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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-39157
AgileThought, Inc.
(Exact name of registrant as specified in its charter)
agil-20220630_g1.jpg
Delaware001-3915787-2302509
(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification No.)
222 W. Las Colinas Blvd. Suite 1650E, Irving, Texas
(971) 501-1140
75039
(Address of Principal Executive Offices)
(Registrant's telephone number, including area code)
(Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per shareAGIL
NASDAQ Capital Market
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per shareAGILW
NASDAQ Capital Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
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Accelerated filer
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Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   o     No  x
The registrant had outstanding 48,193,369 shares of common stock as of August 8, 2022.


TABLE OF CONTENTS
AgileThought, Inc. - Quarterly Report on Form 10-Q
June 30, 2022
Page
1


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. You can generally identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions. We have based these forward-looking statements largely on our current expectations and projections regarding future events and trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding:

•the financial and business performance of the Company;
•our ability to repay and/or continue to service our indebtedness;
•our future capital requirements and sources and uses of cash;
•our ability to obtain funding for our future operations;
•our business, expansion plans and opportunities;
•changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
•our ability to develop, maintain and expand client relationships, including relationships with our largest clients;
•changes in domestic and foreign business, market, financial, political, regulatory and legal conditions;
•our ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition and our ability to grow and manage growth profitably;
•costs related to the business combination;
•our ability to successfully identify and integrate any future acquisitions;
•our ability to attract and retain highly skilled information technology professionals;
•our ability to maintain favorable pricing, utilization rates and productivity levels for our information technology professionals and their services;
•our ability to innovate successfully and maintain our relationships with key vendors;
•our ability to provide our services without security breaches and comply with changing regulatory, legislative and industry standard developments regarding privacy and data security matters;
•our ability to operate effectively in multiple jurisdictions in Latin America and in the United States in the different business, market, financial, political, legal and regulatory conditions in the different markets;
•developments and projections relating to our competitors and industry;
•the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto;
•expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended;
•changes in applicable laws or regulations;
•the outcome of any known and unknown litigation or legal proceedings and regulatory proceedings involving us; and
•our ability to maintain the listing of our securities.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. In addition, in light of the risks and uncertainties described in the section entitled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, the matters referred to in the forward-looking statements contained in this Quarterly Report on Form 10-Q may not occur. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

AgileThought, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands USD, except share data)June 30, 2022December 31, 2021
Assets
Current assets:
Cash, cash equivalents and restricted cash$11,279 $8,640 
Accounts receivable, net38,863 31,387 
Prepaid expenses and other current assets4,943 7,490 
Current VAT receivables8,514 9,713 
Total current assets63,599 57,230 
Property and equipment, net2,931 3,107 
Goodwill and indefinite-lived intangible assets86,796 86,694 
Finite-lived intangible assets, net63,563 66,233 
Operating lease right of use assets, net6,180 6,434 
Other noncurrent assets659 1,612 
Total noncurrent assets160,129 164,080 
Total assets$223,728 $221,310 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$13,465 $20,970 
Accrued liabilities11,464 9,778 
Income taxes payable— 97 
Other taxes payable9,567 9,733 
Current portion of operating lease liabilities2,281 2,834 
Deferred revenue4,117 1,789 
Obligation for contingent purchase price9,184 8,791 
Current portion of long-term debt2,525 14,838 
Other current liabilities3,452 — 
Total current liabilities56,055 68,830 
Long-term debt, net of current portion72,137 42,274 
Deferred tax liabilities, net2,708 2,762 
Operating lease liabilities, net of current portion2,940 3,759 
Warrant liability3,093 2,137 
Other noncurrent liabilities— 6,900 
Total liabilities136,933 126,662 
Commitments and contingencies (Note 18)
Stockholders' Equity
Class A common stock $0.0001 par value, 210,000,000 shares authorized, 48,171,500 and 50,402,763 shares issued as of June 30, 2022 and December 31, 2021, respectively
5 5 
Treasury stock, 2,662,061 and 181,381 shares at cost as of June 30, 2022 and December 31, 2021, respectively
(597)(294)
Additional paid-in capital201,489 198,649 
Accumulated deficit(96,143)(86,251)
Accumulated other comprehensive loss(17,948)(17,362)
Total stockholders' equity attributable to the Company86,806 94,747 
Noncontrolling interests(11)(99)
Total stockholders' equity86,795 94,648 
Total liabilities and stockholders' equity$223,728 $221,310 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

AgileThought, Inc.
Unaudited Condensed Consolidated Statements of Operations
Three Months Ended
June 30,		Six Months Ended June 30,
(in thousands USD, except share data)2022202120222021
Net revenues$46,166 $38,940 $90,390 $76,153 
Cost of revenue30,775 26,812 61,175 53,043 
Gross profit15,391 12,128 29,215 23,110 
Operating expenses:
Selling, general and administrative expenses11,607 10,189 24,226 18,957 
Depreciation and amortization1,737 1,719 3,491 3,493 
Change in fair value of contingent consideration obligations— (2,200)— (2,200)
Change in fair value of embedded derivative liabilities— (1,112)— (2,522)
Change in fair value of warrant liability478 — 956 — 
(Gain) loss on debt extinguishment(950)— 6,186 — 
Equity-based compensation expense2,019 — 2,537 12 
Restructuring expenses162 12 915 22 
Other operating expenses, net575 472 1,196 1,107 
Total operating expense15,628 9,080 39,507 18,869 
(Loss) income from operations(237)3,048 (10,292)4,241 
Interest expense(2,779)(3,724)(6,092)(8,052)
Other (expense) income(514)1,723 6,807 415 
(Loss) income before income taxes(3,530)1,047 (9,577)(3,396)
Income tax (benefit) expense (28)499 223 (109)
Net (loss) income(3,502)548 (9,800)(3,287)
Net income attributable to noncontrolling interests43 137 92 167 
Net (loss) income attributable to the Company$(3,545)$411 $(9,892)$(3,454)
(Loss) earning per share (Note 16):
Basic and Diluted Class A common stock$(0.08)$0.01 $(0.21)$(0.10)
Weighted average number of shares:
Basic and Diluted Class A common stock46,043,419 34,557,480 46,028,557 34,557,480 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

AgileThought, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income
Three Months Ended
June 30,		Six Months Ended June 30,
(in thousands USD)2022202120222021
Net (loss) income$(3,502)$548 $(9,800)$(3,287)
Actuarial (gain) loss(1)— 3 — 
Foreign currency translation adjustments(934)982 (593)764 
Comprehensive (loss) income(4,437)1,530 (10,390)(2,523)
Less: Comprehensive income attributable to noncontrolling interests42 104 88 139 
Comprehensive (loss) income attributable to the Company$(4,479)$1,426 $(10,478)$(2,662)
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

AgileThought, Inc.
Unaudited Condensed Consolidated Statements of Stockholders' Equity
Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total
Stockholders'
Equity
(in thousands USD, except share data)SharesAmountSharesAmount
December 31, 2021
50,402,763 $5 181,381 $(294)$198,649 $(86,251)$(17,362)$(99)$94,648 
Net (loss) income— — — — — (6,347)— 49 (6,298)
Equity-based compensation87,999 — — — 518 — — — 518 
Employee withholding taxes paid related to net share settlements(17,359)— 17,359 (97)97 — — — — 
Redemption of public warrants20 — — — — — — — — 
Other comprehensive expense— — — — — — 4 — 4 
Foreign currency translation adjustments— — — — — — 344 (3)341 
March 31, 202250,473,423 5 198,740 (391)199,264 (92,598)(17,014)(53)89,213 
Net (loss) income— — — — — (3,545)— 43 (3,502)
Equity-based compensation161,398 — — — 2,019 — — — 2,019 
Employee withholding taxes paid related to net share settlements(40,117)— 40,117 (206)206 — — — — 
Monroe share settlement(2,423,204)— 2,423,204 — — — — — — 
Other comprehensive expense— — — — — — (1)— (1)
Foreign currency translation adjustments— — — — — — (933)(1)(934)
June 30, 202248,171,500 $5 2,662,061 $(597)$201,489 $(96,143)$(17,948)$(11)$86,795 

Common StockTreasury StockAdditional
Paid-in
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Noncontrolling
Interests		Total
Stockholders'
Equity
(in thousands USD, except share data)SharesAmountSharesAmount
December 31, 202034,557,480 $3 151,950 $— $101,494 $(66,181)$(16,981)$(137)$18,198 
Net (loss) income— — — — — (3,865)— 30 (3,835)
Equity-based compensation
— — — — 12 — — — 12 
Foreign currency translation adjustments— — — — — — (223)5 (218)
March 31, 202134,557,480 3 151,950 — 101,506 (70,046)(17,204)(102)14,157 
Net income— — — — — 411 — 137 548 
Foreign currency translation adjustments— — — — — — 1,015 (33)982 
June 30, 202134,557,480 $3 151,950 $— $101,506 $(69,635)$(16,189)$2 $15,687 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

AgileThought, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30,
(in thousands USD)20222021
Operating activities
Net loss$(9,800)$(3,287)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion of interest from convertible notes1,242 2,410 
Gain on forgiveness of debt(7,280)(1,306)
Loss on debt extinguishment6,186 — 
Provision for (recoveries of) bad debt expense21 (46)
Equity-based compensation2,537 12 
Right-of-use asset amortization1,549 1,575 
Foreign currency remeasurement6 (2,382)
Deferred income tax provision(94)18 
Obligations for contingent purchase price362 (1,832)
Embedded derivative liabilities — (2,522)
Warrant liability956 — 
Amortization of debt issuance costs1,936 535 
Depreciation and amortization3,491 3,493 
Changes in assets and liabilities:
Accounts receivable(7,189)(9,102)
Prepaid expenses and other current assets2,507 (3,452)
Accounts payable(7,753)11,724 
Accrued liabilities1,221 2,226 
Deferred revenue2,136 775 
Current VAT receivables and other taxes payable1,234 (1,034)
Income taxes payable(97)568 
Operating lease liabilities(1,666)(1,569)
Net cash used in operating activities(8,495)(3,196)
Investing activities
Purchase of property and equipment(394)(494)
Net cash used in investing activities(394)(494)
Financing activities
Proceeds from loans58,000 673 
Repayments of borrowings(37,193)(22,665)
Payment of debt issuance costs(8,966)— 
Cash paid for shares withheld from a grantee to satisfy tax withholding(303)— 
Proceeds from capital contributions— 20,000 
Net cash provided by (used in) financing activities11,538 (1,992)
Effect of exchange rates on cash(10)60 
Net increase (decrease) in cash and cash equivalents2,639 (5,622)
Cash, cash equivalents and restricted cash at beginning of the period8,640 9,432 
Cash, cash equivalents and restricted cash at end of the period$11,279 $3,810 
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements

AgileThought, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 – Organization and Basis of Consolidation and Presentation
Organization
AgileThought, Inc. (“AgileThought”) is a global provider of agile-first, end-to-end digital transformation services in the North American market using on-shore and near-shore delivery. The Company’s headquarters is in Irving, Texas. AgileThought’s Class A common stock is listed on the NASDAQ Capital Market (“NASDAQ”) under the symbol “AGIL.”
On August 23, 2021 (the “Closing Date”), LIV Capital Acquisition Corp. (“LIVK”), a special purpose acquisition company, and AgileThought (“Legacy AgileThought”) consummated the transactions contemplated by the definitive agreement and plan of merger (“Merger Agreement”), dated May 9, 2021 (“Business Combination”). Pursuant to the terms, Legacy AgileThought merged with and into LIVK, whereupon the separate corporate existence of Legacy AgileThought ceased, with LIVK surviving such merger (the “Surviving Company”). On the Closing Date, the Surviving Company changed its name to AgileThought, Inc. (the “Company”, “AgileThought”, “we” or “us”).
Basis of Consolidation and Presentation
The Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). For interim financial reporting not all disclosures normally required in annual Consolidated Financial Statements prepared in accordance with U.S. GAAP are required.
The Business Combination was accounted for as a reverse capitalization in accordance with U.S. GAAP (the “Recapitalization”). Under this method of accounting, LIVK is treated as the acquired company and Legacy AgileThought is treated as the accounting acquirer for financial reporting purposes, resulting in no change in the carrying amount of the Company's assets and liabilities. The consolidated assets, liabilities and results of operations prior to the Recapitalization are those of Legacy AgileThought. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination.
In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of normal and recurring nature, have been made for the interim periods reported. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. The balance sheet as of December 31, 2021 has been derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2021 that are included in our annual report on Form 10-K filed with the SEC on March 31, 2022 ("Annual Report"). All intercompany transactions and balances have been eliminated in consolidation. The ownership interest of noncontrolling investors of the Company's subsidiaries are recorded as noncontrolling interest.
The Company evaluated subsequent events, if any, that would require an adjustment to the Company's Unaudited Condensed Consolidated Financial Statements or require disclosure in the notes to the Unaudited Condensed Consolidated Financial Statements through the date of issuance of the condensed consolidated financial statements. Where applicable, the notes to these Unaudited Condensed Consolidated Financial Statements have been updated to discuss all significant subsequent events which have occurred.


Note 2 – Summary of Significant Accounting Policies
Refer to Note 2, Summary of Significant Accounting Policies, within our annual Consolidated Financial Statements included in our Annual Report for the full listing of significant accounting policies.
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements. Further, certain estimates and assumptions include the direct and indirect impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations. We make significant estimates with respect to intangible assets, goodwill, depreciation, amortization, income taxes, equity-based compensation, contingencies, fair value of assets and liabilities acquired, obligations related to contingent consideration in connection with business combinations, fair value of embedded derivative liabilities, and fair value of warrant liability. To the extent the actual results differ materially from these estimates and assumptions, the Company’s future financial statements could be materially affected.
Accounting Pronouncements
The authoritative bodies release standards and guidance, which are assessed by management for impact on the Company’s Unaudited Condensed Consolidated Financial Statements. Accounting Standards Updates (“ASUs”) not listed below were assessed and determined to be not applicable to the Company’s Unaudited Condensed Consolidated Financial Statements.
The following standards were recently adopted by the Company:
•In May 2021, the FASB issued ASU 2021-04, Earnings Per Share, Debt-Modifications and Extinguishments, Compensation-Stock Compensation, and Derivatives and Hedging-Contracts in Entity’s Own Equity. This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU is effective for fiscal years beginning after December 15, 2021 on a prospective basis. Early adoption is permitted for all entities, including adoption in an interim period. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements.
•In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Asset and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers. This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. This standard is effective for annual periods beginning after December 15, 2022, including interim periods therein, with early adoption permitted. The ASU was adopted by the Company on January 1, 2022, resulting in no material impact to the Unaudited Condensed Consolidated Financial Statements.
Note 3 – Business Combination
As discussed in Note 1, Organization and Basis of Consolidation and Presentation, the Company consummated the Business Combination on August 23, 2021, pursuant to the Merger Agreement dated May 9, 2021. In connection with the Business Combination, the following occurred:
• On August 20, 2021, LIVK changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware by deregistering as an exempted company in the Cayman Islands and domesticating and continuing as a corporation formed under the laws of the State of Delaware. As a result, each of LIVK’s issued and outstanding Class A ordinary shares and Class B ordinary shares automatically converted by operation of law, on a one-for-one basis, into shares of Class A common stock. Similarly, all of LIVK’s outstanding warrants became warrants to acquire shares of Class A common Stock.
•LIVK entered into subscription agreements with certain investors pursuant to which such investors collectively subscribed for 2,760,000 shares of the Company's Class A common stock at $10.00 per share for aggregate proceeds of $27,600,000 (the “PIPE Financing”).


•Holders of 7,479,065 of LIVK’s Class A ordinary shares originally sold in LIVK's initial public offering, or 93% of the shares with redemption rights, exercised their right to redeem their shares for cash at a redemption price of approximately $10.07 per share, for an aggregate redemption amount of $75.3 million.
•The Business Combination was effected through the merger of Legacy AgileThought with and into LIVK, whereupon the separate corporate existence of Legacy AgileThought ceased and LIVK was the surviving corporation.
•On the Closing Date, the Company changed its name from LIV Capital Acquisition Corp. to AgileThought, Inc.
•An aggregate of 34,557,480 shares of Class A common stock were issued to holders of Legacy AT common stock and 2,000,000 shares of Class A common stock were issued to holders of Legacy AT preferred stock as merger consideration.
•After adjusting its embedded derivative liabilities to fair value, upon conversion of the preferred stock, the Company's embedded derivative liabilities were extinguished during the third quarter of 2021. Refer to Note 4, Fair Value Measurements, for additional information.
•The Company's private placement warrants meet the criteria for liability classification. For additional information on our warrants, refer to Note 14, Warrants, and Note 4, Fair Value Measurements.
The following table reconciles the elements of the Business Combination to the additional paid-in capital in the Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2021:
(in thousands USD)Business Combination
Cash - LIVK trust and cash, net of redemptions$5,749 
Cash - PIPE Financing27,600 
Less: Transaction costs(13,033)
Net proceeds from the Business Combination20,316 
Less: Initial fair value of warrant liabilities recognized in the Business Combination(15,123)
Equity classification of Public Warrants8,292 
Surrender of related party receivables(1,359)
Debt conversion38,120 
Conversion of mezzanine equity(a)
15,594 
Net adjustment to total equity from the Business Combination$65,840 
_________________
(a)Relates to the transfer from mezzanine equity to permanent equity of the preferred contribution received from LIV Capital on February 2, 2021, which was considered part of the PIPE financing and upon the transaction close, was reclassified to permanent equity of the Company.

The number of shares of Class A common stock issued immediately following the consummation of the Business Combination:
Number of Shares
Class A ordinary shares of LIVK outstanding prior to the Business Combination8,050,000 
Less: redemption of LIVK's Class A ordinary shares(7,479,065)
     Shares of LIVK's Class A ordinary shares570,935 
Shares held by LIVK's sponsor and its affiliates2,082,500 
Shares issued in the PIPE Financing2,760,000 
Shares issued to convert Legacy AgileThought's preferred stock to Class A common stock2,000,000 
Shares issued to Legacy AgileThought's common stock holders34,557,480 
Total shares of Class A common stock immediately after the Business Combination41,970,915 


Note 4 – Fair Value Measurements
The carrying amount of assets and liabilities including cash, cash equivalents, and restricted cash, accounts receivable and accounts payable approximated their fair value as of June 30, 2022 and December 31, 2021, due to the relative short maturity of these instruments.
Long-term Debt
Our debt is not actively traded and the fair value estimate is based on discounted estimated future cash flows or a fair value in-exchange assumption, which are significant unobservable inputs in the fair value hierarchy. As such, these estimates are classified as Level 3 in the fair value hierarchy.
The following table summarizes our instruments where fair value differs from carrying value:
Fair Value
Hierarchy Level		June 30, 2022December 31, 2021
(in thousands USD)Carry AmountFair ValueCarry AmountFair Value
Bank credit agreement
Level 3$— $— $31,882 $31,897 
New Second Lien Facility
Level 317,570 16,418 16,120 16,214 
Blue Torch Credit FacilityLevel 355,000 52,302 — — 
The above table excludes our revolving credit facilities, subordinated promissory note payable, contingent purchase price obligation, and subordinated zero-coupon loan as these balances approximate fair value due to the short-term nature of our borrowings. The above table also excludes our Paycheck Protection Program loans (“PPP loans”) as the carrying value of the Company’s PPP loans approximates fair value based on the current yield for debt instruments with similar terms. Refer to Note 8, Long-term Debt, for additional information.

Warrant Liability
As of June 30, 2022, the Company has private placement warrants, which are liability classified, as discussed in Note 14, Warrants. The Company's private placement warrants are classified as Level 3 of the fair value hierarchy due to use of significant inputs that are unobservable in the market. Private placement warrants are fair valued using the Black-Scholes model, which require a risk-free rate assumption based upon constant-maturity treasury yields. Other significant inputs and assumptions in the model are the stock price, exercise price, volatility, and term or maturity. The volatility input was determined using the historical volatility of comparable publicly traded companies which operate in a similar industry or compete directly against the Company.
The following table presents the changes in the fair value of the private warrant liability at June 30, 2022:
(in thousands USD)Private Placement Warrants
Beginning balance, January 1, 2022$2,137 
Change in valuation inputs and other assumptions 956 
Ending balance, June 30, 2022
$3,093 


Note 5 – Balance Sheet Details
The following table provides detail of selected balance sheet items:
(in thousands USD)June 30,
2022		December 31,
2021
Cash and cash equivalents$11,081 $8,463 
Restricted cash198 177 
Total cash, cash equivalents and restricted cash$11,279 $8,640 
(in thousands USD)June 30,
2022		December 31,
2021
Accounts receivables$21,045 $19,173 
Unbilled accounts receivables17,145 11,716 
Other receivables883 686 
Allowance for doubtful accounts(210)(188)
Total accounts receivable, net$38,863 $31,387 
(in thousands USD)June 30,
2022		December 31,
2021
Income tax receivables$2,697 $2,369 
Prepaid expenses and other current assets2,246 5,121 
Total prepaid expenses and other current assets$4,943 $7,490 

(in thousands USD)June 30,
2022		December 31,
2021
Accrued wages, vacation & other employee related items$4,843 $2,387 
Accrued interest861 381 
Accrued incentive compensation1,409 654 
Receipts not vouchered3,674 5,872 
Accrued liabilities - Related Party— 17 
Other accrued liabilities677 467 
Total accrued liabilities$11,464 $9,778 
The following table is a rollforward of the allowance for doubtful accounts:
Six Months Ended June 30,
(in thousands USD)20222021
Beginning balance, January 1$188 $267 
Charges (recoveries) to expense21 (46)
Foreign currency translation1 2 
Ending balance$210 $223 

The Company carries its obligations for contingent purchase price at fair value. The Company recorded the 2019 acquisition-date fair value of a contingent liability based on the likelihood of contingent earn-out payments subject to the underlying agreement terms. At December 31, 2021, the obligation relates to a known and fixed amount due based on and is no


longer a contingent obligation recorded at fair value. The amount due accrues interest at 12%. The following table provides a roll-forward of the obligation for the contingent purchase price due to the seller:

(in thousands USD)Contingent Purchase Price
Opening balance, December 31, 2021
$8,791 
Cash payments— 
Accrued interest on the contingent consideration362 
Effect of exchange rate fluctuations31 
Ending balance, June 30, 2022
9,184 
Less: Current portion9,184 
Obligation for contingent purchase price, net of current portion$— 
Note 6 – Property and Equipment, Net
Property and equipment, net consist of the following:
(in thousands USD)June 30,
2022		December 31,
2021
Computer equipment$4,139 $4,210 
Leasehold improvements2,217 2,179 
Furniture and equipment1,354 1,691 
Computer software2,787 2,240 
Transportation equipment27 55 
10,524 10,375 
Less: accumulated depreciation(7,593)(7,268)
Property and equipment, net$2,931 $3,107 
Depreciation expense was $0.1 million and $0.2 million for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $0.4 million for the six months ended June 30, 2022 and 2021, respectively. The Company did not recognize any impairment expense related to property and equipment during the six months ended June 30, 2022 or 2021.
Note 7 – Goodwill and Intangible Assets, Net
The Company performs an assessment each year to test goodwill and indefinite-lived intangible assets for impairment, or more frequently in certain circumstances where impairment indicators arise.
The following table presents changes in the goodwill balances as of June 30, 2022:
(in thousands USD)LATAMUSATotal
December 31, 2021$39,651 $30,694 $70,345 
Foreign currency translation62 — 62 
June 30, 2022$39,713 $30,694 $70,407 
Summary of our finite-lived intangible assets is as follows:
As of June 30, 2022
(in thousands USD)Gross Carrying AmountCurrency
Translation
Adjustment		Accumulated AmortizationNet Carrying AmountWeighted Average Remaining Useful Life (Years)
Customer relationships$89,915 $(480)$(26,726)62,709 11.2
Tradename1,234 (15)(365)854 3.3
Total$91,149 $(495)$(27,091)$63,563 11.1


As of December 31, 2021
(in thousands USD)Gross Carrying AmountCurrency
Translation
Adjustment		Accumulated Amortization Net Carrying AmountWeighted Average Remaining Useful Life (Years)
Customer relationships$89,915 $(973)(23,669)$65,273 11.8
Tradename1,234 (31)(243)960 3.9
Total$91,149 $(1,004)$(23,912)$66,233 11.7
In 2021, the Company changed the estimated life of a certain tradenames from indefinite to finite-lived and began amortizing it over the average remaining economic life of five years. See Note 2, Summary of Significant Accounting Policies. No impairment charges were recognized related to finite-lived intangible assets during the three and six months ended June 30, 2022 and 2021.
The Company’s indefinite-lived intangible assets relate to trade names acquired in connection with business combinations. The trade names balance was $16.4 million and $16.3 million as of June 30, 2022 and December 31, 2021, respectively. No impairment charges were recognized related to infinite-lived intangible assets during the three and six months ended June 30, 2022 and 2021.


Note 8 – Long-term Debt
Long-term debt as of June 30, 2022 and December 31, 2021 consists of the following:
(in thousands USD)June 30,
2022		December 31,
2021
Borrowings under revolving credit agreement, principal due May 27, 2026
$3,000 $— 
Borrowings under term loan, principal due May 27, 2026
55,000 — 
Unamortized debt issuance costs(a)
(4,927)— 
Blue Torch Credit Facility, net of unamortized debt issuance costs
53,073 — 
Borrowings under bank revolving credit agreement, principal due Nov. 10, 2023
— 5,000 
Borrowings under bank credit agreement, principal due Nov. 10, 2023
— 31,882 
Unamortized debt issuance costs and debt premium(a)
— (6,915)
Borrowing under bank credit agreements, net of unamortized debt issuance costs
— 29,967 
Paycheck Protection Program loans, 1% interest, due May 2, 2025
280 7,673 
Subordinated promissory note payable with a related party, 20% effective December 21, 2021, principal due January 31, 2023
673 673 
Subordinated debt, guaranteed by a related party, principal due January 26, 20233,700 3,700 
Unamortized debt issuance costs(a)
(68)(76)
Subordinated debt, guaranteed by a related party, net of unamortized debt issuance costs3,632 3,624 
Borrowings under convertible note payable with a related party, 11% interest capitalized every three months, principal due September 15, 2026
3,226 3,037 
Borrowings under convertible note payable with a related party, 17.41% interest capitalized every three months, principal due September 15, 2026
6,543 5,894 
Borrowings under convertible note payable with a related party, 11% interest capitalized every three months, principal due June 15, 2023
3,524 3,336 
Borrowings under convertible note payable with a related party, 17.41% interest capitalized every three months, principal due June 15, 2023
4,277 3,853 
Unamortized debt issuance costs(a)
(566)(945)
New Second Lien Facility, net of unamortized debt issuance costs17,004 15,175 
Total debt
74,662 57,112 
Less: current portion of debt
2,525 14,838 
Long-term debt, net of unamortized debt issuance costs and current portion
$72,137 $42,274 
    
_________________
(a)Debt issuance costs and debt premium are presented as a reduction of the Company’s debt in the Unaudited Condensed Consolidated Balance Sheets. $1.9 million and $0.5 million of debt issuance cost amortization was charged to interest expense for the six months ended June 30, 2022 and 2021.

Blue Torch Credit Facility
On May 27, 2022, the Company entered into a financing agreement ("Blue Torch Credit Facility") by and among the Company, AN Global LLC, certain subsidiaries of the Company, as guarantors (the “Guarantors”), the financial institutions party thereto as lenders, and Blue Torch Finance LLC (“Blue Torch”), as the administrative agent and collateral agent. The Blue Torch Credit Facility is secured by substantially all of the Company’s and the Guarantors’ properties and assets and provides for a term loan of $55.0 million and a revolving credit facility with an aggregate principal limit not to exceed $3.0 million at any time outstanding. On May 27, 2022, the Company borrowed the full $55.0 million under the term loan. On June 28, 2022, the Company borrowed $3.0 million under the revolving credit facility. The Company has agreed to make quarterly payments on the term loan of approximately $0.7 million starting December 31, 2023. The remaining principal balance under the term loan and any loans drawn under the revolving credit facility will be due on May 27, 2026, the maturity date. The revolving credit facility bears a 2.00% annual usage fee on the undrawn portion of the facility. Interest is paid


quarterly for both loans, and is calculated based on the Adjusted Term SOFR (the three-month Term Secured Overnight Financing Rate, plus 0.26161%) plus a margin of 7.0% to 9.0% depending on the Total Leverage Ratio. Interest on each loan shall be payable on the last day of the then effective interest period applicable to such loan and at maturity. The Company recognized $5.0 million in debt issuance costs.

On August 10, 2022, the Company entered into a waiver and amendment to the Blue Torch Credit Facility to provide for an extension of the period of time which the Company has to satisfy certain post-closing obligations under the Blue Torch Credit Facility and an acceleration of the maturity of the loans made by the lenders thereunder to May 1, 2023 if the Company does not obtain regulatory approval to convert certain loans outstanding under the New Second Lien Facility into common stock of the Company.

Credit Agreements

In 2018, the Company entered into a revolving credit agreement with Monroe Capital Management Advisors LLC that permits the Company to borrow up to $1.5 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing limit to $5.0 million. Also in 2018, the Company entered into a term loan credit agreement with Monroe Capital Management Advisors LLC that permits the Company to borrow up to $75.0 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing amount to $98.0 million. Interest on the revolving credit agreement and term loan agreement (“First Lien Facility”) are paid monthly and calculated as LIBOR plus a margin of 8.0% to 9.0%, based on the Total Leverage Ratio as calculated in the most recent Compliance Certificate. An additional 2.0% interest may be incurred during periods of loan covenant default.
On March 22, 2021, the Company used $20.0 million from proceeds of issuance of preferred stock to partially pay the First Lien Facility. Refer to Note 15, Stockholders’ Equity, for additional information on issuance of preferred stock.
On June 24, 2021, an amendment was signed to modify the debt covenants for the periods June 30, 2021 and thereafter. In addition to the covenant modifications, the amendment also established the deferral of the monthly $1.0 million principal payments previously due in April and May, along with the $1.0 million payments due in June and July to September 30, 2021. As a result, the regular quarterly principal installments resumed, and the First Lien lenders charged a $4.0 million fee paid upon the end of the term loan in exchange for the amended terms. The amendment resulted in a debt modification, thus the fees payable to the First Lien lenders were capitalized and were being amortized over the remaining life of the First Lien Facility.
From September 30, 2021 to October 29, 2021, the Company entered into various amendments to extend the due date of the $4.0 million in principal payments previously due September 30, 2021 to November 19, 2021.
On November 29, 2021, the Company made a $20.0 million principal prepayment, which included the $4.0 million principal payment originally due September 30, 2021. The Company paid with proceeds from the New Second Lien Facility (defined below). Furthermore, on December 29, 2021, the Company issued 4,439,333 shares of Class A Common Stock to the administrative agent for the First Lien Facility (the “First Lien Shares”), which subject to certain terms and regulatory restrictions, may sell the First Lien Shares upon the earlier of August 29, 2022 and an event of default and apply the proceeds to the outstanding balance of the loan. In addition, the Company agreed to issue warrants to the administrative agent to purchase $7.0 million worth of the Company’s Class A Common Stock for nominal consideration. The warrants will be issued on the earlier of full repayment of outstanding deferred fees or August 29, 2023. In addition, the Company may be required to pay the First Lien lenders cash to the extent that we cannot issue some or all of the warrants due to regulatory restrictions. The First Lien lenders charged an additional $2.9 million fee paid upon the end of the term loan in exchange for the amended terms.
On November 22, 2021, the Company entered into an amendment that required sixty percent (60%) of proceeds from equity issuances be used to repay the outstanding balance on the First Lien Facility. On December 27, 2021, the Company closed a follow on stock offering resulting in $21.8 million of net proceeds, of which $13.7 million was used as payment of the outstanding principal and interest balances for the First Lien Facility.
On March 30, 2022, the Company entered into an amendment with the First Lien and Second Lien Facility Lenders to waive the Fixed Charge Coverage Ratio for March 31, 2022. In addition, the Total Leverage Ratio covenant for the quarterly period of March 31, 2022 was reset. As consideration for entering into this amendment, the Company agreed to pay the First Lien Facility’s administrative agent a fee equal to $0.5 million. The fee would be fully earned as of March 30, 2022 and due and payable upon the end of the term loan. However, the agreement provided that the fee shall be waived in its entirety if final payment in full occurred prior to or on May 30, 2022. This modification triggered by this new amendment was determined to be substantially different to the old instrument, therefore the modification was accounted for as an extinguishment and the debt


instrument was adjusted to fair value as of the March 31, 2022. The Company recognized a loss on debt extinguishment of $7.1 million in the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2022.

On May 27, 2022, the Company paid approximately $40.2 million to settle the outstanding principal, interest, and a portion of the $6.9 million deferred fees related to amendments on the First Lien Facility. The First Lien Lenders waived the $0.5 million fee related to the March 30, 2022 amendment and returned 2,423,204 First Lien Shares as part of the deferred fees settlement. Beginning on August 29, 2022 the First Lien Lenders may sell the remaining First Lien Shares and apply 100% of the net proceeds to the outstanding fees obligation. The First Lien Lenders shall return any of the remaining unsold First Lien Shares upon full payment of the remaining fees. At June 30, 2022, total deferred fees payable on or before May 25, 2023, including fees recognized from prior amendments, totaled $3.5 million. These fees are recognized in Other current liabilities and Other noncurrent liabilities in the Unaudited Condensed Consolidated Balance Sheet at June 30, 2022 and December 31, 2021, respectively. The Company recognized a gain on debt extinguishment of $1.0 million for the three months ended June 30, 2022 and a loss on debt extinguishment of $6.2 million for the six months ended June 30, 2022.

Second Lien Facility
On July 18, 2019, the Company entered into separate credit agreements with Nexxus Capital and Credit Suisse (“the Creditors”) that permitted the Company to borrow $12.5 million from each bearing 13.73% interest. On January 31, 2020, the agreements were amended to increase the borrowing amount by $2.05 million under each agreement. Interest was capitalized every six months and payable when the note was due. Immediately prior to the Business Combination, the Creditors exercised their option to convert their combined $38.1 million of debt outstanding (including interest) into 115,923 shares of the Company's Class A ordinary shares, which were converted into the Company's Class A common stock as a result of the Business Combination. Concurrently with the conversion, the Company amortized the remaining $0.1 million of unamortized debt issuance costs and recognized incremental interest expense in the Unaudited Condensed Consolidated Statements of Operations.
New Second Lien Facility
On November 22, 2021, the Company entered into a new Second Lien Facility (the “New Second Lien Facility”) with Nexxus Capital and Credit Suisse (both of which are existing AgileThought shareholders and have representation on AgileThought’s Board of Directors), Manuel Senderos, Chief Executive Officer and Chairman of the Board of Directors, and Kevin Johnston, Global Chief Operating Officer. The New Second Lien Facility provides for a term loan facility in an initial aggregate principal amount of approximately $20.7 million, accruing interest at a rate per annum from 11.00% for the US denominated loan and 17.41% for the Mexican Peso denominated Loan. The New Second Lien Facility has an original maturity date of March 15, 2023. If the Blue Torch Credit Facility, as the first lien facility, remains outstanding on December 15, 2022, the maturity date of the New Second Lien Facility will be extended to May 10, 2024. As the Company does not intend to pay the outstanding balance under the Blue Torch Credit Facility prior to the maturity of the New Second Lien Facility on March 15, 2023, the amounts outstanding under the New Second Lien Facility are classified as noncurrent in the Unaudited Condensed Consolidated Balance Sheet. The New Second Lien Facility also includes an option for the Company to extend the maturity date an additional 18 months. The Company recognized $0.9 million in debt issuance costs with the issuance.
Each lender under the New Second Lien Facility has the option to convert all or any portion of its outstanding loans into AgileThought Class A Common Stock on or after December 15, 2022 or earlier, upon our request, at a conversion price equal to the closing price of one share of our Class A Common Stock on the trading day immediately prior to the conversion date. The amounts outstanding under the New Second Lien Facility will only convert into up to 2,098,545 shares of our Class A Common Stock and will only convert at a price per share equal to the then-current market value. On December 27, 2021, Manuel Senderos and Kevin Johnston exercised the conversion options for their respective loan amounts of $4.5 million and $0.2 million, respectively. See Note 15, Stockholders’ Equity, for additional information.
On May 27, 2022, the Company entered into an amendment and ratified the New Second Lien Facility and replaced references to the First Lien Facility with the Blue Torch Credit Facility.

