledge of the Parent Borrower or the Cayman Borrower, threatened in writing in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect.

 

(e)   Financial Matters .

 

(i)   Financial Statements . The Administrative Agent shall have received (A) the audited Consolidated and consolidating balance sheet of the Parent Borrower and its Subsidiaries as of June 30, 2015, June 30, 2016 and June 30, 2017, and the related audited Consolidated and consolidating statements of income and retained earnings and cash flows for the Fiscal Years then ended and (B) unaudited Consolidated and consolidating balance sheet of the Parent Borrower and its Subsidiaries as of September 30, 2017 and related unaudited Consolidated and consolidating interim statements of income and retained earnings.

 

(ii)   Financial Projections . The Administrative Agent shall have received pro forma Consolidated financial statements for the Parent Borrower and its Subsidiaries, and projections prepared by management of the Parent Borrower, of balance sheets, income statements and cash flow statements on a quarterly basis for the first year following the Closing Date and on an annual basis for each year thereafter during the term of the Credit Facility.

 

(iii)   Financial Condition/Solvency Certificate . The Parent Borrower shall have delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by the chief financial officer or chief accounting officer of the Parent Borrower (not in his individual capacity), that (A) after giving effect to the Transactions, (x) the Parent Borrower and its Subsidiaries, taken as a whole, are Solvent and (y) the Credit Parties, taken as a whole, are Solvent and (B) the financial projections previously delivered to the Administrative Agent represent the good faith estimates (utilizing reasonable assumptions) of the financial condition and operations of the Parent Borrower and its Subsidiaries.

 

(iv)   Closing Leverage Ratio/Liquidity . The Administrative Agent will be reasonably satisfied that (A) the Consolidated Total Leverage Ratio as of the most recently ended fiscal quarter prior to the Closing Date for which financial statements are available (calculated on a pro forma basis after giving effect to the Transactions) will not exceed 3.25 to 1.00 and (B) the Credit Parties have Liquidity of at least $250,000,000 on the Closing Date, after giving effect to the Transactions.

 

(v)   Payment at Closing . The Borrowers shall have paid or made arrangements to pay contemporaneously with closing (A) to the Administrative Agent, the Arrangers and the Lenders the fees set forth or referenced in Section 4.3 and any other accrued and unpaid fees or commissions due hereunder, (B) all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) and (C) to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby, including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents.

 

(f)   Miscellaneous .

 

(i)   Notice of Account Designation . The Administrative Agent shall have received a Notice of Account Designation specifying the account or accounts to which the proceeds of any Loans made on or after the Closing Date are to be disbursed.

 

(ii)   Existing Credit Agreement . The Indebtedness outstanding under the Existing Credit Agreement shall have been refinanced, or shall be refinanced substantially simultaneously with the initial Extensions of Credit.

 

(iii)   PATRIOT Act, etc . Each Borrower and each of the Guarantors shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act, applicable “know your customer” and anti-money laundering rules and regulations at least ten (10) Business Days prior to the Closing Date.

 

(iv)   Other Documents . All opinions, certificates and other instruments and all proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall have received copies of all other documents, certificates and instruments reasonably requested thereby, with respect to the transactions contemplated by this Agreement.

 

Without limiting the generality of the provisions of the last paragraph of Section 10.3 , for purposes of determining compliance with the conditions specified in this Section 5.1 , the Administrative Agent and each Lender that has signed this Agreement 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 a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

SECTION 5.2   Conditions to All Extensions of Credit . The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit) and/or the Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date:

 

(a)   Continuation of Representations and Warranties . The representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects, on and as of such borrowing, issuance or extension date with the same effect as if made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date).

 

(b)   No Existing Default . No Default or Event of Default shall have occurred and be continuing (i) on the borrowing date with respect to such Loan or after giving effect to the Loans to be made on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance or extension of such Letter of Credit on such date.

 

(c)   Notices . The Administrative Agent shall have received a Notice of Borrowing or a Letter of Credit Application, as applicable, from the Borrower Agent in accordance with Section 2.3(a) , 3.2 or  2.9 , as applicable.

 

(d)   New Swingline Loans/Letters of Credit . So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) the Issuing Lender shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

 

To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, the Credit Parties hereby represent and warrant to the Administrative Agent and the Lenders, which representations and warranties shall be deemed made on the Closing Date and as otherwise set forth in Section 5.2 , that:

 

SECTION 6.1   Organization; Power; Qualification . Each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) (a) is duly organized or incorporated, validly existing and in good standing (or in the case of any Foreign Subsidiary, the equivalent status, if any, in the applicable foreign jurisdiction), under the laws of the jurisdiction of its incorporation or formation, (b) has the power and authority to own its Properties and to carry on its business as now being and hereafter proposed to be conducted and (c) is duly qualified and authorized to do business in each jurisdiction in which the character of its Properties or the nature of its business requires such qualification and authorization (to the extent applicable in the case of Foreign Subsidiaries) except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect. The jurisdictions in which each Credit Party and each Subsidiary thereof are organized and qualified to do business as of the Closing Date are described on Schedule 6.1 . No Credit Party nor any Subsidiary thereof is an EEA Financial Institution.

 

SECTION 6.2   Ownership . Each Subsidiary of each Credit Party as of the Closing Date is listed on Schedule 6.2 . As of the Closing Date, the capitalization of each Credit Party (other than the Parent Borrower) and its Subsidiaries consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 6.2 . All outstanding shares have been duly authorized and validly issued and, to the extent applicable, are fully paid and non-assessable and not subject to any preemptive or similar rights, except as described in Schedule 6.2 . The shareholders or other owners, as applicable, of each Credit Party (other than the Parent Borrower) and its Subsidiaries which are not traded on a public exchange and the number of shares owned by each as of the Closing Date are described on Schedule 6.2 . As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Credit Party (other than the Parent Borrower) or any Subsidiary thereof, except as described on Schedule 6.2 .

 

SECTION 6.3   Authorization; Enforceability . Each Credit Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms. This Agreement and each of the other Loan Documents have been duly executed and delivered by the duly authorized officers of each Credit Party that is a party thereto, and each such document constitutes the legal, valid and binding obligation of each Credit Party that is a party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

 

SECTION 6.4   Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The execution, delivery and performance by each Credit Party of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the Extensions of Credit hereunder and the transactions contemplated hereby or thereby do not, (a) require any Governmental Approval or violate any Applicable Law relating to any Credit Party or any Subsidiary thereof where the failure to obtain such Governmental Approval or such violation could reasonably be expected to have a Material Adverse Effect, (b) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Credit Party, (c) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (d) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens or (e) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than (i) consents, authorizations, filings or other acts or consents that have been obtained or made and that are still in force and effect, (ii) consents, authorizations, filings or other acts or consents for which the failure to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (iii) consents or filings under the UCC or other security filings as applicable in foreign jurisdictions.

 

SECTION 6.5   Compliance with Law; Governmental Approvals . Each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) (a) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect (b) is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Laws relating to it or any of its respective Properties and (c) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority and has retained all material records and documents required to be retained by it under Applicable Law except in each case (a), (b) or (c) where the failure to have, comply or file could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.6   Tax Returns and Payments . Each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) has duly filed or caused to be filed all federal and state and any other material tax returns required by Applicable Law to be filed, and all taxes shown to be due on such tax returns have been timely paid (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party or Subsidiary). Such tax returns accurately reflect in all material respects all liability for taxes of any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) for the periods covered thereby. As of the Closing Date, except as set forth on Schedule 6.6 , there is no ongoing audit or examination or, to its knowledge, other investigation by any Governmental Authority of any material tax liability of any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries). No Governmental Authority has asserted any Lien or other claim against any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) with respect to material unpaid taxes which has not been discharged or resolved (other than (a) any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party or Subsidiary and (b) Permitted Liens). The charges, accruals and reserves on the books of each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) in respect of U.S. federal, state, local and other taxes for all Fiscal Years and portions thereof since the organization of any such Credit Party or Subsidiary thereof are in the judgment of the Borrowers adequate, and the Borrowers do not anticipate any additional material taxes or assessments for any of such years.