On August 10, 2022, the Company entered into an amendment to the New Second Lien Facility to provide for the covenants and certain other provisions of the New Second Lien Facility to be made consistent with those in the Blue Torch Credit Facility (and in certain cases for those covenants to be made less restrictive than those in the Blue Torch Credit Facility). In addition, the amendment extends the maturity date of the Tranche A loans thereunder to September 15, 2026, and provides for potential increases, that step up over time from one percent to five percent, in the interest rate applicable to the Tranche A loans. The amendment also extends the maturity date of the Tranche B loans thereunder to June 15, 2023, and provides for a


mandatory conversion of the Tranche B loans thereunder, including interest and fees, into equity securities of the Company upon the maturity of said loans.
Paycheck Protection Program Loans
On April 30, 2020 and May 1, 2020, the Company received PPP loans through four of its subsidiaries for a total amount of $9.3 million. The PPP loans bear a fixed interest rate of 1% over a two-year term, are guaranteed by the United States federal government, and do not require collateral. The loans may be forgiven, in part or whole, if the proceeds are used to retain and pay employees and for other qualifying expenditures. The Company submitted its forgiveness applications to the Small Business Administration (“SBA”) between November 2020 and January 2021. The monthly repayment terms were established in the notification letters with the amount of loan forgiveness. On December 25, 2020, $0.1 million of a $0.2 million PPP loan was forgiven. On March 9, 2021, $0.1 million of a $0.3 million PPP loan was forgiven. On June 13, 2021, $1.2 million of a $1.2 million PPP loan was forgiven. On January 19, 2022, $7.3 million of a $7.6 million PPP loan was forgiven resulting in a remaining PPP Loan balance of $0.3 million of which $0.1 million is due within the next year. The remaining payments will be made quarterly until May 2, 2025. All loan forgiveness was recognized in Other (expense) income, net of the Unaudited Condensed Consolidated Statements of Operations.
Subordinated Promissory Note
On June 24, 2021, the Company entered into a credit agreement with AGS Group LLC (“AGS Group”) for a principal amount of $0.7 million. The principal amount outstanding under this agreement matured on December 20, 2021 (“Original Maturity Date”) and was extended until May 19, 2022 (“Extended Maturity Date”). Interest is due and payable in arrears on the Original Maturity Date at a 14.0% per annum until and including December 20, 2021 and at 20.0% per annum from the Original Maturity Date to the Extended Maturity Date calculated on the actual number of days elapsed. The Subordinated Promissory Note can only be repaid after the settlement of the Blue Torch Credit Facility. On August 4, 2022, the Company entered into an amendment with the AGS Group to extend the maturity date of the Subordinated Debt to January 31, 2023.
Exitus Capital Subordinated Debt
On July 26, 2021, the Company agreed with existing lenders and Exitus Capital (“Subordinated Creditor”) to enter into a zero-coupon subordinated loan agreement with Exitus Capital in an aggregate principal amount equal to $3.7 million (“Subordinated Debt”). No periodic interest payments are made and the loan was due on January 26, 2022, with an option to extend up to two additional six month terms. Net loan proceeds totaled $3.2 million, net of $0.5 million in debt discount. Payment of any and all of the Subordinated Debt shall be subordinate of all existing senior debt. In the event of any liquidation, dissolution, or bankruptcy proceedings, all senior debt shall first be paid in full before any distribution shall be made to the Subordinated Creditor. The loan is subject to a 36% annual interest moratorium if full payment is not made upon the maturity date. On January 25, 2022, the Company exercised the option to extend the loan an additional six months to July 26, 2022. The Company recognized an additional $0.5 million in debt issuance costs related to the loan extension. On July 26, 2022, the Company exercised the option to extend the loan an additional six months to January 26, 2023.
Financial Covenants
The Blue Torch Credit Facility establishes the following financial covenants for the consolidated group:
Revenue. Requires the Company's trailing annual aggregate revenue to exceed $150.0 million as of the end of each computation period as described below.
Computation Period EndingRevenue
June 30, 2022, September 30, 2022, and December 31, 2022$150,000,000 
March 31, 2023 and each fiscal month ending thereafter150,000,000 
Liquidity. Requires the Company's liquidity to be above $5.0 million at any time during the effective duration of the agreement. Liquidity is defined as the remaining capacity under the Blue Torch Credit Facility plus the total unrestricted cash on hand.
Leverage Ratio. The First Lien Leverage Ratio applies to the consolidated group and is determined in accordance with US GAAP. It is calculated as of the last day of any Computation Period as the ratio of (a) total debt (as defined in credit agreement) to (b) EBITDA for the Computation Period ending on such day.


Computation Period EndingFirst Lien Leverage Ratio
December 31, 2022
4.00:1.00
March 31, 2023
3.75:1.00
June 30, 2023 and each quarter ending thereafter
3.50:1.00
The New Second Lien Facility establishes the following financial covenants for the consolidated group:
Revenue. Requires the Company's trailing annual aggregate revenue to exceed $130.0 million as of the end of each computation period as described below.
Computation Period EndingRevenue
June 30, 2022, September 30, 2022, and December 31, 2022$130,000,000 
March 31, 2023 and each fiscal month ending thereafter130,000,000 
Liquidity. Requires the Company's liquidity to be above $3.0 million at any time during the effective duration of the agreement. Liquidity is defined as the remaining capacity under the Blue Torch Credit Facility plus the total unrestricted cash on hand.
Leverage Ratio. The Second Lien Leverage Ratio applies to the consolidated group and is determined in accordance with US GAAP. It is calculated as of the last day of any Computation Period as the ratio of (a) total debt (as defined in credit agreement) to (b) EBITDA for the Computation Period ending on such day.
Computation Period EndingSecond Lien Leverage Ratio
December 31, 2022
4.80:1.00
March 31, 2023
4.50:1.00
June 30, 2023 and each quarter ending thereafter
4.20:1.00
The Company was compliant with all debt covenants as of June 30, 2022.
Note 9 – Other (Expense) Income
Items included in other (expense) income in the Unaudited Condensed Consolidated Statements of Operations are as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands USD)2022202120222021
Foreign exchange (loss) gain$(263)$596 $(6)$(740)
Forgiveness of PPP loans— 1,243 7,280 1,306 
Other interest income— 23 — 46 
Other non-operating expense(251)(139)(467)(197)
Total other (expense) income$(514)$1,723 $6,807 $415 
Note 10 – Income Taxes
Income tax (benefit) expense and effective income tax rate were as follows for the periods indicated:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands USD)2022202120222021
Income tax (benefit) expense$(28)$499 $223 $(109)
Effective tax rates0.8 %47.7 %(2.3 %)3.2 %
The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period.


For the three months ended June 30, 2022, the Company reported a tax benefit for less than a $0.1 million on a pretax loss of $3.5 million which resulted in an effective tax rate of 0.8%. The Company’s effective tax rate differs from the U.S. statutory rate of 21% due to losses incurred in jurisdictions for which no tax benefit is recognized.
For the three months ended June 30, 2021, the Company reported a tax expense of $0.5 million on a pretax income of $1.0 million, which resulted in an effective tax rate of 47.7%. The Company’s effective tax rate differs from the U.S. Statutory rate of 21% due to the mix of earnings in international jurisdictions with relatively higher tax rates and losses incurred in jurisdictions for which no tax benefit is recognized.
For the six months ended June 30, 2022, the Company recorded a tax report expense for $0.2 million on a pretax loss of $9.6 million which resulted in an effective tax rate of (2.3%). The Company’s effective tax rate differs from the U.S. statutory rate of 21% due to the losses incurred in jurisdictions for which no tax benefit is recognized.
For the six months ended June 30, 2021, the Company reported a tax benefit of $0.1 million on a pretax loss of $3.4 million, which resulted in an effective tax rate of 3.2%. The Company’s effective tax rate differs from the U.S. Statutory rate of 21% due to losses incurred in jurisdictions for which no tax benefit is recognized.
Note 11 – Net Revenues
Disaggregated revenues by contract type and the timing of revenue recognition are as follows:
(in thousands USD)Timing of Revenue RecognitionThree Months Ended June 30,Six Months Ended June 30,
Revenues by Contract Type2022202120222021
Time and materialsover time$32,851 $32,252 $66,102 $62,792 
Fixed priceover time13,315 6,688 24,288 13,361 
Total$46,166 $38,940 $90,390 $76,153 
Liabilities by contract related to contracts with customers
As of June 30, 2022 and December 31, 2021, deferred revenues were $4.1 million and $1.8 million, respectively. During the six months ended June 30, 2022 and 2021, the Company recognized revenue of $2.7 million and $0.7 million, respectively, that was deferred in the previous period.
Major Customers
The Company derived 13% of its revenues for the three months ended June 30, 2022 from one significant customer, as well as 13% and 10% of our revenues for the three months June 30, 2021 from two significant customers. Sales to these customers occur at multiple locations and the Company believes that the loss of these customers would have only a short-term impact on our operating results. There is risk, however, that the Company would not be able to identify and access a replacement market at comparable margins.
The Company derived 13% of its revenues for the six months ended June 30, 2022 from one significant customer, as well as 13% and 10% and of our revenues for the six months ended June 30, 2021 from two significant customers. Sales to these customers occur at multiple locations and the Company believes that the loss of these customers would have only a short-term impact on our operating results. There is risk, however, that the Company would not be able to identify and access a replacement market at comparable margins.

Note 12 – Segment Reporting and Geographic Information
The Company operates as a single operating segment. The Company's chief operating decision maker is the CEO, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources.


The following table presents the Company's geographic net revenues based on the geographic market where revenues are accumulated, as determined by customer location:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands USD)2022202120222021
United States$29,287 $25,423 $58,285 $49,943 
Latin America16,879 13,517 32,105 26,210 
Total$46,166 $38,940 $90,390 $76,153 
The following table presents certain of our long-lived assets by geographic area, which includes property and equipment, net and operating lease right of use assets, net:
(in thousands USD)June 30,
2022		December 31,
2021
United States$4,790 $5,837 
Latin America4,321 3,704 
Total long-lived assets$9,111 $9,541 
Note 13 – Restructuring
Restructuring expenses consist of costs associated with the ongoing reorganization of our business operations and expense re-alignment efforts.
In November 2021, we communicated efforts to streamline our operating model further by reducing layers of management and reducing our cost structure. These restructuring efforts included consolidating the Chief Revenue Officer’s responsibilities with the Global Chief Operating Officer position, consolidating span of control of sales managers from eight to four, and a reduction of underutilized bench personnel. The Company exited employees in the last half of the three months ended December 31, 2021. During the first quarter of 2022 the Company incurred additional restructuring costs related to additional terminations and consolidation of our marketing department.
The following table summarizes the Company’s restructuring activities included in accrued liabilities:
(in thousands USD)Organization Restructuring
Balance as of December 31, 2021
$552 
Restructuring charges915 
Payments(982)
Balance as of June 30, 2022
$485 
Note 14 - Warrants
The Company reviewed the accounting for both its public warrants and private warrants and determined that its public warrants should be accounted for as equity while the private warrants should be accounted for as liabilities in the Unaudited Condensed Consolidated Balance Sheets.
In connection with the Business Combination, each public and private placement warrant of LIVK was assumed by the Company and represents the right to purchase one share of the Company's Class A common stock upon exercise of such warrant. The fair value of private placement warrants was remeasured as of June 30, 2022. During the three and six months ended June 30, 2022, the Company recognized a loss of $0.5 million and $1.0 million respectively on private placement warrants to reflect the change in fair value. Refer to Note 4, Fair Value Measurements, for additional information.
As of June 30, 2022, there were 8,049,980 public warrants and 2,811,250 private placement warrants outstanding.
As part of LIVK's initial public offering, 8,050,000 public warrants (“Public Warrants”) were sold. The Public Warrants entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public


Warrants became exercisable when the Company completed an effective registration statement. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
Additionally, LIVK consummated a private placement of 2,811,250 warrants (“Private Placement Warrants”). The Private Placement Warrants entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of the Business Combination. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. The Company filed a Form S-1 to register the shares issuable upon exercise of the Public Warrants which was declared effective on September 27, 2021. No Public Warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
Once the warrants become exercisable, the Company may redeem the Public Warrants:
•in whole and not in part;
•at a price of $0.01 per warrant;
•upon not less than 30 days’ prior written notice of redemption to each warrant holder and if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
•if, and only if, there is a current registration statement in effect with respect to the Class A common stock underlying such warrants.
If and when the Public Warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
Note 15 – Stockholders’ Equity
As a result of the Business Combination, the Company authorized two classes of common stock: Class A common stock and preferred stock.
Class A Common Stock
As of June 30, 2022, the Company has 210,000,000 shares of Class A common stock authorized, and 48,171,500 shares issued and outstanding. Class A common stock has par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote per share.
On December 21, 2021, AgileThought, Inc. entered into an underwriting agreement with A.G.P./Alliance Global Partners as representatives of the underwriters (the “Underwriters”), relating to the sale and issuance of 3,560,710 shares of the Company’s Class A common stock. The offering price to the public of the shares was $7.00 per share, and the Underwriters


agreed to purchase the shares from the Company pursuant to the underwriting agreement at a price of $6.51 per share. The Company’s net proceeds from the offering were approximately $21.8 million.
On December 27, 2021, the Company issued 461,236 shares of Class A Common Stock (the “Conversion Shares”) to Mr. Senderos and Mr. Johnston upon conversion of their loans under the New Second Lien Facility in the amount of $4,500,000 and $200,000, respectively. Mr. Senderos received 441,409 Conversion Shares, and Mr. Johnston received 19,827 Conversion Shares.
On December 28, 2021, the Company issued 4,439,333 shares of Class A Common Stock to the administrative agent for the First Lien Facility in accordance with the amendment dated November 15, 2021. As these common shares have been issued to and are held by the lender, and are contingently returnable to the Company under certain conditions, such shares are considered as issued and outstanding on the Company’s balance sheet, but are not included in earnings per share calculations for all periods presented. On June 3, 2022, the lenders returned 2,423,204 shares as part of the extinguishment of the First Lien Facility. See Note 9, Long-Term Debt, for further information.
On January 27, 2022, the Company issued 2,228,000 Restricted Stock Units (“RSU”) to senior employees and directors under the 2021 Equity Incentive Plan, of which 228,000 RSUs are subject to a service vesting condition and 2,000,000 RSUs are subject to market vesting requirement. See Note 17, Equity-based Arrangements, for further information.
On May 9, 2022, the Company issued an additional 2,208,960 RSUs to senior employees, directors, and board members, of which 1,197,180 RSUs are subject to a service vesting condition and 1,011,780 RSUs are subject to market vesting requirements. See Note 17, Equity-based Arrangements, for further information.
Preferred Stock
Under the Company's certificate of incorporation, the Company is authorized to issue 10,000,000 shares of preferred stock having par value of $0.0001 per share. The Company's Board of Directors has the authority to issue shares of preferred stock in one or more series and to determine preferences, privileges, and restrictions, including voting rights, of those shares. As of June 30, 2022, no shares were issued and outstanding.
Prior to the Business Combination, the Company had three classes of equity: Class A ordinary shares, Class B ordinary shares and redeemable convertible preferred stock.
Legacy Class A and Class B Shares
As of December 31, 2020, the capital stock is represented by 431,682 Class A Shares and 37,538 Class B Shares. Holders of Class A Shares were entitled to one vote per share and Holders of Class B Shares are not entitled to vote. The common shares have no preemptive, subscription, redemption or conversion rights. In connection with the Business Combination, the Company converted its Class A and Class B ordinary shares outstanding into shares of the Company's Class A common stock. As of June 30, 2022, no shares of Class A and Class B ordinary shares were outstanding.
Redeemable Convertible Preferred Stock
On February 2, 2021, LIV Capital Acquisition Corp (“LIVK”), related parties to LIVK (and together with LIVK, the “Equity Investors”) and the Company entered into an equity contribution agreement. Per the agreement, the Equity Investors purchased 2 million shares of a newly created class of preferred stock at a purchase price of $10 per share for an aggregate purchase price of $20 million.
The redeemable convertible preferred stock would be redeemable for an amount in cash equal to the greater of $15 per share (the “Required Price”), or $10 per share of redeemable convertible preferred stock plus 18% interest if the Business Combination did not occur (defined in the agreement as the “Required Return”), other than as a result of LIVK’s failure to negotiate in good faith or failure to satisfy or perform any of its obligations under the merger agreement.
Additionally, the redeemable convertible preferred stock would be convertible into common shares of the Company either on a one to one basis in the event of the closing of the merger agreement, or if the merger agreement were terminated and the Company subsequently consummated an initial public offering, into a number of common shares of the Company equal to the Required Return divided by 0.9, or $16.6667, multiplied by the price at which the shares of voting common stock of the Company are initially priced in such initial public offering.
The redeemable convertible preferred stock had no voting and dividend rights until converted into common stock and had a liquidation preference equal to the amount of the Required Return.


The Company concluded that because the redemption and conversion features of the Preferred Stock were outside of the control of the Company, the instrument was recorded as temporary or mezzanine equity in accordance with the provisions of Accounting Series Release No. 268, Presentation in Financial Statements of Redeemable Preferred Stocks.
In connection with the Business Combination, all redeemable convertible preferred stock was converted into shares of Class A common stock on a one for one basis. As of June 30, 2022, no shares of redeemable convertible preferred stock were outstanding.
Note 16 – (Loss) Earnings Per Share
The following table sets forth the computation of basic and diluted net (loss) earning per share, retroactively restated based on the Business Combination, attributable to common stockholders:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands USD, except share and (loss) earning per share data)2022202120222021
Net (loss) income attributable to common stockholders$(3,545)$411 $(9,892)$(3,454)
Weighted average number of common stock - basic and diluted46,043,419 34,557,480 46,028,557 34,557,480 
(Loss) income per common share attributable to common stockholders:
Basic$(0.08)$0.01 $(0.21)$(0.10)
Diluted(0.08)0.01 (0.21)(0.10)
The following table presents securities that are excluded from the computation of diluted net (loss) income per common stock as of the periods presented because including them would have been antidilutive:
June 30,
20222021
Public and private warrants10,861,230 — 
Class A common stock held by administrative agent with restricted resale rights
2,016,129 — 
Unvested 2021 Plan awards for Class A shares with a service condition1,152,284 — 
Unvested 2021 Plan awards for Class A shares with a market condition3,011,780 — 
Redeemable convertible preferred stock— 2,000,000 
Unvested stock based compensation awards for Class A common stock with service and performance vesting conditions
— 1,500 
Unvested stock based compensation awards for Class A shares upon occurrence of liquidity event— 2,892 
Note 17 – Equity-based Arrangements
The Company has granted various equity-based awards to its employees and board members as described below. The Company issues, authorized but unissued shares, for the settlement of equity-based awards.
2021 Equity Incentive Plan
In connection with the Business Combination, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) on August 18, 2021, which became effective immediately upon the Closing. The 2021 Plan provides the Company with flexibility to use various equity-based incentive awards as compensation tools to motivate and retain the Company’s workforce. The Company initially reserved 5,283,216 shares of Class A common stock for the issuance of awards under the 2021 Plan. The number of shares of Class A common stock available for issuance under the 2021 Plan automatically increases on the first day of each calendar year, beginning January 1, 2022 and ending on and including January 1, 2031, in an amount equal to 5% of the total number of shares of Class A common stock outstanding on December 31 of the preceding year; provided that the Board


may act prior to January 1 of a given year to provide that the increase of such year will be a lesser amount of shares of Class A common stock.
On January 27, 2022, the Company issued 2,228,000 Restricted Stock Units ("RSU") to senior employees and directors, of which 228,000 RSUs are subject to a service vesting condition and 2,000,000 RSUs are subject to market vesting requirements.
The awards subject to a service vesting requirement will vest over a three year period until 2023. The portion of the awards related to the 2021 service period immediately vested on the grant date. The remaining awards vest and are expensed on a graded basis each year. The grant date fair value for the service vested RSUs under the 2021 Plan was approximately $1.0 million. On January 27, 2022, 87,999 RSUs subject to service vesting conditions vested, of which 13,462 were withheld for taxes. Expense during the three and six months ended June 30, 2022 related to the service vested RSUs was $0.2 million and $0.6 million respectively. The Company also cancelled 10,000 awards during the three and six months ended June 30, 2022.
The awards subject to a market vesting condition will expire after 6-10 years. The market condition is met if the volume-weighted average stock price reaches the specified stock price during the specified period. The grant date fair value for these RSUs was approximately $4.3 million. The Company recognized $0.3 million and $0.4 million of expense during the three and six months ended June 30, 2022 using straight line amortization over a derived service period of 3-7 years.
On May 9, 2022, the Company issued an additional 2,208,960 RSUs to senior employees, directors, and board members, of which 1,197,180 RSUs are subject to a service vesting condition and 1,011,780 RSUs are subject to market vesting requirements.
Of the RSUs subject to a service vesting condition, 1,103,180 awards will vest over a three year period until June 1, 2025. The remaining 94,000 awards will vest quarterly until December 31, 2022. The grant date fair value for all the service vested RSUs was approximately $5.4 million. For the three months ended June 30, 2022, 184,898 shares vested, of which 40,117 shares were withheld for taxes. Expense for the three and six months ended June 30, 2022 was $1.4 million.
The awards subject to a market vesting condition will vest over a period of five years from date of grant if a market condition is met. The market condition is met if the volume-weighted average stock price reaches the specified stock price during the specified period. The grant date fair value for these RSUs was approximately $2.9 million. Expense for the three and six months ended June 30, 2022 was $0.2 million using straight-line amortization over a derived service period of 1-4 years.
Employee Stock Purchase Plan
In connection with the Business Combination, on August 18, 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “ESPP”) for the issuance of up to a total of 1,056,643 shares of Class A common stock. The number of shares reserved for issuance will automatically increase on January 1 of each calendar year, from January 1, 2022 through January 1, 2031, by the lesser of (i) 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, and (ii) the number of shares equal to 200% of the initial share reserve, unless a smaller number of shares may be determined by the Board. The purchase price of Class A Common Stock will be 85% of the lesser of the fair market value of Class A Common Stock on the first trading date or on the date of purchase. No purchases have been made under the ESPP during the six months ended June 30, 2022.
2020 Equity Plan
On August 4, 2020, the Company adopted the 2020 Equity Plan with the intent to encourage and retain certain of the Company’s senior employees, as well as board members. Pursuant to the 2020 Equity Plan, senior employees may receive up to 7,465 of Class A RSUs subject to time-based vesting and the occurrence of a liquidity event while board members may receive up to 300 Class A RSUs subject to time-based vesting. The awards were granted on August 4, 2020 and generally vest ratably over a three-year service period on each successive August 4th. The grant date fair value for the RSUs under the 2020 Equity Plan was approximately $5.8 million.
On May 9, 2021, the Company announced the acceleration of 1,372 performance-based RSUs that the Board previously granted which covered shares of the Company’s Class A common stock pursuant to the Company’s 2020 Equity Plan. The liquidity requirement of the accelerated of RSU's was removed per the Board approval on August 19, 2021. The acceleration of RSUs became effective immediately prior to the Business Combination. During the year ended December 31, 2021, the


Company recognized $1.0 million of equity-based compensation expense related to acceleration of RSUs pursuant to the 2020 Equity Plan.
On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 4,921 RSUs. The RSU cancellation agreements were effective immediately prior to the Business Combination. Additionally, the remaining 1,472 RSUs were forfeited.
Additionally, concurrently with the Business Combination, the Company granted additional fully vested stock awards covering shares of Class A common stock pursuant to the 2020 Equity Incentive Plan. The compensation expense related to this award recognized during the August 2021 was $5.5 million.
AgileThought, LLC PIP
In connection with the AgileThought, LLC acquisition in July 2019, the Company offered a performance incentive plan (“AT PIP”) to key AgileThought, LLC employees. Pursuant to the AT PIP, participants may receive up to an aggregate of 3,150 Class A shares based on the achievement of certain EBITDA-based performance metrics during each of the fiscal years as follows: up to 1,050 shares for 2020, up to 1,050 shares for 2021, and up to 1,050 shares for 2022. The EBITDA-based performance metrics were not met in 2021 or 2020 and the related awards were cancelled. The AT PIP was cancelled in August 2021.
4th Source Performance Incentive Plan
On November 15, 2018, the Company acquired 4th Source and offered shares to key 4th Source employees under a Performance Incentive Plan (“the 4th Source PIP”). Pursuant to the 4th Source PIP, participants may receive up to an aggregate of 8,394 shares based on the achievement of certain EBITDA-based performance metrics during each of the fiscal years as follows: up to 3,222 shares for 2018, up to 4,528 shares for 2019, and up to 644 shares for 2020. The EBITDA-based performance metric was not met in 2021 and the related PSUs were cancelled. The 4th Source PIP was cancelled in August 2021.
AgileThought Inc. Management Performance Share Plan
In 2019, the Company adopted the Management Performance Share Plan, which provides for the issuance of PSUs. These awards representing an aggregate of 1,232 Class A shares vest upon the occurrence of a liquidity event, attainment of certain performance metrics and service-based vesting criteria. On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 1,232 RSUs pursuant to the 2019 AN Management Compensation Plan. The RSU cancellation agreements were effective immediately prior to the Business Combination.
2017 AN Management Stock Compensation Plan
On May 9, 2021 and August 16, 2021, the Company entered into RSU cancellation agreements with existing shareholders, cancelling a total of 1,880 RSUs pursuant to the 2017 AN Management Compensation Plan. The RSU cancellation agreements were effective immediately prior to the Business Combination.
The following table summarizes all of our equity-based awards activity for the plans described above:
Number of AwardsWeighted Average Grant Date Fair Value
Awards outstanding as of December 31, 2021
— $— 
Granted4,436,960 3.40 
Forfeited / cancelled(10,000)4.29 
Vested(272,897)4.41 
Awards outstanding as of June 30, 2022
4,154,063 3.08 
As of June 30, 2022, the Company had $11.1 million of unrecognized stock-based compensation expense related to the 2021 Plan RSUs. The unrecognized stock-based compensation expense related to the RSUs is expected to be recognized over a weighted-average period of 2.8 years.


Note 18 – Commitments and Contingencies
The Company is, from time to time, involved in certain legal proceedings, inquiries, claims and disputes, which arise in the ordinary course of business. Although management cannot predict the outcomes of these matters, management does not believe these actions will have a material, adverse effect on the Company’s Unaudited Condensed Consolidated Balance Sheets, Unaudited Condensed Consolidated Statements of Operations or Unaudited Condensed Consolidated Statements of Cash Flows. As of June 30, 2022 and December 31, 2021, the Company had labor lawsuits in process, whose resolution is pending. As of June 30, 2022 and December 31, 2021, the Company has recorded liabilities for labor lawsuits and/or litigation of $1.5 million and $1.4 million, respectively.
Note 19 – Supplemental Cash Flows
The following table provides detail of non-cash activity and cash flow information:
(in thousands USD)Six Months Ended June 30,
Supplemental disclosure of non-cash investing activities & cash flow information20222021
Forgiveness of loans$7,280 $1,306 
Right-of-use assets obtained in exchange for operating lease liabilities1,359 573 
Cash paid during the period for interest1,489 4,359 
Fees due to creditor— 4,000 
Note 20 – Subsequent Events
On July 26, 2022, the Company exercised its option to extend the maturity date of the Exitus Capital Subordinated Debt an additional six months to January 26, 2023. The Company recognized an additional $0.5 million in debt issuance costs related to the loan extension.
On August 4, 2022, the Company entered into an amendment for the Subordinated Promissory Note with the AGS Group to extend the maturity date of the Subordinated Debt to January 31, 2023.
On August 10, 2022, the Company entered into a waiver and amendment to the Blue Torch Credit Facility to provide for an extension of the period of time which the Company has to satisfy certain post-closing obligations under the Blue Torch Credit Facility and an acceleration of the maturity of the loans made by the lenders thereunder to May 1, 2023 if the Company does not obtain regulatory approval to convert certain loans outstanding under the New Second Lien Facility into common stock of the Company.
On August 10, 2022, the Company entered into an amendment to the New Second Lien Facility to provide for the covenants and certain other provisions of the New Second Lien Facility to be made consistent with those in the Blue Torch Credit Facility (and in certain cases for those covenants to be made less restrictive than those in the Blue Torch Credit Facility). In addition, the amendment extends the maturity date of the Tranche A loans thereunder to September 15, 2026, and provides for potential increases, that step up over time from one percent to five percent, in the interest rate applicable to the Tranche A loans. The amendment also extends the maturity date of the Tranche B loans thereunder to June 15, 2023, and provides for a mandatory conversion of the Tranche B loans thereunder, including interest and fees, into equity securities of the Company upon the maturity of said loans.
Management has evaluated all subsequent events until August 12, 2022, when the unaudited condensed consolidated financial statements were issued. Accordingly, where applicable, the notes to these unaudited condensed consolidated financial statements have been updated and adjustments to the Company's unaudited condensed consolidated financial statements have been reflected.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included in Part II, Item 8 "Financial Statements and Supplementary Data" on our Annual Report on Form 10-K filed on March 31, 2022. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly under the captions “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”


For purposes of this item only, “AgileThought”,“the Company,” “we,” “us” or “our” refer to AgileThought, Inc. and its subsidiaries, unless the context otherwise requires.
Overview
We are a leading provider of agile-first, end-to-end digital transformation services in the North American market using onshore and nearshore delivery. We offer client-centric, onshore and nearshore agile-first digital transformation services that help our clients transform by building, improving and running new solutions at scale. Our services enable our clients to leverage technology more effectively to focus on better business outcomes. From consulting to application development and cloud services to data management and automation, we strive to create a transparent, collaborative, and responsive experience for our clients.
For the three months ended June 30, 2022, we had 108 active clients, in the six months ended June 30, 2022, we had 120 active clients, and for the twelve months ended June 30, 2022, we had 166 active clients.
As of June 30, 2022 we had 7 delivery centers across the United States, Mexico, Brazil, Argentina and Costa Rica from which we deliver services to our clients. As of June 30, 2022, we had 2,253 billable employees providing services remotely, from our talent centers or directly at client locations in the United States and Latin America. The breakdown of our employees by geography is as follows for the dates presented:
As of June 30,
As of December 31,
Employees by Geography
202220212021
United States
291 367 355 
Latin America
2,317 2,087 2,315 
Total
2,608 2,454 2,670 
Total headcount increased by 154 people from June 30, 2021 to June 30, 2022. The increase is related mainly to the hiring of 131 billable employees as a result of the requirements to staff new contracts obtained from 2021 and through the second quarter of 2022. Our Latin America based headcount increased by 230 people from June 30, 2021 to June 30, 2022 as a result of our focus to expand our talent footprint and become an employer of choice within the region, whereas our United States based headcount decreased by 76 people during the same period, mainly as a result of the observed attrition in the region.
The following table presents our revenue by geography for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
Revenue by Geography (in thousands)2022202120222021
United States$29,287 $25,423 $58,285 $49,943 
Latin America16,879 13,517 32,105 26,210 
Total$46,166 $38,940 $90,390 $76,153 
For the three months ended June 30, 2022, our revenue was $46.2 million as compared to $38.9 million for the three months ended June 30, 2021. We generated 63.4% and 65.3% of our revenue from clients located in the United States and 36.6% and 34.7% of our revenue from clients located in Latin America for the three months ended June 30, 2022 and 2021, respectively.
The following table presents our (loss) income before income taxes for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
2022202120222021
(in thousands)
(Loss) income before income taxes$(3,530)$1,047 $(9,577)$(3,396)
Our (loss) income before income taxes was $(3.5) million and $1.0 million for the three months ended June 30, 2022 and 2021, respectively, and, for the same periods, our loss as a percentage of revenue was 7.6% and 2.7%, respectively.


Our loss before taxes was $9.6 million and $3.4 million for the six months ended June 30, 2022 and 2021, respectively, and for the same periods, our loss as percentage of revenue was 10.6% and 4.5%, respectively.

Factors Affecting Our Performance
We believe that the key factors affecting our performance and results of operations include our ability to:
Expand Our Client Footprint in the United States
We are focused on growing our client footprint in the United States and furthering the application of our proven business capabilities in the U.S. market. We acquired 4th Source in 2018 and AgileThought, LLC in 2019, both U.S. headquartered and operated companies. For the three months ended June 30, 2022 and 2021, we had 55 and 61 active clients in the United States, respectively, for the six months ended June 30, 2022 and 2021, respectively, we had 60 and 68 active clients in the United States, and for the twelve month period ended June 30, 2022 and June 30, 2021 we had 74 and 90 active clients in the United States, respectively. We define an active client at a specific date as a client with whom we have recognized revenue for our services during the preceding 12-month period. As of June 30, 2022, we had 291 employees located in the United States. We believe we have a significant opportunity to penetrate the U.S. market further and expand our U.S. client base. Our ability to expand our footprint in the United States will depend on several factors, including the U.S. market perception of our services, our ability to increase nearshore delivery successfully, our ability to successfully integrate acquisitions, as well as pricing, competition and overall economic conditions, and to a lesser extent our ability to complete future complementary acquisitions.
Penetrate Existing Clients via Cross-Selling
We seek to strengthen our relationships with existing clients by cross-selling additional services. We have a proven track record of expanding our relationship with clients by offering a wide range of complementary services. Our ten largest active clients based on revenue accounted for $28.0 million, or 60.6%, and $25.5 million, or 65.5%, of our total revenue in the three months ended June 30, 2022 and 2021, respectively. Our ten largest active clients based on revenue accounted for $55.2 million, or 61.0%, and $50.2 million, or 65.9%, of our total revenue in the six months ended June 30, 2022 and 2021, respectively. The average revenue from our ten largest clients was $2.8 million and $2.5 million for the three months ended June 30, 2022 and 2021, respectively, and was $5.5 million and $5.0 million in the six months ended June 30, 2022 and 2021, respectively. The following table shows the active client concentration from the top client to the top twenty clients, for the periods presented:
Percent of Revenue for the Three Months Ended June 30,
Percent of Revenue for Six Months Ended June 30,
Client Concentration2022202120222021
Top client
12.7 %13.5 %12.5 %13.4 %
Top five clients
41.8 %43.7 %42.1 %45.7 %
Top ten clients
60.6 %65.5 %61.0 %65.9 %
Top twenty clients
77.8 %80.4 %78.0 %79.9 %
The following table shows the number of our active clients by revenue for the periods presented:
Three Months Ended June 30,
For Six Months Ended June 30,
For Twelve Months Ended June 30,
Active Clients by Revenue202220212022202120222021
Over $5 Million
1 1 5 4 9 8 
$2 – $5 Million
5 4 5 5 12 7 
$1 – $2 Million
4 5 13 7 11 12 
Less than $1 Million
98 135 97 153 134 188 
Total
108 145 120 169 166 215 


Greater than $1 million10 10 23 16 32 27 
The decrease in the total number of active clients from June 30, 2021 to June 30, 2022 is mainly related to the completion of smaller customer projects and maintenance engagements in 2021 that were not subsequently renewed as a result of the remaining effects of the COVID-19 pandemic combined with our gradual efforts, starting during the second quarter of 2022, to de-emphasize non-core projects and to focus on strategic digital projects.
We believe we have the opportunity to further cross-sell our clients with additional services that we have enhanced through recent acquisitions. However, our ability to increase sales to existing clients will depend on several factors, including the level of client satisfaction with our services, changes in clients’ strategic priorities and changes in key client personnel or strategic transactions involving clients, as well as pricing, competition and overall economic conditions.
Attract, Develop, Retain and Utilize Highly Skilled Employees
We believe that attracting, training, retaining and utilizing highly skilled employees with capabilities in next-generation technologies will be key to our success. As of June 30, 2022, we had 2,608 employees. We continuously invest in training our employees and offer regular technical and language training, as well as other professional advancement programs. These programs not only help ensure our employees are well trained and knowledgeable, but also help enhance employee retention.
Strengthen Onshore and Nearshore Delivery with Diversification in Regions
In order to drive digital transformation initiatives for our clients, we believe that we need to be near the regions in which our clients are located and in similar time zones. We have established a strong base for our onshore and nearshore delivery model across Mexico. We also have offices in Argentina, Brazil, Costa Rica and the United States to source diverse talent and be responsive to clients in our core markets. Since January 1, 2018, we have added 4 new delivery centers, including one in the United States (Tampa, Florida) and three in Mexico (one in Mexico City and the other two in Merida and Colima as a result of the acquisitions). From December 31, 2021 to June 30, 2022, our delivery headcount remained flat, mainly driven by the voluntary and involuntary attrition observed during the first half of 2022. As we continue to grow our relationships, we will expand our delivery centers in other cities in Mexico and other countries in similar time zones, such as Argentina and Costa Rica. While we believe that we currently have sufficient delivery center capacity to address our near-term needs and opportunities, as the recovery from the COVID-19 pandemic continues to materialize, and as we continue to expand our relationships with existing clients, attract new clients and expand our footprint in the United States, we will need to expand our teams through remote work opportunities and at existing and new delivery centers in nearshore locations with an abundance of technical talent. As we do so, we compete for talented individuals with other companies in our industry and companies in other industries.
Key Business Metrics
We regularly monitor several financial and operating metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Our key non-GAAP and business metrics may be calculated in a different manner than similarly titled metrics used by other companies. See “Non-GAAP Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Gross Profit Margin
33.3 %31.1 %32.3 %30.3 %
Adjusted Operating Income (in thousands)
$3,488 $1,767 $4,635 $3,748 
Adjusted Net Income (Loss) (in thousands)$1,932 $(946)$1,495 $(1,191)
Adjusted Diluted EPS$0.04 $(0.03)$0.03 $(0.03)
Number of large active clients (at or above $1.0 million of revenue in prior 12-month period) as of end of period
32 27 32 27 
Revenue concentration with top 10 clients as of end of period
60.6 %65.5 %61.0 %65.9 %
Gross Profit Margin


We monitor gross profit margin to understand the profitability of the services we provide to our clients. Gross profit margin is calculated as net revenues for the period minus cost of revenue for the period, divided by net revenues.
Adjusted Operating Income
We define and calculate Adjusted Operating Income as (Loss) income from operations adjusted to exclude the change in fair value of embedded derivative liability, plus the change in fair value of contingent consideration obligation, plus the change in fair value of warrant liability, plus equity-based compensation expense, plus impairment charges, plus restructuring expenses, plus (gain) loss on business dispositions, plus (gain) loss on debt extinguishment, plus intangible assets amortization, plus certain transaction costs and certain other operating expense (income), net.
Adjusted Net Income (Loss)
We define and calculate Adjusted Net Income (Loss) as Net (loss) income adjusted to exclude the change in fair value of embedded derivative liability, plus the change in fair value of contingent consideration obligations, plus the change in fair value of warrant liability, plus equity-based compensation expense, plus impairment charges, plus restructuring expenses, plus (gain) loss on business dispositions, plus foreign exchange loss (gain), plus (gain) loss on debt extinguishment and debt forgiveness, plus intangible assets amortization, plus certain transaction costs, plus paid in kind interest expenses and amortization of debt issuance cost and certain other expense, net.
Adjusted Diluted EPS
We define and calculate Adjusted EPS as Adjusted Net income, divided by the diluted weighted-average number of common shares outstanding for the period.
Number of Large Active Clients
We monitor our number of large active clients to better understand our progress in winning large contracts on a period-over-period basis. We define the number of large active clients as the number of active clients from whom we generated more than $1.0 million of revenue in the prior 12-month period. For comparability purposes, we include the clients of the acquired businesses that meet these criteria to properly evaluate total client spending evolution.
Revenue Concentration with Top 10 clients
We monitor our revenue concentration with top 10 clients to understand our dependence on large clients on a period-over-period basis and to monitor our success in diversifying our revenue base. We define revenue concentration as the percent of our total revenue derived from our ten largest active clients.
See “Non-GAAP Measures” for additional information and a reconciliation of (Loss) income from operations to Adjusted Operating Income (Loss) and Net (loss) income to Adjusted Net Income (Loss) and Adjusted Diluted EPS.
Components of Results of Operations
Our business is organized into a single reportable segment. The Company's chief operating decision maker is the CEO, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.
Net Revenues
Revenue is derived from the several types of integrated solutions we provide to our clients. Revenue is organized by contract type and geographic location. The type of revenue we generate from customers is classified based on: (i) time and materials, and (ii) fixed price contracts. Time and materials are transaction-based, or volume-based contracts based on input method such as labor hours incurred. Fixed price contracts are contracts where price is contractually predetermined. Revenue by geographic location is derived from revenue generated in the United States and Latin America, which includes Mexico, Argentina, Brazil, and Costa Rica.
Cost of Revenue
Cost of revenue consists primarily of employee-related costs associated with our personnel and fees from third-party vendors engaged in the delivery of our services, including: salaries, bonuses, benefits, project related travel costs, software licenses and any other costs that relate directly to the delivery of our services.


Gross Profit
Gross profit represents net revenues less cost of revenue.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consists primarily of employee-related costs associated with our sales, marketing, legal, accounting and administrative personnel. Selling, general and administrative expenses also includes legal costs, external professional fees, brand marketing, provision for doubtful accounts, as well as expenses associated with our back-office facilities and office infrastructure, information technology, and other administrative expenses.
Depreciation and Amortization
Depreciation and amortization consist of depreciation and amortization expenses related to customer relationships, computer equipment, leasehold improvements, furniture and equipment, and other assets.
Change in Fair Value of Embedded Derivative Liabilities
Changes in fair value of embedded derivative liabilities consists of changes in the fair value of redemption and conversion features embedded within our preferred stock.
Change in Fair Value of Warrant Liability
Changes in fair value of warrant liability consist of changes to the outstanding public and private placement warrants assumed upon the consummation of the Business Combination.
(Gain) Loss on Debt Extinguishment
(Gain) Loss on debt extinguishment represents the difference between the net carrying value of the old debt instrument and the fair value of the new debt instrument.
Equity-based Compensation Expense
Equity-based compensation expense consists of compensation expenses recognized in connection with performance incentive awards granted to our employees and board members.
Restructuring Expenses
Restructuring expenses consists of costs associated with business realignment efforts and strategic transformation costs resulting from value creation initiatives following business acquisitions, which primarily relate to severance costs from back-office headcount reductions.
Other Operating Expenses, Net
Other operating expenses, net consists primarily of acquisition related costs and transaction costs related, including legal, accounting, valuation and investor relations advisors, and compensation consultant fees, as well as other operating expenses.
Interest Expense
Interest expense consists of interest incurred in connection with our debt obligations, and amortization of debt issuance costs.
Other (Expense) Income
Other (expense) income consists of interest (expense) income on invested funds, impacts from foreign exchange transactions, gain on loan forgiveness and other non-operating expenses.
Income Tax (Benefit) Expense
Income tax (benefit) expense represents benefits or expenses associated with our operations based on the tax laws of the jurisdictions in which we operate. Our calculation of income tax (benefit) expense is based on tax rates and tax laws at the end of each applicable reporting period.


Results of Operations
The following table sets forth our unaudited condensed consolidated statements of operations for the presented periods:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Net revenues
$46,166 $38,940 $90,390 $76,153 
Cost of revenue
30,775 26,812 61,175 53,043 
Gross profit
15,391 12,128 29,215 23,110 
Operating expenses:
Selling, general and administrative expenses
11,607 10,189 24,226 18,957 
Depreciation and amortization
1,737 1,719 3,491 3,493 
Change in fair value of contingent consideration obligations
— (2,200)— (2,200)
Change in fair value of embedded derivative liabilities
— (1,112)— (2,522)
Change in fair value of warrant liability478 — 956 — 
(Gain) Loss on debt extinguishment(950)— 6,186 — 
Equity-based compensation expense
2,019 — 2,537 12 
Restructuring expenses
162 12 915 22 
Other operating expenses, net
575 472 1,196 1,107 
Total operating expenses
15,628 9,080 39,507 18,869 
(Loss) income from operations
(237)3,048 (10,292)4,241 
Interest expense
(2,779)(3,724)(6,092)(8,052)
Other (expense) income
(514)1,723 6,807 415 
(Loss) income before income tax
(3,530)1,047 (9,577)(3,396)
Income tax (benefit) expense
(28)499 223 (109)
Net (loss) income
(3,502)548 (9,800)(3,287)
Net income attributable to noncontrolling interests
43 137 92 167 
Net (loss) income attributable to the Company
$(3,545)$411 $(9,892)$(3,454)
The following table sets forth our unaudited condensed consolidated statements of operations information expressed as a percentage of net revenues for the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net revenues
100.0 %100.0 %100.0 %100.0 %
Cost of revenue
66.7 %68.9 %67.7 %69.7 %
Gross profit
33.3 %31.1 %32.3 %30.3 %
Operating expenses:
Selling, general and administrative expenses
25.1 %26.2 %26.8 %24.9 %
Depreciation and amortization
3.8 %4.4 %3.9 %4.6 %
Change in fair value of contingent consideration obligations
— %(5.6)%— %(2.9)%
Change in fair value of embedded derivative liabilities
— %(2.9)%— %(3.3)%
Change in fair value of warrant liability1.0 %— %1.1 %— %
Loss on debt extinguishment(2.1)%— %6.8 %— %
Equity-based compensation expense
4.4 %— %2.8 %— %
Restructuring expenses
0.4 %— %1.0 %— %
Other operating expenses, net
1.2 %1.2 %1.3 %1.5 %
Total operating expenses
33.9 %23.3 %43.7 %24.8 %
Income (loss) from operations
(0.5)%7.8 %(11.4)%5.6 %


Interest expense
(6.0)%(9.6)%(6.7)%(10.6)%
Other income (expense)
(1.1)%4.4 %7.5 %0.5 %
(Loss) income before income tax
(7.6)%2.7 %(10.6)%(4.5)%
Income tax expense (benefit)
(0.1)%1.3 %0.2 %(0.1)%
Net (loss) income
(7.6)%1.4 %(10.8)%(4.3)%
Net income attributable to noncontrolling interests
0.1 %0.4 %0.1 %0.2 %
Net (loss) income attributable to the Company
(7.7)%1.1 %(10.9)%(4.5)%
Comparison of the three months ended June 30, 2022 and 2021
Net revenues
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Net Revenues
$46,166 $38,940 18.6 %
Net revenues for the three months ended June 30, 2022 increased $7.3 million, or 18.6%, to $46.2 million from $38.9 million for the three months ended June 30, 2021. The increase was mainly due to increases in services and expanded scope in projects with existing clients, and the commencement of new projects with new clients during the second quarter of 2022.
Net Revenues by Geographic Location
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
United States
$29,287 $25,423 15.2 %
Latin America
16,879 13,517 24.9 %
Total
$46,166 $38,940 18.6 %
Net revenues from our United States operations for the three months ended June 30, 2022 increased $3.9 million, or 15.2%, to $29.3 million from $25.4 million for the three months ended June 30, 2021. The change was mainly driven by a $5.1 million increase in new projects and expanded scope of work. This was offset by $1.3 million of decreased scope with one of our existing clients.
Net revenues from our Latin America operations for the three months ended June 30, 2022 increased $3.4 million, or 24.9%, to $16.9 million from $13.5 million for the three months ended June 30, 2021. The change was driven by an increase of $3.7 million related to four major customers and $0.9 million comprised of multiple smaller projects, offset by a $1.2 million decrease related mainly to a milestone project observed during the second quarter of 2021, not recurring in 2022.
Revenues by Contract Type
The following table sets forth net revenues by contract type and as a percentage of our revenues for the periods indicated:
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Time and materials$32,851 $32,252 1.9 %
Fixed price
13,315 6,688 99.1 %
Total
$46,166 $38,940 18.6 %
Net revenues from our time and materials contracts for the three months ended June 30, 2022 increased approximately $0.6 million, or 1.9%, to $32.9 million from $32.3 million for the three months ended June 30, 2021. The main driver of the net variation is related to the increase in service volume with existing and new customers under the time and materials revenue model. Net revenues from our fixed price contracts for the three months ended June 30, 2022 increased $6.6 million, or 99.1%, to $13.3 million from $6.7 million for the three months ended June 30, 2021. The main driver of the net increase is related to


the shift to fixed price core delivery teams with two major clients from the financial services industry in Latin America, combined with additional revenues coming from fixed price engagements with other major existing customers.
Cost of revenue
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Cost of revenue
$30,775 $26,812 14.8 %
% of net revenues
66.7 %68.9 %
Cost of revenue for the three months ended June 30, 2022 increased $4.0 million, or 14.8%, to $30.8 million from $26.8 million for the three months ended June 30, 2021. The increase was primarily driven by the increase in scope of work from existing clients and new scope of work from our new clients as evidenced by our revenue growth from June 30, 2021 to June 30, 2022.
Selling, general and administrative expenses
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Selling, general and administrative expenses$11,607 $10,189 13.9 %
% of net revenues25.1 %26.2 %
Selling, general and administrative expenses for the three months ended June 30, 2022 increased $1.4 million, or 13.9%, to $11.6 million from $10.2 million for the three months ended June 30, 2021. The increase was primarily due to an increase of $1.0 million related to increased headcount and salaries, and an increase of $0.9 million of software and equipment rent offset by a decrease of $0.5 million in professional fees.
Depreciation and amortization
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Depreciation and amortization$1,737 $1,719 1.0 %
% of net revenues3.8 %4.4 %
Depreciation and amortization for three months ended June 30, 2022 and 2021, was $1.7 million, respectively.
Change in fair value of embedded derivative liabilities
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Change in fair value of embedded derivative liabilities$— $(1,112)(100.0)%
% of net revenues— %(2.9)%
Change in fair value of embedded derivative liabilities for the three months ended June 30, 2021 resulted in a gain of $1.1 million. The gain was primarily driven by the change in the discount rate used estimate the fair value of embedded derivative liabilities from March 31, 2021 to June 30, 2021. There was no change in fair value of embedded derivative liabilities for three months ended June 30, 2022 as the embedded derivative liability was settled during the third quarter of 2021 as a result of the Business Combination.


Change in fair value of warrant liability
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Change in fair value of warrant liability$478 $— 100.0 %
% of net revenues1.0 %— %
Change in fair value of warrant liability for the three months ended June 30, 2022 resulted in a loss of $0.5 million. The loss was primarily driven by an increase in the market price of our public warrants, changes in the risk-free rate of return and volatility used to estimate the fair value of our warrant liability from March 31, 2022 to June 30, 2022. There was no warrant liability during the second quarter of 2021.
Gain on debt extinguishment
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Gain on debt extinguishment$(950)$— 100.0 %
% of net revenues(2.1)%— %
Gain on debt extinguishment for the three months ended June 30, 2022 of $1.0 million was due to the extinguishment of the First Lien Facility, refer to Note 8, Long-Term Debt, for further information.
Equity-based compensation expense
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Equity-based compensation expense$2,019 $— 100.0 %
% of net revenues4.4 %— %
Equity-based compensation expense for the three months ended June 30, 2022 increased $2.0 million, or 100.0%. The Company issued an additional 2,208,960 RSUs during three months ended June 30, 2022 under the 2021 Equity plan and recognized $2.0 million equity-based compensation expense. No expense was recognized during the three months ended June 30, 2021 related to the 2020 Equity Plan. Refer to Note 17, Equity-based Arrangements, for further information.
Restructuring expenses
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Restructuring expenses$162 $12 >1000.0 %
% of net revenues0.4 %— %
Restructuring expenses for the three months ended June 30, 2022 increased $0.2 million, or over 1,000.0%, to $0.2 million from less than $0.1 million for the three months ended June 30, 2021. The increase was primarily due to additional costs related to restructuring activities implemented during the first quarter of 2022.


Other operating expenses, net
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Other operating expense, net$575 $472 21.8 %
% of net revenues1.2 %1.2 %
Other operating expense, net for three months ended June 30, 2022 increased $0.1 million, or 21.8%, to $0.6 million from and $0.5 million for the three months ended June 30, 2021. This was mainly driven by increased fees for tax audit consultants.
Interest expense
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Interest expense$(2,779)$(3,724)(25.4)%
% of net revenues(6.0)%(9.6)%
Interest expense for the three months ended June 30, 2022 decreased $0.9 million, or 25.4%, to $2.8 million from $3.7 million for the three months ended June 30, 2021. The decrease was primarily due to the reduction in the principal debt obligation since June 30, 2021.
Other (expense) income
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Other (expense) income$(514)$1,723 (129.8)%
% of net revenues(1.1)%4.4 %
Other (expense) income for the three months ended June 30, 2022 decreased $2.2 million, or 129.8%, to $(0.5) million from $1.7 million for the three months ended June 30, 2021. The change was primarily driven by a $1.0 million decrease in net foreign currency exchange losses and a $1.2 million gain related to the loan forgiveness granted in June 2021 on a PPP Loan.
Income tax (benefit) expense
Three Months Ended June 30,
% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Income tax (benefit) expense $(28)$499 (105.6)%
Effective income tax rate0.8 %47.7 %
Income tax (benefit) expense for the three months ended June 30, 2022 decreased $0.5 million, or 105.6%, to less than $0.1 million from $0.5 million for the three months ended June 30, 2021 due to discrete tax items recorded in the second quarter of 2021 and differences in losses incurred in jurisdictions for which no tax benefit is recognized. For additional information, see Note 10, Income Taxes, to our unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.
Comparison of the six months ended June 30, 2022 and 2021
Net revenues
Six Months Ended June 30,% Change
20222021
2022 vs. 2021


(in thousands, except percentages)
Net Revenues
$90,390 $76,153 18.7 %
Net revenues for the six months ended June 30, 2022 increased $14.2 million, or 18.7%, to $90.4 million from $76.2 million for the six months ended June 30, 2021. The increase was mainly due to increases in services and expanded scope in projects with existing clients, and the commencement of new projects with new clients during the six months ended June 30, 2022.
Net Revenues by Geographic Location
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
United States
$58,285 $49,943 16.7 %
Latin America
32,105 26,210 22.5 %
Total
$90,390 $76,153 18.7 %
Net revenues from our United States operations for the six months ended June 30, 2022 increased $8.4 million, or 16.7%, to $58.3 million from $49.9 million for the six months ended June 30, 2021. The change was mainly driven by a $11.9 million increase in new projects and expanded scope of work with existing customers. This was offset by $3.5 million of decreased scope with two of our existing clients.
Net revenues from our Latin America operations for the six months ended June 30, 2022 increased $5.9 million, or 22.5%, to $32.1 million from $26.2 million for the six months ended June 30, 2021. The change was driven by an increase of $7.5 million related to increased volume in retail and financial services clients, offset by a $1.2 million decrease in revenues related to a milestone project with a customer from the financial services industry during the second quarter of 2021 that was not re-occurring in 2022 and $0.4 million decrease from other customers as a result of project scope reductions.
Revenues by Contract Type
The following table sets forth net revenues by contract type and as a percentage of our revenues for the periods indicated:
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Time and materials$66,102 $62,792 5.3 %
Fixed price
24,288 13,361 81.8 %
Total
$90,390 $76,153 18.7 %
Net revenues from our time and materials contracts for the six months ended June 30, 2022 increased approximately $3.3 million, or 5.3%, to $66.1 million from $62.8 million for the six months ended June 30, 2021. The main driver of the net variation is related to the increase in service volume with existing and new customers under the time and materials revenue model. Net revenues from our fixed price contracts for the six months ended June 30, 2022 increased $10.9 million, or 81.8%, to $24.3 million from $13.4 million for the six months ended June 30, 2021. The main driver of the net increase is related to the shift to fixed price core delivery teams with two major clients from the financial services industry in Latin America, combined with additional revenues coming from fixed price engagements with other major existing customers.
Cost of revenue
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Cost of revenue
$61,175 $53,043 15.3 %
% of net revenues
67.7 %69.7 %
Cost of revenue for the six months ended June 30, 2022 increased $8.1 million, or 15.3%, to $61.2 million from $53.0 million for the six months ended June 30, 2021. The increase was primarily driven by the increase in scope of work from


an existing client and new scope of work from new clients consistent with our revenue growth from June 30, 2021 to June 30, 2022.
Selling, general and administrative expenses
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Selling, general and administrative expenses$24,226 $18,957 27.8 %
% of net revenues26.8 %24.9 %
Selling, general and administrative expenses for the six months ended June 30, 2022 increased approximately $5.3 million, or 27.8%, to $24.2 million from $19.0 million for the six months ended June 30, 2021. The increase was primarily due to an increase of $2.9 million related to increased headcount and salaries, an increase of $1.7 million of software and equipment rent, and an increase of $1.0 million in insurance expense, offset by a decrease of $0.3 million professional fees.
Depreciation and amortization
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Depreciation and amortization$3,491 $3,493 (0.1)%
% of net revenues3.8 %4.6 %
Depreciation and amortization for six months ended June 30, 2022 and 2021, was $3.5 million, respectively.
Change in fair value of embedded derivative liabilities
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Change in fair value of embedded derivative liabilities$— $(2,522)(100.0)%
% of net revenues— %(3.3)%
Change in fair value of embedded derivative liabilities for the six months ended June 30, 2021 resulted in a gain of $2.5 million. The gain was primarily driven by the change in the discount rate used to estimate the fair value of embedded derivative liabilities from February 2, 2021 (inception date) to June 30, 2021. There was no change in fair value of embedded derivative liabilities for six months ended June 30, 2022 as the embedded derivative liability was settled during the third quarter of 2021 as a result of the Business Combination.
Change in fair value of warrant liability
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Change in fair value of warrant liability$956 $— 100.0 %
% of net revenues1.0 %— %
Change in fair value of warrant liability for the six months ended June 30, 2022 resulted in a loss of $1.0 million. The loss was primarily driven by an increase in the market price of our public warrants, changes in the risk-free rate of return and volatility used to estimate the fair value of our warrant liability from December 31, 2021 to June 30, 2022. There was no warrant liability during the first half of 2021.


Loss on debt extinguishment
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Loss on debt extinguishment$6,186 $— 100.0 %
% of net revenues6.8 %— %
Loss on debt extinguishment for the six months ended June 30, 2022 of $6.2 million was due to an amendment signed on March 30, 2022 for the First Lien Facility resulting in a $7.1 million loss offset by the $0.9 million gain on debt extinguishment recognized on May 27, 2022 when the Company extinguished the First Lien Facility, refer to Note 8, Long-Term Debt, for further information.
Equity-based compensation expense
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Equity-based compensation expense$2,537 $12 >1000.0 %
% of net revenues2.8 %— %
Equity-based compensation expense for the six months ended June 30, 2022 increased $2.5 million, or over 1000.0%, to $2.5 million from less than $0.1 million for the six months ended June 30, 2021. The Company issued 4,436,960 RSUs during six months ended June 30, 2022 under the 2021 Equity Incentive Plan. In total, the awards under the 2021 Equity Incentive Plan resulted in $2.5 million equity-based compensation expense that was recognized during the six months ended June 30, 2022. Refer to Note 17, Equity-based Arrangements, for further information.
Restructuring expenses
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Restructuring expenses$915 $22 >1000.0 %
% of net revenues1.0 %— %
Restructuring expenses for the six months ended June 30, 2022 increased $0.9 million, or over 1,000.0%, to $0.9 million from less than $0.1 million for the six months ended June 30, 2021. The increase was primarily due to additional organization restructuring activities implemented during the first quarter of 2022.
Other operating expenses, net
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Other operating expense, net$1,196 $1,107 8.0 %
% of net revenues1.3 %1.5 %
Other operating expense, net for six months ended June 30, 2022 increased $0.1 million, or 8.0%, to $1.2 million from $1.1 million for the six months ended June 30, 2021. This was mainly driven by increased fees for tax audit consultants.


Interest expense
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Interest expense$(6,092)$(8,052)(24.3)%
% of net revenues(6.7)%(10.6)%
Interest expense for the six months ended June 30, 2022 decreased $2.0 million, or 24.3%, to $6.1 million from $8.1 million for the six months ended June 30, 2021. The decrease was primarily due to the reduction in the principal debt obligation since June 30, 2021.
Other income (expense)
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Other income (expense)$6,807 $415 >1000.0 %
% of net revenues7.5 %0.5 %
Other income (expense) for the six months ended June 30, 2022 increased $6.4 million, or over 1,000.0%, to $6.8 million from $0.4 million for the six months ended June 30, 2021. The change was driven by a $0.8 million decrease in net foreign currency exchange losses and an increase of the $6.0 million gain related to the PPP loan forgiveness.
Income tax expense (benefit)
Six Months Ended June 30,% Change
20222021
2022 vs. 2021
(in thousands, except percentages)
Income tax expense (benefit)$223 $(109)(304.6)%
Effective income tax rate(2.3)%3.2 %
Income tax expense (benefit) for the six months ended June 30, 2022 increased $0.3 million, or 304.6%, to $0.2 million from $(0.1) million for the six months ended June 30, 2021 due to discrete tax items recorded in the first half of 2021 and differences in losses incurred in jurisdictions for which no tax benefit is recognized. For additional information, see Note 10, Income Taxes, to our unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.

Non-GAAP Measures
To supplement our consolidated financial data presented on a basis consistent with U.S. GAAP, we present certain non-GAAP financial measures, including Adjusted Operating Income (Loss), Adjusted Net (Loss) Income and Adjusted Diluted EPS. We have included the non-GAAP financial measures because they are financial measures used by our management to evaluate our core operating performance and trends, to make strategic decisions regarding the allocation of capital and new investments and are among the factors analyzed in making performance-based compensation decisions for key personnel. The measures exclude certain expenses that are required under U.S. GAAP. We exclude certain non-cash expenses and certain items that are not part of our core operations.
We believe these supplemental performance measurements are useful in evaluating operating performance, as they are similar to measures reported by our public industry peers and those regularly used by security analysts, investors and other interested parties in analyzing operating performance and prospects. The non-GAAP financial measures are not intended to be a substitute for any GAAP financial measures and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used


to compare our performance to that of other companies. We compensate for these limitations by providing investors and other users of our financial information a reconciliation of our non-GAAP measures to the related GAAP financial measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP measures in conjunction with GAAP financial measures.
We define and calculate our non-GAAP financial measures as follows:
•Adjusted Operating Income (Loss): (Loss) income from operations adjusted to exclude the change in fair value of embedded derivative liability, plus the change in fair value of contingent consideration obligation, plus the change in fair value of warrant liability, plus equity-based compensation expense, plus impairment charges, plus restructuring expenses, plus (gain) loss on business dispositions, plus (gain) loss on debt extinguishment, plus intangible assets amortization, plus certain transaction costs and certain other operating expense (income), net.
The following table presents the reconciliation of our Adjusted Operating Income (Loss) to our (Loss) income from operations, the most directly comparable GAAP measure, for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands USD)2022202120222021
(Loss) income from operations$(237)$3,048 $(10,292)$4,241 
Change in fair value of embedded derivative liability— (1,112)— (2,522)
Change in fair value of contingent consideration— (2,200)— (2,200)
Change in fair value of warrant liability478 — 956 — 
Equity-based compensation expense2,019 — 2,537 12 
Restructuring expenses1
162 12 915 22 
(Gain) loss on debt extinguishment(950)— 6,186 — 
Intangible assets amortization 1,620 1,547 3,228 3,087 
Transaction costs— 467 9 795 
Other operating income, net2
396 5 1,096 313 
Adjusted Operating Income$3,488 $1,767 $4,635 $3,748 
1 - Represents restructuring expenses associated with the ongoing reorganization of our business operations and realignment efforts. Refer to Note 13, Restructuring, within our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
2 - Represents professional service fees primarily comprised of legal fees in connection with debt modifications, tax consulting fees in connection with review advisory and corporate consolidation project assessments, as well as a non-recurring recruiting fee.
•Adjusted Net Income (Loss): Net (loss) income adjusted to exclude the change in fair value of embedded derivative liability, plus the change in fair value of contingent consideration obligations, plus the change in fair value of warrant liability, plus equity-based compensation expense, plus impairment charges, plus restructuring expenses, plus (gain) loss on business dispositions, plus foreign exchange loss (gain), plus (gain) loss on debt extinguishment and debt forgiveness, plus intangible assets amortization, plus certain transaction costs, plus paid in kind interest and amortization of debt issuance cost and certain other expense, net.
•Adjusted Diluted EPS: Adjusted Net income, divided by the diluted weighted-average number of common shares outstanding for the period.


The following table presents the reconciliation of our Adjusted Net Income (Loss) to our Net (loss) income, the most directly comparable GAAP measure, for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands USD, except share data)2022202120222021
Net (loss) income$(3,502)$548 $(9,800)$(3,287)
Change in fair value of embedded derivative liability— (1,112)— (2,522)
Change in fair value of contingent consideration— (2,200)— (2,200)
Change in fair value of warrant liability478 — 956 — 
Equity-based compensation expense2,019 — 2,537 12 
Restructuring expenses162 12 915 22 
Foreign exchange loss (gain)1
259 (596)7 740 
Gain on debt extinguishment and debt forgiveness(950)(1,243)(1,094)(1,306)
Intangible assets amortization1,620 1,547 3,228 3,087 
Transaction costs— 467 9 795 
Paid in kind interests and amortization of debt issuance cost1,203 1,486 3,177 2,959 
Other expense, net2
643 145 1,560 509 
Adjusted Net Income (Loss)
$1,932 $(946)$1,495 $(1,191)
Number of shares used in Adjusted Diluted EPS46,340,888 34,557,480 46,326,025 34,557,480 
Adjusted Diluted EPS$0.04 $(0.03)$0.03 $(0.03)
1 - Represents foreign exchange loss (gain) due to foreign currency transactions
2 - Represents professional service fees primarily comprised of legal fees in connection with debt modifications as well as other miscellaneous non-operating/ non-recurring items.
Liquidity and Capital Resources
Our main sources of liquidity have been our cash and cash equivalents, cash generated from operations, and proceeds from issuances of stock and debt. Our main uses of cash are funds to operate our business, make principal and interest payments on our outstanding debt, capital expenditures, and business acquisitions.
Our future capital requirements will depend on many factors, including our growth rate. Over the past several years, operating expenses have increased as we have invested in growing our business. Payments of principal and interest on our debt and earnout cash payments following our acquisitions have also been cash outflows. Our operating cash requirements may increase in the future as we continue to invest in the growth of our Company.
As of June 30, 2022, we had $11.1 million of available cash and cash equivalents, an increase of $2.6 million from December 31, 2021. We believe that we will have sufficient financial resources to fund our operations for the next 12 months. We are continuously looking to implement strategies to improve our profitability and reduce expenses.

Debt

Blue Torch Credit Facility
On May 27, 2022, the Company entered into a financing agreement ("Blue Torch Credit Facility") by and among the Company, AN Global LLC, certain subsidiaries of the Company, as guarantors (the “Guarantors”), the financial institutions party thereto as lenders, and Blue Torch Finance LLC (“Blue Torch”), as the administrative agent and collateral agent. The Blue Torch Credit Facility is secured by substantially all of the Company’s and the Guarantors’ properties and assets and provides for a term loan of $55.0 million and a revolving credit facility with an aggregate principal limit not to exceed $3.0 million at any time outstanding. On May 27, 2022, the Company borrowed the full $55.0 million under the term loan. On June 28, 2022, the Company borrowed $3.0 million under the revolving credit facility. The Company has agreed to make quarterly payments on the term loan of approximately $0.7 million starting December 31, 2023. The remaining principal balance under the term loan and any loans drawn under the revolving credit facility will be due on May 27, 2026, the maturity date. The revolving credit facility bears a 2.00% annual usage fee on the undrawn portion of the facility. Interest is paid quarterly for both loans, and is calculated based on the Adjusted Term SOFR (the three-month Term Secured Overnight Financing Rate, plus 0.26161%) plus a margin of 7.0% to 9.0% depending on the Total Leverage Ratio. Interest on each loan shall be payable on the


last day of the then effective interest period applicable to such loan and at maturity. The Company recognized $5.0 million in debt issuance costs.

On August 10, 2022, the Company entered into a waiver and amendment to the Blue Torch Credit Facility to provide for an extension of the period of time which the Company has to satisfy certain post-closing obligations under the Blue Torch Credit Facility and an acceleration of the maturity of the loans made by the lenders thereunder to May 1, 2023 if the Company does not obtain regulatory approval to convert certain loans outstanding under the New Second Lien Facility into common stock of the Company.

First Lien Facility
In 2018, the Company entered into a revolving credit agreement with Monroe Capital Management Advisors LLC that permits the Company to borrow up to $1.5 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing limit to $5.0 million. Also in 2018, the Company entered into a term loan credit agreement with Monroe Capital Management Advisors LLC that permits the Company to borrow up to $75.0 million through November 10, 2023. In 2019, the agreement was amended to increase the borrowing amount to $98.0 million. Interest on the revolving credit agreement and term loan agreement (“First Lien Facility”) are paid monthly and calculated as LIBOR plus a margin of 8.0% to 9.0%, based on the Total Leverage Ratio as calculated in the most recent Compliance Certificate. An additional 2.0% interest may be incurred during periods of loan covenant default.
On March 22, 2021, the Company used $20.0 million from proceeds of issuance of preferred stock to partially pay the First Lien Facility. Refer to Note 15, Stockholders’ Equity, for additional information on issuance of preferred stock.
On June 24, 2021, an amendment was signed to modify the debt covenants for the periods June 30, 2021 and thereafter. In addition to the covenant modifications, the amendment also established the deferral of the monthly $1.0 million principal payments previously due in April and May, along with the $1.0 million payments due in June and July to September 30, 2021. As a result, the regular quarterly principal installments resumed, and the First Lien lenders charged a $4.0 million fee paid upon the end of the term loan in exchange for the amended terms. The amendment resulted in a debt modification, thus the fees payable to the First Lien lenders were capitalized and were being amortized over the remaining life of the First Lien Facility.
From September 30, 2021 to October 29, 2021, the Company entered into various amendments to extend the due date of the $4.0 million in principal payments previously due September 30, 2021 to November 19, 2021.
On November 29, 2021, the Company made a $20.0 million principal prepayment, which included the $4.0 million principal payment originally due September 30, 2021. The Company paid with proceeds from the New Second Lien Facility (defined below). Furthermore, on December 29, 2021, the Company issued 4,439,333 shares of Class A Common Stock to the administrative agent for the First Lien Facility (the “First Lien Shares”), which subject to certain terms and regulatory restrictions, may sell the First Lien Shares upon the earlier of August 29, 2022 and an event of default and apply the proceeds to the outstanding balance of the loan. In addition, the Company agreed to issue warrants to the administrative agent to purchase $7.0 million worth of the Company’s Class A Common Stock for nominal consideration. The warrants will be issued on the earlier of full repayment of outstanding deferred fees or August 29, 2023. In addition, the Company may be required to pay the First Lien lenders cash to the extent that we cannot issue some or all of the warrants due to regulatory restrictions. The First Lien lenders charged an additional $2.9 million fee paid upon the end of the term loan in exchange for the amended terms.
On November 22, 2021, the Company entered into an amendment that required sixty percent (60%) of proceeds from equity issuances be used to repay the outstanding balance on the First Lien Facility. On December 27, 2021, the Company closed a follow on stock offering resulting in $21.8 million of net proceeds, of which $13.7 million was used as payment of the outstanding principal and interest balances for the First Lien Facility.
On March 30, 2022, the Company entered into an amendment with the First Lien and Second Lien Facility Lenders to waive the Fixed Charge Coverage Ratio for March 31, 2022. In addition, the Total Leverage Ratio covenant for the quarterly period of March 31, 2022 was reset. As consideration for entering into this amendment, the Company agreed to pay the First Lien Facility’s administrative agent a fee equal to $0.5 million. The fee would be fully earned as of March 30, 2022 and due and payable upon the end of the term loan. However, the agreement provided that the fee shall be waived in its entirety if final payment in full occurred prior to or on May 30, 2022. This modification triggered by this new amendment was determined to be substantially different to the old instrument, therefore the modification was accounted for as an extinguishment and the debt instrument was adjusted to fair value as of the March 31, 2022. The Company recognized a loss on debt extinguishment of $7.1 million in the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2022.
On May 27, 2022, the Company paid approximately $40.2 million to settle the outstanding principal, interest, and a portion of the $6.9 million deferred fees related to amendments on the First Lien Facility. The First Lien Lenders waived the $0.5 million fee related to the March 30, 2022 amendment and returned 2,423,204 First Lien Shares as part of the deferred fees


settlement. Beginning on August 29, 2022 the First Lien Lenders may sell the remaining First Lien Shares and apply 100% of the net proceeds to the outstanding fees obligation. The First Lien Lenders shall return any of the remaining unsold First Lien Shares upon full payment of the remaining fees. At June 30, 2022, total deferred fees payable on or before May 25, 2023, including fees recognized from prior amendments, totaled $3.5 million. These fees are recognized in Other current liabilities and Other noncurrent liabilities in the Unaudited Condensed Consolidated Balance Sheet at June 30, 2022 and December 31, 2021, respectively. The Company recognized a gain on debt extinguishment of $1.0 million for the three months ended June 30, 2022 and a loss on debt extinguishment of $6.2 million for the six months ended June 30, 2022.

Second Lien Facility
On July 18, 2019, the Company entered into separate credit agreements with Nexxus Capital and Credit Suisse (“the Creditors”) that permited the Company to borrow $12.5 million from each bearing 13.73% interest. On January 31, 2020, the agreements were amended to increase the borrowing amount by $2.05 million under each agreement. Interest was capitalized every six months and payable when the note was due. Immediately prior to the Business Combination, the Creditors exercised their option to convert their combined $38.1 million of debt outstanding (including interest) into 115,923 shares of the Company's Class A ordinary shares, which were converted into the Company's Class A common stock as a result of the Business Combination. Concurrently with the conversion, the Company amortized the remaining $0.1 million of unamortized debt issuance costs and recognized incremental interest expense in the Unaudited Condensed Consolidated Statements of Operations.