 

SECTION 6.7   Intellectual Property Matters . Each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) owns or possesses rights to use all franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing, in each case which are material and reasonably necessary to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights which are material and reasonably necessary to conduct its business. To their knowledge, no Credit Party nor any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations where such liability could reasonably be expected to have a Material Adverse Effect.

 

 

SECTION 6.8   Environmental Matters .

 

(a)   The properties owned, leased or operated by each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) now or in the past do not contain, and to their knowledge have not previously contained, any Hazardous Materials in amounts or concentrations which constitute or constituted a violation of applicable Environmental Laws which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;

 

(b)   To its knowledge, each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) and such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, with all applicable Environmental Laws, and there is no contamination at, under or about such properties or such operations which could interfere with the continued operation of such properties or impair the fair saleable value thereof except for non-compliance or violations which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect;

 

(c)   No Credit Party nor any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters, Hazardous Materials, or compliance with Environmental Laws that, if adversely determined, could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, nor does any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) have actual knowledge that any such notice will be received or is being threatened;

 

(d)   Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, to its knowledge, Hazardous Materials have not been transported or disposed of to or from the properties owned, leased or operated by any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) in violation of, or in a manner or to a location which could give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws;

 

(e)   No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of either Borrower, threatened, under any Environmental Law to which any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) is or will be named as a potentially responsible party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any applicable Environmental Law with respect to any Credit Party, any Subsidiary thereof (other than Immaterial Foreign Subsidiaries), with respect to any real property owned, leased or operated by any Credit Party or any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) or operations conducted in connection therewith that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and

 

(f)   There has been no release, or to its knowledge, threat of release, of Hazardous Materials at or from properties owned, leased or operated by any Credit Party or any Subsidiary (other than Immaterial Foreign Subsidiaries), now or in the past, in violation of or in amounts or in a manner that could give rise to liability under applicable Environmental Laws that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

SECTION 6.9   Employee Benefit Matters .

 

(a)   Each Credit Party and each ERISA Affiliate is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply could not reasonably be expected to have a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect, each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the Code except for such plans that have not yet received determination letters but for which the remedial amendment period for submitting a determination letter has not yet expired or plans covered by an IRS opinion or advisory letter. No liability has been incurred by any Credit Party or any ERISA Affiliate which remains unsatisfied for any taxes or penalties assessed with respect to any Employee Benefit Plan or any Multiemployer Plan except for a liability that could not reasonably be expected to have a Material Adverse Effect;

 

(b)   As of the Closing Date, no Pension Plan has been terminated, nor has any Pension Plan become subject to funding based benefit restrictions under Section 436 of the Code, nor has any funding waiver from the IRS been received or requested with respect to any Pension Plan, nor has any Credit Party or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Sections 412 or 430 of the Code, Section 302 of ERISA or the terms of any Pension Plan on or prior to the due dates of such contributions under Sections 412 or 430 of the Code or Section 302 of ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

 

(c)   Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Credit Party nor any ERISA Affiliate has: (i) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or Section 4975 of the Code, (ii) incurred any liability to the PBGC which remains outstanding other than the payment of premiums and there are no premium payments which are due and unpaid, (iii) failed to make a required contribution or payment to a Multiemployer Plan, or (iv) failed to make a required installment or other required payment under Sections 412 or 430 of the Code;

 

(d)   No Termination Event has occurred or is reasonably expected to occur that would reasonably be expected to have a Material Adverse Effect;

 

(e)   Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or investigation is existing or, to its knowledge, threatened concerning or involving (i) any employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed to by any Credit Party or any ERISA Affiliate, (ii) any Pension Plan or (iii) any Multiemployer Plan.

 

(f)   No Credit Party nor any Subsidiary thereof is a party to any contract, agreement or arrangement that could, solely as a result of the delivery of this Agreement or the consummation of transactions contemplated hereby, result in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code.

 

SECTION 6.10   Margin Stock . No Credit Party nor any Subsidiary thereof is engaged principally or as one of its important activities in the business of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System) or extending credit for such purpose. No part of the proceeds of any of the Loans or Letters of Credit will be used for, or extended as credit for, purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors. Following the application of the proceeds of each Extension of Credit, not more than twenty-five percent (25%) of the value of the assets (either of the Borrowers only or of the Parent Borrower   and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 8.2 or Section 8.5 or subject to any restriction contained in any agreement or instrument between the Borrowers and any Lender or any Affiliate of any Lender relating to Indebtedness in excess of the Threshold Amount will be “margin stock”.

 

SECTION 6.11   Government Regulation . No Credit Party nor any Subsidiary thereof is an “investment company” or a company “controlled” by an “investment company” (as each such term is defined or used in the Investment Company Act of 1940) and no Credit Party nor any Subsidiary thereof is, or after giving effect to any Extension of Credit will be, subject to regulation under any Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

 

SECTION 6.12   Material Contracts . Schedule 6.12 sets forth a complete and accurate list of all Material Contracts of each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) in effect as of the Closing Date. Other than as set forth in Schedule 6.12 , as of the Closing Date, each such Material Contract is, and after giving effect to the consummation of the transactions contemplated by the Loan Documents will be, in full force and effect in accordance with the terms thereof. As of the Closing Date, no Credit Party nor any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) (nor, to its knowledge, any other party thereto) is in breach of or in default under any Material Contract in any material respect.

 

SECTION 6.13   Employee Relations . As of the Closing Date, no Credit Party or any Subsidiary thereof is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of its employees except as set forth on Schedule 6.13 . Neither Borrower knows of any pending, threatened (in writing) strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.14   Financial Statements . The audited and unaudited financial statements delivered pursuant to Section 5.1(e)(i) are complete and correct in all material respects and fairly present on a Consolidated and consolidating basis the assets, liabilities and financial position of the Parent Borrower and its Subsidiaries as at such dates, and the results of the operations and changes of financial position for the periods then ended in all material respects (other than customary year-end adjustments for unaudited financial statements and the absence of footnotes from unaudited financial statements). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP. Such financial statements show all material Indebtedness and other material liabilities, direct or contingent, of the Parent Borrower and its Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments, and Indebtedness, in each case, to the extent required to be disclosed under GAAP. The projections delivered pursuant to Section 5.1(e)(ii) and were prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable in light of then existing conditions except that such financial projections and statements shall be subject to normal year end closing and audit adjustments (it being recognized by the Lenders that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections).

 

SECTION 6.15   No Material Adverse Change . Since June 30, 2017, there has been no material adverse change in the properties, business, operations, or condition (financial or otherwise) of the Parent Borrower and its Subsidiaries, taken as a whole, and no event has occurred or condition arisen, either individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.16   Solvency . (a) The Parent Borrower and its Subsidiaries, taken as a whole, and (b) the Credit Parties, taken as a whole, are Solvent.

 

SECTION 6.17   Title to Properties . As of the Closing Date, the real property listed on Schedule 6.17 constitutes all of the real property that is owned, leased or subleased or used by any Credit Party or any of its Subsidiaries (other than Immaterial Foreign Subsidiaries). Each Credit Party and each Subsidiary thereof (other than Immaterial Foreign Subsidiaries) has such title to, or valid leasehold interests in, the real property owned or leased by it as is necessary to the conduct of its business and valid and legal title to all of its personal property and assets, except those which have been disposed of by the Credit Parties and their Subsidiaries subsequent to such date which dispositions have been in the ordinary course of business or as otherwise permitted hereunder and except where the failure to have such title or leasehold interests could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.18   Litigation . Except for matters existing on the Closing Date and set forth on Schedule 6.18 , there are no actions, suits or proceedings pending nor, to its knowledge, threatened in writing against or in any other way relating adversely to or affecting any Credit Party or any Subsidiary thereof or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.19   Anti-Corruption Laws and Sanctions . None of (a) the Borrowers, any Subsidiary or to the knowledge of either Borrower or such Subsidiary any of their respective directors, officers, employees or affiliates, or (b) to the knowledge of either Borrower, any agent or representative of either Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby is a Sanctioned Person or the subject or target of any Sanctions.