New Second Lien Facility
On November 22, 2021, the Company entered into a new Second Lien Facility (the “New Second Lien Facility”) with Nexxus Capital and Credit Suisse (both of which are existing AgileThought shareholders and have representation on AgileThought’s Board of Directors), Manuel Senderos, Chief Executive Officer and Chairman of the Board of Directors, and Kevin Johnston, Global Chief Operating Officer. The New Second Lien Facility provides for a term loan facility in an initial aggregate principal amount of approximately $20.7 million, accruing interest at a rate per annum from 11.00% for the US denominated loan and 17.41% for the Mexican Peso denominated Loan. The New Second Lien Facility has an original maturity date of March 15, 2023. If the Blue Torch Credit Facility, as the first lien facility, remains outstanding on December 15, 2022, the maturity date of the New Second Lien Facility will be extended to May 10, 2024. As the Company does not intend to pay the outstanding balance under the Blue Torch Credit Facility prior to the maturity of the New Second Lien Facility on March 15, 2023, the amounts outstanding under the New Second Lien Facility are classified as noncurrent in the Unaudited Condensed Consolidated Balance Sheet. The New Second Lien Facility also includes an option for the Company to extend the maturity date an additional 18 months. The Company recognized $0.9 million in debt issuance costs with the issuance.
Each lender under the New Second Lien Facility has the option to convert all or any portion of its outstanding loans into AgileThought Class A Common Stock on or after December 15, 2022 or earlier, upon our request, at a conversion price equal to the closing price of one share of our Class A Common Stock on the trading day immediately prior to the conversion date. The amounts outstanding under the New Second Lien Facility will only convert into up to 2,098,545 shares of our Class A Common Stock and will only convert at a price per share equal to the then-current market value. On December 27, 2021, Manuel Senderos and Kevin Johnston exercised the conversion options for their respective loan amounts of $4.5 million and $0.2 million, respectively. See Note 15, Stockholders’ Equity, for additional information.
On May 27, 2022, the Company entered into an amendment and ratified the New Second Lien Facility and replaced references to the First Lien Facility with the Blue Torch Credit Facility.

On August 10, 2022, the Company entered into an amendment to the New Second Lien Facility to provide for the covenants and certain other provisions of the New Second Lien Facility to be made consistent with those in the Blue Torch Credit Facility (and in certain cases for those covenants to be made less restrictive than those in the Blue Torch Credit Facility). In addition, the amendment extends the maturity date of the Tranche A loans thereunder to September 15, 2026, and provides for potential increases, that step up over time from one percent to five percent, in the interest rate applicable to the Tranche A loans. The amendment also extends the maturity date of the Tranche B loans thereunder to June 15, 2023, and provides for a mandatory conversion of the Tranche B loans thereunder, including interest and fees, into equity securities of the Company upon the maturity of said loans.

Paycheck Protection Program Loans
On April 30, 2020 and May 1, 2020, the Company received PPP loans through four of its subsidiaries for a total amount of $9.3 million. The PPP loans bear a fixed interest rate of 1% over a two-year term, are guaranteed by the United States federal government, and do not require collateral. The loans may be forgiven, in part or whole, if the proceeds are used to retain and


pay employees and for other qualifying expenditures. The Company submitted its forgiveness applications to the Small Business Administration (“SBA”) between November 2020 and January 2021. The monthly repayment terms were established in the notification letters with the amount of loan forgiveness. On December 25, 2020, $0.1 million of a $0.2 million PPP loan was forgiven. On March 9, 2021, $0.1 million of a $0.3 million PPP loan was forgiven. On June 13, 2021, $1.2 million of a $1.2 million PPP loan was forgiven. On January 19, 2022, $7.3 million of a $7.6 million PPP loan was forgiven resulting in a remaining PPP Loan balance of $0.3 million of which $0.1 million is due within the next year. The remaining payments will be made quarterly until May 2, 2025. All loan forgiveness was recognized in Other income (expense), net of the Unaudited Condensed Consolidated Statements of Operations.

Subordinated Promissory Note
On June 24, 2021, the Company entered into a credit agreement with AGS Group LLC (“AGS Group”) for a principal amount of $0.7 million. The principal amount outstanding under this agreement matures on December 20, 2021 (“Original Maturity Date”) and was extended until May 19, 2022 (“Extended Maturity Date”). Interest is due and payable in arrears on the Original Maturity Date at a 14.0% per annum until and including December 20, 2021 and at 20.0% per annum from the Original Maturity Date to the Extended Maturity Date calculated on the actual number of days elapsed. The Subordinated Promissory Note can only be repaid after the settlement of the Blue Torch Credit Facility. On August 4, 2022, the Company entered into an amendment with the AGS Group to extend the maturity date of the Subordinated Debt to January 31, 2023.

Exitus Capital Subordinated Debt
On July 26, 2021, the Company agreed with existing lenders and Exitus Capital (“Subordinated Creditor”) to enter into a zero-coupon subordinated loan agreement with Exitus Capital in an aggregate principal amount equal to $3.7 million (“Subordinated Debt”). No periodic interest payments are made and the loan was due on January 26, 2022, with an option to extend up to two additional six month terms. Net loan proceeds totaled $3.2 million, net of $0.5 million in debt discount. Payment of any and all of the Subordinated Debt shall be subordinate of all existing senior debt. In the event of any liquidation, dissolution, or bankruptcy proceedings, all senior debt shall first be paid in full before any distribution shall be made to the Subordinated Creditor. The loan is subject to a 36% annual interest moratorium if full payment is not made upon the maturity date. On January 25, 2022, the Company exercised the option to extend the loan an additional six months to July 26, 2022. The Company recognized an additional $0.5 million in debt issuance costs related to the loan extension. On July 26, 2022, the Company exercised the option to extend the loan an additional six months to January 26, 2023.
Cash Flows
The following table summarizes our consolidated cash flows for the periods presented:
Six Months Ended June 30,
(in thousands)20222021
Net cash used in operating activities
$(8,495)$(3,196)
Net cash used in investing activities
(394)(494)
Net cash provided by (used in) financing activities
11,538 (1,992)
Operating Activities
Net cash used in operating activities for the six months ended June 30, 2022 increased by approximately $5.3 million to $8.5 million from $3.2 million for the six months ended June 30, 2021. The increase was mainly driven by an increase of $6.5 million in net loss and a decrease of $9.7 million resulting from changes in our operating assets and liabilities offset by an increase of $10.9 million in non-cash items.
The decrease of $9.7 million resulting from changes in our operating assets and liabilities was primarily driven by (i) a decrease of $19.5 million in accounts payable, (ii) a decrease of $1.0 million in accrued liabilities, (iii) a decrease of $0.5 million in income taxes payable, and (iv) a $0.1 million change in lease liability offset by (i) a decrease of $5.8 million in prepaid expenses and guarantee deposits, (ii) a $1.4 million increase of deferred revenue, (iii) a decrease of $1.9 million in accounts receivable and (iv) a decrease of $2.3 million in current VAT receivables and other taxes payable
The increase of $10.9 million in non-cash items was driven by (i) an increase of $2.3 million in the foreign currency remeasurement, (ii) a $6.2 million loss on debt extinguishment, (iii) an increase of $2.5 million of share-based compensation, (iv) an increase of $0.9 million from the change in fair value of privately held warrants, (v) an increase of $1.4 million of debt issuance costs, (vi) an increase of $2.5 million due to no embedded derivative liability in 2022, (vii) a $2.1 million increase in


obligations for contingent purchase price offset, and (viii) a $1.4 million increase in paid in kind interest offset by (i) the increase on gain on the forgiveness of the PPP loan of $6.0 million and (ii) the decrease in accretion from convertible notes of $2.4 million.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2022 decreased $0.1 million to $0.4 million from $0.5 million for the six months ended June 30, 2021 as a result of a decrease in capital expenditures.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2022 increased $13.5 million to $11.5 million from $(2.0) million for the six months ended June 30, 2021. The increase in net cash provided was primarily driven by (i) proceeds of $58.0 million from the Blue Torch Facility in 2022 offset by $0.7 million received from the subordinated promissory note in 2021 offset by (i) an increase in repayment of borrowings of $14.5 million, (ii) a decrease in $20.0 million in share capital received due to the issuance of preferred stock in 2021, (iii) an increase of $0.3 million of tax withholding for equity-based compensation, and (iv) an increase in $9.0 million of debt issuance payments.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations as of June 30, 2022:
Payments Due By Period
(in thousands)TotalLess than 1 Year1-3 Years3-5 YearsMore than 5 Years
Debt obligations
$83,648 $7,925 $4,993 $70,730 $— 
Operating lease obligations
5,761 2,586 2,587 588 — 
Total
$89,409 $10,511 $7,580 $71,318 $— 
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.
For additional information, see Note 8, Long-term Debt, to our unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Estimates
We believe that the following accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. See Note 2, Summary of Significant Accounting Policies, to our audited consolidated financial statements included in our Annual Report on Form 10-K, as well as unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a description of our other significant accounting policies. The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in those financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.
Revenue Recognition
The Company recognizes revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Account Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.
Revenue is recognized when or as control of promised products or services are transferred to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. In instances where revenue is recognized over time, the Company uses an appropriate input or output measurement method, typically based on the contract or labor volume.


The Company applies judgment in determining the customer’s ability and intention to pay based on a variety of factors, including the customer’s historical payment experience. If there is uncertainty about the receipt of payment for the services, revenue recognition is deferred until the uncertainty is sufficiently resolved. Our payment terms are based on customary business practices and can vary by region and customer type, but are generally 30-90 days. Since the term between invoicing and expected payment is less than a year, we do not adjust the transaction price for the effects of a financing component.
The Company may enter into arrangements that consist of any combination of our deliverables. To the extent a contract includes multiple promised deliverables, the Company determines whether promised deliverables are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a single performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. The standalone selling price is the price at which we would sell a promised good or service on an individual basis to a customer. When not directly observable, the Company generally estimates standalone selling price by using the expected cost plus a margin approach. The Company reassesses these estimates on a periodic basis or when facts and circumstances change.
Revenues related to software maintenance services are recognized over the period the services are provided using an output method that is consistent with the way in which value is delivered to the customer.
Revenues related to cloud hosting solutions, which include a combination of services including hosting and support services, and do not convey a license to the customer, are recognized over the period as the services are provided. These arrangements represent a single performance obligation.
For software license agreements that require significant customization of third-party software, the software license and related customization services are not distinct as the customization services may be complex in nature or significantly modify or customize the software license. Therefore, revenue is recognized as the services are performed in accordance with an output method which measures progress towards satisfaction of the performance obligation.
Revenues related to our non-hosted third-party software license arrangements that do not require significant modification or customization of the underlying software are recognized when the software is delivered as control is transferred at a point in time.
Revenues related to consulting services (time-and-materials), transaction-based or volume-based contracts are recognized over the period the services are provided using an input method such as labor hours incurred.
The Company may enter into arrangements with third party suppliers to resell products or services, such as software licenses and hosting services. In such cases, the Company evaluates whether the Company is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). In doing so, the Company first evaluates whether it controls the good or service before it is transferred to the customer. In instances where the Company controls the good or service before it is transferred to the customer, the Company is the principal; otherwise, the Company is the agent. Determining whether we control the good or service before it is transferred to the customer may require judgment.
Some of our service arrangements are subject to customer acceptance clauses. In these instances, the Company must determine whether the customer acceptance clause is substantive. This determination depends on whether the Company can independently confirm the product meets the contractually agreed-upon specifications or if the contract requires customer review and approval. When a customer acceptance is considered substantive, the Company does not recognize revenue until customer acceptance is obtained.
Client contracts sometimes include incentive payments received for discrete benefits delivered to clients or service level agreements and volume rebates that could result in credits or refunds to the client. Such amounts are estimated at contract inception and are adjusted at the end of each reporting period as additional information becomes available only to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur.
Business Combinations
The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations, by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is re-measured to fair value as of each reporting date until the contingency is resolved, and subsequent


changes in fair value are recognized in earnings. Acquisition-related costs are expensed as incurred within other operating expenses, net.
Equity-Based Compensation
We recognize and measure compensation expense for all equity-based awards based on the grant date fair value.
For performance share units (“PSUs”), we are required to estimate the probable outcome of the performance conditions in order to determine the equity-based compensation cost to be recorded over the vesting period. Vesting is tied to performance conditions that include the achievement of EBITDA-based metrics and/or the occurrence of a liquidity event.
The grant date fair value is determined based on the fair market value of the Company’s shares on the grant date of such awards. Because there is no public market for the Company’s equity prior to the Business Combination, the Company determines the fair value of shares by using an income approach, specifically a discounted cash flow method, and in consideration of a number of objective and subjective factors, including the Company’s actual operating and financial performance, expectations of future performance, market conditions and liquidation events, among other factors.
Determining the fair value of equity-based awards requires estimates and assumptions, including estimates of the period the awards will be outstanding before they are exercised and future volatility in the price of our common shares. We periodically assess the reasonableness of our assumptions and update our estimates as required. If actual results differ significantly from our estimates, equity-based compensation expense and our results of operations could be materially affected. The Company’s accounting policy is to account for forfeitures of employee awards as they occur.
Warrants
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging.
For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded as liabilities. At the end of each reporting period, changes in fair value during the period are recognized as a component of results of operations. The Company will continue to adjust the warrant liability for changes in the fair value until the earlier of a) the exercise or expiration of the warrants or b) the redemption of the warrants.
Our public warrants meet the criteria for equity classification and accordingly, are reported as a component of stockholders’ equity while our private warrants do not meet the criteria for equity classification and are thus classified as a liability.
Recent Accounting Pronouncements
See Note 2, Summary of Significant Accounting Policies, to our audited consolidated financial statements included in our Annual Report on Form 10-K filed March 31, 2022, as well as our unaudited condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q, for a description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations.


Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable.

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.



Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures and considering the material weakness that still remains related to the proper application of revenue recognition related to our Latin America business, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2022.
Management's Plan to Remediate the Material Weakness
We intend to continue to take steps to remediate the remaining material weakness related to the proper application of revenue recognition related to our Latin America business and further improve our accounting processes. We will not be able to remediate this material weakness until these steps have been completed and have been operating effectively for a sufficient period of time.

Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the three months ended June 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management time and resources and other factors.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K filed March 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Use of proceeds

LIVK raised a total net proceeds of $72,575,000, comprised of $70,000,000 of the proceeds from its initial public offering and $2,575,000 of the proceeds from the sale of the private warrants. On December 18, 2019, LIVK consummated the sale of an additional 1,050,000 units that were subject to the underwriter’s over-allotment option at $10.00 per unit, generating gross proceeds of $10,500,000. Simultaneously with the closing of the sale of additional units, LIVK consummated the sale of an additional 236,250 private warrants at a price of $1.00 per private warrant, generating total proceeds of $236,250. Transaction cost amounted to approximately $2,250,000. Following the closing of the over-allotment option and sale of additional private warrants, net of transaction cost an aggregate amount of $81,060,244 was placed in the trust account established in connection with LIVK’s initial public offering.

On August 23, 2021, the Company (f/k/a LIVK) consummated the previously announced merger, by and among LIVK and Legacy AT. The Company’s shareholders approved the Business Combination and the change of LIVK’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware by deregistering as an exempted company in the Cayman Islands and domesticating and continuing as a corporation formed under the laws of the State of Delaware at a special meeting of stockholders held on August 18, 2021 (the “Special Meeting”). In connection with the Special Meeting and the Business Combination, holders of 7,479,065 of LIVK’s Class A ordinary shares, or 93% of the shares with redemption rights, exercised their right to redeem their shares for cash at a redemption price of approximately $10.07 per share, for an aggregate redemption amount of $75,310,929.45.

In connection with the closing of the transaction, the Company obtained $5.7 million from the trust account, $27.6 million from the private sale of Class A Common Stock. The Company paid $4.3 million to the First Lien Facility lenders and $14 million transactions costs to a total remaining cash balance of $15 million available without restriction and available for general corporate purposes. Since the Business Combination, the Company has used the proceeds to fund operating expenses in combination with cash generated from operations. As of June 30, 2022, the Company had no remaining proceeds from the transaction on the balance sheet.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.


Exhibit NumberDescription
3.1
3.2
10.1+#
10.2+
10.4
10.5+
10.6
10.7+
10.8+
31.1*
31.2*
32.1**
32.2**
101.INS*XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
+The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.
#Indicates management contract or compensatory plan or arrangement.
*Filed Herewith
**Furnished Herewith




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 12, 2022

AGILETHOUGHT, INC.
By:
/s/ Amit Singh
Amit Singh
Chief Financial Officer
Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into effective as of May 2, 2022 (the “Effective Date”), by and between Amit Singh (“Executive”) and AgileThought, LLC (the “Company”).
The Company desires to employ Executive and, in connection therewith, to compensate Executive for Executive’s personal services to the Company; and
Executive wishes to be employed by the Company and provide personal services to the Company in return for certain compensation.
Accordingly, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:
1.Employment by the Company.
1.1At-Will Employment. Executive shall be employed by the Company on an “at-will” basis, meaning either the Company or Executive may terminate Executive’s employment at any time, with or without Cause (as defined in Section 6.2(g) below), Good Reason (as defined in Section 6.2(f) below), or advance notice. Any contrary representations that may have been made to Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between Executive and the Company on the “at-will” nature of Executive’s employment with the Company, which may be changed only in an express written agreement signed by Executive and a duly authorized officer of the Company. Executive’s rights to any salary or cash bonus following a termination shall be only as set forth in Section 6 or under any applicable benefit or equity plan.
1.2Position. Subject to the terms set forth herein, the Company agrees to employ Executive and Executive hereby accepts such employment as Chief Financial Officer. During the term of Executive’s employment with the Company, and excluding periods of vacation and sick leave to which Executive is entitled, Executive shall devote all business time and attention to the affairs of the Company necessary to discharge the responsibilities assigned hereunder, and shall use commercially reasonable efforts to perform faithfully and efficiently such responsibilities.
1.3Duties. Executive will report to the Chief Executive Officer and will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position as Chief Financial Officer, as shall reasonably be assigned to him/her by the Chief Executive Officer. Executive shall perform Executive’s duties under this Agreement principally out of the Company’s corporate headquarters in Dallas, Texas, or such other location as assigned; provided, however, that Executive shall have the flexibility to work remotely at Executive’s discretion in accordance with the reasonable business and operational needs of the Company. In addition, Executive shall make such business trips to such places as may be reasonably necessary or advisable for the efficient operations of the Company.
1.4Company Policies and Benefits. The employment relationship between the parties shall be subject to the Company’s written personnel policies and procedures as they may be adopted, revised, or deleted from time to time in the Company’s sole discretion. Executive shall be expected to comply with all applicable laws, regulations, rules, directives and other legal requirements of federal, state and other governmental and regulatory bodies having jurisdiction over the Company and of the professional bodies of which the Company is a member. During Executive’s employment with the Company, Executive shall be required to maintain in good


standing any licenses and certifications necessary for the performance of Executive’s duties for the Company.  Executive will be eligible to participate on the same basis as similarly-situated employees in the Company’s benefit plans in effect from time to time during Executive’s employment, including the Company’s 401k plan. Subject to the preceding sentence, the Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion. All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of such plan. Notwithstanding the foregoing, in the event that the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control. The parties acknowledge that as of the Effective Date of this Agreement, the Company’s current vacation policy provides that any accrued but unused vacation will not be paid out upon termination of Executive’s employment unless otherwise required by applicable law.
1.5PTO. You are entitled to begin accruing 20 days Paid Time off (PTO) per year. You will be eligible for additional PTO days based on the length of service pursuant to our Paid Time Off policy. Additionally, you will be entitled to 10 paid holidays per year. Of those 10 holidays, 9 are fixed and 1 is a floating day. Employees are not entitled to additional paid time off for sick leave unless required by state or local law.
2.Compensation.
2.1Salary. Executive shall receive an annualized base salary of $350,000.00, subject to review and adjustment from time to time by the Company in its sole discretion, payable subject to standard federal and state payroll withholding requirements in accordance with the Company’s standard payroll practices (the “Base Salary”).
2.2Bonus.
(a)During Employment. Executive shall be eligible to earn a quarterly performance bonus with respect to each calendar quarter (each, a “Quarterly Bonus”) based upon such Quarterly Bonus target amounts and performance objectives as may be set forth annually in a schedule (each, a “Quarterly Bonus Schedule”) to be pre-determined by the Company and provided to Executive. Attached hereto as Exhibit A is the applicable Quarterly Bonus Schedule for calendar year 2022. The Quarterly Bonuses will be awarded based upon the assessment by the AgileThought, Inc.’s (“Parent”) Board of Directors (the “Board”) of the Parent’s attainment of the targeted goals set forth by the Company in the applicable Quarterly Bonus Schedule, as determined by the Board in its reasonable good faith discretion.  The Quarterly Bonuses, if any, will be subject to applicable payroll deductions and withholdings.  Following the close of each quarter of each calendar year, the Board (or any authorized committee thereof) will determine whether Executive has earned such quarter’s applicable Quarterly Bonus and the amount of any Quarterly Bonus, on the bases described above and as set forth on the applicable Bonus Schedule. No amount of any Quarterly Bonus is guaranteed at any time, and, Executive must be an employee in good standing through the date a respective Quarterly Bonus is paid to be eligible to receive such Quarterly Bonus.  Any Quarterly Bonus, if earned, will be paid at the same time quarterly bonuses are generally paid to other similarly-situated employees of the Company.  Executive’s eligibility for a Quarterly Bonus is subject to change in the discretion of the Board (or any authorized committee thereof). Executive is eligible to receive a prorated bonus with respect to the 2nd quarter of calendar year 2022.
(b)Upon Termination. Subject to the provisions of Section 6, in the event Executive leaves the employ of the Company for any reason prior to the date a Quarterly Bonus is paid, Executive is not eligible to earn such Quarterly Bonus, prorated or otherwise.
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2.3Equity. Subject to approval by the Board (or its designee), Parent shall, as soon as practicable following the Effective, grant Executive a restricted stock unit award (the “RSU”) covering 250,000 shares of Parent’s Class A common stock.  The RSU shall be granted pursuant to the Company’s 2021 Equity Incentive Plan (the “Plan”) and shall be subject to the terms and conditions of the Plan and applicable restricted stock unit award agreement thereunder that subject vesting on applicable service-based (60%) and performance-based (40%) vesting provisions as determined by the Board (or its designee), subject to Executive’s Continuous Service (as defined in the Plan) through each applicable vesting date. Notwithstanding the foregoing, vesting for said RSUs shall accelerate upon the termination of Executive’s Employment without Cause by the Company, and any portion of the RSU that has not vested prior to said termination shall be immediately vested.
2.4Future Equity Awards. Executive remains eligible to be considered for an annual grant of future equity awards of restrictred stock units covering shares of the Company common stock with an approximate grant fair value of $200,000 dollars, as may be determined by the Board or a committee of the Board in its discretion, in accordance with the terms of any applicable equity plan or arrangement that may be in effect from time to time.
2.5Expense Reimbursement. The Company will issue to Executive a Company credit card for business expenses and shall further reimburse Executive for reasonable out-of-pocket business expenses in accordance with the Company’s standard expense reimbursement policy; provided that such reimbursements, to the extent taxable under applicable law, will be subject to applicable deductions and withholdings. For the avoidance of doubt, to the extent that any reimbursements payable to Executive are subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”): (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
2.6Relocation Expenses. In the event Executive and the Company agree that Executive shall relocate his principal residence, Executive will be entitled to relocation benefits up to a maximum amount of $50,000 USD, subject to the terms and conditions of any applicable plans and/or policies of the Company, as amended from time to time. Executive agrees to pay any income or other taxes that are required to be paid in connection with the receipt of these benefits.
3.Confidential Information, Inventions, Non-Solicitation and Non-Competition Obligations. In connection with Executive’s employment with the Company, Executive will receive and have access to the Company’s confidential information and trade secrets. Accordingly, and in consideration of the benefits that Executive is eligible to receive under this Agreement, Executive agrees to sign the Company’s Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement (the “Confidential Information Agreement”), attached as Exhibit B, which contains restrictive covenants and prohibits unauthorized use or disclosure of the Company’s confidential information and trade secrets, among other obligations. The Confidential Information Agreement contains provisions that are intended by the parties to survive and do survive termination or expiration of this Agreement.

4.Outside Activities. Except with the prior written consent of the Board, Executive will not, while employed by the Company, undertake or engage in any other employment, occupation, or business enterprise that would interfere with Executive’s responsibilities and the performance of Executive’s duties hereunder except for (i) reasonable time devoted to volunteer services for or on behalf of such religious, educational, non-profit, and/or other charitable organization as Executive may wish to serve, (ii) reasonable time devoted to activities in the non-
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profit and business communities consistent with Executive’s position with the Company, (iii) reasonable time serving as trustee, director, or advisor to any family companies or trusts, or (iv) with prior written notice to the Board, reasonable time devoted to service as a member of the board of directors (or its equivalent in the case of a non-corporate entity) of a non-competing business; so long as the activities set forth in clauses (i), (ii), (iii), and (iv) do not interfere, individually or in the aggregate, with the performance of Executive’s duties for the Company, are not competitive with the business of the Company, will not otherwise result in Executive’s breach of the Confidential Information Agreement, or create a business or fiduciary conflict. This restriction shall not, however, preclude Executive from (x) owning less than one percent (1%) of the total outstanding shares of a publicly traded company, (y) managing Executive’s passive personal investments, or (z) employment or service in any capacity with Affiliates of the Company. As used in this Agreement, “Affiliates” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 of the Securities Act of 1933, as amended. The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

5.No Conflict with Existing Obligations. Executive represents that Executive’s performance of all the terms of this Agreement and service as an employee of the Company do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services. Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith or with Executive’s duties to the Company.

6.Termination Of Employment. The parties acknowledge that Executive’s employment relationship with the Company will be at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without Cause (as defined below) or advance notice. The provisions in this Section govern the amount of compensation, if any, to be provided to Executive upon termination of employment and do not alter this at-will status.

6.1Termination by Virtue of Death or Disability of Executive.
(a)In the event of Executive’s death while employed pursuant to this Agreement, all obligations of the parties hereunder and Executive’s employment shall terminate immediately, and the Company shall, pursuant to the Company’s standard payroll policies and applicable law, pay to Executive’s legal representatives the Accrued Obligations (as defined in Section 6.2(e) below) due to Executive.
(b)Subject to applicable state and federal law, the Company shall at all times have the right, upon written notice to Executive, to terminate this Agreement based on Executive’s Disability (as defined below). Termination by the Company of Executive’s employment based on “Disability” shall mean termination because Executive is unable due to a physical or mental condition to perform the essential functions of Executive’s position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event Executive’s employment is terminated based on Executive’s Disability, Executive will be entitled to the Accrued Obligations due to Executive.
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6.2Termination by the Company or Resignation by Executive.
(a)The Company shall have the right to terminate Executive’s employment pursuant to this Section 6.2 at any time (subject to any applicable cure period stated in Section 6.2(f)) with or without Cause or advance notice, by giving notice as described in Section 7.1 of this Agreement. Likewise, Executive can resign from employment with or without Good Reason, by giving notice as described in Section 7.1 of this Agreement. Executive hereby agrees to comply with the additional notice requirements set forth in Section 6.2(f) below for any resignation for Good Reason. If Executive is terminated by the Company (with or without Cause) or resigns from employment with the Company (with or without Good Reason), then Executive shall be entitled to the Accrued Obligations (as defined below). In addition, if Executive is terminated without Cause or resigns for Good Reason, and provided that such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “Separation from Service”), and further provided that Executive executes and allows to become effective a separation agreement that includes, among other terms, a general release of claims in favor of the Company and its Affiliates and representatives, in the form presented by the Company (the “Separation Agreement”), and subject to Section 6.2(b) (the date that the general release of claims in the Separation Agreement becomes effective and may no longer be revoked by Executive is referred to as the “Release Date”), then Executive shall be eligible to receive the following severance benefits (collectively the “Non-CIC Severance Benefits”):
(i)An amount equal to twelve (12) months of Executive’s then current Base Salary, less standard payroll deductions and withholdings, paid in installments on the Company’s regular payroll dates;
(ii)Provided Executive or Executive’s covered dependents, as the case may be, timely elect continued coverage under COBRA under the Company’s group health plans following such termination, the portion of the COBRA premiums which is equal to the cost of the coverage that the Company was paying as of the date of termination, to continue Executive’s (and Executive’s covered dependents’, as applicable) health insurance coverage in effect on the termination date until the earliest of: (1) twelve (12) months following the termination date; (2) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (3) the date Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (1)-(3), (the “COBRA Payment Period”)). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on Executive’s behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive Executive of Executive’s rights under COBRA or ERISA for benefits under plans and policies arising under Executive’s employment by the Company; and
(b)Executive shall not receive the Non-CIC Severance Benefits pursuant to Section 6.2(a) unless Executive executes the Separation Agreement within the consideration period specified therein, which shall in no event be more than forty-five (45) days, and until the Separation Agreement becomes effective and can no longer be revoked by Executive under its terms. Executive’s ability to receive benefits pursuant to Section 6.2(a) is further conditioned upon
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Executive: (i) returning all Company property; (ii) complying with Executive’s post-termination obligations under this Agreement and the Confidential Information Agreement; (iii) complying with the Separation Agreement, including without limitation any non-disparagement and confidentiality provisions contained therein; and (iv) resignation from any other positions Executive holds with the Company, effective no later than Executive’s date of termination (or such other date as requested by the Board).

(c)The Company will not make any payments to Executive with respect to any of the benefits pursuant to Section 6.2(a) prior to the 60th day following Executive’s date of termination. On the first payroll date after the 60th day following Executive’s date of termination, and provided that Executive has delivered an effective Separation Agreement, the Company will make the first payment to Executive under Section 6.2(a)(i) and, in a lump sum, an amount equal to the aggregate amount of payments that the Company would have paid Executive through such date had the payments commenced on Executive’s date of termination through such 60th day, with the balance of the payments paid thereafter on the schedule described above, subject to any delay in payment required by Section 6.6.

(d)Subject to any delay in payment required by Section 6.6.
(e)For purposes of this Agreement, “Accrued Obligations” are (i) Executive’s accrued but unpaid salary through the date of termination and, if required by applicable law and the Company’s applicable policy as of the time of termination, any accrued but unused vacation through the date of termination (both of which, for purpose of clarity, shall be paid in cash), (ii) any unreimbursed business expenses incurred by Executive payable in accordance with the Company’s standard expense reimbursement policies, and (iii) benefits owed to Executive under any qualified retirement plan or health and welfare benefit plan in which Executive was a participant in accordance with applicable law and the provisions of such plan.
(f)For purposes of this Agreement, “Good Reason” means any of the following actions taken by the Company without Executive’s express prior written consent: (i) a material reduction by the Company of Executive’s Base Salary (other than in a broad based reduction similarly affecting all other members of the Company’s executive management); (ii) a material breach by the Company of this Agreement or any other material written agreement between Executive and the Company concerning the terms and conditions of Executive’s employment; (iii) the relocation of Executive’s principal place of employment, without Executive’s consent, to a place that increases Executive’s one-way commute by more than fifty (50) miles as compared to Executive’s then-current principal place of employment immediately prior to such relocation; or (iv) a material reduction in Executive’s duties, authority, or responsibilities for the Company relative to Executive’s duties, authority, or responsibilities in effect immediately prior to such reduction; provided, however, that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (1) Executive gives the Company written notice of Executive’s intent to terminate for Good Reason within thirty (30) days following Executive’s learning of the occurrence of the condition(s) that Executive believes constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (3) Executive voluntarily terminates Executive’s employment within thirty (30) days following the end of the Cure Period. For the avoidance of doubt, any change in Executive’s title or the entity structure of the Company, in each case, without a corresponding material reduction in Executive’s duties, authority, or responsibilities, in accordance with clause (iv) above, shall not constitute Good Reason.
(g)For purposes of this Agreement, “Cause” for termination shall mean that the Company has determined in its sole discretion that Executive has engaged in any of the
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following: (i) a material breach of any covenant or condition under this Agreement or any other agreement between the parties; (ii) any act constituting dishonesty, fraud, immoral or disreputable conduct which is reasonably likely to cause harm (including reputational harm) to the Company; (iii) any conduct which constitutes a felony under applicable law; (iv) material violation of any Company policy, after the expiration of ten (10) days without cure after written notice of such violation to the extent such violation is curable; (v) refusal to follow or implement a clear, lawful and reasonable directive of Company after the expiration of ten (10) days without cure after written notice of such failure to the extent such failure is curable; (vi) gross negligence or incompetence in the performance of Executive’s duties after the expiration of ten (10) days without cure after written notice of such failure; or (vii) breach of fiduciary duty.
(h)The benefits provided to Executive pursuant to this Section 6.2 are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy, or program.

(i)Any damages caused by the termination of Executive’s employment without Cause or for Good Reason would be difficult to ascertain; therefore, the Non-CIC Severance Benefits for which Executive is eligible pursuant to Section 6.2(a) above in exchange for the Separation Agreement is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

(j)If the Company terminates Executive’s employment for Cause, or Executive resigns from employment with the Company without Good Reason, regardless of whether or not such termination is in connection with a Change in Control (as defined in the Plan), then Executive shall be entitled to the Accrued Obligations, but Executive will not receive the Non-CIC Severance Benefits, the CIC Severance Benefits, or any other severance compensation or benefit.
6.3Resignation by Executive for Good Reason or Termination by the Company without Cause (in connection with a Change in Control).
(a)In the event that the Company terminates Executive’s employment without Cause or Executive resigns for Good Reason within twelve (12) months following the effective date of a Change in Control (“Change in Control Termination Date”), then Executive shall be entitled to the Accrued Obligations and, subject to Executive’s compliance with Section 6.2(b) above, Executive shall be eligible to receive the following severance benefits (collectively the “CIC Severance Benefits”), subject to the terms and conditions set forth in Section 6.3(b):
(i)An amount equal to twelve (12) months of Executive’s then current Base Salary, less standard payroll deductions and withholdings, paid in installments on the Company’s regular payroll dates;
(ii)Provided Executive or Executive’s covered dependents, as the case may be, timely elects continued coverage under COBRA under the Company’s group health plans following such termination, the portion of the COBRA premiums which is equal to the cost of the coverage that the Company was paying as of the date of termination, to continue Executive’s (and Executive’s covered dependents, as applicable) health insurance coverage in effect on the termination date until the earliest of: (1) twelve (12) months following the termination date; (2) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (3) the date Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination (such period from the termination date through the earlier of (1)-(3), (the “CIC COBRA Payment Period”).
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Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on Executive’s behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the CIC COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding, for the remainder of the CIC COBRA Payment Period. Nothing in this Agreement shall deprive Executive of Executive’s rights under COBRA or ERISA for benefits under plans and policies arising under Executive’s employment by the Company;
(iii)Effective as of Executive’s Change in Control Termination Date, the vesting and exercisability of all outstanding service-based equity awards held by Executive immediately prior to the Change in Control Termination Date, including the RSU, shall be accelerated in full. Such awards shall remain outstanding following Executive’s Change in Control Termination Date if and to the extent necessary to give effect to this Section 6.3(a)(iv) subject to earlier termination under the terms of the equity incentive plan under which such awards were granted and the original maximum term of the award (without regard to Executive’s termination).
(b)The Company will not make any payments to Executive with respect to any of the benefits pursuant to Section 6.3(a) prior to the 60th day following Executive’s date of termination. On the first payroll date after the 60th day following Executive’s date of termination, and provided that Executive has delivered an effective Separation Agreement, the Company will make the first payment to Executive under Section 6.3(a)(i) and, in a lump sum, an amount equal to the aggregate amount of payments that the Company would have paid Executive through such date had the payments commenced on Executive’s date of termination through such 60th day, with the balance of the payments paid thereafter on the schedule described above; subject to any delay in payment required by Section 6.6.

(c)The benefits provided to Executive pursuant to this Section 6.3 are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy, or program.