 

SECTION 6.20   Absence of Defaults . No Default or an Event of Default has occurred and is continuing.

 

SECTION 6.21   Disclosure . The Parent Borrower and/or its Subsidiaries have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which any Credit Party and any Subsidiary thereof (other than Immaterial Foreign Subsidiaries) are subject, and all other matters known to them, that, in each case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statement, material report, material certificate or other material information furnished (whether in writing or orally) by or on behalf of any Credit Party or any Subsidiary thereof to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), taken together as a whole, and together with the Borrower’s filings with the SEC, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being recognized by the Lenders that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections); provided further that with respect to information relating to the Borrowers’ industry generally and trade data which relates to a Person that is not a Borrower or a Subsidiary thereof, the Borrowers represent and warrant only that such information is believed by it in good faith to be accurate in all material respects.

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

Until all of the Obligations (other than contingent indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements with respect thereto have been made that are satisfactory to the Issuing Lender) and the Revolving Credit Commitments terminated, each Credit Party will, and will cause each of its Subsidiaries (other than Immaterial Foreign Subsidiaries) to:

 

SECTION 7.1   Financial Statements and Budgets . Deliver to the Administrative Agent, in form and detail satisfactory to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)   Annual Financial Statements . As soon as practicable and in any event within 90 days (or, if later, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act), but not to exceed 105 days) after the end of each Fiscal Year (commencing with the Fiscal Year ended June 30, 2018), an audited Consolidated and consolidating balance sheet of the Parent Borrower and its Subsidiaries as of the close of such Fiscal Year and audited Consolidated and consolidating statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing reasonably acceptable to the Administrative Agent, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Parent Borrower or any of its Subsidiaries not in accordance with GAAP.

 

(b)   Quarterly Financial Statements . As soon as practicable and in any event within 45 days (or, if later, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act), but not to exceed 50 days) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended March 31, 2018), an unaudited Consolidated and consolidating balance sheet of the Parent Borrower and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated and consolidating statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the fiscal quarter then ended and that portion of the Fiscal Year then ended (to the extent such information is provided in the applicable quarterly report filed by the Parent Borrower with the SEC under the Exchange Act), including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the Parent Borrower in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the Parent Borrower to present fairly in all material respects the financial condition of the Parent Borrower and its Subsidiaries on a Consolidated and consolidating basis as of their respective dates and the results of operations of the Parent Borrower and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

 

(c)   Annual Business Plan and Budget . As soon as practicable and in any event within forty-five (45) days after the end of each Fiscal Year, a business plan and operating and capital budget of the Parent Borrower and its Subsidiaries for the ensuing fiscal year, such plan to include, on an annual basis, the following: an annual operating and capital budget, a projected income statement, statement of cash flows and balance sheet, calculations demonstrating projected compliance with the financial covenants set forth in Section 8.13 and a report containing a reasonable disclosure of the key assumptions and drivers with respect to such budget, accompanied by a certificate from a Responsible Officer of the Parent Borrower to the effect that such budget contains good faith estimates (utilizing assumptions believed to be reasonable at the time of delivery of such budget) of the financial condition and operations of the Parent Borrower and its Subsidiaries for such period.

 

SECTION 7.2   Certificates; Other Reports . Deliver to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)   at each time financial statements are delivered pursuant to Sections 7.1(a) or (b) , a duly completed Officer’s Compliance Certificate signed by the chief executive officer, chief financial officer, chief accounting officer, treasurer or controller of the Parent Borrower and a report containing management’s discussion and analysis of such financial statements;

 

(b)   promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Parent Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Parent Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(c)   at each time financial statements are delivered pursuant to Section 7.1(a) , a listing of all Foreign Subsidiaries that are not Material Foreign Subsidiaries and calculations showing compliance with the definition of Material Foreign Subsidiary and Section 7.14(d) ;

 

(d)   promptly, and in any event within five (5) Business Days after receipt thereof by any Credit Party or any Subsidiary thereof, copies of each material notice or other material correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation by such agency regarding financial or other operational results of the Parent Borrower or any Subsidiary thereof;

 

(e)   promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including, without limitation, the PATRIOT Act), as from time to time reasonably requested by the Administrative Agent or any Lender; and

 

(f)   such other information regarding the operations, business affairs and financial condition of the Parent Borrower or any Subsidiary thereof as the Administrative Agent or any Lender may reasonably request.

 

Documents required to be delivered pursuant to Section 7.1(a) or (b) or Section 7.2(b) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Parent Borrower posts such documents, or provides a link thereto on the Parent 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 Parent 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). Notwithstanding anything contained herein, in every instance the Parent Borrower shall be required to provide paper copies of the Officer’s Compliance Certificates required by Section 7.2 to the Administrative Agent. Except for such Officer’s Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Parent Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the Issuing Lender materials and/or information provided by or on behalf of the Parent Borrower and its Subsidiaries hereunder (collectively, “ Borrower Materials ”) by posting the Borrower Materials on Debt Domain, IntraLinks, SyndTrak Online or another similar electronic system (the “ Platform ”) and (b) certain of the Lenders may be “public-side” Lenders ( i.e. , Lenders that do not wish to receive material non-public information with respect to the Parent Borrower or its securities) (each, a “ Public Lender ”). The Borrowers hereby agree that so long as the Parent Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Lender and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Parent Borrower or its securities for purposes of United States Federal and state securities laws ( provided , however , that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.10 ); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

SECTION 7.3   Notice of Other Matters . Promptly (but in no event later than ten (10) days after any Responsible Officer of any Credit Party obtains knowledge thereof) notify the Administrative Agent in writing of (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)   the occurrence of any Default or Event of Default;

 

(b)   any event that results in, or could reasonably be expected to result in, a Material Adverse Effect; and

 

(c)   (i) any letter from the IRS stating that an Employee Benefit Plan of a Credit Party is disqualified under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by any Credit Party or any ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (iii) all notices received by any Credit Party or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and (iv) either Borrower obtaining knowledge that any Credit Party or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA; provided that in the case of clause (i) through (iv) , notice shall only be required if the subject of the notice would reasonably be expected to have a Material Adverse Effect.

 

 

Each notice pursuant to Section 7.3 shall be accompanied by a statement of a Responsible Officer of the Parent Borrower or the Cayman Borrower setting forth details of the occurrence referred to therein and stating what action the Parent Borrower or the Cayman Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 7.3(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

SECTION 7.4   Preservation of Corporate Existence and Related Matters . Except as permitted by Section 8.4 , preserve and maintain its separate corporate existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation or other entity and authorized to do business in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.5   Maintenance of Property and Licenses .

 

(a)   In addition to the requirements of any of the Security Documents, protect and preserve all Properties necessary in and material to its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear and permitted dispositions excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such Property necessary for the conduct of its business, so that the business carried on in connection therewith may be conducted in a commercially reasonable manner, in each case except as such action or inaction would not reasonably be expected to result in a Material Adverse Effect.

 

(b)   Maintain, in full force and effect in all material respects, each and every license, permit, certification, qualification, approval or franchise issued by any Governmental Authority (each a “ License ”) required for each of them to conduct their respective businesses as presently conducted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.6   Insurance . Maintain insurance with financially sound and reputable insurance companies against at least such risks and in at least such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and as are required by any Security Documents (including, without limitation, hazard and business interruption insurance). All such insurance shall, (a) provide that no cancellation shall be effective until at least 30 days after receipt by the Administrative Agent of written notice thereof (or 10 days’ in the case of cancellation for non-payment of premiums) and (b) name the Administrative Agent as an additional insured party or lender’s loss payee, as applicable. On the Closing Date and from time to time thereafter, deliver to the Administrative Agent upon its request (but no more frequently than annually unless an Event of Default has occurred and is continuing) information in reasonable detail as to the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby.

 

SECTION 7.7   Accounting Methods and Financial Records . Maintain a system of accounting, and keep proper books, records and accounts (which shall be true and complete in all material respects) as may be required or as may be necessary to permit the preparation of financial statements in accordance with GAAP and in compliance in all material respects with the regulations of any Governmental Authority having jurisdiction over it or any of its Properties.

 

SECTION 7.8   Payment of Taxes . Pay and perform all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its Property that are due and payable if the failure to so pay would result in a lien on Collateral in excess of $5,000,000 having priority to the lien of Administrative Agent; provided that the Borrowers or such Subsidiary may contest any item in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.

 

SECTION 7.9   Compliance with Laws and Approvals . Observe and remain in compliance with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 7.10   Environmental Laws . In addition to and without limiting the generality of Section 7.9 , except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (a) comply with, and ensure such compliance by all tenants and subtenants with all applicable Environmental Laws and obtain and comply with and maintain, and ensure that all tenants and subtenants, if any, obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws, and (c) defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the presence of Hazardous Materials, or the violation of, non-compliance with or liability under any Environmental Laws applicable to the operations of the Borrowers or any such Subsidiary, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor, as determined by a court of competent jurisdiction by final non-appealable judgment.

 

SECTION 7.11   Compliance with ERISA . In addition to and without limiting the generality of Section 7.9 , (a) except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (ii) not take any action or fail to take action the result of which could reasonably be expected to result in a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and (iv) operate each Employee Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code and (b) furnish to the Administrative Agent upon the Administrative Agent’s request such additional information about any Employee Benefit Plan as may be reasonably requested by the Administrative Agent.

 

SECTION 7.12   Compliance with Material Contracts . Comply in all material respects with each Material Contract; provided , that the Borrowers or any such Subsidiary may contest the terms and conditions of any such Material Contract in good faith through applicable proceedings so long as adequate reserves are maintained in accordance with GAAP.

 

SECTION 7.13   Visits and Inspections . Permit representatives of the Administrative Agent or any Lender, from time to time upon prior reasonable notice and at such times during normal business hours, all at the expense of the Borrowers, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects; provided that excluding any such visits and inspections during the continuation of an Event of Default, the Administrative Agent shall not exercise such rights more often than one (1) time during any calendar year at the Borrowers’ expense (and no Lender may exercise any such right independently of the Administrative Agent); provided further that upon the occurrence and during the continuance of an Event of Default, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Borrowers at any time without advance notice.

 

SECTION 7.14   Additional Subsidiaries .

 

(a)   Additional Domestic Subsidiaries . Promptly after the creation or acquisition of any Domestic Subsidiary (and, in any event, within thirty (30) days after such creation or acquisition,   as such time period may be extended by the Administrative Agent in its sole discretion) (x) deliver to the Administrative Agent such original certificated Equity Interests or other certificates and stock or other transfer powers evidencing the Equity Interests of such Domestic Subsidiary and (y) cause such Domestic Subsidiary to (i) become a US Guarantor by delivering to the Administrative Agent a duly executed supplement to the US Subsidiary Guaranty Agreement or such other document as the Administrative Agent shall deem appropriate for such purpose, (ii) grant a security interest in all

 

 

Collateral (subject to the exceptions specified in the applicable Security Documents) owned by such Domestic Subsidiary by delivering to the Administrative Agent a duly executed supplement to each applicable Security Document or such other document as the Administrative Agent shall deem appropriate for such purpose and comply with the terms of each applicable Security Document, (iii) deliver to the Administrative Agent such opinions, documents and certificates referred to in Section 5.1 as may be reasonably requested by the Administrative Agent, (iv)  deliver to the Administrative Agent such updated Schedules to the Loan Documents as requested by the Administrative Agent with respect to such Domestic Subsidiary, and (v) deliver to the Administrative Agent such other documents as may be reasonably requested by the Administrative Agent in connection with the actions under this Section 7.14(a) , all in form, content and scope reasonably satisfactory to the Administrative Agent; provided , however , that this Section 7.14(a) shall only apply to a Domestic Subsidiary that would qualify as a US Guarantor.

 

(b)   Additional Material Foreign Subsidiaries . Notify the Administrative Agent promptly after any Person becomes a Material Foreign Subsidiary of any Credit Party (other than Ubiquiti Hong Kong), and promptly thereafter (and, in any event, within forty five (45) days after such notification, 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 Security Documents pledging one hundred percent (100%) of the total outstanding Equity Interests of such Material Foreign Subsidiary and a consent thereto executed by such Material Foreign Subsidiary (including, without limitation, if applicable, original certificated Equity Interests (or the equivalent thereof pursuant to the Applicable Laws and practices of any relevant foreign jurisdiction) evidencing the Equity Interests of such Material Foreign 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 Material Foreign Subsidiary to deliver to the Administrative Agent such opinions, documents and certificates substantially similar to those referred to in Section 5.1 as may be reasonably requested by the Administrative Agent and (iii) such Material Foreign Subsidiary to deliver to the Administrative Agent such updated Schedules to the Loan Documents as requested by the Administrative Agent with regard to such Material Foreign Subsidiary and (iv) such Subsidiary to deliver to the Administrative Agent such other documents as may be reasonably requested by the Administrative Agent in connection with the foregoing, all in form, content and scope reasonably satisfactory to the Administrative Agent; provided , however , that if the pledge pursuant to this Section 7.14(b) is to provide security for a US Obligation, (x) then only Equity Interests in a Material First-Tier Foreign Subsidiary shall be pledged and (y) the pledge pursuant to this Section 7.14(b) shall be limited to sixty five percent (65%) of the Equity Interests of the total outstanding Equity Interests of such Material First-Tier Foreign Subsidiary that are entitled to vote and one hundred percent (100%) of the total outstanding Equity Interests of such Material First-Tier Foreign Subsidiary that are not entitled to vote.

 

(c)   Merger Subsidiaries . Notwithstanding the foregoing, to the extent any new Subsidiary is created solely for the purpose of consummating a merger transaction pursuant to a Permitted Acquisition, and such new Subsidiary at no time holds any assets or liabilities other than any merger consideration contributed to it substantially contemporaneously with the closing of such merger transaction, such new Subsidiary shall not be required to take the actions set forth in Section 7.14(a) or (b) , as applicable, until the consummation of such Permitted Acquisition (at which time, the surviving entity of the respective merger transaction shall be required to so comply with Section 7.14(a) or (b) , as applicable, within thirty (30) days of the consummation of such Permitted Acquisition, as such time period may be extended by the Administrative Agent in its sole discretion).

 

(d)   Material Foreign Subsidiaries . If at any time the aggregate amount of assets or revenues of all Foreign Subsidiaries that are not Material Foreign Subsidiaries, determined as of the end of the most recent Fiscal Year for which financial statements have been delivered, exceed 15% of the Consolidated assets or revenues of the Parent Borrower and its Subsidiaries as of such date, the Parent Borrower shall designate additional Foreign Subsidiaries as Material Foreign Subsidiaries in order to satisfy such 15% limit and thereafter comply with the requirements of Section 7.14(b) with respect thereto.