(d)Any damages caused by the termination of Executive’s employment without Cause or for Good Reason in connection with a Change in Control would be difficult to ascertain; therefore, the CIC Severance Benefits for which Executive is eligible pursuant to Section 6.3(a) above in exchange for the Separation Agreement is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

6.4Cooperation With the Company After Termination of Employment. Following termination of Executive’s employment for any reason, Executive shall reasonably cooperate with the Company in all matters relating to the winding up of Executive’s pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other executives as may be designated by the Company; provided, that the Company agrees that the Company (a) shall make reasonable efforts to minimize disruption of Executive’s other activities, and (b) shall reimburse Executive for all reasonable expenses incurred in connection with such cooperation.
6.5Effect of Termination. Executive agrees that should Executive’s employment be terminated for any reason, Executive shall be deemed to have resigned from any and all positions with the Company, including, but not limited to, a position on the Board and all positions with any and all subsidiaries and Affiliates of the Company.
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6.6Application of Section 409A.
(a)It is intended that all of the compensation payable under this Agreement, to the greatest extent possible, either complies with the requirements of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively, “Section 409A”) or satisfies one or more of the exemptions from the application of Section 409A, and this Agreement will be construed in a manner consistent with such intention, incorporating by reference all required definitions and payment terms.
(b)No severance payments will be made under this Agreement unless Executive’s termination of employment constitutes a Separation from Service. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.
(c)To the extent that any severance payments are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, to the extent required to comply with Section 409A, if the period during which Executive may consider and sign the Separation Agreement spans two calendar years, the severance payments will not begin until the second calendar year. If the Company determines that the severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A and if Executive is a “specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i) of the Code at the time of Executive’s Separation from Service, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the severance will be delayed as follows: on the earlier to occur of (a) the date that is six months and one day after Executive’s Separation from Service, and (b) the date of Executive’s death, the Company will: (i) pay to Executive a lump sum amount equal to the sum of the severance benefits that Executive would otherwise have received if the commencement of the payment of the severance benefits had not been delayed pursuant to this Section 6.6(c); and (ii) commence paying the balance of the severance benefits in accordance with the applicable payment schedule set forth in Sections 6.2 and 6.3. No interest shall be due on any amounts deferred pursuant to this Section 6.6(c).
(d)To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that compensation paid pursuant to the terms of this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment.
6.7Excise Tax Adjustment.
(a)If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment provided pursuant to this Agreement (a “Payment”) shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax, or (y) the largest portion, up to and
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including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).
(b)Notwithstanding any provision of this Section 6.7 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(c)Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity, or group effecting the Change in Control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 6.7. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
(d)If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 6.7(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 6.7(a)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 6.7(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
7.General Provisions.
7.1Notices. Any notices required hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (c) five (5) days after having been sent by registered or certified
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mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll or (if notice is given prior to Executive’s termination of employment) to Executive’s Company-issued email address, or at such other address as the Company or Executive may designate by ten (10) days’ advance written notice to the other.
7.2Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed, and enforced in such jurisdiction as if such invalid, illegal, or unenforceable provisions had never been contained herein.
7.3Waiver. If either party should waive any breach of any provisions of this Agreement, Executive or the Company shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
7.4Complete Agreement. This Agreement (including Exhibits A and B), and any other separate agreement relating to equity awards constitute the entire agreement between Executive and the Company with regard to the subject matter hereof and supersede any prior oral discussions or written communications and agreements. This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in writing signed by Executive and an authorized officer of the Company.
7.5Counterparts. This Agreement may be executed by electronic transmission and in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.
7.6Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
7.7Successors and Assigns. The Company shall assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any company or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. Executive may not assign or transfer this Agreement or any rights or obligations hereunder, other than to Executive’s estate upon Executive’s death.
7.8Choice of Law. All questions concerning the construction, validity, and interpretation of this Agreement will be governed by the laws of the State of Delaware.
7.9Resolution of Disputes. The parties recognize that litigation in federal or state courts or before federal or state administrative agencies of disputes arising out of the Executive’s employment with the Company or out of this Agreement, or the Executive’s termination of employment or termination of this Agreement, may not be in the best interests of either the Executive or the Company, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties agree that any dispute between the parties arising out of or relating to the negotiation, execution, performance or termination of this Agreement or the Executive’s
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employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Executive Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine, whether that dispute arises during or after employment, shall be settled by binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association; provided however, that this dispute resolution provision shall not apply to any separate agreements between the parties that do not themselves specify arbitration as an exclusive remedy. The location for the arbitration shall be the Tampa Bay, Florida area. Any award made by such panel shall be final, binding and conclusive on the parties for all purposes, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitrators’ fees and expenses and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the Company; provided however, that at the Executive’s option, Executive may voluntarily pay up to one-half the costs and fees. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of this Agreement and continue after the termination of the employment relationship between Executive and the Company. The parties each further agree that the arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. By election arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a Federal, State or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury.


[Remainder of page intentionally left blank.]

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In Witness Whereof, the parties have executed this Employment Agreement on the day and year first written above.


AgileThought, LLC
By:/s/ Manuel Senderos
Name: Manuel Senderos
Title: Chief Executive Officer
Executive:
/s/ Amit Singh
Amit Singh
Date:May 2, 2022
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Exhibit A


2022 Quarterly Bonus Schedule











Exhibit B

Employee Confidential Information, Inventions, Non-Solicitation and Non-Competition Agreement




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Exhibit 10.7
AMENDMENT No. 4 TO CREDIT AGREEMENT
This AMENDMENT No. 4 TO THE CREDIT AGREEMENT (this "Amendment"), dated as of August 10, 2022, is entered into by and among AGILETHOUGHT, INC., a Delaware corporation ("Ultimate Holdings") and AGILETHOUGHT MEXICO, S.A. DE C.V., a sociedad anónima de capital variable incorporated and existing under the laws of Mexico ("AgileThought Mexico" and together with Ultimate Holdings, each a "Borrower" and collectively, the "Borrowers"), AN GLOBAL LLC, a Delaware limited liability company ("Intermediate Holdings", and together with Ultimate Holdings, the "Holding Companies"), the other Loan Parties party hereto, the lenders party hereto (together with their respective successors and assigns, the "Lenders"), GLAS USA LLC, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Administrative Agent"), and GLAS AMERICAS LLC, as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the "Collateral Agent," and together with the Administrative Agent, the "Agents" and each, an "Agent").
RECITALS
WHEREAS, the Borrowers, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent are parties to that certain Credit Agreement, dated as of November 22, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, on May 27, 2022, AN Global LLC, as borrower, the other Loan Parties party thereto as guarantors, the lenders party thereto, Blue Torch Finance LLC, as collateral agent and Blue Torch Finance LLC, as administrative agent, entered into a Financing Agreement, providing for the extension of a $55,000,000 term loan facility and a $3,000,000 revolving facility (the "New First Lien Credit Agreement"); and
WHEREAS, pursuant to the Amendment No. 3 to the Credit Agreement, dated as of May 27, 2022 (the "Amendment No. 3 to Credit Agreement"), the parties thereto agreed to engage in good faith negotiations in order to enter into this Amendment for the purpose of amending the terms and conditions of the affirmative covenants, negative covenants, events of default, and guaranty of the Credit Agreement, in order for such terms and conditions to be not more favorable to the Lenders than the corresponding provisions under the New First Lien Credit Agreement.
NOW, THEREFORE, in consideration of the matters set forth in the above Recitals and the covenants and provisions herein set forth, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
RATIFICATION; DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1     Amendments to Credit Agreement. This Amendment is entered into in accordance with Section 15.1 of the Credit Agreement and constitutes an integral part of the Credit Agreement. Except as amended by this Amendment, the provisions of the Credit Agreement are in all respects ratified and confirmed and shall remain in full force and effect.
Section 1.2     Definitions. Unless otherwise defined herein, terms defined in the Credit Agreement (as amended by this Amendment) are used herein as therein defined, and the rules of interpretation set forth in Section 1.2 of the Credit Agreement shall apply mutatis mutandis to this Amendment.



ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT; RECTIFICATION OF AMENDMENT NO. 3 TO CREDIT AGREEMENT
Section 2.1     Amendments to Credit Agreement. Effective as of the Amendment No. 4 Effective Date (as defined below),
(a)     the Credit Agreement is hereby amended in accordance with Exhibit A hereto by deleting the stricken text (indicated textually in the same manner as the following example: stricken text) and by inserting the double-underlined text (indicated textually in the same manner as the following example: double-underlined text), in each case in the place where such text appears therein; and
(b)     the Credit Agreement is hereby amended by replacing the Schedules thereto in their entirety, with the Schedules included in Exhibit B hereto.

Section 2.2     Rectification of Amendment No. 3 to Credit Agreement.
(a)     The Loan Parties, the Lenders and the Agents hereby acknowledge and agree that (i) AgileThought Mexico continues to be a Borrower and party to the Credit Agreement, and that reference to AgileThought Mexico in Section 3.2 of the Amendment No. 3 to Credit Agreement was a typographical error, and (ii) the Mexican Administrative Trust and the Mexican Security Trust have not been terminated and continue in full force and effect.
(b)     The Loan Parties, the Lenders and the Agents hereby agree that Section 3.1 of the Amendment No. 3 to Credit Agreement shall be restated as follows:
"Effective as of the Amendment No. 3 Effective Date, the Lenders hereby agree that:
(a) the Mexican Loan Documents will terminate automatically and without further action (other than such actions as may be required to effectuate, or reflect in public or private record, the termination and release of such Mexican Loan Documents, as further described below), except only those provisions that are expressly specified in the Mexican Loan Documents as surviving that respective agreement's termination (such provisions shall survive without prejudice and remain in full force and effect);
(b) they will promptly execute and deliver such other termination statements and lien releases as the Loan Parties may reasonably request to further evidence, effect or reflect on public record the release of any security interests, pledges, mortgages, liens and other encumbrances granted to the Lenders pursuant to the Mexican Loan Documents;
(c) they will promptly terminate each financing statement existing under the Uniform Commercial Code pursuant to the Guaranty and Collateral Agreement as in effect on the date hereof (prior to giving effect to any amendment thereto on the date hereof); and
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(d) they will promptly execute and deliver termination notices in relation to each Control Agreement executed pursuant to the terms of the Guaranty and Collateral Agreement as in effect on the date hereof (prior to giving effect to any amendment thereto on the date hereof);
provided that each of the Mexican Administrative Trust and the Mexican Security Trust shall not be so terminated, and the Liens and beneficial rights created thereunder in favor of the Lenders shall survive in full force and effect (and the obligations under clause (b) above shall not apply thereto), until such time as the holder of the first beneficiary rights thereunder shall have terminated its rights thereunder (in which case the Lenders agree that they shall concurrently terminate their respective rights thereunder)."
(c)    The Loan Parties, the Lenders and the Agents hereby agree that Section 3.2 of the Amendment No. 3 to Credit Agreement shall be restated as follows:
"Effective as of the Amendment No. 3 Effective Date, the Lenders hereby agree that the obligations of AgileThought Digital Solutions S.A.P.I. de C.V., Facultas Analytics, S.A.P.I. de C.V., Faktos Inc, S.A.P.I. de C.V., Cuarto Origen, S. de R.L. de C.V., AGS Alpama Global Services Mexico, S.A. de C.V., Entrepids Mexico, S.A. de C.V., AN UX, S.A. de C.V., AN Data Intelligence, S.A. de C.V., Anzen Soluciones, S.A. de C.V., AgileThought Servicios México, S.A. de C.V., and AgileThought Servicios Administrativos, S.A. de C.V. under the Loan Documents shall be automatically terminated and of no further force and effect (other than those obligations that expressly survive the termination thereof)."
ARTICLE III
CONDITIONS TO EFFECTIVENESS
Section 3.1     Conditions Precedent to Effectiveness of Amendment. This Amendment shall become effective on the date hereof, subject to the Administrative Agent and the Lenders having received on such date a copy of this Amendment signed by the Loan Parties, the Administrative Agent, the Collateral Agent and the Lenders.
ARTICLE IV
RATIFICATION AND REAFFIRMATION
Section 4.1     Ratification and Reaffirmation. Each Loan Party hereby ratifies and confirms the Credit Agreement and each other Loan Document to which it is a party, each of which shall remain in full force and effect according to their respective terms, as amended hereby. In connection with the execution and delivery of this Amendment and the other Loan Documents delivered herewith, each Loan Party, as borrower, debtor, grantor, mortgagor, pledgor, guarantor, assignor, obligor or in other similar capacities in which such Loan Party grants liens or security interests in its properties or otherwise acts as an accommodation party, guarantor, obligor or indemnitor or in such other similar capacities, as the case may be, in any case under any Loan Documents, hereby (a) ratifies, reaffirms, confirms and continues all of its
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payment and performance and other obligations, including obligations to indemnify, guarantee, act as surety, or as principal obligor, in each case contingent or otherwise, under each of such Loan Documents to which it is a party, (b) ratifies, reaffirms, confirms and continues its grant of liens on, or security interests in, and assignments of its properties pursuant to such Loan Documents to which it is a party as security for the Obligations, and (c) confirms and agrees that such liens and security interests secure all of the Obligations. Each Loan Party hereby consents to the terms and conditions of the Credit Agreement, as amended hereby. Each Loan Party acknowledges (i) that each of the Loan Documents to which it is a party remains in full force and effect, (ii) that each of the Loan Documents to which it is a party is hereby ratified, continued and confirmed, (iii) that any and all obligations of such Loan Party under any one or more such documents to which it is a party is hereby ratified, continued and reaffirmed, and (iv) that, to such Loan Party's knowledge, there exists no offset, counterclaim, deduction or defense to any obligations described in this Section 4. This Amendment shall not constitute a course of dealing with the Administrative Agent, the Collateral Agent or the Lenders at variance with the Credit Agreement or the other Loan Documents such as to require further notice by the Administrative Agent, the Collateral Agent or the Lenders to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future.
ARTICLE V
ACKNOWLEDGMENTS BY CERTAIN LENDERS
Section 5.1     Acknowledgments by Certain Lenders. By executing this Amendment, each of the Tranche C Lender, the Tranche D Lender and the Tranche E Lender agrees that:
(a)     it does not hold or maintain any principal of any Loan under the Credit Agreement, and all principal of Loans under the Credit Agreement previously held or maintained under the Credit Agreement was converted into shares of Common Stock of Ultimate Holdings prior to the date hereof in accordance with Article XVIII of the Credit Agreement; and
(b)     none of the interest owed to it under the Credit Agreement has been so converted.
ARTICLE VI
MISCELLANEOUS
Section 6.1     Signatures; Effect of Amendment. By executing this Amendment, each of the Loan Parties is deemed to have executed the Credit Agreement, as amended hereby, as a Borrower and a Loan Party (or, in the case of the Intermediate Holdings and the Guarantors, solely as a Loan Party). All such Loan Parties, the Administrative Agent, the Collateral Agent and the Lenders acknowledge and agree that (a) nothing contained in this Amendment in any manner or respect limits or terminates any of the provisions of the Credit Agreement or any of the other Loan Documents other than as expressly set forth herein and further agree and acknowledge that the Credit Agreement (as amended hereby) and each of the other Loan Documents remain and continue in full force and effect and are hereby ratified and confirmed, and (b) other than as expressly set forth herein, the obligations under the Credit Agreement and the guarantees, pledges and grants of security interests created under or pursuant to the Credit
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Agreement and the other Loan Documents continue in full force and effect in accordance with their respective terms and the Collateral secures and shall continue to secure the Loan Parties' obligations under the Credit Agreement (as amended hereby) and any other obligations and liabilities provided for under the Loan Documents. Except to the extent expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any rights, power or remedy of the Administrative Agent, the Collateral Agent or the Lenders under the Credit Agreement or any other Loan Document, nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document, nor constitute a novation of any of the Obligations under the Credit Agreement or obligations under the Loan Documents. This Amendment does not extinguish the indebtedness or liabilities outstanding in connection with the Credit Agreement or any of the other Loan Documents. No delay on the part of the Administrative Agent, the Collateral Agent or any Lender in exercising any of their respective rights, remedies, powers and privileges under the Credit Agreement or any of the Loan Documents or partial or single exercise thereof, shall constitute a waiver thereof. None of the terms and conditions of this Amendment may be changed, waived, modified or varied in any manner, whatsoever, except in accordance with Section 15.1 of the Credit Agreement.
Section 6.2     Counterparts. This Amendment may be executed electronically and in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of the executed counterpart of this Amendment by telecopy or electronic mail shall be as effective as delivery of a manually executed counterpart to this Amendment.
Section 6.3     Severability. The illegality or unenforceability of any provision of this Amendment or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Amendment or any instrument or agreement required hereunder.
Section 6.4     Captions. Section captions used in this Amendment are for convenience only, and shall not affect the construction of this Amendment.
Section 6.5     Entire Agreement. This Amendment embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof.
Section 6.6     References. Any reference to the Credit Agreement contained in any notice, request, certificate, or other document executed concurrently with or after the execution and delivery of this Amendment shall be deemed to include this Amendment unless the context shall otherwise require. Reference in any of this Amendment, the Credit Agreement, or any other Loan Document to the Credit Agreement shall be a reference to the Credit Agreement as amended hereby and as may be further amended, modified, restated, supplemented or extended from time to time.
Section 6.7     Governing Law. THIS AMENDMENT IS A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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Section 6.8     Payment of Costs and Expenses. Each Loan Party, jointly and severally, agree pursuant to the terms of Section 15.5 of the Credit Agreement, to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent and the Lenders incurred in connection with the transactions contemplated hereby (including Attorney Costs and Taxes) in connection with the preparation, execution and delivery of this Amendment and the other Loan Documents.
Section 6.9     Administrative Agent and Collateral Agent Instruction. Each Lender party hereto, through its execution of this Amendment, hereby instructs each of the Administrative Agent and the Collateral Agent to execute and deliver this Amendment.
[Signatures Immediately Follow]
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The parties are signing this Amendment No. 4 to Credit Agreement as of the date stated in the introductory clause.
BORROWERS:AGILETHOUGHT, INC. (f/k/a AN GLOBAL INC.),
a Delaware corporation

By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: Chief Executive Officer

AGILETHOUGHT MEXICO, S.A. DE C.V.,
a sociedad anónima de capital variable incorporated under the laws of Mexico
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: Attorney-in-fact
By: /s/ Mauricio Garduño
Name: Mauricio Garduño
Title: Attorney-in-fact




GUARANTORS:
4TH SOURCE, LLC,
a Delaware limited liability company
By: /s/ Diana Abril
Name: Diana Abril
Title: Manager

Signature page to Fourth Amendment


IT GLOBAL HOLDING LLC,
a Delaware limited liability company
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President
AN GLOBAL LLC,
a Delaware limited liability company
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President
QMX INVESTMENT HOLDINGS USA, INC.,
a Delaware Corporation
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President
AGILETHOUGHT DIGITAL SOLUTIONS S.A.P.I. de CV.,
a sociedad anomina promotora de inversiones de capital variable incorporated under the laws of Mexico
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: Attorney-in-fact
By: /s/ Mauricio Garduño
Name: Mauricio Garduño
Title: Attorney-in-fact


Signature page to Fourth Amendment


GUARANTORS:
4TH SOURCE HOLDING CORP.,
a Delaware corporation
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President



4TH SOURCE MEXICO, LLC,
a Delaware limited liability company
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President



Signature page to Fourth Amendment


GUARANTORS:
ENTREPIDS TECHNOLOGY, INC.,
a Delaware corporation
By: /s/ Carolyne Cesar
Name: Carolyne Cesar
Title: Secretary




AGS ALPAMA GLOBAL SERVICES USA, LLC,
a Delaware limited liability company
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President



AN USA,
a California corporation
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: President


Signature page to Fourth Amendment


GUARANTORS:
AGILETHOUGHT DIGITAL SOLUTIONS, S.A.P.I. DE C.V.,
a sociedad anónima promotora de inversión de capital variable incorporated under the laws of Mexico
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: Attorney-in-fact
By: /s/ Mauricio Garduño
Name: Mauricio Garduño
Title: Attorney-in-fact




AGILETHOUGHT LLC,
a Florida limited liability company
By: /s/ Manuel Senderos
Name: Manuel Senderos
Title: Manager

Signature page to Fourth Amendment


LENDERS:BANCO NACIONAL DE MÉXICO, S.A., INTEGRANTE DEL GRUPO FINANCIERO BANAMEX, DIVISIÓN FIDUCIARIA, COMO FIDUCIARIO DEL FIDEICOMISO IRREVOCABLE F/17937-8
a trust organized under the laws of Mexico
By: /s/ Andres Borrego
Name: Andres Borrego
Title: Attorney-in-fact
By: /s/ Alejandro Aguirre
Name: Alejandro Aguirre
Title: Attorney-in-fact



BANCO NACIONAL DE MÉXICO, S.A., MEMBER OF GRUPO FINANCIERO BANAMEX, DIVISIÓN FIDUCIARIA, IN ITS CAPACITY AS TRUSTEE OF THE TRUST NO. F/17938-6
a trust organized under the laws of Mexico
By: /s/ Andres Borrego
Name: Andres Borrego
Title: Attorney-in-fact
By: /s/ Alejandro Aguirre
Name: Alejandro Aguirre
Title: Attorney-in-fact


Signature page to Fourth Amendment


LENDERS:
BANCO NACIONAL DE MÉXICO, S.A., MEMBER OF NAMAEX, DIVISIÓN FIDUCIARIA, IN ITS CAPACITY AS TRUSTEE OF THE TRUST "NEXXUS CAPITAL VI" AND IDENTIFIED WITH NUMBER NO. F/173183
a trust organized under the laws of Mexico
By: /s/ Arturo Jose Saval Perez
Name: Arturo Jose Saval Perez
Title: Attorney-in-fact
By: /s/ Alejandro Gorozpe Barbara
Name: Alejandro Gorozpe Barbara
Title: Attorney-in-fact



NEXXUS CAPITAL PRIVATE EQUITY FUND VI, L.P.
By: /s/ Arturo Jose Saval Perez
Name: Arturo Jose Saval Perez
Title: Attorney-in-fact
By: /s/ Alejandro Gorozpe Barbara
Name: Alejandro Gorozpe Barbara
Title: Attorney-in-fact


Signature page to Fourth Amendment


LENDERS:
MANUEL SENDEROS FERNANDEZ
/s/ Manuel Senderos
KEVIN JOHNSTON
/s/ Kevin Johnston

Signature page to Fourth Amendment


ADMINISTRATIVE AGENT:
GLAS USA LLC,
as Administrative Agent
By: /s/ Lisha John
Name: Lisha John
Title: Vice President

COLLATERAL AGENT:
GLAS AMERICAS LLC,
as Collateral Agent
By: /s/ Lisha John
Name: Lisha John
Title: Vice President
Signature page to Fourth Amendment



EXHIBIT A

[attached]









CREDIT AGREEMENT
dated as of November 22, 2021
by and among
AGILETHOUGHT, INC.
and
AGILETHOUGHT MEXICO, S.A. DE C.V.
as Borrowers,
AN GLOBAL LLC,
as Intermediate Holdings
CERTAIN OTHER LOAN PARTIES PARTY HERETO,

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders,
GLAS USA LLC,
as Administrative Agent,
and
GLAS AMERICAS LLC,
as Collateral Agent



        





TABLE OF CONTENTS
Page
ARTICLE I

DEFINITIONS
Section 1.1    Definitions
2
Section 1.2    Other Interpretive Provisions
51
Section 1.3    Accounting and Other Terms
52
Section 1.4    Classification of Loans
53
Section 2.1    Loans
53
Section 2.2    Borrowing Procedures
54
Section 2.3    Commitments Several
55
Section 2.4    Certain Conditions
55
Section 2.5    Defaulting Lenders
55
ARTICLE III

EVIDENCING OF LOANS
Section 3.1    Notes
56
Section 3.2    Recordkeeping
57
ARTICLE IV

INTEREST
Section 4.1    Interest Rates
57
Section 4.2    Interest Payment Dates; Payment-in-Kind
58
Section 4.3    Computation of Interest
61
Section 4.4    Intent to Limit Charges to Maximum Lawful Rate
61
ARTICLE V

FEES
        




Section 5.1    Fee Letters
62
Section 5.2    Facility Fee.
62
ARTICLE VI

REDUCTION OR TERMINATION OF THE COMMITMENT; PREPAYMENTS.
Section 6.1    Reduction or Termination of the Commitment
64
Section 6.2    Prepayments
64
Section 6.3    Manner and Application of Prepayments
66
Section 6.4    Repayments
66
Section 6.5    Increase of Tranche B-1 and Tranche B-2 Loans Payment Amount
66
Section 6.6    [Reserved]
67
ARTICLE VII

MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
Section 7.1    Making of Payments
67
Section 7.2    Application of Certain Payments
68
Section 7.3    Due Date Extension
69
Section 7.4    Setoff
69
Section 7.5    Proration of Payments
69
Section 7.6    Taxes
69
ARTICLE VIII

INCREASED COSTS
Section 8.1    Increased Costs
73
Section 8.2    [Reserved]
74
Section 8.3    Changes in Law Rendering Loans Unlawful
74
Section 8.4    Right of Lenders to Fund through Other Offices
74
Section 8.5    Mitigation of Circumstances; Replacement of Lenders
74
Section 8.6    Conclusiveness of Statements; Survival of Provisions
75
Section 8.7    Funding Losses
75



ARTICLE IX

REPRESENTATIONS AND WARRANTIES
Section 9.1    Organization; Good Standing, Etc.
76
Section 9.2    Authorization; Etc.
76
Section 9.3    Government Approvals
76
Section 9.4    Enforceability of Loan Documents
76
Section 9.5    Capitalization
77
Section 9.6    Litigation
77
Section 9.7    Financial Statements
77
Section 9.8    Compliance with Law, Etc.
78
Section 9.9    ERISA
78
Section 9.10    Taxes, Etc.
78
Section 9.11    Regulations T, U and X
78
Section 9.12    Nature of Business
79
Section 9.13    Adverse Agreements, Etc.
79
Section 9.14    Permits, etc
79
Section 9.15    Properties
79
Section 9.16    Employee and Labor Matters
79
Section 9.17    Environmental Matters
80
Section 9.18    Insurance
80
Section 9.19    [reserved]
80
Section 9.20    Solvency
80
Section 9.21    Intellectual Property
80
Section 9.22    Material Contracts
81
Section 9.23    Investment Company Act
81
Section 9.24    Customers and Suppliers
81
Section 9.25    [Reserved].
81
Section 9.26    Sanctions; Anti-Corruption and Anti-Money Laundering Laws
81
Section 9.27    Anti-Bribery and Corruption
82
Section 9.28    Full Disclosure
82
ARTICLE X

AFFIRMATIVE AND NEGATIVE COVENANTS
Section 10.1    Affirmative Covenants
83
Section 10.2    Negative Covenants
94
Section 10.3    Financial Covenants
100



ARTICLE XI

[RESERVED]
ARTICLE XII

EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
Section 12.1    Credit Extension
101
Section 12.2    Conditions Precedent to all Loans
103
ARTICLE XIII

EVENTS OF DEFAULT AND THEIR EFFECT
Section 13.1    Events of Default
104
Section 13.2    Cure Right
108
ARTICLE XIV

AGENCY
Section 14.1    Appointment and Authorization
108
Section 14.2    [Reserved]
109
Section 14.3    Delegation of Duties
109
Section 14.4    Exculpation of Agents
109
Section 14.5    Reliance by Agents
112
Section 14.6    Notice of Default
112
Section 14.7    Credit Decision
113
Section 14.8    Indemnification
113
Section 14.9    Agents in their Individual Capacity
114
Section 14.10    Successor Agents
114
Section 14.11    Collateral Matters
114
Section 14.12    Restriction on Actions by Lenders
115
Section 14.13    Administrative Agent May File Proofs of Claim
115
Section 14.14    Other Agents; Arrangers and Managers
116
Section 14.15    [Reserved]
116
Section 14.16    Mexican Powers of Attorney
116



ARTICLE XV

GENERAL
Section 15.1    Waiver; Amendments
117
Section 15.2    Confirmations
118
Section 15.3    Notices
118
Section 15.4    Computations
119
Section 15.5    Costs, Expenses and Taxes
119
Section 15.6    Assignments; Participations
120
Section 15.7    Register
121
Section 15.8    GOVERNING LAW
122
Section 15.9    Confidentiality
122
Section 15.10    Severability
123
Section 15.11    Nature of Remedies
123
Section 15.12    Entire Agreement
123
Section 15.13    Counterparts
123
Section 15.14    Successors and Assigns
124
Section 15.15    Captions
124
Section 15.16    Customer Identification – USA PATRIOT Act Notice
124
Section 15.17    INDEMNIFICATION BY LOAN PARTIES
124
Section 15.18    Nonliability of Lenders
125
Section 15.19    FORUM SELECTION AND CONSENT TO JURISDICTION
125
Section 15.20    WAIVER OF JURY TRIAL
126
Section 15.21    Acknowledgement and Consent to Bail-In of EEA Financial Institutions
126
ARTICLE XVI

JOINT AND SEVERAL LIABILITY
Section 16.1    Joint and Several Liability
127
ARTICLE XVII

APPOINTMENT OF BORROWER REPRESENTATIVE

ARTICLE XVIII

CONVERSION RIGHTS




Section 18.1    Conversion on the Maturity Date
131
Section 18.2    Early Conversion
132
Section 18.3    Limitation on Conversion
132
Section 18.4    Conversions Generally
132
Section 18.5    Mergers
132
Section 18.6    Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.
133
Section 18.7    Delivery of Conversion Payment Shares
134
Section 18.8    Reservation of Shares
134
Section 18.9    Calculations
135
Section 18.10    Conversion Information
135
Section 18.11    Taxes
135
Section 18.12    Peso Loans
136
Section 18.13    Additional Definitions
136
ARTICLE XIX

GUARANTY

Section 19.1    Guaranty
138
Section 19.2    Guaranty Absolute
138
Section 19.3    Waiver
139
Section 19.4    Continuing Guaranty; Assignments
140
Section 19.5    Subrogation
140
Section 19.6    Contribution
141





ANNEXES
Annex ACommitments and Applicable Percentages
Annex BNotices
SCHEDULES
Schedule 9.5Capitalization; Subsidiaries
Schedule 9.6Litigation
Schedule 9.9ERISA
Schedule 9.12Nature of Business
Schedule 9.16Employee and Labor Matters
Schedule 9.17Environmental Matters
Schedule 9.18Insurance
Schedule 9.21Intellectual Property
Schedule 9.22Material Contracts
Schedule 11.1(e)Permitted Existing Earn-out Obligations

EXHIBITS
Exhibit AForm of Compliance Certificate
Exhibit BForm of Joinder Agreement
Exhibit CForm of Master Intercompany Note
Exhibit DForm of Tranche A-1 Note
Exhibit EForm of Tranche A-2 Note
Exhibit FForm of Tranche B-1 Note
Exhibit GForm of Tranche B-2 Note
Exhibit HForm of Tranche C Note
Exhibit IForm of Tranche D Note
Exhibit JForm of Assignment Agreement
Exhibit KForm of Tranche E Note





INDEX OF DEFINED TERMS
Page

Account    2
Account Debtor    2
Accounts    2
Administrative Agent    2
Affiliate    2
Agents    2
Agents Fee Letters    3
AgileThought Mexico    1
Agreement    1
Allocable Amount    128
Amendment No. 1    3
Amendment No. 1 Effective Date    3
Approved Fund    4
Assignee    120
Assignment Agreement    120
Attorney Costs    4
Bail-In Action    4
Bail-In Legislation    4
Bankruptcy Code    4
Borrower    1
Borrower Representative    4
Borrowers    1
Business Day    4
Business Interruption Proceeds    5
Capitalized Lease Obligations    5
Cash Collateralize    5
Change in Law    5
Closing Date    6
Code    6
Collateral    6
Collateral Agent    7
Collateral Documents    7
Commitment    7
Commodity Exchange Act    7
Competitor    7
Compliance Certificate    7
Computation Period    7
Connection Income Taxes    7
Consolidated Group    7
Contingent Liability    8
Control Agreement    9
Debt    10
Default    10
Defaulting Lender    10
Deposit Account    11
Deposit Accounts    11
Dollar    11
Dollar Amount    11



Dollar Commitment    12
Dollar Equivalent    12
Dollar Lender    12
Dollar Loan    12
Earn-out Obligations    12
EBITDA    12
EEA Financial Institution    14
EEA Member Country    14
EEA Resolution Authority    14
Eligible Assignee    14
Equity Interests    15
ERISA    15
ERISA Affiliate    16
EU Bail-In Legislation Schedule    17
Excluded Foreign Subsidiary    17
Excluded Swap Obligation    17
Excluded Taxes    17
Extraordinary Receipts    18
FATCA    19
First Lien Agent    1
Fiscal Quarter    19
Fiscal Year    19
Foreign Subsidiary    20
FRB    20
Funds Flow Memorandum    54
GAAP    20
Governmental Authority    20
Guarantor    20
Guaranty    20
Guaranty and Collateral Agreement    21
Hazardous Substances    21
Hedging Obligations    21
Indemnified Liabilities    124
Indemnified Taxes    22
Indemnitee    124
Insolvency Proceeding    22
Intellectual Property Security Agreement    23
Interest Expense    23
Inventory    23
IRR    23
IRS    23
Joint Liability Payment    128
Lender    24
Lender Party    124
Lenders    1
Lien    24
Liquidity    24
Loan    24
Loan Documents    24
Loan Party    24
Market Disruption Event    136
Master Intercompany Note    24



Material Adverse Effect    24
Maturity Conversion Date    131
Maturity Conversion Notice    131
Maturity Date    25
Merger Event    132
Mexican Administration Trust    25
Mexican Administration Trust Amendment and Reaffirmation Agreement    25
Mexican Collateral Agreements    26
Mexican Collateral Amendment and Reaffirmation Agreements    26
Mexican Loan Documents    26
Mexican Security Trust    26
Mexican Security Trust Amendment and Reaffirmation Agreement    26
Mexican Subsidiaries    26
Mexico    27
Mortgage    27
Mortgage-Related Documents    27
MXN    39
Net Cash Proceeds    27
New Senior Credit Facility    28
Non-Consenting Lender    118
Note    28
Notes    28
Notice of Borrowing    54
Obligations    28
OFAC    28
Optional Conversion Notice    132
Other Connection Taxes    28
Paid in Full    29
Participant    121
Participant Register    122
Payment Conditions    28
Payment in Full    29
Perfection Certificate    29
Permits    29
Permitted Earn-out Obligations    32
Permitted Earn-out Payments    32
Permitted Existing Earn-Out Obligations    32
Permitted Factoring Dispositions    32
Permitted Holders    32
Person    39
Peso Commitments    39
Peso Equivalent    39
Peso Lender    39
Peso Loan    39
Peso/Dollar Reference Exchange Rate    39
Pesos    39
Pro Rata Share    40
proceeding    40
Proceeding    40
Process Agent    125
Reference Property    133
Reference Subordination Agreement    1



Register    121
Registration Rights Agreement    42
Replacement Lender    75
Required Lenders    43
Sanction(s)    44
SEC    44
Senior Officer    45
Subordinated Debt    45
Subordination Agreement    45
Subsidiary    45
Successor Company    132
Swap Obligation    45
Taxes    45
Termination Date    45
Total Debt    45
Total Leverage Ratio    46
Tranche A Applicable Rate    46
Tranche A Commitment    47
Tranche A Lender    47
Tranche A Loan    47, 48
Tranche A Note    47, 48
Tranche A-1 Facility Fee    62
Tranche A-1 Facility Fee Payment Date    62
Tranche A-1 Total Repayment Return    47
Tranche A-2 Facility Fee    62
Tranche A-2 Facility Fee Payment Date    62
Tranche A-2 Total Repayment Return    48
Tranche B Commitment    48, 49
Tranche B Lender    48, 49, 50
Tranche B Loan    48, 49, 50
Tranche B Note    48, 49, 50
Tranche E Commitment    50
Tranche E Lender    50
Tranche E Loan    50
Tranche E Maturity Date    50
Tranche E Note    50
Type    50
U.S.    51
U.S. Withholding Tax Additional Amounts    70
U.S.$    11
UCC    51
Ultimate Holdings    1, 51
United States    51
Wholly-Owned Subsidiary    51
Write-Down and Conversion Powers    51






CREDIT AGREEMENT
THIS CREDIT AGREEMENT (as amended, modified, or supplemented from time to time, this “Agreement”), dated as of November 22, 2021, is entered into by and among AGILETHOUGHT, INC., a Delaware corporation (“Ultimate Holdings”) and AGILETHOUGHT MEXICO, S.A. DE C.V., a sociedad anónima de capital variable incorporated and existing under the laws of Mexico (“AgileThought Mexico ” and together with Ultimate Holdings, each a “Borrower” and collectively, the “Borrowers”), AN GLOBAL LLC, a Delaware limited liability company (“Intermediate Holdings,” and together with Ultimate Holdings, the “Holding Companies”) the other Loan Parties party hereto, the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”), GLAS USA LLC, a limited liability company organized and existing under the laws of the State of New Jersey, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”), and GLAS AMERICAS LLC, as the Collateral Agent for the Lenders, and together with the Administrative Agent, the “Agents” and each, an “Agent.”
RECITALS
WHEREAS, the Borrowers have requested that the Lenders (as defined below) make Loans (as defined below) to provide the funds required to prepay existing Debt of the Loan Parties and for other general corporate purposes, as further provided herein, in the form of US Dollar denominated term loans and Peso denominated term loans to the Borrowers;
WHEREAS, the Lenders are willing to do so, but solely on the terms and conditions set forth in this Agreement;
WHEREAS, to secure the Loans and other Obligations, the Borrowers and the other Loan Parties are granting to the Collateral Agent, for the benefit of the Agents (as defined below) and Lenders, or directly to the Lenders in the case of the Mexican Collateral Agreements (as defined below), a security interest in and lien upon substantially all of the real and personal property of the Loan Parties; and
WHEREAS, this Agreement (and the indebtedness and obligations evidenced hereby) are subordinate in the manner, and to the extent, set forth in that certain subordination and intercreditor agreement dated as of May 27, 2022 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Reference Subordination Agreement”) by and among Blue Torch Finance LLC, as first lien agent for the first lien creditors (the “First Lien Agent”) and the Agents, as second lien agents for the second lien creditors, and acknowledged by the Credit Parties signatory thereto; and each Lender under this Agreement, by its acceptance hereof, shall be bound by the terms and provisions of the Reference Subordination Agreement.
NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:





ARTICLE I

DEFINITIONS
Section 1.1 Definitions. When used herein the following terms shall have the following meanings:
“Account” or “Accounts” is defined in the UCC.
“Account Debtor” is defined in the Guaranty and Collateral Agreement.
“Acquisition” means the acquisition (whether by means of a merger, amalgamation, consolidation or otherwise) of Equity Interests of any Person or all or substantially all of the assets of (or any division or business line of) any Person.
“Additional Second Lien Indebtedness” means Indebtedness of any Loan Party (other than the Mexican Loan Party) that is secured on a pari passu basis to the Obligations; the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are satisfactory to the Agents (as defined in the New Senior Credit Agreement) and the Required Lenders (as defined in the New Senior Credit Agreement).
“Administrative Agent” means GLAS USA LLC in its capacity as administrative agent for the Lenders hereunder, and any successor thereto in such capacity.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of members of the Board of Directors of such Person or (b) direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Notwithstanding anything herein to the contrary, in no event shall any Agent or any Lender be considered an “Affiliate” of any Loan Party.
“AGS Indebtedness” means Indebtedness in the aggregate principal amount of $673,000 pursuant to that certain Subordinated Promissory Note, dated as of June 24, 2021, by Ultimate Holdings in favor of AGS Group LLC.
“AGS Subordination Agreement” means that certain Subordination Agreement, dated as of June 24, 2021, by and among Intermediate Holdings, Ultimate Holdings, Blue Torch Finance LLC and AGS Group LLC, with respect to the AGS Indebtedness, as said agreement may be supplemented by an agreement in which AGS Group LLC confirms the subordination provided thereby with respect to the Obligations (as defined in the New Senior Credit Agreement).
“Agents” means Administrative Agent and Collateral Agent.
“Agents Fee Letter” means the fee letter dated as of November 22, 2021, among the Borrowers and Agents.
“Aggregate Commitments” means the Commitments of all the Lenders. The Aggregate Commitments of the Lenders on the Closing Date is (i) with respect to the Dollar
2
        




Commitments, US$7,500,000.00 plus the equivalent in Dollars of MXN$71,524,492.12 determined by reference to the Conversion Rate as of the Closing Date and (ii) with respect to the Peso Commitments, MXN198,446,203.
“Amendment No. 1 Effective Date” has the meaning ascribed to such term in the Amendment No. 1 to the Credit Agreement.
“Amendment No. 1” means that certain Amendment No. 1 to Credit Agreement, dated as of December 9, 2021, among Ultimate Holdings and AgileThought Mexico as Borrowers, Intermediate Holdings and Ultimate Holdings as Holding Companies, the other Loan Parties party hereto, the financial institutions that are or may from time to time become parties hereto as Lenders, the Administrative Agent and the Collateral Agent.
“Amendment No. 3” means that certain Amendment No. 3 to Credit Agreement, dated as of May 22, 2022, among Ultimate Holdings and AgileThought Mexico as Borrowers, Intermediate Holdings and Ultimate Holdings as Holding Companies, the other Loan Parties party hereto, the financial institutions that are or may from time to time become parties hereto as Lenders, the Administrative Agent and the Collateral Agent.
“Amendment No. 3 Effective Date” has the meaning ascribed to such term in the Amendment No. 3 to the Credit Agreement.
“Amendment No. 4 Effective Date” has the meaning ascribed to such term in the Amendment No. 4 to the Credit Agreement.
“Amendment No. 4” means that certain Amendment No. 4 to Credit Agreement, dated as of August 8, 2022, among Ultimate Holdings and AgileThought Mexico as Borrowers, Intermediate Holdings and Ultimate Holdings as Holding Companies, the other Loan Parties party hereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.
“AN Extend Earn-Out” means certain earn-out payments owed by AN Extend, S.A. de C.V. and Holdings to certain Persons that were sellers of AN Extend, S.A. de C.V. in respect of the sale of AN Extend, S.A. de C.V. in an amount equal to US$1,750,333 (as of March 31, 2022), together with interest thereon.
“Anti-Corruption Laws” means all Requirements of Law concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act of 2010, and the anti-bribery and anti-corruption laws and regulations of those jurisdictions in which the Loan Parties do business.
“Anti-Money Laundering Laws” means all Requirements of Law concerning or relating to terrorism or money laundering, including, without limitation, the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956-1957), the USA PATRIOT Act and the Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5332 and 12 U.S.C. §§ 1818(s), 1820(b) and §§ 1951-1959) and the rules and regulations thereunder, and any law prohibiting or directed against the financing or support of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B).
“Approved Fund” means (a) any Person (other than a natural Person) engaged in making, purchasing, holding, or investing in commercial loans and similar extensions of credit and that is advised, administered, or managed by a Lender, an Affiliate of a Lender (or an entity
3
        




or an Affiliate of an entity that administers, advises or manages a Lender), (b) with respect to any Lender that is an investment fund, any other investment fund that invests in loans and that is advised, administered or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor, and (c) any third party which provides “warehouse financing” to a Person described in clause (a) or (b) (and any Person described in said clause (a) or (b) shall also be deemed an Approved Fund with respect to such third party providing such warehouse financing).
“Attorney Costs” means, with respect to any Person, all reasonable and documented out-of-pocket fees and charges of any counsel to such Person, and all court costs and similar legal expenses.
“Authorized Officer” means, with respect to any Person, the chief executive officer, chief operating officer, chief financial officer, treasurer or other financial officer performing similar functions, secretary, president or executive vice president of such Person.
“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.
“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended and in effect from time to time and the regulations issued from time to time thereunder.
“Borrower Representative” means Ultimate Holdings.
“Business Day” means a day (other than Saturday or Sunday) on which commercial banks are not authorized or required to close in Mexico City, Mexico or New York City, New York.
“Business Interruption Proceeds” means cash proceeds received by any Loan Party pursuant to business interruption policies of insurance.
“Capitalized Lease” means, with respect to any Person, any lease of (or other arrangement conveying the right to use) real or personal property by such Person as lessee that is required under GAAP to be capitalized on the balance sheet of such Person.
“Capitalized Lease Obligations” means, with respect to any Person, obligations of such Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Collateralization” means, with respect to any inchoate, contingent, or other Obligations, the delivery of cash with notice to Administrative Agent, as security for the payment of those Obligations, in an amount equal to with respect to any contingent indemnification obligations for which any claim with respect to Administrative Agent or any
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Lender has been asserted or threatened in writing, Administrative Agent’s or Lender’s (as applicable) good faith estimate of the amount due or to become due, including all fees and other amounts relating to those Obligations.
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within six months from the date of acquisition thereof; (b) commercial paper, maturing not more than 270 days after the date of issue rated P 1 by Moody’s or A 1 by Standard & Poor’s; (c) certificates of deposit maturing not more than 270 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (c) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof; (e) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000, which assets are primarily comprised of Cash Equivalents described in another clause of this definition; and (f) marketable tax-exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s, in each case, maturing within 270 days from the date of acquisition thereof.
“Change in Law” means the adoption or phase-in of, or any change in, in each case after the date of this Agreement, any applicable law, rule, or regulation, or any change in the interpretation or administration of any applicable law, rule, or regulation by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) of any such authority, central bank, or comparable agency. For purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, or directives thereunder or issued in connection therewith, and all requests, rules, guidelines, or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, will, in each case, be deemed to have been adopted and gone into effect after the date of this Agreement.
“Change of Control” means each occurrence of any of the following:
(i)the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) other than a Permitted Holder of beneficial ownership of more than 33% of the aggregate outstanding voting or economic power of the Equity Interests of Ultimate Holdings;
(ii)during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Ultimate Holdings (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of Ultimate Holdings was approved by a vote of at least a majority of the directors of Ultimate Holdings then still in office who were either directors at the beginning of such period, or whose election or nomination for election was previously approved) cease for any reason to constitute a majority of the Board of Directors of Ultimate Holdings;
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(iii)(i) Ultimate Holdings shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting or economic power of the Equity Interests of Intermediate Holdings and (ii) Ultimate Holdings shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% (or such lesser percentage as may be set forth on Schedule 9.5 of the aggregate voting or economic power of the Equity Interests of each other Loan Party and each of its Subsidiaries (other than in connection with any transaction permitted pursuant to Section 10.2(c)(i)), free and clear of all Liens (other than Permitted Specified Liens); or
(iv)a “Change of Control” (or any comparable term or provision) under or with respect to any of the Equity Interests or Indebtedness of Ultimate Holdings or any of its Subsidiaries, including, for the avoidance of doubt, the New Senior Credit Agreement.
“Closing Date” means the first date upon which the conditions precedent set forth in Article XII shall have been satisfied.
“Code” means the U.S. Internal Revenue Code of 1986, as amended and in effect from time to time and the regulations issued from time to time thereunder.
“Collateral” means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations.
“Collateral Agent” means GLAS AMERICAS LLC in its capacity as collateral agent for the Lenders hereunder, and any successor thereto in such capacity.
“Collateral Documents” means, collectively, the Guaranty and Collateral Agreement, the Mexican Collateral Agreements, the Mexican Collateral Amendment and Reaffirmation Agreements, each Mortgage-Related Document, each Control Agreement, each pledge agreement, each Intellectual Property Security Agreement, and any other agreement or instrument pursuant to which any Loan Party, any Subsidiary thereof, or any other Person grants or purports to grant collateral to Collateral Agent for the benefit of Agents and the Lenders or, in the case of the Mexican Collateral Agreements, to the Lenders, or otherwise relates to any such collateral.
“Commitment” means a Dollar Commitment or a Peso Commitment, as the context may require.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Competitor” means any Person that is primarily engaged in the business of providing information technologies services, including, but not limited to, the implementation and integration of systems, support, consulting, maintenance, planning, and management of projects, design, and development of applications of the type made by the members of the Consolidated Group and their Subsidiaries.
“Compliance Certificate” means a Compliance Certificate in substantially the form of Exhibit A.
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“Computation Period” means each period of four Fiscal Quarters ending on the last day of a Fiscal Quarter.
“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.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Consolidated Group” means the Loan Parties and their Subsidiaries.
“Consolidated Net Income” means, with respect to any Person, for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period; provided, however, that the following shall be excluded: (a) the net income of any other Person in which such Person or one of its Subsidiaries has a joint interest with a third-party (which interest does not cause the net income of such other Person to be consolidated into the net income of such Person), except to the extent of the amount of dividends or distributions paid to such Person or Subsidiary, (b) the net income of any Subsidiary of such Person that is, on the last day of such period, subject to any restriction or limitation on the payment of dividends or the making of other distributions, to the extent of such restriction or limitation, and (c) the net income of any other Person arising prior to such other Person becoming a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries.
“Consolidated Net Interest Expense” means, with respect to any Person for any period, (a) gross interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP (including, without limitation, interest expense paid to Affiliates of such Person), less (b) the sum of (i) interest income for such period and (ii) gains for such period on Hedging Agreements (to the extent not included in interest income above and to the extent not deducted in the calculation of gross interest expense), plus (c) the sum of (i) losses for such period on Hedging Agreements (to the extent not included in gross interest expense) and (ii) the upfront costs or fees for such period associated with Hedging Agreements (to the extent not included in gross interest expense), in each case, determined on a consolidated basis and in accordance with GAAP.
“Contingent Indemnity Obligations” means any Obligation constituting a contingent indemnification obligation of any Loan Party, in each case, to the extent (a) such obligation has not accrued and is not yet due and payable and (b) no claim has been made with respect thereto.
“Contingent Liability” means, with respect to any Person, each obligation and liability of such Person and all such obligations and liabilities of such Person incurred pursuant to any agreement, undertaking or arrangement by which such Person (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including any indebtedness, dividend or other obligation which may be issued or incurred at some future time, (b) guarantees the payment of dividends or other distributions upon the Equity Interests of any other Person, (c) undertakes or agrees (whether
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contingently or otherwise) (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received, (d) agrees to lease property or to purchase securities, property or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation, (e) induces the issuance of, or is made in connection with the issuance of, any letter of credit for the benefit of such other Person, or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.
“Contingent Obligation” means, with respect to any Person, any obligation of such Person guaranteeing or intending to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, and (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include any product warranties extended in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.
“Control Agreement” means each deposit account control agreement or securities account control agreement, as applicable, entered into by, inter alios, a Loan Party or Subsidiary thereof, each depository institution or securities intermediary party thereto, and Collateral Agent in form and substance satisfactory to the Collateral Agent and the Required Lenders in their discretion.
“Conversion Rate” means, as of any date, the Peso/Dollar exchange rate published by Banco de México in the Federal Official Gazette of Mexico (Diario Oficial de la Federación) as the rate “para solventar obligaciones denominadas en moneda extranjera pagaderas en la República Mexicana” (or any successor publication thereof of analogous import) on the Business Day immediately prior to the relevant calculation date, to be in effect on such calculation date;
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provided that, if Banco de México ceases to publish such exchange rate, the Conversion Rate shall equal the average of the Peso/Dollar exchange rates published by Credit Suisse AG (or the main offices of its subsidiaries located in Mexico, if not published by Credit Suisse AG) at the close of business on the Business Day immediately prior to the relevant calculation date (i.e., 24-hours forward), to be in effect on such calculation date.
“Cure Right” has the meaning specified therefor in Section 13.2.
“Current Value” has the meaning specified therefor in Section 10.1(m).
“Debt” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables or other accounts payable incurred in the ordinary course of such Person’s business and not outstanding for more than 90 days after the date such payable was created and any earn-out, purchase price adjustment or similar obligation until such obligation appears in the liabilities section of the balance sheet of such Person); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis satisfactory to the Collateral Agent and in accordance with accepted practice, of such Person under Hedging Agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing; (i) all Contingent Obligations; (j) all Disqualified Equity Interests; and (k) all obligations referred to in clauses (a) through (j) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer.
“Default” means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans within two Business Days of the date required to be funded by it under this Agreement; (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it under this Agreement within two Business Days of the date when due, unless the subject of a good faith dispute; (c) has, or has a parent company that has, (i) been deemed insolvent or become the subject of an Insolvency Proceeding, or (ii) become the subject of a Bail-In Action; (d) has notified any Borrower, the Administrative Agent, or any Lender that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit (unless that writing or public statement relates to that Lender’s obligation to fund a Loan under this Agreement and states that that position is based on that Lender’s determination that a
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condition precedent to funding (which condition precedent, together with any applicable default, must be specifically identified in that writing or public statement) cannot be satisfied); or (e) has failed to confirm within three Business Days of a request by Administrative Agent made at the request of the Required Lenders that it will comply with the terms of this Agreement relating to its obligations to fund Loans.
“Deferred Monroe Fees” means fees owed to Monroe Capital Management Advisors, LLC in respect of fees accrued prior to the May 27, 2022, under the Senior Credit Facility in an amount equal to $3,448,385.
“Deposit Account” or “Deposit Accounts” is defined in the UCC.
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells (including, without limitation, any sale leaseback transaction), assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts, (b) any disposition of property through a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, or (c) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification).
“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends or distributions in cash, or (d) is convertible into or exchangeable for (i) Indebtedness or (ii) any other Equity Interests that would constitute Disqualified Equity Interests, in each case of clauses (a) through (d), prior to the date that is 91 days after the New Senior Credit Agreement Final Maturity Date.
“Dollar” and the sign “U.S.$” mean lawful money of the United States of America.
“Dollar Amount” means, at any time, for any Lender and for purposes of any determination required hereunder:
(v)with respect to any Dollar Commitment, the Dollar amount thereof as set forth on Annex A or in the Assignment Agreement pursuant to which such Commitment (or portion thereof) has been assigned;
(vi)with respect to any Dollar Loan, the principal amount of, and interest on, such Loan then outstanding, expressed in Dollars;
(vii)with respect to any Peso Commitment, the Dollar equivalent determined using the Peso/Dollar Reference Exchange Rate of the amount of such Peso Commitment as set
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forth on Annex A or in the Assignment Agreement pursuant to which a Lender shall have assumed its Peso Commitment, as applicable; and
(viii)with respect to any Peso Loan, the principal amount of, and interest on, such Loan then outstanding, expressed as the Dollar equivalent amount thereof determined using the Peso/Dollar Reference Exchange Rate.
“Dollar Commitment” means, as to each Dollar Lender, its obligation to make Dollar Loans to the Borrower pursuant to Section 2.1(a), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Dollar Lender’s name on Annex A or in the Assignment Agreement pursuant to which such Dollar Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Dollar Equivalent” means, with respect to any monetary amount in Pesos, the amount, determined by reference to the Conversion Rate as of any date of determination, of Dollars that could be purchased with such amount of Pesos on such date.
“Dollar Lender” means at any time, (a) any Lender that has a Dollar Commitment at such time and (b) if the Commitments of the Dollar Lenders to make Dollar Loans have been terminated pursuant to Section 6.1 or Section 6.2 or if the Aggregate Commitments have expired, any Lender that holds a Dollar Loan at such time.
“Dollar Loan” means a Tranche A-1 Loan, a Tranche B-1 Loan, a Tranche C Loan, a Tranche D Loan and/or Tranche E Loan as the context may require.
“Domestic Subsidiary” means any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.
“Earn-out Obligations” means the aggregate outstanding amount under all seller notes, earn-outs or obligations of all Loan Parties and their Subsidiaries (other than customary purchase price adjustments or indemnification obligations) in connection with any Acquisitions.
“EBITDA” means, for the Consolidated Group for any period, in each case as determined in accordance with GAAP,
(a)     Consolidated Net Income thereof for such period plus, to the extent deducted in determining such Consolidated Net Income for such period, the sum of:
(b)    without duplication, the sum of the following amounts for such period to the extent deducted in the calculation of Consolidated Net Income for such period:
(i)    any provision for United States federal income taxes or other taxes measured by net income (including any potential surcharges related to the timing difference of the provisional tax payments and the annual tax payments that would otherwise been paid as a tax expense),
(ii)    Consolidated Net Interest Expense,
(iii)    any loss from extraordinary items or non-recurring items; provided that the aggregate amount of all addbacks pursuant to this clause (iii), together
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with all addbacks for non-recurring items pursuant to clause (viii)(B) below, shall not exceed 5% of EBITDA of Ultimate Holdings in any period,
(iv)    any non-cash loss related to fair value adjustments (including with respect to the Existing Warrants),
(v)     any depreciation and amortization expense,
(vi)    any aggregate net loss on the Disposition of property (other than accounts and Inventory) outside the ordinary course of business, and
(vii)    any other non-cash expenditure, charge or loss for such period (other than any non-cash expenditure, charge or loss relating to write-offs, write-downs or reserves with respect to accounts and Inventory),
(viii)    non-recurring cash restructuring expenses and other transaction expenses (including in connection with Project Thunder) in an aggregate amount (A) for the Fiscal Year ending December 31, 2022, not to exceed $3,000,000, and (B) for any subsequent period, not to exceed (together with all addbacks for non-recurring items pursuant to clause (iii) above), 5% of EBITDA of Ultimate Holdings for the most recently concluded fiscal quarter for which financial statements were delivered or were required to be delivered in accordance with Section 10.1(a)(ii),
(ix)     any non-cash losses relating to currency translation adjustments when converting the results of Foreign Subsidiaries to Dollars for such period,
(x)    the actual amount of reasonable and documented out-of-pocket fees, costs, and expenses paid during such period in connection with the negotiation, execution, and delivery of (A) the New Senior Credit Agreement and the other loan documents thereunder, and (B) amendments to this Agreement in connection with the New Senior Credit Agreement, in each case, to the extent such amounts are invoiced and paid on or prior to May 27, 2022 (or within 120 days thereafter); provided that the aggregate amount of all addbacks for non-recurring items pursuant to this clause (x) shall not exceed US$5,250,000,
(xi)    any additional addbacks satisfactory to the First Lien Agent in its sole discretion, minus
(c)    without duplication, the sum of the following amounts for such period to the extent included in the calculation of such Consolidated Net Income for such period:
(i)    any credit for United States federal income taxes or other taxes measured by net income,

(ii)    any gain from extraordinary items,

(iii)    any aggregate net gain from the Disposition of property (other than accounts and Inventory) outside the ordinary course of business,