 

(e)   Exclusions . The provisions of this Section 7.14 shall not apply to assets as to which the Administrative Agent and the Parent Borrower shall reasonably determine that the costs and burdens of obtaining a security interest therein or perfection thereof outweigh the value of the security afforded thereby.

 

 

SECTION 7.15   Use of Proceeds . The Borrowers shall use the proceeds of the Loans (a) to refinance the Indebtedness outstanding under the Existing Credit Agreement, (b) to pay fees, commissions and expenses in connection with the Transactions, (c) to repurchase Equity Interests of any Credit Party or to make dividends to the holders of shares of any Equity Interests of any Credit Party and (d) for working capital and general corporate purposes of the Parent Borrower and its Subsidiaries. No Borrower will request any Extension of Credit, and no Borrower shall directly or, to such Borrower’s knowledge, indirectly use, and shall ensure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not directly or, to such Borrower’s or such Subsidiary’s knowledge, indirectly use, the proceeds of any Extension of Credit (i) 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, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

SECTION 7.16   Further Assurances . Execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Credit Parties.  The Borrowers also agree to provide to the Administrative Agent, from time to time upon the reasonable request by the Administrative Agent, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

 

SECTION 7.17   Anti-Corruption Laws and Sanctions . The Borrowers will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrowers, their respective Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

ARTICLE VIII

 

NEGATIVE COVENANTS

 

Until all of the Obligations (other than contingent, indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements with respect thereto have been made that are satisfactory to the Issuing Lender) and the Revolving Credit Commitments terminated, the Credit Parties will not, and will not permit any of their respective Subsidiaries to:

 

SECTION 8.1   Indebtedness . Create, incur, assume or suffer to exist any Indebtedness except:

 

(a)   the Obligations;

 

(b)   Indebtedness and obligations owing under Hedge Agreements entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;

 

(c)   Indebtedness existing on the Closing Date and listed on Schedule 8.1 , and any refinancings, refundings, renewals or extensions thereof; provided that (i) 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, (ii) the final maturity date and weighted average life of such refinancing, refunding, renewal or extension shall not be prior to or shorter than that applicable to the Indebtedness immediately prior to such refinancing, refunding, renewal or extension and (iii) any refinancing, refunding, renewal or extension of any Subordinated Indebtedness shall be (A) on subordination terms at least as favorable to the Lenders and (B) not materially more restrictive on the Parent Borrower and its Subsidiaries than the Subordinated Indebtedness being refinanced, refunded, renewed or extended;

 

(d)   Indebtedness incurred in connection with Capital Leases and purchase money Indebtedness in an aggregate amount not to exceed $25,000,000 at any time outstanding;

 

(e)   Guarantees with respect to Indebtedness permitted pursuant to this Section other than subsections (f) and (j) ; provided that any Guarantees with respect to Subordinated Indebtedness permitted pursuant to subsection (h) shall be subordinated in right and time of payment to the Obligations on the same terms and conditions as such Subordinated Indebtedness;

 

(f)   unsecured intercompany Indebtedness:

 

(i)            owed by any Credit Party to another Credit Party;

 

(ii)            owed by any Credit Party to any Non-Credit Party ( provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent);

 

(iii)   owed by any Non-Credit Party to any other Non-Credit Party; and

 

(iv)   owed by any Non-Credit Party to any Credit Party to the extent permitted pursuant to Section 8.3(a)(vi) ;

 

(g)   Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business;

 

(h)   Subordinated Indebtedness; provided , that in the case of each incurrence of such Subordinated Indebtedness, (i) no Default or Event of Default shall have occurred and be continuing or would be caused by the incurrence of such Subordinated Indebtedness and (ii) the Administrative Agent shall have received satisfactory written evidence that the Parent Borrower would be in compliance with the financial covenants set forth in Section 8.13 on a pro forma basis after giving effect to the issuance of any such Subordinated Indebtedness;

 

(i)   Indebtedness under performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations or with respect to workers’ compensation claims, in each case incurred in the ordinary course of business, and reimbursement obligations in respect of any of the foregoing;

 

(j)   Indebtedness (i) of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Subsidiary of a Credit Party or Indebtedness attaching to assets that are acquired by a Credit Party, in each case after the Closing Date as the result of a Permitted Acquisition (or Indebtedness assumed by such Person pursuant to a Permitted Acquisition as a result of a merger or consolidation to effectuate a Permitted Acquisition), in an aggregate principal amount, when added to the aggregate principal amounts of Indebtedness incurred pursuant to subclause (ii) below, not to exceed at any time $15,000,000; provided that such Indebtedness existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof, or (ii) owed to the seller of any property acquired pursuant to a Permitted Acquisition in an aggregate principal amount, when added to the aggregate principal amounts of Indebtedness incurred pursuant to subclause (i) above, not to exceed $15,000,000 at any one time outstanding;

 

(k)   contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation incurred in connection with the consummation of one or more Permitted Acquisitions;

 

(l)   Indebtedness incurred in the ordinary course of business in respect of (i) Cash Management Agreements with a Cash Management Bank and (ii) other credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or cash management services of any Foreign Subsidiaries in an aggregate principal amount not to exceed $20,000,000 at any time outstanding; and

 

(m)   Indebtedness not otherwise permitted pursuant to this Section in an aggregate principal amount not to exceed $25,000,000 at any time outstanding.

 

 

SECTION 8.2   Liens . Create, incur, assume or suffer to exist, any Lien on or with respect to any of its Property, whether now owned or hereafter acquired, except:

 

(a)   Liens created pursuant to the Loan Documents (including, without limitation, Liens in favor of the Swingline Lender and/or the Issuing Lender, as applicable, on Cash Collateral granted pursuant to the Loan Documents);

 

(b)   Liens in existence on the Closing Date and described on Schedule 8.2 , and the replacement, renewal or extension thereof (including Liens incurred, assumed or suffered to exist in connection with any refinancing, refunding, renewal or extension of Indebtedness pursuant to Section 8.1(c) (solely to the extent that such Liens were in existence on the Closing Date and described on Schedule 8.2 )); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, as applicable, beyond that in existence on the Closing Date, except for products and proceeds of the foregoing;

 

(c)   Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) (i) not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP or applicable local accounting standards;

 

(d)   the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (i) are not overdue for a period of more than thirty (30) days, or if more than thirty (30) days overdue, no action has been taken to enforce such Liens and such Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP or applicable local accounting standards and (ii) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Parent Borrower or any of its Subsidiaries;

 

(e)   deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business, in each case, so long as no foreclosure sale or similar proceeding has been commenced with respect to any portion of the Collateral on account thereof;

 

(f)   encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, detract from the value of such property or impair the use thereof in the ordinary conduct of business;

 

(g)   Liens arising from the filing of precautionary UCC financing statements (or similar Liens in foreign jurisdictions) relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Borrowers and their Subsidiaries;

 

(h)   Liens securing Indebtedness permitted under Section 8.1(d) ; provided that (i) such Liens shall be created concurrently with or within 90 days after the acquisition, repair, improvement or lease, as applicable, of the related Property, (ii) such Liens do not at any time encumber any property other than the Property financed by such Indebtedness and the proceeds thereof and (iii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the price for the purchase, repair improvement or lease amount (as applicable) of such Property;

 

(i)   Liens securing judgments for the payment of money not constituting an Event of Default under Section 9.1(m) or securing appeal or other surety bonds relating to such judgments;

 

(j)   (i) Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction or similar law of a foreign jurisdiction and (ii) Liens of any depositary bank in connection with statutory, common law and contractual rights of set-off and recoupment with respect to any deposit account of the Borrowers or any Subsidiary thereof;

 

(k)   (i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property or assets relating to such contract;

 

(l)   any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement which do not (i) interfere in any material respect with the business of the Parent Borrower or its Subsidiaries or materially detract from the value of the relevant assets of the Parent Borrower or its Subsidiaries or (ii) secure any Indebtedness;

 

(m)   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;

 

(n)   Liens solely on any cash earnest money deposits made by a Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition;

 

(o)   Liens securing Indebtedness permitted under Section 8.1(j) ; provided that (i) any such Lien existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof and (ii) any such Lien secures only those obligations which it secures on the date that such Person becomes a Subsidiary or the date of such merger or the date of such acquisition; and

 

(p)   Liens not otherwise permitted hereunder on assets other than the Collateral securing Indebtedness or other obligations in the aggregate principal amount not to exceed $25,000,000 at any time outstanding.