(iv)    any other non-cash gain, including any reversal of a charge referred to in clause (b)(vii) above by reason of a decrease in the value of any Equity Interest;
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“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition; or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means:
(a)     (i) any Lender, (ii) any Affiliate of a Lender, and (iii) any Approved Fund; and
(b)    any other Person (other than a natural person) that is neither (i) a Competitor, nor (ii) designated by the Borrowers as a “Disqualified Institution” by written notice delivered to the Administrative Agent on or prior to the Closing Date.
“Employee Plan” means an employee benefit plan within the meaning of Section 3(3) of ERISA (other than a Multiemployer Plan), regardless of whether subject to ERISA, that any Loan Party maintains, sponsors or contributes to or is obligated to contribute to.
“Environmental Claim” means any action, suit, complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication, from any Person or Governmental Authority relating to or arising out of any threatened, alleged or actual (a) violation of, non-compliance with, or liability under, any Environmental Law, or (b) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Law” means any Requirement of Law relating to, regulating or governing (i) the pollution or protection of the environment, any environmental media, natural resources, human health or safety, or (ii) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Liability” means all liabilities (contingent or otherwise, known or unknown), monetary obligations, losses (including monies paid in settlement), damages, natural resource damages, costs and expenses (including all reasonable fees, costs, client charges and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest arising directly or indirectly as a result of, from, or based upon (a) any Environmental Claim, (b) any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, (c) any actual, alleged or threatened Release of, or exposure to, Hazardous Materials, (d) any Remedial Action, (e) any adverse environmental condition or (f) any contract, agreement or other arrangement pursuant to which liability is assumed or imposed contractually or by operation of law with respect to any of the foregoing clauses (a)-(e).
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“Environmental Lien” means any Lien in favor of any Governmental Authority arising out of any Environmental Liability.
“Environmental Permit” means any permit, license, authorization, approval, registration or entitlement required by or issued pursuant to any Environmental Law or by any Governmental Authority pursuant to Environmental Law.
“Equity Interests” means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.
“Equity Issuance” means either (a) the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by Ultimate Holdings of any cash capital contributions.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time and the regulations issued from time to time thereunder.
“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” or under “common control” within the meaning of Sections 414(b), (c) (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” means (a) the occurrence of a Reportable Event with respect to any Pension Plan; (b) the failure to meet the minimum funding standards of Section 412 or 430 of the Internal Revenue Code or Section 302 or 303 of ERISA with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA) or the failure to make a contribution or installment required under Section 412 or Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) a determination that any Pension Plan is, or is expected to be, in “at risk” status (as defined in Section 430 of the Internal Revenue Code or Section 303 of ERISA); (d) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or “endangered” status under Section 432 of the Internal Revenue Code or Section 305 of ERISA; (e) the filing of a notice of intent to terminate a Pension Plan or the treatment of an amendment to a Pension Plan as a termination under Section 4041 of ERISA; (f) the withdrawal by any Loan Party or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any Loan Party or any of its ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (g) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition that might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (h) the imposition of liability on any Loan Party or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069(a) of ERISA or by reason of the application of Section 4212(c) of ERISA; (i) the withdrawal of any Loan Party or any of its ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan or the receipt by any Loan Party or any of its ERISA Affiliates of notice from any Multiemployer Plan
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that it is insolvent pursuant to Section 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (j) the occurrence of an act or omission which could give rise to the imposition on any Loan Party of material fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Plan or Pension Plan; (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent, upon any Loan Party or any of its ERISA Affiliates; (l) the assertion of a claim (other than routine claims for benefits) against any Employee Plan or the assets thereof, or against any Loan Party or any of its ERISA Affiliates in connection with any Pension Plan or Multiemployer Plan; (m) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any such Pension Plan (or such other Employee Plan) to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (n) the imposition on any Loan Party of any material fine, excise tax or penalty with respect to any Employee Plan, Pension Plan, or Multiemployer Plan resulting from any noncompliance with any Requirements of Law; (o) the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan; or (p) the occurrence of any Foreign Plan Event.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” has the meaning specified therefor in Section 13.1.
“Excluded Foreign Subsidiary” means any Foreign Subsidiary that is not a Loan Party as of the Amendment No. 4 Effective Date.
“Excluded Swap Obligation” means, with respect to any Loan Party, each Swap Obligation as to which, and only to the extent that, such Loan Party’s guaranty of or grant of a Lien as security for such Swap Obligation is or becomes illegal under the Commodity Exchange Act because the Loan Party does not constitute an “eligible contract participant” as defined in the act (determined after giving effect to any keepwell, support or other agreement for the benefit of such Loan Party and all guarantees of Swap Obligations by other Loan Parties) when such guaranty or grant of Lien becomes effective with respect to the Swap Obligation. If a Hedging Agreement governs more than one Swap Obligation, only the Swap Obligation(s) or portions thereof described in the foregoing sentence shall be Excluded Swap Obligation(s) for the applicable Loan Party.
“Excluded Taxes” means, with respect to any payment (including, for the avoidance of doubt, any payment that results from the exercise of the conversion rights under Article XVIII) made to any Agent, any Lender, or any other Person pursuant to the terms of this Agreement, the following: (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 that Person being organized under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing that Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) Taxes attributable to that Person’s failure to comply with Section 7.6.5 or Section 7.6.8, other than any such failure resulting from a Non-U.S. Lender being unable to obtain the required documentation and forms from its partners or other beneficial
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owners after using its best efforts to do so; and (c) any withholding Taxes imposed under FATCA.
“Existing Earn-Out Obligations” means the Indebtedness listed on Schedule 7.02(b)(ii) to the New Senior Credit Agreement (as in effect on May 27, 2022), including, for the avoidance of doubt, the AN Extend Earn-Out.
“Existing First Lien Lenders” means the lenders party to the Senior Credit Facility.
“Existing Warrants” means warrants for Class A ordinary shares of Holdings that have been issued prior to May 27, 2022, to the Existing First Lien Lenders.
“Exitus Borrower” shall mean AgileThought Digital Solutions S.A.P.I. de C.V. (f/k/a North American Software, S.A.P.I. de C.V.), formed under the laws of Mexico.
“Exitus Debt Noteholder” shall mean Exitus Capital, S.A.P.I. DE C.V. SOFOM ENR.
“Exitus Debt Promissory Note” shall mean that certain Promissory Note, dated as of and as in effect on the Amendment No. 6 Effective Date (as defined in the Senior Credit Facility), by and between Exitus Borrower and the Exitus Debt Noteholder, as amended, modified or supplemented from time to time solely with the consent of the Administrative Agent acting at the instruction of the Required Lenders.
“Exitus Indebtedness” means Indebtedness in the aggregate principal amount of $3,700,000 pursuant to that certain Simple Loan Facility Agreement and related promissory note, in each case, dated as of July 26, 2021, by AgileThought Digital Solutions S.A.P.I. de C.V. in favor of Exitus Capital, S.A.P.I. de C.V.
“Exitus Renewal Fee” means certain renewal fees with respect to the Exitus Indebtedness, in an aggregate amount not to exceed $444,000 in the aggregate.
“Extraordinary Receipts” means any cash received by or paid to or for the account of any Loan Party not in the ordinary course of business consisting of: (a) pension plan reversions, (b) proceeds of insurance (other than, for avoidance of doubt, Business Interruption Proceeds), (c) litigation proceeds, judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action (other than with respect to reimbursement of third-party claims), (d) condemnation awards (and payments in lieu thereof), (e) indemnity payments (other than with respect to reimbursement of third-party claims), (f) amounts received in respect of indemnity obligations of any party or purchase price, working capital, and other monetary adjustments in connection with the Specified Acquisition Transactions or any other Acquisition, (g) amounts received in connection with or as proceeds from representation and/or warranty insurance in connection with the Specified Acquisition Transactions or any other Acquisition, net of any reasonable and documented legal and accounting expenses and taxes paid in cash by the Loan Parties as a result thereof, (h) foreign, Mexican, United States, state or local tax refunds to the extent not included in the calculation of EBITDA (other than refunds of value-added or similar taxes received in the ordinary course of business), and (i) upon repayment in full of the New Senior Credit Agreement, any excess Net Cash Proceeds resulting from the offering of securities or the execution of transactions for the purpose of refinancing, in whole or in part, directly or indirectly, in one or a series of transactions, Debt of any Borrower or Guarantor.
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“Facility” means the real property identified on Schedule 1.01(B) to the New Senior Credit Agreement (as in effect on May 27, 2022) and any New Facility hereafter acquired by Ultimate Holdings or any of its Subsidiaries, including, without limitation, the land on which each such facility is located, all buildings and other improvements thereon, and all fixtures located thereat or used in connection therewith.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of the Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements entered into in connection with the implementation of those sections of the Code and any fiscal and regulatory legislation rules, practices, or other official guidance thereunder.
“First Lien Agent” has the meaning ascribed to such to such term in the recitals to this Agreement.
“First Lien Leverage Ratio” means, with respect to any Person and its Subsidiaries for any period, the ratio of (a) all Indebtedness described in clauses (a), (b), (c), (d), (e) and (f) in the definition thereof of such Person and its Subsidiaries as of the end of such period that is secured by a Lien on assets of such Person and its Subsidiaries as of such date which is pari passu with or senior to the Liens securing the Obligations as of such date (other than Indebtedness hereunder) to (b) EBITDA of such Person and its Subsidiaries for such period.
“Fiscal Quarter” means a fiscal quarter of a Fiscal Year, which period is the three-month period ending on the last day of each of March, June, September, and December of each year.
“Fiscal Year” means the fiscal year of Loan Parties and their Subsidiaries, which period shall be the 12-month period ending on December 31 of each year.
“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party that is subject to any Requirements of Laws other than, or in addition to, the laws of the United States or any state thereof or the laws of the District of Columbia.
“Foreign Plan Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any Requirement of Law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make any required contribution or payment under any Requirement of Law within the time permitted by any Requirement of Law for such contributions or payments, (c) the receipt of a notice from a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any liability by any Loan Party or any Subsidiary under any law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, or (e) the occurrence of any transaction with respect to a Foreign Plan that is prohibited under any Requirement of Law and that could reasonably be expected to result in the incurrence of any liability by any Loan Party or any Subsidiary, or the imposition on any Loan Party or any
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Subsidiary of any material fine, excise tax or penalty with respect to a Foreign Plan resulting from any noncompliance with any Requirement of Law.
“Foreign Subsidiary” means any Subsidiary of Ultimate Holdings that is not a Domestic Subsidiary.
“FRB” means the Board of Governors of the Federal Reserve System or any successor thereto.
“GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and the SEC, which are applicable to the circumstances as of the date of determination.
“Governing Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement or limited liability company agreement (or equivalent or comparable constitutive documents); (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization, governance and capitalization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed in connection with its formation, incorporation or organization with the applicable Governmental Authority in the jurisdiction of its formation, incorporation or organization.
“Governmental Authority” means any nation or government, any foreign, Federal, state, territory, provincial, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency 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).
“Guarantor” means Intermediate Holdings and each other Person that guarantees any of the Obligations, including, without limitation, 4th Source, LLC, IT Global Holding LLC, QMX Investment Holdings USA, INC, AgileThought Digital Solutions S.A.P.I. de C.V. (formerly known as North American Software, S.A.P.I. de C.V.), 4TH Source Holding Corp., Entrepids Technology INC., 4th Source Mexico, LLC, AGS Alpama Global Services USA, LLC., AN USA, and AgileThought, LLC. For the avoidance of doubt, no Excluded Foreign Subsidiary or Immaterial Subsidiary shall be a Guarantor.
“Guaranty” means each guaranty executed and delivered by any Guarantor, together with any joinders thereto and any other guaranty agreement executed by a Guarantor, in each case in form and substance satisfactory to the Required Lenders in their discretion. The Guaranty and Collateral Agreement and the Mexican Collateral Agreements are a Guaranty.
“Guaranty and Collateral Agreement” means the Guaranty and Collateral Agreement to be entered into by each Loan Party and the Collateral Agent, together with any
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joinders thereto and any other guaranty and collateral agreement executed by a Loan Party, in each case in form and substance satisfactory to the Required Lenders in their discretion.
“Hazardous Material” means any element, material, substance, waste, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic or hazardous substance, hazardous waste, universal waste, special waste, or solid waste or is otherwise characterized by words of similar import under any Environmental Law or that is regulated under, or for which liability or standards of care are imposed, pursuant to any Environmental Law, including, without limitation, petroleum, polychlorinated biphenyls; asbestos-containing materials, lead or lead-containing materials, urea formaldehyde-containing materials, radioactive materials, radon, per- and polyfluoroalkyl substances and mold.
“Hazardous Substances” means any hazardous waste, hazardous substance, pollutant, contaminant, toxic substance, oil, hazardous material, chemical or other substance regulated by any Environmental Law.
“Hedging Agreement” means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
“Hedging Obligations” means, with respect to any Person, any liabilities of such Person under any Hedging Agreement determined (a) for any date on or after the date that Hedging Agreement has been closed out and termination value determined in accordance therewith, using that termination value; and (b) for any date prior to the date referenced in clause (a), using the amount determined as the mark-to-market value for that Hedging Agreement, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in that Hedging Agreement (which may include a Lender or any Affiliate of a Lender).
“Holding Companies” means Ultimate Holdings and Intermediate Holdings.
“Immaterial Subsidiary” means any Subsidiary that, as of the last day of the most recently ended fiscal quarter of Ultimate Holdings, when taken together with all other Immaterial Subsidiaries, have not, in the aggregate, contributed greater than 3% of the EBITDA of Ultimate Holdings for the period of four consecutive fiscal quarters then most recently ended or greater than 3% of the total assets of Ultimate Holdings and its Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of Ultimate Holdings delivered pursuant to Section 10.1(a)(ii) or (iii); provided that, if at any time the aggregate amount of that portion of EBITDA of all Subsidiaries that are not Loan Parties exceeds 3% of EBITDA of Ultimate Holdings and its Subsidiaries or greater than 3% of the total assets of Ultimate Holdings and its Subsidiaries for any such period, Intermediate Holdings shall designate sufficient Subsidiaries as “Loan Parties” to cause that portion of EBITDA of Ultimate Holdings generated by Immaterial Subsidiaries to equal or be less than 3% of EBITDA and the portion of total assets of Ultimate Holdings and its Subsidiaries to equal or be less than 3%, and Ultimate Holdings shall cause all such Subsidiaries so designated to become a Guarantor and deliver all applicable Loan Documents in accordance with Section 10.1(b)(i).
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“Indebtedness” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables or other accounts payable incurred in the ordinary course of such Person’s business and not outstanding for more than 90 days after the date such payable was created and any earn-out, purchase price adjustment or similar obligation until such obligation appears in the liabilities section of the balance sheet of such Person); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis satisfactory to the Required Lenders and in accordance with accepted practice, of such Person under Hedging Agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing; (i) all Contingent Obligations; (j) all Disqualified Equity Interests; and (k) all obligations referred to in clauses (a) through (j) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer.
“Indemnified Taxes” means all Taxes, other than Excluded Taxes, imposed on or with respect to any payment (including, for the avoidance of doubt, any payment that results from the exercise of the conversion rights under Article XVIII) made by or on account of any obligation of any Loan Party under any Loan Document.
“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of a Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, concurso mercantil, quiebra, debtor relief, or debt adjustment law (including, but not limited to, the Mexican Bankruptcy Law (Ley de Concursos Mercantiles)), (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for that Person or any part of its property, or (c) an assignment or trust mortgage for the benefit of creditors.
“Intellectual Property” has the meaning specified therefor in the Guaranty and Collateral Agreement.
“Intellectual Property Security Agreement” is used as defined in the Guaranty and Collateral Agreement.
“Interest Payment Date” means, as to any Loan, (i) the 15th day of each March, June, September and December to occur while such Loan is outstanding (or if any such day is not a Business Day, the immediately succeeding Business Day) and (ii) the Maturity Date.
“Intermediate Holdings” has the meaning ascribed to such to such term in the preamble to this Agreement.
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“Inventory” means, with respect to any Person, all goods and merchandise of such Person leased or held for sale or lease by such Person, including, without limitation, all raw materials, work-in-process and finished goods, and all packaging, supplies and materials of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to an Account or cash.
“Investor Debt Noteholder” shall mean AGS Group, LLC.
“Investor Debt Promissory Note” shall mean that certain Subordinated Promissory Note, dated as of and as in effect on June 24, 2021, by and between Ultimate Holdings and the Investor Debt Noteholder, as amended, modified or supplemented from time to time solely with the consent of the Lenders, in their discretion.
“Investment” means, with respect to any Person, (a) any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances or other extensions of credit (excluding Accounts arising in the ordinary course of business), capital contributions or acquisitions of Indebtedness (including, any bonds, notes, debentures or other debt securities), Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), (b) the purchase or ownership of any futures contract or liability for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or (c) any investment in any other items that are or would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP.
“IRR” means a compounded, cumulative internal rate of return, compounded monthly calculated at the designated annual discount rate, which, when applied to any amount, and discounted, produces a net present value of such amount equal to zero.
“IRS” means the Internal Revenue Service.
“Joinder Agreement” means a Joinder Agreement, in form and substance satisfactory to the Required Lenders, duly executed by a Subsidiary of a Loan Party made a party hereto pursuant to Section 10.1(b).
“Lease” means any lease, sublease or license of, or other agreement granting a possessory interest in, real property to which any Loan Party or any of its Subsidiaries is a party as lessor, lessee, sublessor, sublessee, licensor or licensee.
“Lender” means the Tranche A-1 Lender, the Tranche A-2 Lender, the Tranche B-1 Lender, the Tranche B-2 Lender, the Tranche C Lender, Tranche D Lender and/or the Tranche E Lender, as the context may require.
“Lien” means any mortgage, deed of trust, deed to secure debt, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any Capitalized Lease and any collateral assignment, deposit arrangement or financing lease intended as, or having the effect of, security.
“Liquidity” means Availability plus Qualified Cash.
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“Loan” means a Tranche A-1 Loan, a Tranche A-2 Loan, a Tranche B-1 Loan, a Tranche B-2 Lender, a Tranche C Loan, a Tranche D Loan and/or a Tranche E Loan, as the context may require.
“Loan Documents” means this Agreement, the Notes, the Agents Fee Letter, each Perfection Certificate, the Collateral Documents, the Reference Subordination Agreement, any Subordination Agreements (including the Master Intercompany Note), and all documents, instruments, and agreements delivered in connection with the foregoing, as any of the foregoing are amended or modified in accordance with their respective terms.
“Loan Party” means, collectively (a) Intermediate Holdings, (b) the Borrowers, (c) each Subsidiary of Ultimate Holdings or any Borrower that is not an Excluded Foreign Subsidiary or an Immaterial Subsidiary, and (d) each other Person (including without limitation each Guarantor) that (i) executes a joinder agreement to this Agreement as a Loan Party in the form of Exhibit B, (ii) is liable for payment of any of the Obligations, or (iii) has granted a Lien in favor of Collateral Agent or the Lenders on its assets to secure any of the Obligations.
“Master Intercompany Note” means a demand promissory note made by and among the Loan Parties and their Subsidiaries, substantially in the form of Exhibit C, and acceptable to the Required Lenders, in their reasonable discretion.
“Material Adverse Effect” means any event, development, state of facts, change, circumstance, occurrence, condition or effect that, either individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on any of (a) the operations, assets, liabilities, financial condition or prospects of the Loan Parties and their respective Subsidiaries, taken as a whole, (b) the ability of the Loan Parties to perform any of their obligations under any Loan Document, (c) the legality, validity or enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of any Agent or any Lender under any Loan Document, or (e) the validity, perfection or priority of a Lien in favor of the Collateral Agent for the benefit of the Agents and the Lenders on Collateral having a fair market value in excess of US$300,000.
“Material Contract” means, with respect to any Person, (a) each contract listed on Schedule 6.01(v) to the New Senior Credit Agreement (as in effect on May 27, 2022), (b) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $300,000 or more in any Fiscal Year (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium), and (c) each other contract or agreement as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means, the Tranche A-1 Maturity Date, the Tranche A-2 Maturity Date, the Tranche B-1 Maturity Date, the Tranche B-2 Maturity Date, the Tranche C Maturity Date, the Tranche D Maturity Date and/or the Tranche E Maturity Date, as the context may require.
“Mexican Administration Trust” means that certain Administration and Source of Payment Trust Agreement with identification number No. F/3272 (Contrato de Fideicomiso Irrevocable de Administración y Fuente de Pago No. F/3272), dated November 9, 2017,
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including its exhibits, as amended and restated on the Closing Date, and as further amended from time to time.
“Mexican Administration Trust Amendment and Reaffirmation Agreement” means the amendment, acknowledgement and reaffirmation agreement to the Mexican Administration Trust to be entered by and among (i) AgileThought Inc., AgileThought Digital Solutions, S.A:P.I. de C.V. (formerly known as North American Software, S.A.P.I. de C.V.), AGS Alpama Global Services México, S.A. de C.V., AgileThought México, S.A. de C.V. (formerly known as AN-Digital, S.A. de C.V.), AN UX, S.A. de C.V., Anzen Soluciones, S.A. de C.V., AN Data Intelligence, S.A. de C.V., Faktos Inc., S.A.P.I. de C.V., Facultas Analytics, S.A.P.I. de C.V., AgileThought Servicios Administrativos, S.A. de C.V. (formerly known as Nasoft Servicios Administrativos, S.A de C.V.), AgileThought Servicios México, S.A. de C.V. (formerly known as AGS Nasoft Servicios Administrativos, S.A. de C.V.), Entrepids Mexico, S.A. de C.V., as settlors and third place beneficiaries, (ii) Monroe Capital Management Advisors, LLC. as first place beneficiary, (iii) Banco Nacional de México, S.A., Grupo Financiero Citibanamex, División Fiduciaria, in its capacity as trustee of irrevocable trust number F/17937-8, Banco Nacional de México, S.A., Grupo Financiero Citibanamex, División Fiduciaria, in its capacity as trustee of irrevocable trust number F/173183, Nexxus Capital Private Equity Fund VI, L.P., Manuel Senderos Fernández and Mauricio Garduño González, as second place beneficiaries, and (iv) Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as trustee.
“Mexican Collateral Agreements” means, collectively, the Mexican Administration Trust and the Mexican Security Trust.
“Mexican Collateral Amendment and Reaffirmation Agreements” means, collectively, the Mexican Administration Trust Amendment and Reaffirmation Agreement and the Mexican Security Trust Amendment and Reaffirmation Agreement.
“Mexican Loan Documents” means the Mexican Collateral Agreements, the Mexican Collateral Amendment and Reaffirmation Agreements and all documents, instruments, and agreements delivered in connection with the foregoing, as any of the foregoing are amended or modified in accordance with their respective terms.
“Mexican Loan Party” means AgileThought Digital Solutions, S.A.P.I. de C.V.
“Mexican Security Trust” means certain Security Trust Agreement with identification number No. F/3757 (Contrato de Fideicomiso Irrevocable de Garantía No. F-3757), dated November 15, 2018, including its exhibits, as amended from time to time. Into this trust the settlors contribute all the shares and equity interests of Mexican Subsidiaries (except for one share or equity interest in each Mexican Subsidiary), and all the intellectual property duly registered, or in the process of registration, in their name before the Mexican Institute of Property.
“Mexican Security Trust Amendment and Reaffirmation Agreement” means the acknowledgement and reaffirmation agreement to the Mexican Security Trust to be entered by and among (i) AgileThought Inc., AgileThought Digital Solutions, S.A:P.I. de C.V. (formerly known as North American Software, S.A.P.I. de C.V.), AGS Alpama Global Services México, S.A. de C.V., AgileThought México, S.A. de C.V. (formerly known as AN-Digital, S.A. de C.V.), AN UX, S.A. de C.V., Anzen Soluciones, S.A. de C.V., AN Data Intelligence, S.A. de C.V., Faktos Inc., S.A.P.I. de C.V., Facultas Analytics, S.A.P.I. de C.V., AgileThought Servicios
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Administrativos, S.A. de C.V. (formerly known as Nasoft Servicios Administrativos, S.A de C.V.), AgileThought Servicios México, S.A. de C.V. (formerly known as AGS Nasoft Servicios Administrativos, S.A. de C.V.), Entrepids México S.A. de C.V., Cuarto Origen, S. de R.L. de C.V., AN Evolution, S. de R.L. de C.V., Invertis, S.A. de C.V., QMX Investment Holding USA, Inc., IT Global Holding LLC, AgileThought Mexico, S.A. de C.V. (formerly known as AN-Digital, S.A. de C.V.), Entrepids Technology Inc., 4th Source, LLC, as settlors and third place beneficiaries, (ii) Monroe Capital Management Advisors, LLC., as first place beneficiary, (iii) Banco Nacional de México, S.A., Grupo Financiero Citibanamex, División Fiduciaria, in its capacity as trustee of irrevocable trust number F/17937-8, Banco Nacional de México, S.A., Grupo Financiero Citibanamex, División Fiduciaria, in its capacity as trustee of irrevocable trust number F/173183, Nexxus Capital Private Equity Fund VI, L.P., Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Manuel Senderos Fernández and Mauricio Garduño González as second place beneficiaries, and (iv) Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, as trustee.
“Mexican Subsidiaries” means, collectively, the Subsidiaries incorporated under the laws of Mexico.
“Mexico” means the United Mexican States.
“Mortgage” means a mortgage, deed of trust or similar instrument granting Collateral Agent or the Lenders a Lien on fee owned real property of any Loan Party.
“Mortgage-Related Documents” means with respect to any real property subject to a Mortgage, the following, in form and substance satisfactory to the Required Lenders in their discretion: (a) an ALTA Loan Title Insurance Policy (or binder therefor) covering Collateral Agent’ or the Lenders’, as applicable, interest under the Mortgage, in a form and amount and by an insurer acceptable to the Required Lenders, which must be fully paid on that effective date; (b) copies of all documents of record concerning such real property as shown on the commitment for the ALTA Loan Title Insurance Policy referred to above; (c) all assignments of leases, estoppel letters, attornment agreements, consents, waivers, and releases as the Required Lenders reasonably require with respect to other Persons having an interest in the real estate; (d) a current, as-built survey of the real estate, containing a metes-and-bounds property description and certified by a licensed surveyor acceptable to the Required Lenders, in their discretion; (e) a life-of-loan flood hazard determination and, if the real estate is located in a flood plain, an acknowledged notice to borrower and flood insurance in an amount, with endorsements and by an insurer acceptable to the Required Lenders; (f) a current appraisal of the real estate, prepared by an appraiser acceptable to the Required Lenders, and in form and substance satisfactory to the Required Lenders in their discretion; (g) an environmental assessment, prepared by environmental engineers acceptable to the Required Lenders and accompanied by all reports, certificates, studies, or data as the Required Lenders reasonably require (including, without limitation, “Phase II” reports), which must all be in form and substance satisfactory to the Required Lenders in their discretion; and (h) an environmental agreement and all other documents, instruments, or agreements as the Required Lenders in their discretion require with respect to any environmental risks regarding the real estate, in form and substance satisfactory to the Required Lenders, in their discretion.
“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed, or has been obligated to contribute, to at any time during the preceding six calendar years.
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“Net Cash Proceeds” means:
i.with respect to any Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by any Loan Party or Subsidiary thereof pursuant to such Disposition net of (i) the direct costs relating to that sale, transfer or other disposition (including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by Borrowers to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), and (iii) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to that Disposition (other than the Loans).
ii.with respect to any issuance of Equity Interests, the aggregate cash proceeds received by any Loan Party or Subsidiary thereof pursuant to such issuance, net of the direct costs of non-Affiliates relating to such issuance (including sales and underwriters’ commissions); and
with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan Party or Subsidiary thereof pursuant to such issuance, net of the direct costs of non-Affiliates of such issuance (including up-front, underwriters’ and placement fees).
“New Senior Credit Agreement” means the financing agreement dated as of May 27, 2022, among AgileThought, Inc., as Holdings (as defined therein), AN Global LLC, as borrower, each of the guarantors party thereto, the lenders from time to time party thereto, and Blue Torch Finance LLC, as collateral agent and administrative agent for the lenders party thereto, as amended, amended and restated, supplemented or otherwise modified from time to time.
“New Senior Credit Agreement Final Maturity Date” means May 27, 2026. If such date is not a Business Day, the immediately preceding Business Day.
“Note” or “Notes” means a Tranche A-1 Note, a Tranche A-2 Note, a Tranche B-1 Note, a Tranche B-2 Note, a Tranche C Note, a Tranche D Note and/or a Tranche E Note, as the context may require.
“Obligations” means all obligations (monetary (including post-petition interest, default-rate interest, fees, and expenses, allowed or not in an Insolvency Proceeding) or otherwise) of any Loan Party under this Agreement and any other Loan Document, including attorney costs and reimbursement obligations, all in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due. Notwithstanding the foregoing, the Obligations shall not include any Excluded Swap Obligations.
“OFAC” means the U.S. economic sanctions laws, Executive Orders and implementing regulations as promulgated by the U.S. Treasury Department's Office of Foreign Assets Control.
“Other Connection Taxes” means, with respect to any Person, Taxes imposed as a result of a present or former connection between that Person and the jurisdiction imposing any such Tax (other than connections arising from that Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a
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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).
“Payment Conditions” means, with respect to any Permitted Investor Debt Payment or Permitted Earn-out Payment, that (a) no Event of Default has occurred and is continuing or would be caused by the making thereof, and (b) after giving pro forma effect to that payment, (i) Liquidity exceeds US$5,000,000 and (ii) as of the last day of the most recently ended Computation Period for which financial statements have been delivered (or were required to be delivered) to Administrative Agent under and in accordance with Section 10.1(a), the Consolidated Group shall be in pro forma compliance with the financial covenants set forth in Section 10.3 for the most recently concluded Computation Period.
“Payment in Full” means either (i), (a) the payment in full in cash of all Loans and other Obligations, other than contingent indemnification obligations for which no claims have been asserted, (b) the termination of all Commitments, (c) the Cash Collateralization of all contingent indemnification obligations for which any claim with respect to Administrative Agent or any Lender has been asserted or threatened in writing, and (d) the release of any claims of the Loan Parties against Agents and Lenders arising on or before the payment date, or (ii) the conversion by each Lender of all of the Outstanding Obligations (as defined in Article XVIII) owed to such Lender pursuant to Article XVIII. “Paid in Full” shall have a correlative meaning.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means an “employee pension benefit plan” as defined in Section 3(2) of ERISA that is subject to Section 412 of the Internal Revenue Code, Section 302 of ERISA or Title IV of ERISA maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party or any of its ERISA Affiliates at any time during the preceding six calendar years.
“Perfection Certificate” means a perfection and “know your customer” certificate executed and delivered to Administrative Agent by a Loan Party on or prior to the Closing Date.
“Permits” means, with respect to any Person, any permit, approval, clearance, consent, authorization, license, registration, accreditation, certificate, certification, certificate of need, concession, grant, franchise, variance or permission from, and any other contractual obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property or products or to which such Person or any of its property or products is subject.
“Permitted Acquisition” means any Acquisition by a Loan Party (other than the Mexican Loan Party) to the extent that each of the following conditions shall have been satisfied:
iii.no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition;
iv.[reserved];
v.Intermediate Holdings shall have furnished to the Lender at least ten (10) Business Days prior to the consummation of such Acquisition (i) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of
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such Acquisition) and, at the request of any Agent, such other information and documents that any Lender may request, including, without limitation, executed counterparts of the respective agreements, instruments or other documents pursuant to which such Acquisition is to be consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, instruments or other documents and all other material ancillary agreements, instruments or other documents to be executed or delivered in connection therewith, (ii) pro forma financial statements of Ultimate Holdings and its Subsidiaries after the consummation of such Acquisition, (iii) a certificate of the chief financial officer of Ultimate Holdings, demonstrating on a pro forma basis compliance, as at the end of the most recently ended fiscal quarter for which internally prepared financial statements are available, with all covenants set forth in Section 10.3 hereof after the consummation of such Acquisition, and (iv) copies of such other agreements, instruments or other documents as any Agent at the request of the Required Lenders shall reasonably request;
vi.the agreements, instruments and other documents referred to in paragraph (c) above shall provide that (i) neither the Loan Parties nor any of their Subsidiaries shall, in connection with such Acquisition, assume or remain liable in respect of any Indebtedness of the Seller or Sellers, or other obligation of the Seller or Sellers (except for Permitted Indebtedness), and (ii) all property to be so acquired in connection with such Acquisition shall be free and clear of any and all Liens, except for Permitted Liens (and if any such property is subject to any Lien not permitted by this clause (ii) then concurrently with such Acquisition such Lien shall be released);
vii.such Acquisition shall be effected in such a manner so that the acquired assets or Equity Interests are owned either by a Loan Party (other than the Mexican Loan Party) or a wholly owned Domestic Subsidiary of a Loan Party and, if effected by merger or consolidation involving a Loan Party (other than the Mexican Loan Party), such Loan Party shall be the continuing or surviving Person;
viii.the Loan Parties shall have Liquidity in an amount equal to or greater than U.S.$8,000,000 immediately after giving effect to the consummation of the proposed Acquisition;
ix.the assets being acquired or the Person whose Equity Interests are being acquired did not have negative EBITDA during the 12 consecutive month period most recently concluded prior to the date of the proposed Acquisition;
x.the assets being acquired, or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of the Loan Parties and their Subsidiaries or a business reasonably related thereto;
xi.the assets being acquired are located within the United States or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States;
xii.such Acquisition shall be consensual and shall have been approved by the board of directors of the Person whose Equity Interests or assets are proposed to be acquired and shall not have been preceded by an unsolicited tender offer for such Equity Interests
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by, or proxy contest initiated by, Ultimate Holdings or any of its Subsidiaries or an Affiliate thereof;
xiii.any such Domestic Subsidiary (and its equity holders) shall execute and deliver the agreements, instruments and other documents required by Section 10.1(b) on or prior to the date of the consummation of such Acquisition; and
xiv.the Purchase Price payable in respect of any single Acquisition or series of related Acquisitions shall not exceed an amount equal to 15% of Revenue of Intermediate Holdings for the period of four consecutive fiscal quarters most recently ended prior to the date of such Acquisition.
“Permitted Cure Equity” means Qualified Equity Interests of Ultimate Holdings.
“Permitted Disposition” means:
xv.sale of Inventory in the ordinary course of business;
xvi.licensing, on a non-exclusive basis, Intellectual Property rights in the ordinary course of business;
xvii.leasing or subleasing assets in the ordinary course of business;
xviii.(i) the lapse of Registered Intellectual Property of Ultimate Holdings and its Subsidiaries to the extent not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Secured Parties;
xix.any involuntary loss, damage or destruction of property;
xx.any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;
xxi.so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from Ultimate Holdings or any of its Subsidiaries to a Loan Party (other than Ultimate Holdings or the Mexican Loan Party), and (ii) from any Subsidiary of Ultimate Holdings that is not a Loan Party (or is the Mexican Loan Party) to any other Subsidiary of Ultimate Holdings;
xxii.Permitted Factoring Dispositions;
xxiii.Disposition of obsolete or worn-out equipment in the ordinary course of business, in an aggregate amount not to exceed, for all Loan Parties and their Subsidiaries, $300,000 in any Fiscal Year; and
xxiv.Disposition of property or assets not otherwise permitted in clauses (a) through (i) above for cash in the ordinary course of business for not less than the fair market value of such property or assets, in an aggregate amount not to exceed, for all Loan Parties and their Subsidiaries, US$600,000 in any Fiscal Year.
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“Permitted Earn-out Obligations” means, collectively, (a) all Permitted Existing Earn-Out Obligations and (b) all Permitted Future Earn-out Obligations, in each case determined assuming the maximum amount payable in connection with any such Earn-out Obligations.
“Permitted Earn-out Payments” means (a) the payment of all Permitted Existing Earn-Out Obligations that are payable solely in Equity Interests, as and when due and payable under the Acquisition documents related thereto, (b) the payment of all Permitted Existing Earn-Out Obligations that are payable solely in cash or Cash Equivalents, as and when due and payable under the Acquisition documents related thereto, but in the case of this clause (b) solely as long as the Payment Conditions are met with respect thereto, and (c) the payment of all Permitted Future Earn-out Obligations, as and when due and payable under the Acquisition documents related thereto, to the extent such payment is permitted under the Subordination Agreement entered into with respect thereto.
“Permitted Existing Earn-Out Obligations” means, collectively, the aggregate outstanding amount of all Earn-out Obligations incurred prior to the Closing Date set forth on Schedule 11.1(e), whether payable in Equity Interests or cash or Cash Equivalents.
“Permitted Factoring Dispositions” means any Disposition of Accounts via a factoring, reverse factoring or confirming arrangement to any Person that is not an Affiliate of any Loan Party or Subsidiary thereof, in the ordinary course of business and consistent with past practices, so long as the aggregate face value of all such Accounts that have been so factored, reversed factored or confirmed and not been paid by the account debtor thereof shall not exceed US$1,800,000 at any one time outstanding.
“Permitted Future Earn-Out Obligations” means, collectively, the aggregate outstanding amount of all Earn-out Obligations incurred after May 27, 2022 (other than, for avoidance of doubt, the Existing Earn-Out Obligations), whether payable in Equity Interests or cash or Cash Equivalents, so long as (a) such Earn-out Obligations are incurred in connection with a Permitted Acquisition, and (b) the aggregate outstanding amount of all such Earn-out Obligations payable in cash does not exceed US$12,000,000 and the holders of such Earn-out Obligations have agreed to subordinate their claims with respect thereto to the prior payment of the Obligations pursuant to a subordination agreement reasonably satisfactory to the Required Lenders.
“Permitted Holders” means (i) Macfran S.A. de C.V., (ii) Invertis, SA de CV, (iii) Diego Zavala (iv) Mauricio Rioseco, (v) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the trust No. F/17938-6 (Credit Suisse), (vi) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the trust No. F/17937-8 (Credit Suisse), (vii) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the irrevocable trust for the issuance of senior bonds No. F/173183 (Nexxus), (viii) Nexxus Capital Private Equity Fund, VI, LP, (ix) Mauricio Garduño González Elizondo, (x) Rodrigo Franco Hernández, (xi) MZM Estrategia, S.A.P.I. de C.V., (xii) Isabelle Richard, (xiii) Georgina Rojas Aboumrad, (xiv) Alejandro Rojas Domene, (xv) Miguel Angel Ambrosi Herrera, (xvi) Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero acting as trustee pursuant to the Contrato de Fideicomiso Irrevocable de Emisión de Cert. Bursátiles Fid. de Desarrollo N.F2416 (LIV Mexico Growth IV N.F2416) and (xvii) LIV Mexico Growth Fund IV, L.P.
“Permitted Indebtedness” means:
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xxv.any Indebtedness owing to any Agent or any Lender under the New Senior Credit Agreement and the other loan documents thereunder;
xxvi.any other Indebtedness listed on Schedule 7.02(b) to the New Senior Credit Agreement (as in effect on May 27, 2022), and any Permitted Refinancing Indebtedness in respect of such Indebtedness;
xxvii.Permitted Purchase Money Indebtedness and any Permitted Refinancing Indebtedness in respect of such Indebtedness;
xxviii.Permitted Intercompany Investments;
xxix.Indebtedness incurred in the ordinary course of business under performance, surety, statutory, and appeal bonds;
xxx.Indebtedness owed to any Person providing, or providing financing for, property, casualty, liability, or other insurance to the Loan Parties, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the period in which such Indebtedness is incurred and such Indebtedness is outstanding only during such period;
xxxi.the incurrence by any Loan Party of Indebtedness under Hedging Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with such Loan Party’s operations and not for speculative purposes;
xxxii.Indebtedness incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) or other similar cash management services, in each case, incurred in the ordinary course of business;
xxxiii.contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions;
xxxiv.Indebtedness of a Person whose assets or Equity Interests are acquired by Holdings or any of its Domestic Subsidiaries in a Permitted Acquisition in an aggregate amount not to exceed US$300,000 at any one time outstanding; provided that such Indebtedness (i) is either Permitted Purchase Money Indebtedness or a Capitalized Lease with respect to equipment or mortgage financing with respect to a Facility, (ii) was in existence prior to the date of such Permitted Acquisition, and (iii) was not incurred in connection with, or in contemplation of, such Permitted Acquisition;
xxxv.unsecured Indebtedness of Ultimate Holdings or any of its Subsidiaries that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness does not mature prior to the date that is 12 months after the New Senior Credit Agreement Final Maturity Date, (iv) such unsecured Indebtedness does not amortize until 12 months after the New Senior Credit Agreement Final Maturity Date, (v)
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such unsecured Indebtedness does not provide for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 12 months after the New Senior Credit Agreement Final Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to the Collateral Agent and the Required Lenders;
xxxvi.the Existing Earn-Out Obligations;
xxxvii.Permitted Future Earn-Out Obligations;
xxxviii.Subordinated Indebtedness;
xxxix.Indebtedness arising from Permitting Factoring Dispositions;
xl.the AGS Indebtedness; provided that such Indebtedness is subject to, and permitted by, the AGS Subordination Agreement;
xli.the Exitus Indebtedness; provided that such Indebtedness is subject to, and permitted by, the Exitus Subordination Agreement (as defined in the New Senior Credit Agreement);
xlii.to the extent constituting Indebtedness, the Unpaid Taxes;
xliii.PPP Indebtedness, in an aggregate amount not to exceed US$312,041;
xliv.Indebtedness in respect of letters of credit issued by third-party financial institutions, so long as the maximum aggregate face amount of such letters of credit shall not exceed US$2,400,000 at any time; and
xlv.other unsecured Indebtedness owed to any Person that is not an Affiliate of Intermediate Holdings or any of its Subsidiaries, in an aggregate outstanding amount not to exceed US$4,800,000 at any time.
“Permitted Intercompany Investments” means Investments made by (a) a Loan Party to or in another Loan Party (other than the Mexican Loan Party), (b) a Loan Party to or in a Subsidiary that is not a Loan Party (or to the Mexican Loan Party) so long as either (i) such Investment is made in the ordinary course of business, or (ii) the aggregate amount of all Investments made pursuant to this clause (b)(ii) does not exceed $600,000 at any one time outstanding, (c) a Subsidiary that is not a Loan Party (or that is the Mexican Loan Party) to or in another Subsidiary that is not a Loan Party (or to the Mexican Loan Party), and (d) a Subsidiary that is not a Loan Party (or the Mexican Loan Party) to or in a Loan Party (including the Investments listed on Schedule 1.01(C) to the New Senior Credit Agreement (as in effect on May 27, 2022)), so long as, in the case of a loan or advance, the parties thereto are party to the Intercompany Subordination Agreement (as defined in the New Senior Credit Agreement).
“Permitted Investments” means:
(i)Investments in cash and Cash Equivalents;
(ix)Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business;
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(x)advances made in connection with purchases of goods or services in the ordinary course of business;
(xi)Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries;
(xii)Investments existing on the date hereof, as set forth on Schedule 7.02(e) to the New Senior Credit Agreement (as in effect on May 27, 2022) hereto, but not any increase in the amount thereof as set forth in such Schedule or any other modification of the terms thereof;
(xiii)Permitted Intercompany Investments; and
(xiv)Permitted Acquisitions.
“Permitted Investor Debt” shall mean all indebtedness incurred under the Investor Debt Promissory Note, in a maximum aggregate amount not to exceed US$8,000,000 (or the Peso Equivalent thereof) at any time.
“Permitted Investor Debt Payments” shall mean, solely as long as the Payment Conditions are met with respect thereto, the payment to the Investor Debt Noteholder of (a) regularly scheduled interest payments, as and when due and payable under the Investor Debt Promissory Note, and (b) solely on or after January 1, 2022, regularly scheduled payments of principal of the Permitted Investor Debt (for the avoidance of doubt, excluding any prepayments), as and when due and payable under the Investor Debt Promissory Note.
“Permitted Liens” means:
xlvi.Liens securing the Obligations;
xlvii.Liens for taxes, assessments and governmental charges the payment of which is not required under Section 10.1(c)(ii);
xlviii.Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and other similar Liens arising in the ordinary course of business and securing obligations (other than Indebtedness for borrowed money) that are not overdue by more than 30 days or are being contested in good faith and by appropriate proceedings promptly initiated and diligently conducted, and a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor;
xlix.Liens described on Schedule 7.02(a) to the New Senior Credit Agreement (as in effect on May 27, 2022); provided that any such Lien shall only secure the Indebtedness that it secures on May 27, 2022, and any Permitted Refinancing Indebtedness in respect thereof;
l.purchase money Liens on equipment acquired or held by any Loan Party or any of its Subsidiaries in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (i) attaches to such property and (ii) secures the Indebtedness that was incurred to acquire such property or any Permitted Refinancing Indebtedness in respect thereof;
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li.deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (iii) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due;
lii.with respect to any Facility, easements, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the value of such property or its use by any Loan Party or any of its Subsidiaries in the normal conduct of such Person’s business;
liii.Liens of landlords and mortgagees of landlords (i) arising by statute or under any Lease or related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, or (iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;
liv.the title and interest of a lessor or sublessor in and to personal property leased or subleased (other than through a Capitalized Lease), in each case extending only to such personal property;
lv.non-exclusive licenses of Intellectual Property rights in the ordinary course of business;
lvi.judgment liens (other than for the payment of taxes, assessments or other governmental charges) securing judgments and other proceedings not constituting an Event of Default under Section 13.1(j);
lvii.rights of set-off or bankers’ liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business;
lviii.Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness;
lix.Liens assumed by Holdings or any of its Domestic Subsidiaries in connection with a Permitted Acquisition that secure Indebtedness permitted by clause (j) of the definition of Permitted Indebtedness; and
lx.Liens solely on any cash earnest money deposits made by any Loan Party in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition;
lxi.Liens on cash collateral securing Indebtedness and obligations relating thereto that is permitted, and not securing any obligations in excess of the amount that is permitted, under clause (u) of the definition of Permitted Indebtedness;
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lxii.Liens securing this Agreement, to the extent subject to the Reference Subordination Agreement; and
lxiii.other Liens granted to any Person that is not an Affiliate of the Borrower or any Subsidiary of the Borrower in the ordinary course of business, so long as such Liens secure obligations in an aggregate outstanding amount that does not exceed $120,000 at any time;
provided that in no event shall any Loan Party or any Subsidiary of a Loan Party grant a Lien on (x) any property of any Loan Party or Subsidiary of a Loan Party that is organized under the law of Mexico, or (y) any Equity Interests of any Loan Party or any Subsidiary of a Loan Party that is organized under the law of Mexico unless, in each such case, such Lien secures the Obligations (subject to the provisions of the Reference Subordination Agreement) and obligations under the New Senior Credit Agreement.

“Permitted Purchase Money Indebtedness” means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (e) of the definition of “Permitted Liens”; provided that:
(a)     such Indebtedness is incurred within 30 days after such acquisition,
(b)     such Indebtedness when incurred shall not exceed the purchase price of the asset financed and
(c)     the aggregate principal amount of all such Indebtedness shall not exceed US$900,000 at any time outstanding.
“Permitted Refinancing Indebtedness” means the extension of maturity, refinancing or modification of the terms of Indebtedness so long as:
lxiv.after giving effect to such extension, refinancing or modification, the amount of such Indebtedness is not greater than the amount of Indebtedness outstanding immediately prior to such extension, refinancing or modification (other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto);
lxv.such extension, refinancing or modification does not result in a shortening of the average weighted maturity (measured as of the extension, refinancing or modification) of the Indebtedness so extended, refinanced or modified;
lxvi.such extension, refinancing or modification is pursuant to terms that are not less favorable to the Loan Parties and the Lenders than the terms of the Indebtedness (including, without limitation, terms relating to the collateral (if any) and subordination (if any)) being extended, refinanced or modified; and
lxvii.the Indebtedness that is extended, refinanced or modified is not recourse to any Loan Party or any of its Subsidiaries that is liable on account of the obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.
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“Permitted Restricted Payments” means any of the following Restricted Payments made by:
lxviii.any Loan Party to Ultimate Holdings in amounts necessary to pay taxes and other customary expenses as and when due and owing by Ultimate Holdings in the ordinary course of its business as a public holding company (including salaries and related reasonable and customary expenses incurred by employees of Ultimate Holdings), so long as no Default or Event of Default shall have occurred and be continuing or would result from the making of such payment,
lxix.any Loan Party to any other Loan Party (other than Ultimate Holdings and the Mexican Loan Party),
lxx.any Subsidiary of Intermediate Holdings that is not a Loan Party (or that is the Mexican Loan Party) to any other Subsidiary of Intermediate Holdings,
lxxi.Ultimate Holdings to pay dividends in the form of common Equity Interests, and
lxxii.payments hereunder constituting Restricted Payments.
“Permitted Specified Liens” means Permitted Liens described in clauses (a), (b) and (c) of the definition of Permitted Liens, and, solely in the case of Section 10.1(b)(i), including clauses (g), (h) and (i) of the definition of Permitted Liens.
“Person” means any natural person, corporation, partnership, trust, limited liability company, association, Governmental Authority, or any other entity, whether acting in an individual, fiduciary or other capacity.
“Pesos” or “MXN” means the lawful currency of Mexico.
“Peso/Dollar Reference Exchange Rate” means an exchange rate of MXN21.00 Pesos for each Dollar.
“Peso Commitments” means, as to each Peso Lender, its obligation to make Peso Loans to the Borrowers pursuant to Section 2.1(b), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Peso Lender’s name on Annex A or in the Assignment Agreement pursuant to which such Peso Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Peso Equivalent” means, with respect to any amount in Dollars, the amount, determined by reference to the Conversion Rate as of any date of determination, of Pesos that could be purchased with such amount of Dollars on such date.
“Peso Lender” means at any time, (a) any Lender that has a Peso Commitment at such time and (b) if the Commitments of the Peso Lenders to make Peso Loans have been terminated pursuant to Section 6.1 or Section 6.2 or, if the Aggregate Commitments have expired, any Lender that holds a Peso Loan at such time.
“Peso Loan” means a Tranche A-2 Loan and/or a Tranche B-2 Loan, as the context may require.
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“PPP Indebtedness” means, collectively, certain Indebtedness pursuant to the Paycheck Protection Program of the Small Business Administration (a) between Bank of America, as lender, and AgileThought, LLC, as borrower, in the original aggregate principal amount of US$310,000, (b) between Bank of America, as lender, and AN USA LLC, as borrower, in the original aggregate principal amount of US$42,000 and (c) between Bank of America, as lender, and AGS Alpama Global Services LLC, as borrower, in the original aggregate principal amount of US$8,000.
“Proceeding” or “proceeding” means any investigation, inquiry, litigation, review, hearing, suit, claim, audit, arbitration, proceeding or action (in each case, whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.
“Project Thunder” means the fundamental changes described on Schedule 7.02(c) to the New Senior Credit Agreement (as in effect on May 27, 2022).
“Projections” means financial projections of Ultimate Holdings and its Subsidiaries delivered to the Lender, as updated from time to time pursuant to Section 10.1(a)(vi).
“Pro Rata Share” means:
lxxiii.with respect to a Lender’s obligation to make Loans of any Type and right to receive payments of interest, fees, and principal with respect thereto, (i) prior to the Commitments being terminated or reduced to zero, the percentage obtained by dividing (x) the Dollar Amount of such Lender’s Commitment to make Loans of such Type plus the Dollar Amount of the unpaid principal amount of such Lender’s Loans of such Type, by (y) the Dollar Amount of the Aggregate Commitments of all Lenders required to make Loans of such Type plus the Dollar Amount of the aggregate unpaid principal amount of all Loans of such Type of all Lenders, and (ii) from and after the time the Commitments to make Loans of such Type have been terminated or reduced to zero, the percentage obtained by dividing (x) the Dollar Amount of the aggregate unpaid principal amount of such Lender’s Loans of such Type, by (y) the Dollar Amount of the aggregate unpaid principal amount of all Loans of such Type of all Lenders; and
lxxiv.with respect to all other matters as to a particular Lender, (i) prior to the time that the Commitments have been terminated or reduced to zero, the percentage obtained by dividing (x) the Dollar Amount of such Lender’s Commitment (if any), plus the Dollar Amount of the aggregate unpaid principal amount of such Lender’s Loans, by (y) the Dollar Amount of the Aggregate Commitments of all Lenders, plus the Dollar Amount of the aggregate unpaid principal amount all Loans of all Lenders, and (ii) if the Commitments have been terminated or reduced to zero, the percentage obtained by dividing (x) the Dollar Amount of the aggregate unpaid principal amount of such Lender’s Loans, by (y) the Dollar Amount of the aggregate unpaid principal amount of all Loans of all Lenders.
“Purchase Price” means, with respect to any Acquisition, an amount equal to the sum of (a) the aggregate consideration, whether cash, property or securities (including, without limitation, the fair market value of any Equity Interests of any Loan Party or any of its Subsidiaries issued in connection with such Acquisition), paid or delivered by a Loan Party or any of its Subsidiaries (whether as initial consideration or through the payment or disposition of
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deferred consideration, including, without limitation, in the form of seller financing, royalty payments, payments allocated towards non-compete covenants, payments to principals for consulting services or other similar payments) in connection with such Acquisition, plus (b) the aggregate amount of liabilities of the acquired business (net of current assets of the acquired business) that would be reflected on a balance sheet (if such were to be prepared) of Ultimate Holdings and its Subsidiaries after giving effect to such Acquisition, plus (c) the aggregate amount of all transaction fees, costs and expenses incurred by Ultimate Holdings or any of its Subsidiaries in connection with such Acquisition.
“Qualified Cash” means, as of any date of determination, the aggregate amount of unrestricted cash on-hand of the Loan Parties (other than the Mexican Loan Party) maintained in deposit accounts in the name of a Loan Party in the United States as of such date, which deposit accounts are, subject to Schedule 10.1(r) of the New Senior Credit Agreement, subject to Control Agreements.
“Qualified Equity Interests” means, with respect to any Person, all Equity Interests of such Person that are not Disqualified Equity Interests.
“Real Property Deliverables” means each of the following agreements, instruments and other documents in respect of each Facility:
lxxv.a mortgage agreement, in form and substance satisfactory to the Lenders, duly executed by the applicable Loan Party,
lxxvi.evidence of the recording of each mortgage agreement in such office or offices as may be necessary or, in the reasonable opinion of the Required Lender , desirable to perfect the Lien purported to be created thereby or to otherwise protect the rights of the Collateral Agent and the Lenders thereunder;
lxxvii.a Title Insurance Policy or bring-down of the existing Title Insurance Policy with respect to each mortgage agreement, dated as of the date such Title Insurance Policy is required to be delivered to the Collateral Agent hereunder;
lxxviii.a current ALTA survey and a surveyor’s certificate, certified to the Collateral Agent and to the issuer of the Title Insurance Policy with respect thereto by a professional surveyor licensed in the state in which such Facility is located and reasonably satisfactory to the Required Lenders;
lxxix.in the case of a leasehold interest, a certified copy of the Lease between the landlord and such Person with respect to such real property in which such Person has a leasehold interest;
lxxx.a zoning report issued by a provider reasonably satisfactory to the Collateral Agent or a copy of each letter issued by the applicable Governmental Authority, evidencing each Facility’s compliance with all applicable Requirements of Law, together with a copy of all certificates of occupancy issued with respect to each Facility;
lxxxi.an opinion of counsel, satisfactory to the Required Lenders , in the state where such Facility is located with respect to the enforceability of the Mortgage to be recorded and such other matters as the Collateral Agent may reasonably request at the request of the Required Lenders;
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lxxxii.a Phase I Environmental Site Assessment prepared in accordance with the United States Environmental Protection Agency Standards and Practices for “All Appropriate Inquiries” under Section 101(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act as referenced in 40 CFR Part 312 and ASTM E-1527-13 “Standard Practice for Environmental Assessments” (“Phase I ESA” (and if reasonably requested by the Collateral Agent at the request of the Required Lenders based upon the results of such Phase I ESA, a Phase II Environmental Site Assessment), by a nationally recognized environmental consulting firm, reasonably satisfactory to the Required Lenders; and
lxxxiii.such other agreements, instruments, appraisals and other documents (including guarantees and opinions of counsel) as the Collateral Agent may reasonably require at the request of the Required Lenders.
“Registered Intellectual Property” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.
“Registration Rights Agreement” means a registration rights agreement (as may be amended, restated or otherwise modified from time to time), entered into by and among the Borrowers, the Lenders and any other parties thereto, granting registration rights with respect to the Conversion Payment Shares, which specifically states that it is a “Registration Rights Agreement” for purposes of this Agreement.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in any environmental media, including the indoor or outdoor air, soil, surface or ground water, sediments or property.
“Remedial Action” means any action (a) to correct, mitigate, or address any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, or (b) to clean up, remove, remediate, mitigate, abate, contain, treat, monitor, assess, evaluate, investigate, prevent, minimize or in any other way address any environmental condition or the actual, alleged or threatened presence, Release or threatened Release of any Hazardous Materials (including the performance of pre-remedial studies and investigations and post-remedial operation and maintenance activities).
“Reportable Event” means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).
“Required Lenders” means, at any time, Lenders whose Pro Rata Shares exceed 60% as determined pursuant to clause (b) of the definition of “Pro Rata Share”; provided that the Pro Rata Shares held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Requirements of Law” means, with respect to any Person, collectively, the common law and any and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines,
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ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities), and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Restricted Payment” means (a) the declaration or payment of any dividend or other distribution, direct or indirect, on account of any Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding, together with any payment or distribution pursuant to a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, (b) the making of any repurchase, redemption, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Loan Party or any direct or indirect parent of any Loan Party, now or hereafter outstanding, (c) the making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options or other rights for the purchase or acquisition of shares of any class of Equity Interests of any Loan Party, now or hereafter outstanding, (d) the return of any Equity Interests to any shareholders or other equity holders of any Loan Party or any of its Subsidiaries, or the making of any other distribution of property, assets, shares of Equity Interests, warrants, rights, options, obligations or securities thereto as such or (e) the payment of any management, consulting, monitoring or advisory fees or any other fees or expenses (including the reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to any management, consulting, monitoring, advisory or other services agreement to any of the shareholders or other equity holders of any Loan Party or any of its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party.
“Revenue” means, for any period, the aggregate amount received by Ultimate Holdings and its Subsidiaries during such period for the sale of good and/or the provision of services, determined in compliance with Accounting Standards Codification 606 (Revenue from Contracts with Customers) published by the Financial Accounting Standards Board.
“Sale and Leaseback Transaction” means, with respect to Ultimate Holdings or any of its Subsidiaries, any arrangement, directly or indirectly, with any Person whereby Ultimate Holdings or any of its Subsidiaries shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
“Sanctioned Person” means, at any time, (a) any Person listed in OFAC’s Specially Designated Nationals and Blocked Persons List, OFAC’s Sectoral Sanctions Identification List, and any other Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom, Germany, Canada, Australia, or other relevant sanctions authority, (b) a Person that resides in, is organized in or located in, or has a place of business in, a country or territory named on any list referred to in clause (a) of this definition or a country or territory that is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through any such jurisdiction (each of the foregoing in this clause (b), a “Sanction Target”), or a Person that owns 50% or more of the Equity Interests of, or is otherwise controlled by, or is acting on behalf of, one or more Sanction Targets, (c) any Person with whom or with which a United States Person is prohibited from dealing under any of the Sanctions, or (d) any Person owned or controlled by any Person or Persons described in clause (a) or (b).
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“Sanctions” means Requirements of Law concerning or relating to economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by OFAC, the U.S. Department of State, the European Union, or Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission or any other Governmental Authority succeeding to any of the principal functions thereof.
“Secured Party” means any Agent and any Lender.
“Seller” means any Person that sells Equity Interests or other property or assets to a Loan Party or a Subsidiary of a Loan Party in a Permitted Acquisition.
“Senior Credit Facility” means any extension of credit to IT Global Holding LLC, 4th Source, LLC, AN Extend, S.A. de C.V. and AgileThought, LLC pursuant to the amended and restated credit agreement dated as of July 18, 2019, among IT Global Holding LLC and 4th Source, LLC and AgileThought, LLC, as borrowers, the Holding Companies, the other Loan Parties party thereto and Monroe Capital Management Advisors, LLC as administrative agent, as amended, amended and restated, supplemented or otherwise modified from time to time.
“Senior Officer” means, with respect to any Loan Party, any of the president, chief executive officer, the chief financial officer, or the treasurer of that Loan Party.
“Subordinated Debt” means, collectively, any unsecured Debt of Loan Parties and their Subsidiaries which is subject to a Subordination Agreement.
“Subordinated Indebtedness” means Indebtedness of any Loan Party the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are satisfactory to the Required Lenders and which has been expressly subordinated in right of payment to all Indebtedness of such Loan Party under the New Senior Credit Agreement.
“Subordination Agreement” means (a) the subordination terms and covenants set forth in the Master Intercompany Note, and (b) any other subordination agreement or terms and covenants set forth in documents evidencing Subordinated Debt that are executed by a holder of Subordinated Debt in favor of Administrative Agent and the Lenders from time to time on or after the Closing Date, in the cases of clauses (a) and (b) in form and substance and on terms and conditions satisfactory to the Required Lenders in their discretion.
“Subsidiary” means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns, directly or indirectly, outstanding Equity Interests having more than 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context clearly otherwise requires, each reference to Subsidiaries in this Agreement refers to Subsidiaries (including, for avoidance of doubt, Excluded Foreign Subsidiaries and Immaterial Subsidiaries) of the Loan Parties.
“Swap Obligation” means, with respect to a Loan Party, its obligations under a Hedging Agreement that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
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“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.
“Termination Date” means the earlier of November 29, 2021, and the date on which the Aggregate Commitments shall have been entirely utilized or terminated in accordance with this Agreement.
“Total Debt” means, on any date of determination, all Debt of the Consolidated Group on such day, determined on a consolidated basis in accordance with GAAP, but excluding (a) contingent obligations thereof in respect of Contingent Liabilities (except to the extent constituting (i) Contingent Liabilities thereof in respect of Debt of a Person other than any Loan Party, or (ii) Contingent Liabilities thereof in respect of undrawn letters of credit), (b) any Hedging Obligations thereof, (c) Debt of any Borrower to any other Borrower, to the extent subordinated to the Obligations pursuant to the Master Intercompany Note, (d) for avoidance of doubt, Permitted Earn-out Obligations to the extent that the amount thereof is not yet due and payable, and (e) the Obligations.
“Total Leverage Ratio” means, for the Consolidated Group determined on a consolidated basis in accordance with GAAP as of the last day of any Computation Period, the ratio of (a) Total Debt (excluding any the Permitted Investor Debt, indebtedness outstanding under the Exitus Debt Promissory Note, Permitted Earn-out Obligations and the Fifth Amendment Fee (as such term is defined in the Senior Credit Facility) and other fees or other compensation payable in respect of the Senior Credit Facility) thereof as of such day, to (b) EBITDA thereof for the Computation Period ending on such day.
“Tranche A Applicable Rate” means, as of any date specified in the table below, a rate per annum equal to the rate set forth opposite such date by reference to Tranche B-1 Loan and Tranche B-2 Loan remaining outstanding, or not being outstanding (as applicable), at such date:
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At any time the Tranche B-1 Loan and Tranche B-2 Loan are not outstanding
At any time the Tranche B-1 Loan and Tranche B-2 Loan remain outstanding
DateTranche A Applicable RateDateTranche A Applicable Rate
From the Interest Payment Date falling in September, 2023 to the day immediately preceding the Interest Payment Date falling in March, 20240.00%From the Interest Payment Date falling in September, 2023 to the day immediately preceding the Interest Payment Date falling in March, 20241.00%
From the Interest Payment Date falling in March, 2024 to the day immediately preceding the Interest Payment Date falling in September, 20241.00%From the Interest Payment Date falling in March, 2024 to the day immediately preceding the Interest Payment Date falling in September, 20242.00%
From the Interest Payment Date falling in September, 2024 to the day immediately preceding the Interest Payment Date falling in March, 20252.00%From the Interest Payment Date falling in September, 2024 to the day immediately preceding the Interest Payment Date falling in March, 20253.00%
From the Interest Payment Date falling in March, 2025 to the day immediately preceding the Interest Payment Date falling in September, 20253.00%From the Interest Payment Date falling in March, 2025 to the day immediately preceding the Interest Payment Date falling in September, 20254.00%
From the Interest Payment Date falling in September, 2025 to the day immediately preceding the Interest Payment Date falling in March, 20264.00%From the Interest Payment Date falling in September, 2025 to the day immediately preceding the Interest Payment Date falling in March, 20265.00%
From the Interest Payment Date falling in March, 2026 and any time thereafter5.00%From the Interest Payment Date falling in March, 2026 and any time thereafter5.00%
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“Tranche A-1 Commitment” means, as to any Tranche A-1 Lender, such Lender’s commitment to make Tranche A-1 Loans on the Closing Date under this Agreement.  The amount of each Tranche A-1 Lender’s Tranche A-1 Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche A-1 Commitments of all Tranche A-1 Lenders as of the Closing Date is US$3,000,000.
“Tranche A-1 Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche A-1 Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche A-1 Loan at such time.
“Tranche A-1 Loan” means an extension of credit in Dollars made by a Tranche A-1 Lender to AgileThought Mexico pursuant to this Agreement.
“Tranche A-1 Maturity Date” means September 15, 2026; provided, however, that if such date is not a Business Day, the Tranche A-1 Maturity Date shall be the immediately preceding Business Day.  
“Tranche A-1 Note” means a non-negotiable promissory note (pagaré no negociable) made by AgileThought Mexico, as issuer, and each other Mexican Loan Party, por aval, in favor of a Tranche A-1 Lender evidencing Tranche A-1 Loans made by such Tranche A-1 Lender, substantially in the form of Exhibit D.
“Tranche A-1 Total Repayment Return” means with respect to any repayment of the Tranche A-1 Loans (including by way of conversion pursuant to Article XVIII), an IRR for the Tranche A-1 Lenders in respect of the amount being repaid.
“Tranche A-2 Commitment” means, as to any Tranche A-2 Lender, such Lender’s commitment to make Tranche A-2 Loans on the Closing Date under this Agreement.  The amount of each Tranche A-2 Lender’s Tranche A-2 Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche A-2 Commitments of all Tranche A-2 Lenders as of the Closing Date is MXN$120,000,000.
“Tranche A-2 Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche A-2 Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche A-2 Loan at such time.
“Tranche A-2 Loan” means an extension of credit in Pesos made by a Tranche A-2 Lender to AgileThought Mexico pursuant to this Agreement.
“Tranche A-2 Maturity Date” means September 15, 2026; provided, however, that if such date is not a Business Day, the Tranche A-2 Maturity Date shall be the immediately preceding Business Day.  
“Tranche A-2 Note” means a non-negotiable promissory note (pagaré no negociable) made by AgileThought Mexico, as issuer, and each other Mexican Loan Party, por aval, in favor of a Tranche A-2 Lender evidencing Tranche A-2 Loans made by such Tranche A-2 Lender, substantially in the form of Exhibit E.
“Tranche A-2 Total Repayment Return” means with respect to any repayment of the Tranche A-2 Loans (including by way of conversion pursuant to Article XVIII), an IRR for the Tranche A-2 Lenders in respect of the amount being repaid.
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“Tranche B-1 Commitment” means, as to any Tranche B-1 Lender, such Lender’s commitment to make Tranche B-1 Loans on the Closing Date under this Agreement.  The amount of each Tranche B-1 Lender’s Tranche B-1 Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche B-1 Commitments of all Tranche B-1 Lenders as of the Closing Date is the equivalent in Dollars of MXN$71,524,492.12 determined by reference to the Conversion Rate as of the Closing Date, which amount in Dollars will be specified in the Funds Flow Memorandum.
“Tranche B-1 Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche B-1 Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche B-1 Loan at such time.
“Tranche B-1 Loan” means an extension of credit in Dollars made by a Tranche B-1 Lender to Ultimate Holdings]pursuant to this Agreement.
“Tranche B-1 Maturity Date” means June 15, 2023; provided, however, that, in each case, if such date is not a Business Day, the Tranche B-1 Maturity Date shall be the immediately preceding Business Day.  
“Tranche B-1 Note” means a promissory note made by Ultimate Holdings, as issuer, in favor of a Tranche B-1 Lender evidencing Tranche B-1 Loans made by such Tranche B-1 Lender, substantially in the form of Exhibit F.
“Tranche B-2 Commitment” means, as to any Tranche B-2 Lender, such Lender’s commitment to make Tranche B-2 Loans on the Closing Date under this Agreement.  The amount of each Tranche B-2 Lender’s Tranche B-2 Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche B-2 Commitments of all Tranche B-2 Lenders as of the Closing Date is MXN$78,446,203.
“Tranche B-2 Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche B-2 Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche B-2 Loan at such time.
“Tranche B-2 Loan” means an extension of credit in Pesos made by a Tranche B-2 Lender to Ultimate Holdings pursuant to this Agreement.
“Tranche B-2 Maturity Date” means June 15, 2023; provided, however, that, in each case, if such date is not a Business Day, the Tranche B-2 Maturity Date shall be the immediately preceding Business Day.  
“Tranche B-2 Note” means a promissory note made by Ultimate Holdings, as issuer, in favor of a Tranche B-2 Lender evidencing Tranche B-2 Loans made by such Tranche B-2 Lender, substantially in the form of Exhibit G.
“Tranche C Commitment” means, as to any Tranche C Lender, such Lender’s commitment to make Tranche C Loans on the Closing Date under this Agreement.  The amount of each Tranche C Lender’s Tranche C Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche C Commitments of all Tranche C Lenders as of the Closing Date is US$4,000,000.
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“Tranche C Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche C Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche C Loan at such time.
“Tranche C Loan” means an extension of credit in Dollars made by a Tranche C Lender to Ultimate Holdings pursuant to this Agreement.
“Tranche C Maturity Date” means September 15, 2026; provided, however, that if such date is not a Business Day, the Tranche C Maturity Date shall be the immediately preceding Business Day.  
“Tranche C Note” means a promissory note made by Ultimate Holdings, as issuer, in favor of a Tranche C Lender evidencing Tranche C Loans made by such Tranche C Lender, substantially in the form of Exhibit H.
“Tranche D Commitment” means, as to any Tranche D Lender, such Lender’s commitment to make Tranche D Loans on the Closing Date under this Agreement.  The amount of each Tranche D Lender’s Tranche D Commitment as of the Closing Date is set forth on Annex A.  The aggregate amount of the Tranche D Commitments of all Tranche D Lenders as of the Closing Date is US$500,000.00.
“Tranche D Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Tranche D Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Tranche D Loan at such time.
“Tranche D Loan” means an extension of credit in Dollars made by a Tranche D Lender to Ultimate Holdings pursuant to this Agreement.
“Tranche D Maturity Date” means September 15, 2026; provided, however, that if such date is not a Business Day, the Tranche D Maturity Date shall be the immediately preceding Business Day.
“Tranche D Note” means a promissory note made by Ultimate Holdings, as issuer, in favor of a Tranche D Lender evidencing Tranche D Loans made by such Tranche D Lender, substantially in the form of Exhibit I.
“Tranche E Commitment” means, as to any Tranche E Lender, such Lender’s commitment to make Tranche E Loans on the Amendment No. 1 Effective Date under this Agreement.  The amount of each Tranche E Lender’s Tranche E Commitment as of the Amendment No. 1 Effective Date is set forth on Annex A.  The aggregate amount of the Tranche E Commitments of all Tranche E Lenders as of the Amendment No. 1 Effective Date is US$200,000.
“Tranche E Lender” means (a) at any time on or prior to the Amendment No. 1 Effective Date, any Lender that has a Tranche E Commitment at such time and (b) at any time after the Amendment No. 1 Effective Date, any Lender that holds a Tranche E Loan at such time.
“Tranche E Loan” means an extension of credit in Dollars made by a Tranche E Lender to Ultimate Holdings pursuant to this Agreement.
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“Tranche E Maturity Date” means September 15, 2026; provided, however, that if such date is not a Business Day, the Tranche E Maturity Date shall be the immediately preceding Business Day.
“Tranche E Note” means a promissory note made by Ultimate Holdings, as issuer, in favor of a Tranche E Lender evidencing Tranche E Loans made by such Tranche E Lender, substantially in the form of Exhibit K.
“Type” means, with respect to a Loan, its character as a Tranche A-1 Loan, a Tranche A-2 Loan, a Tranche B-1 Loan, a Tranche B-2 Loan, a Tranche C Loan, a Tranche D Loan or a Tranche E Loan.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
“Ultimate Holdings” as defined in the preamble to this Agreement.
“United States” and “U.S.” mean the United States of America.
“Unpaid Taxes” means the liabilities listed on Schedule 6.01(j) to the New Senior Credit Agreement (as in effect on May 27, 2022).
“Wholly Owned Subsidiary” means, as to any Person, a Subsidiary all of the Equity Interests of which (except directors’ qualifying Equity Interests) are at the time directly or indirectly owned by that Person and/or another Wholly Owned Subsidiary of that Person. Unless the context otherwise requires, each reference to Wholly Owned Subsidiaries in this Agreement refers to Wholly Owned Subsidiaries (including, for avoidance of doubt, Excluded Foreign Subsidiaries and Immaterial Subsidiaries) of the Loan Parties.
“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.
“13-Week Cash Flow” has the meaning assigned to such term in Section 10.1(a)(xix).
1.Other Interpretive Provisions.
1.The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
2.Section, Annex, Schedule and Exhibit references are to this Agreement unless otherwise specified.
3.The term “in its discretion” means “in its sole and absolute discretion.” The term “including” is not limiting and means “including without limitation.”
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4.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.”
5.Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.
6.This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.
7.This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agents, Loan Parties, the Lenders and the other parties hereto and thereto and are the products of all parties. Accordingly, they shall not be construed against the Agents or the Lenders merely because of the Agents’ or Lenders’ involvement in their preparation.
8.If any delivery due date specified in Section 10.1 for the delivery of reports, certificates and other information required to be delivered pursuant to Section 10.1 falls on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day.
9.A Default or Event of Default will be deemed to have occurred and exist at all times during the period commencing on the date that Default or Event of Default occurs to the date on which that Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement, and an Event of Default will “continue” or be “continuing” until that Event of Default has been waived in writing by the Required Lenders.
Section 1.aAccounting and Other Terms.
1.Unless otherwise expressly provided in this Agreement, each accounting term used in this Agreement has the meaning given it under GAAP applied on a basis consistent with those used in preparing the financial statements and using the same inventory valuation method as used in the financial statements, except for any change required or permitted by GAAP if Borrowers’ certified public accountants concur in that change, the change is disclosed to Administrative Agent and Required Lenders, and Section 10.3 is amended in a manner satisfactory to the Required Lenders to take into account the effects of the change. All financial statements delivered pursuant to this Agreement shall be prepared in the English language and Dollars.
2.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 any of the Borrowers, the Required Lenders shall so request, with notice to the Administrative Agent, the Lenders and the Borrower Representative on behalf of the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP
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(subject to the approval of the Required Lenders). Notwithstanding anything to the contrary contained in this paragraph or the definition of “ Capitalized Lease,” or “ Capitalized Lease Obligations” in the event of an accounting change requiring all leases to be capitalized, only those leases (assuming for purposes hereof that they were in existence on the Closing Date) that would constitute Capitalized Leases or Capitalized Lease Obligations in accordance with GAAP on December 31, 2018, shall be considered Capitalized Leases or Capitalized Lease Obligations, as applicable, and all calculations and deliverables under this Agreement or any other Loan Document shall be made in accordance therewith; provided that, for the avoidance of doubt, all leases entered into after December 31, 2018, shall be capitalized, except to the extent that any such lease is a renewal, extension or replacement of any lease entered into or prior to December 31, 2018.
3.All terms used in this Agreement which are defined in Article 8 or Article 9 of the UCC and which are not otherwise defined in this Agreement have the same meanings in this Agreement as set forth therein, except that terms used in this Agreement which are defined in the UCC as in effect in the State of New York on the date of this Agreement will continue to have the same meaning notwithstanding any replacement or amendment of that statute except as Required Lenders may otherwise determine
Section 1.bClassification of Loans. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Tranche A-1 Loan”).
ARTICLE II

COMMITMENTS OF THE LENDERS; BORROWING PROCEDURES

Section 2.1 Loans.
a.Each Tranche A-1 Lender agrees to make a Tranche A-1 Loan in Dollars to AgileThought Mexico on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche A-1 Commitments of all Tranche A-1 Lenders. The Tranche A-1 Commitments of the Tranche A-1 Lenders to make Tranche A-1 Loans shall expire concurrently with the making of the Tranche A-1 Loans on the Closing Date.
b.Each Tranche A-2 Lender agrees to make a Tranche A-2 Loan in Pesos to AgileThought Mexico on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche A-2 Commitments of all Tranche A-2 Lenders.  The Tranche A-2 Commitments of the Tranche A-2 Lenders to make Tranche A-2 Loans shall expire concurrently with the making of the Tranche A-2 Loans on the Closing Date. Funds due in pesos will be deposited to an account with the Administrative Agent by 10:00 a.m., New York Time one Business Day prior to the Closing Date.
c.Each Tranche B-1 Lender agrees to make a Tranche B-1 Loan in Dollars to Ultimate Holdings on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche B-1 Commitments of all Tranche B-1 Lenders.  The Tranche B-1 Commitments of the Tranche B-1 Lenders to make Tranche B-1 Loans shall expire concurrently with the making of the Tranche B-1 Loans on the Closing Date.
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d.Each Tranche B-2 Lender agrees to make a Tranche B-2 Loan in Pesos to Ultimate Holdings on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche B-2 Commitments of all Tranche B-2 Lenders.  The Tranche B-2 Commitments of the Tranche B-2 Lenders to make Tranche B-2 Loans shall expire concurrently with the making of the Tranche B-2 Loans on the Closing Date. Funds due in pesos will be deposited to an account with the Administrative Agent by 10:00 a.m., New York Time one Business Day prior to the Closing Date.
e.Each Tranche C Lender agrees to make a Tranche C Loan in Dollars to Ultimate Holdings on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche C Commitments of all Tranche C Lenders.  The Tranche C Commitments of the Tranche C Lenders to make Tranche C Loans shall expire concurrently with the making of the Tranche C Loans on the Closing Date.
f.Each Tranche D Lender agrees to make a Tranche D Loan in Dollars to Ultimate Holdings on the Closing Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche D Commitments of all Tranche D Lenders.  The Tranche D Commitments of the Tranche D Lenders to make Tranche D Loans shall expire concurrently with the making of the Tranche D Loans on the Closing Date.
g.Each Tranche E Lender agrees to make a Tranche E Loan in Dollars to Ultimate Holdings on the Amendment No. 1 Effective Date in an amount equal to such Lender’s Pro Rata Share of the aggregate amount of the Tranche E Commitments of all Tranche E Lenders.  The Tranche E Commitments of the Tranche E Lenders to make Tranche E Loans shall expire concurrently with the making of the Tranche E Loans on the Amendment No. 1 Effective Date.
h.Amounts repaid with respect to any of the Loans may not be reborrowed.
Section 2.2     Borrowing Procedures.
a.The Borrower Representative shall give written notice (each such written notice, a “Notice of Borrowing”) to Administrative Agent and each Lender of the proposed borrowing not later than 10:00 A.M. (Mexico, City time) three Business Days prior to the proposed date of that borrowing (or such shorter period acceptable to the Administrative Agent). Each such notice will be effective upon receipt by Administrative Agent, will be irrevocable, and must specify the proposed Closing Date (which date shall be a Business Day prior to the Termination Date), or with respect to the borrowing of Tranche E Loans, the proposed Amendment No. 1 Effective Date, and amount of the requested borrowing. Except as otherwise agreed in a flow of funds memorandum in form and substance acceptable to the Administrative Agent and the Lenders (a “Funds Flow Memorandum”) on the Closing Date, or with respect to a borrowing of Tranche E Loans, on the Amendment No. 1 Effective Date, each Lender shall provide Administrative Agent with immediately available funds covering that Lender’s Pro Rata Share of that borrowing so long as the applicable Lender has not received written notice that the conditions precedent set forth in Article XII with respect to that borrowing have not been satisfied. Except as otherwise agreed in a Funds Flow Memorandum, after the Administrative Agent’s receipt of the proceeds of the applicable Loans from the Lenders, the Administrative Agent shall make the proceeds of those Loans available to the applicable Borrower on the Closing Date (or with respect to a borrowing of Tranche E Loans, on the Amendment No. 1 Effective Date) by transferring to the applicable Borrower immediately available funds equal to
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the proceeds received by the Administrative Agent. There shall be a single borrowing of the Loans hereunder.
b.Funding Losses. In connection with each Loan, each Borrower shall jointly and severally indemnify, defend, and hold the Administrative Agent and the Lenders harmless against any loss, cost, or expense actually incurred by the Administrative Agent or any Lender as a result of the failure to borrow any Loan on the date specified by the Borrower Representative in a Notice of Borrowing (other than as a result of any failure of any Lender to make such Loan to the extent required by this Agreement that a court of competent jurisdiction finally determines to have resulted from gross negligence, willful misconduct, or bad faith of such Lender) (such losses, costs, or expenses, “Funding Losses”). A certificate of the Administrative Agent or a Lender delivered to the Borrower Representative setting forth in reasonable detail any amount or amounts that the Administrative Agent or such Lender is entitled to receive pursuant to this Section 2.2(b) shall be conclusive absent manifest error. Borrowers shall pay such amount to the Administrative Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate.
Section 2.3     Commitments Several. The failure of any Lender to make a requested Loan on any date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender. Anything herein to the contrary notwithstanding, the Tranche A-1 Lenders, Tranche A-2 Lenders, Tranche B-1 Lenders and Tranche B-2 Lenders shall be relieved from their obligations to make Loans hereunder in case of failure by the Tranche C Lenders and the Tranche D Lenders to make Tranche C Loans and Tranche D Loans in an aggregate principal amount of at least US$4,000,000, hereunder.
Section 2.4     Certain Conditions. No Lender shall have an obligation to make any Loan if an Event of Default or Default has occurred and is continuing.
Section 2.5     Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions will apply for so long as that Lender is a Defaulting Lender:
a.Any amount payable to a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, or otherwise and including any amount that would otherwise be payable to that Defaulting Lender pursuant to Section 7.5 but excluding Article VIII) will, in lieu of being distributed to that Defaulting Lender, be retained by the Administrative Agent and, subject to any applicable requirements of law, be applied as follows at such time or times: (i) first, to the payment of any amounts owing by that Defaulting Lender to the Agents under this Agreement; (ii) second, pro rata, to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement; (iii) third, if so determined by the Borrowers, held as cash collateral for future funding obligations of the Defaulting Lender under this Agreement; (iv) fourth, pro rata, to the payment of any amounts owing to the Borrowers or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Borrower or any Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and (v) fifth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction. If any such payment is a prepayment of the principal amount of any Loans and made at a time when the conditions set forth in Section 12.2 are satisfied, then that payment will be applied solely to prepay the Loans of all Lenders that are not Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans of any Defaulting Lender.
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b.If any Borrower notifies the Administrative Agent that a Defaulting Lender has adequately remedied all matters that caused that Lender to be a Defaulting Lender, then that Lender shall purchase at par such of the Loans of the other Lenders as necessary in order for that Lender to hold those Loans in accordance with its Pro Rata Share (as determined pursuant to clause (a) of the definition of “Pro Rata Share”). No Defaulting Lender will have any right to approve or disapprove any amendment, waiver, consent, or any other action the Lenders or the Required Lenders have taken or may take under this Agreement (including any consent to any amendment or waiver pursuant to Section 15.1) but any waiver, amendment, or modification requiring the consent of all Lenders or each directly affected Lender that affects a Defaulting Lender differently than other affected Lenders will require the consent of that Defaulting Lender.
ARTICLE III

EVIDENCING OF LOANS
Section 3.1     Notes. Each Tranche A-1 Loan shall be evidenced by a Tranche A-1 Note (which qualifies as a pagaré under Mexican law), executed by AgileThought Mexico as issuer and each Mexican Loan Party, por aval; (ii) each Tranche A-2 Loan shall be evidenced by a Tranche A-2 Note (which qualifies as a pagaré under Mexican law), executed by AgileThought Mexico as issuer and each Mexican Loan Party, por aval; (iii) each Tranche B-1 Loan shall be evidenced by a Tranche B-1 Note, executed by Ultimate Holdings as issuer; (iv) each Tranche B-2 Loan shall be evidenced by a Tranche B-2 Note, executed by Ultimate Holdings as issuer; (v) each Tranche C Loan shall be evidenced by a Tranche C Note, executed by Ultimate Holdings as issuer; (vi) each Tranche D Loan shall be evidenced by a Tranche D Note, executed by Ultimate Holdings as issuer; and (vii) each Tranche E Loan shall be evidenced by a Tranche E Note, executed by Ultimate Holdings as issuer.  The Notes shall be delivered to each Lender for the benefit of such Lender on or before the Closing Date (or with respect to Tranche E Notes, on or before the Amendment No. 1 Effective Date), appropriately completed.  Each Loan and interest thereon shall at all times (including after assignment pursuant to Section 15.6) be represented by one or more Notes in such form payable to the payee named therein.  Each Lender shall be entitled to have its Notes substituted, exchanged or subdivided for Notes of lesser denominations in connection with a permitted assignment of all or any portion of such Lender’s Loans and Notes pursuant to Section 15.6.  In case of theft, partial or complete destruction or mutilation of any Note, the relevant Lender shall be entitled to request to the Borrowers, and the Borrowers shall promptly (but in any event within ten days of such notice) execute and deliver in lieu thereof a new Note, dated the same date as the lost, stolen, destructed or mutilated Note.
Section 3.2     Recordkeeping. The Administrative Agent, on behalf of each Lender, shall record in its records, the date and amount of each Loan made by each Lender and each repayment or conversion (if permissible) thereof. The aggregate unpaid principal amount so recorded will be rebuttably presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so record any such amount or any error in so recording any such amount will not, however, limit or otherwise affect the Obligations of the Borrowers under this Agreement or under any Note to repay the principal amount of the Loans under this Agreement, together with all interest accruing thereon.
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ARTICLE IV

INTEREST
Section 4.1     Interest Rates.
a.(i) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche A-1 Loan (A) for the period commencing on the date that Tranche A-1 Loan is made until the day immediately preceding the Amendment No. 4 Effective Date at a rate per annum equal to 11.00%, and (B) for the period commencing on the Amendment No. 4 Effective Date until the Tranche A-1 Loan is paid in full at a rate per annum equal to the sum of (x) 11.00% and (y) the Tranche A Applicable Rate; (ii) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche A-2 Loan (A) for the period commencing on the date that Tranche A-2 Loan is made until the day immediately preceding the Amendment No. 4 Effective Date at a rate per annum equal to 17.41%, and (B) for the period commencing on the Amendment No. 4 Effective Date until the Tranche A-2 Loan is paid in full at a rate per annum equal to the sum of (x) 17.41% and (y) the Tranche A Applicable Rate; (iii) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche B-1 Loan for the period commencing on the date that Tranche B-1 Loan is made until that Tranche B-1 Loan is paid in full at a rate per annum equal to 11.00%; (iv) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche B-2 Loan for the period commencing on the date that Tranche B-2 Loan is made until that Tranche B-2 Loan is paid in full at a rate per annum equal to 17.41%; (v) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche C Loan for the period commencing on the date that Tranche C Loan is made until that Tranche C Loan is paid in full at a rate per annum equal to 11.00%; (vi) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche D Loan for the period commencing on the date that Tranche D Loan is made until that Tranche D Loan is paid in full at a rate per annum equal to 11.00%; and (vii) Borrowers jointly and severally agree to pay interest on the unpaid principal amount of each Tranche E Loan for the period commencing on the Amendment No. 1 Effective Date until that Tranche E Loan is paid in full at a rate per annum equal to 11.00%.
As between AgileThought Mexico and the Peso Lenders only, and for information purposes only, the interest rate applicable to the Peso Loans has been agreed giving due regard to factors that would make the rate the substantial equivalent to the interest rate applicable to the Dollar Loans.
b.Notwithstanding the foregoing, at any time an Event of Default exists, the interest rate applicable to each Loan will be increased by 2% during the existence of an Event of Default (and, in the case of Obligations not bearing interest, those Obligations will, during the existence of an Event of Default, bear interest at the highest interest rate applicable to the Loans plus 2%), but any such increase may be rescinded by Required Lenders, notwithstanding Section 15.1. Notwithstanding the foregoing, upon the occurrence of an Event of Default under Sections 13.1(a), (f) or (g), the increase provided for in this Section 4.1 will occur automatically. In no event will interest payable by the Borrowers to any Lender under this Agreement exceed the maximum rate permitted under applicable law, and if any such provision of this Agreement is in contravention of any such law, then that provision will be deemed modified to limit that interest to the maximum rate permitted under that law.
Section 4.2     Interest Payment Dates; Payment-in-Kind.
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a.Tranche A-1 Loans.
i.Accrued interest on each Tranche A-1 Loan shall be payable in arrears on each Interest Payment Date, upon a prepayment of such Loan, and on the date on which all or any portion of the Obligations are accelerated, and at maturity.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche A-1 Loans shall be payable on demand.
ii.So long as no Default or Event of Default shall have occurred and