 

Notwithstanding the foregoing, in no event shall this Section permit any Liens on (x) any Intellectual Property (other than agreements among the Parent Borrower, Ubiquiti Hong Kong and Ubiquiti Cayman existing on the Closing Date, as such agreements are amended from time to time in accordance with their terms; provided such amendments are not materially adverse to the Lenders’ interests) and (y) cash and Cash Equivalents (other than Liens permitted under Section 8.2(a) or (j) ) of the Parent Borrower or any Subsidiary.

 

SECTION 8.3   Investments . Purchase, own, invest in or otherwise acquire (in one transaction or a series of transactions), directly or indirectly, any Equity Interests, interests in any partnership or joint venture (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of Property in, any Person (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) any evidence of Indebtedness or other obligation in the nature of accounts receivable of the Parent Borrower and/or its Subsidiaries entered into in the ordinary course of business) (all the foregoing, “ Investments ”) except:

 

(a)   (i)              Investments existing on the Closing Date in Subsidiaries existing on the Closing Date;

 

(ii)            Investments existing on the Closing Date (other than Investments in Subsidiaries existing on the Closing Date) and described on Schedule 8.3 ;

 

(iii)            Investments made after the Closing Date by any Credit Party in any other Credit Party;

 

(iv)           Investments made after the Closing Date by any Non-Credit Party in any other Non-Credit Party; and

 

(v)           Investments made after the Closing Date by any Non-Credit Party in any Credit Party;

 

(vi)           Investments made after the Closing Date (other than Intellectual Property) by any Credit Party in any Non-Credit Party in an aggregate amount at any time outstanding not to exceed (A) $15,000,000 less (B) the amount of outstanding Investments made pursuant to Section 8.3(g)(ii) ; and

 

 

(vii)           Investments made after the Closing Date by any Credit Party in any newly formed Non-Credit Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law or constituting an initial capitalization of such Non-Credit Party, in each case not to exceed $250,000 per Non-Credit Party and $5,000,000 in the aggregate during the term of this Agreement;

 

(b)   Investments in cash and Cash Equivalents;

 

(c)   Investments consisting of Capital Expenditures permitted by this Agreement;

 

(d)   deposits made in the ordinary course of business to secure the performance of leases or other obligations as permitted by Section 8.2 ;

 

(e)   Hedge Agreements permitted pursuant to Section 8.1 ;

 

(f)   purchases of assets or services in the ordinary course of business;

 

(g)   Investments in the form of:

 

(i)            Permitted Acquisitions to the extent that any Person or Property acquired in such acquisition becomes a part of either Borrower or a Guarantor or becomes a Guarantor in the manner contemplated by Section 7.14 ; and

 

(ii)            Permitted Acquisitions to the extent that any Person or Property acquired in such acquisition does not become a Guarantor or a part of a Guarantor or either Borrower in an aggregate amount at any time outstanding not to exceed (A) $15,000,000 less (B) the amount of outstanding Investments made pursuant to Section 8.3(a)(vi) for such Fiscal Year;

 

(h)   Investments in the form of Restricted Payments permitted pursuant to Section 8.6 ;

 

(i)   Guarantees permitted pursuant to Section 8.1 ;

 

(j)   Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers;

 

(k)   Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers, in the ordinary course of business; provided that this paragraph (k) shall not apply to Investments of the Borrowers in any Subsidiary; and

 

(l)   Investments not otherwise permitted pursuant to this Section in an aggregate amount not to exceed $500,000 at any time; provided that, immediately before and immediately after giving pro forma effect to any such Investments, no Default or Event of Default shall have occurred and be continuing.

 

For purposes of determining the amount of any Investment outstanding for purposes of this Section 8.3 , such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

 

SECTION 8.4   Fundamental Changes . Merge, consolidate or enter into any similar combination with, or enter into any Asset Disposition of all or substantially all of its assets (whether in a single transaction or a series of transactions) with, any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except:

 

 

(a)   (i) any Wholly-Owned Subsidiary of the Parent Borrower (other than the Cayman Borrower) may be merged, amalgamated or consolidated with or into the Parent Borrower ( provided that the Parent Borrower shall be the continuing or surviving entity) or (ii) any Wholly-Owned Subsidiary of the Cayman Borrower may be merged, amalgamated or consolidated with or into the Cayman Borrower or any Guarantor ( provided that (x) in the case of a merger, amalgamation or consolidation involving the Cayman Borrower, the Cayman Borrower shall be the continuing or surviving entity and (y) in the case of a merger, amalgamation or consolidation involving a Guarantor, the Guarantor shall be the continuing or surviving entity);

 

(b)   any Non-Credit Party may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Credit Party;

 

(c)   any Subsidiary (other than the Cayman Borrower) may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Parent Borrower or any Guarantor; provided that, with respect to any such disposition by any Non-Credit Party, the consideration for such disposition shall not exceed the fair value of such assets;

 

(d)   any Non-Credit Party may dispose of all or substantially all of its assets, upon voluntary liquidation, dissolution, winding up or otherwise, to any other Non-Credit Party;

 

(e)   any Wholly-Owned Subsidiary of the Parent Borrower may merge with or into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with any acquisition permitted hereunder; provided that in the case of any merger involving a Wholly-Owned Subsidiary that is a Guarantor, (i) a Guarantor shall be the continuing or surviving entity or (ii) simultaneously with such transaction, the continuing or surviving entity shall become a Guarantor and the Borrowers shall comply with Section 7.14 in connection therewith; and

 

(f)   any Person may merge into the Parent Borrower or any of its Wholly-Owned Subsidiaries in connection with a Permitted Acquisition; provided that (i) in the case of a merger involving a Borrower or a Guarantor, the continuing or surviving Person shall be a Borrower or such Guarantor and (ii) the continuing or surviving Person shall be a Wholly-Owned Subsidiary of the Parent Borrower.

 

Notwithstanding the foregoing, at all times during the term of this Agreement, (i) Ubiquiti Hong Kong and Ubiquiti Cayman shall remain directly owned Subsidiaries of the Cayman Borrower and (ii) the Cayman Borrower shall remain a directly owned Subsidiary of the Parent Borrower.

 

SECTION 8.5   Asset Dispositions . Make any Asset Disposition except:

 

(a)   the sale of obsolete, worn-out or surplus assets, or other assets no longer used or usable in the business of the Parent Borrower or any of its Subsidiaries;

 

(b)   licenses and sublicenses of intellectual property rights in the ordinary course of business not interfering, individually or in the aggregate, in any material respect with the conduct of the business of the Parent Borrower and its Subsidiaries;

 

(c)   leases, subleases, licenses or sublicenses of real or personal property granted by the Parent Borrower or any of its Subsidiaries to others in the ordinary course of business not detracting from the value of such real or personal property or interfering in any material respect with the business of the Parent Borrower or any of its Subsidiaries;

 

(d)   Asset Dispositions in connection with transactions permitted by Section 8.4 ;

 

(e)   the sale of inventory in the ordinary course of business;

 

(f)   the transfer of assets to either Borrower or any Guarantor pursuant to any other transaction permitted pursuant to Section 8.4 ;

 

(g)   the write-off, discount, sale or other Asset Disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction;

 

(h)   the Asset Disposition of any Hedge Agreement;

 

(i)   Asset Dispositions of Investments in cash and Cash Equivalents;

 

(j)   the transfer by any Credit Party of its assets to any other Credit Party;

 

(k)   the transfer by any Credit Party of its assets (other than Intellectual Property) to any Non-Credit Party as an Investment in accordance with Section 8.3(a)(vi) ;

 

(l)   the transfer by any Non-Credit Party of its assets to any Credit Party ( provided that in connection with any new transfer, such Credit Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith at the time of such transfer);

 

(m)   the transfer by any Non-Credit Party of its assets to any other Non-Credit Party;

 

(n)   any involuntary loss, damage or destruction of property;

 

(o)   any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;

 

(p)   (i) the lapse of registered patents, trademarks, copyrights and other intellectual property rights of any Borrower and any of its Subsidiaries or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business, so long as (in each case under clauses (i) and (ii)), such lapse is not materially adverse to the interests of the Lenders; and

 

 

(q)   Asset Dispositions not otherwise permitted pursuant to this Section; provided that (i) at the time of such Asset Disposition, no Default or Event of Default shall exist or would result from such Asset Disposition, (ii) such Asset Disposition is made for fair market value and the consideration received shall be no less than 75% in cash, (iii) the aggregate fair market value of all property disposed of in reliance on this clause (q) shall not exceed $15,000,000 during any Fiscal Year and (iv) the aggregate fair market value of any Intellectual Property disposed of in reliance on this clause (q) shall not exceed $5,000,000 during any Fiscal Year.

 

SECTION 8.6   Restricted Payments . Declare or pay any dividend on, or make any payment or other distribution on account of, or purchase, redeem, retire or otherwise acquire (directly or indirectly), or set apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Credit Party or any Subsidiary thereof, or make any distribution of cash, property or assets to the holders of shares of any Equity Interests of any Credit Party or any Subsidiary thereof (all of the foregoing, the “ Restricted Payments ”) provided that:

 

(a)   so long as no Default or Event of Default has occurred and is continuing or would result therefrom,   the Parent Borrower or any of its Subsidiaries may pay dividends in shares of its own Qualified Equity Interests;

 

(b)   any Subsidiary of the Parent Borrower may make Restricted Payments to any Credit Party;

 

(c)   any Non-Credit Party may make Restricted Payments to any other Non-Credit Party (and, if applicable, to other holders of its outstanding Equity Interests on a ratable basis);

 

(d)   Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for directors, management, employees or consultants of the Parent Borrower and its Subsidiaries in an aggregate amount not to exceed $5,000,000 in any Fiscal Year; and

 

(e)   the Borrowers shall be permitted to make Restricted Payments; provided that (i) no Default or Event of Default has occurred and is continuing or would result therefrom, and (ii) the pro forma Consolidated Total Leverage Ratio based on the most recent financial statements that have been delivered pursuant to Section 7.1(a) or (b) or, from the period from the Closing Date until such financial statements are required to be delivered, the financial statements delivered to the Administrative Agent prior to the Closing Date for the period ending September 30, 2017, as applicable, calculated on a pro forma basis after giving effect to such Restricted Payment, does not exceed 3.00 to 1.00.

 

SECTION 8.7   Transactions with Affiliates . Directly or indirectly enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with (a) any officer, director, holder of any Equity Interests in, or other Affiliate of, the Parent Borrower or any of its Subsidiaries or (b) any Affiliate of any such officer, director or holder, other than:

 

(i)   transactions permitted by Sections 8.1 , 8.3 , 8.4 , 8.5 , and 8.6 ;

 

(ii)   transactions existing on the Closing Date and described on Schedule 8.7 ;

 

(iii)   transactions (x) among Credit Parties and (y) among Non-Credit Parties;

 

(iv)   other transactions in the ordinary course of business on terms at least as favorable as could be obtained by it in arm’s-length transaction with an unrelated third party, as determined in good faith by either Borrower and, if such transaction involves over $15,000,000, the board of directors (or equivalent governing body) of the Parent Borrower;

 

(v)   employment and severance arrangements (including equity incentive plans and employee benefit plans and arrangements) and indemnification agreements or arrangements with their respective directors, officers and employees in the ordinary course of business;

 

(vi)   payment of customary fees and reasonable out of pocket costs to, and indemnities for the benefit of, directors, officers and employees of the Parent Borrower and its Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Parent Borrower and its Subsidiaries; and

 

(vii)   transfer pricing arrangements among the Credit Parties and their Subsidiaries entered into in the ordinary course of business and consistent with past practices.

 

SECTION 8.8   Accounting Changes; Organizational Documents .

 

(a)   Change its Fiscal Year end, or make (without the consent of the Administrative Agent) any material change in its accounting treatment and reporting practices, except as required by GAAP or applicable local accounting standards or to change the Fiscal Year end of a Subsidiary to conform its fiscal year to that of the Parent Borrower.

 

(b)   Amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or amend, modify or change its bylaws (or other similar documents) in any manner materially adverse to the rights or interests of the Lenders.

 

SECTION 8.9   Payments and Modifications of Subordinated Indebtedness .

 

(a)   Amend, modify, waive or supplement (or permit the modification, amendment, waiver or supplement of) any of the terms or provisions of any Subordinated Indebtedness in any respect which would materially and adversely affect the rights or interests of the Administrative Agent and Lenders hereunder.

 

(b)   Cancel, forgive, make any payment or prepayment on, or redeem or acquire for value (including, without limitation, (x) by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due and (y) at the maturity thereof) any Subordinated Indebtedness, except:

 

(i)   refinancings, refundings, renewals, extensions or exchange of any Subordinated Indebtedness permitted by Section 8.1 and by any subordination provisions applicable thereto;

 

(ii)   payments and prepayments of any Subordinated Indebtedness made solely with the proceeds of Qualified Equity Interests not otherwise required to prepay Loans pursuant to Section 2.11(b)(ii) ; and

 

(iii)   the payment of interest, expenses and indemnities in respect of Subordinated Indebtedness (other than any such payments prohibited by any subordination provisions applicable thereto).

 

SECTION 8.10   No Further Negative Pledges; Restrictive Agreements .

 

(a)   Enter into, assume or be subject to any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (i) pursuant to this Agreement and the other Loan Documents, (ii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 8.1(d) ( provided that any such restriction contained therein relates only to the asset or assets financed thereby), (iii) customary restrictions contained in the organizational documents of any Non-Credit Party as of the Closing Date and (iv) customary restrictions in connection with any Permitted Lien or any document or instrument governing any Permitted Lien ( provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien).

 

(b)   Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party or any Subsidiary thereof to (i) pay dividends or other distributions with respect to its Equity Interests to any Credit Party or (ii) act as a Credit Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) Applicable Law, (C) any document or instrument governing Indebtedness incurred pursuant to Section 8.1(d) ( provided that any such restriction contained therein relates only to the asset or assets acquired in connection therewith), (D) any Permitted Lien or any document or instrument governing any Permitted Lien ( provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (E) obligations that are binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary of either Borrower, so long as such obligations are not entered into in contemplation of such Person becoming a Subsidiary, (F) customary restrictions contained in an agreement related to the sale of Property (to the extent such sale is permitted pursuant to Section 8.5 ) that limit the transfer of such Property pending the consummation of such sale, (G) customary restrictions in leases, subleases, licenses and sublicenses or asset sale agreements otherwise permitted by this Agreement so long as such restrictions relate only to the assets subject thereto and (H) customary provisions restricting assignment of any agreement entered into in the ordinary course of business.

 

SECTION 8.11   Nature of Business . Engage in any business other than the business conducted by the Parent Borrower and its Subsidiaries as of the Closing Date and business activities reasonably related or ancillary thereto or that are reasonable extensions thereof.

 

SECTION 8.12   Capital Expenditures . Permit the aggregate amount of all Capital Expenditures in any Fiscal Year to exceed $75,000,000; provided that the Credit Parties and their Subsidiaries may make additional Capital Expenditures in each such Fiscal Year in an aggregate amount not to exceed $25,000,000 if (i) the Consolidated Total Leverage Ratio based on the most recent financial statements provided pursuant to Section 7.1(a) or (b) , as applicable, calculated on a pro forma basis after giving effect to such Capital Expenditures, does not exceed 3.00 to 1.00 and (ii) no Default or Event of Default exists or would result therefrom.

 

SECTION 8.13   Financial Covenants .

 

 

(a)   Consolidated Total Leverage Ratio . As of the last day of any fiscal quarter, permit the Consolidated Total Leverage Ratio to be greater than 3.25 to 1.00.

 

(b)   Minimum Liquidity . At any time, permit Liquidity to be less than $250,000,000.

 

SECTION 8.14   Disposal of Subsidiary Interests . Permit any Domestic Subsidiary to be a non-Wholly-Owned Subsidiary except as a result of or in connection with a dissolution, merger, amalgamation, consolidation or disposition permitted by Section 8.4 or 8.5 .

ARTICLE IX

 

DEFAULT AND REMEDIES

 

SECTION 9.1   Events of Default . Each of the following shall constitute an Event of Default:

 

(a)   Default in Payment of Principal of Loans and Reimbursement Obligations . Either Borrower shall default in any payment of principal on any Loan or Reimbursement Obligation when and as due (whether at maturity, by reason of acceleration or otherwise).

 

(b)   Other Payment Default . Either Borrower shall default in the payment when and as due (whether at maturity, by reason of acceleration or otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other Obligation, and such default shall continue for a period of three (3) Business Days.

 

(c)   Misrepresentation . Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Credit Party or any Subsidiary thereof in this Agreement, in any other Loan Document, or in any document delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any respect when made or deemed made or any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Credit Party or any Subsidiary thereof in this Agreement, any other Loan Document, or in any document delivered in connection herewith or therewith that is not subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or deemed made.

 

(d)   Default in Performance of Certain Covenants . Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any covenant or agreement contained in Sections 7.1 , 7.2 (a) or (c), 7.3(a) , 7.4 , 7.14 , 7.15   or   7.17 or Article VIII .

 

(e)   Default in Performance of Other Covenants and Conditions . Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for in this Section) or any other Loan Document and such default shall continue for a period of thirty (30) days after the earlier of (i) the Administrative Agent’s delivery of written notice thereof to the Borrower Agent and (ii) a Responsible Officer of any Credit Party having obtained knowledge thereof.

 

(f)   Indebtedness Cross-Default . Any Credit Party or any Subsidiary thereof shall (i) default in the payment of any Indebtedness (other than the Loans or any Reimbursement Obligation) the aggregate principal amount (including undrawn committed or available amounts), or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount beyond the period of grace if any, provided in the instrument or agreement under which such Indebtedness was created, or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness (other than the Loans or any Reimbursement Obligation) the aggregate principal amount (including undrawn committed or available amounts), or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, any such Indebtedness to become due prior to its stated maturity (any applicable grace period having expired).

 

(g)   Attachment . If any material portion of the Parent Borrower’s, the Cayman Borrower’s or Ubiquiti Hong Kong’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within thirty (30) days or in any event not less than five (5) Business Days prior to the date of any proposed sale thereunder, or if the Parent Borrower, the Cayman Borrower or Ubiquiti Hong Kong is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any substantial part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any substantial portion of the Parent Borrower’s, the Cayman Borrower’s or Ubiquiti Hong Kong’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of the Parent Borrower’s material assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal or governmental agency, and the same is not paid within thirty (30) days after the Parent Borrower, the Cayman Borrower or Ubiquiti Hong Kong receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by the Parent Borrower, the Cayman Borrower or Ubiquiti Hong Kong, as applicable (provided that no Extensions of Credit will be required to be made during such cure period).

 

(h)   Change in Control . Any Change in Control shall occur.

 

(i)   Voluntary Bankruptcy Proceeding . Any Credit Party or any Subsidiary thereof shall (i) commence a voluntary case under any Debtor Relief Laws, (ii) file a petition seeking to take advantage of any Debtor Relief Laws, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under any Debtor Relief Laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) circulate written resolutions of the shareholders, convene a meeting of shareholders or take any corporate action, in each case, for the purpose of authorizing any of the foregoing.

 

(j)   Involuntary Bankruptcy Proceeding . A case or other proceeding shall be commenced against any Credit Party or any Subsidiary thereof in any court of competent jurisdiction seeking (i) relief under any Debtor Relief Laws, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any Credit Party or any Subsidiary thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered.

 

(k)   Failure of Agreements . Any provision of this Agreement or any provision of any other Loan Document shall for any reason cease to be valid and binding on any Credit Party or any Subsidiary thereof party thereto or any such Person shall so state in writing, or any Loan Document shall for any reason cease to create a valid and perfected first priority Lien (subject to Permitted Liens) on, or security interest in, any of the Collateral purported to be covered thereby with a fair market value in excess of $2,500,000, in each case other than in accordance with the express terms hereof or thereof.

 

(l)   ERISA Events . The occurrence of any of the following events that would reasonably be expected to have a Material Adverse Effect: (i) any Credit Party or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Sections 412 or 430 of the Code, any Credit Party or any ERISA Affiliate is required to pay as contributions thereto, or (ii) a Termination Event.

 

(m)   Judgment . A judgment or order for the payment of money which causes the aggregate amount of all such judgments or orders (net of any amounts paid or fully covered by independent third party insurance as to which the relevant insurance company does not dispute coverage) to exceed the Threshold Amount shall be entered against any Credit Party or any Subsidiary thereof by any court and such judgment or order shall continue without having been discharged, vacated or stayed for a period of thirty (30) consecutive days after the entry thereof.

 

 

SECTION 9.2   Remedies . Upon the occurrence of an Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower Agent:

 

(a)   Acceleration; Termination of Credit Facility . Terminate the Revolving Credit Commitment and declare the principal of and interest on the Loans and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including, without limitation, all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented or shall be entitled to present the documents required thereunder) and all other Obligations, to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of the Borrowers to request borrowings or Letters of Credit thereunder; provided , that upon the occurrence of an Event of Default specified in Section 9.1(i) or (j) , the Credit Facility shall be automatically terminated and all Obligations shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.

 

(b)   Letters of Credit . With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Parent Borrower shall at such time deposit in a Cash Collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such Cash Collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the other Secured Obligations on a pro rata basis. After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Secured Obligations shall have been paid in full, the balance, if any, in such Cash Collateral account shall be returned to the Parent Borrower.

 

(c)   General Remedies . Exercise on behalf of the Secured Parties all of its other rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Secured Obligations.

 

SECTION 9.3   Rights and Remedies Cumulative; Non-Waiver; etc.

 

(a)   The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between the Borrowers, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

 

(b)   Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.2 for the benefit of all the Lenders and the Issuing Lender; provided that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the Issuing Lender or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as the Issuing Lender or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.4 (subject to the terms of Section 4.6 ), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any Debtor Relief Law; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.2 and (ii) in addition to the matters set forth in clauses (b) , (c) and (d) of the preceding proviso and subject to Section 4.6 , any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

SECTION 9.4   Crediting of Payments and Proceeds . In the event that the Obligations have been accelerated pursuant to Section 9.2 or the Administrative Agent or any Lender has exercised any remedy set forth in this Agreement or any other Loan Document, all payments received on account of the Secured Obligations and all net proceeds from the enforcement of the Secured Obligations shall be applied by the Administrative Agent as follows: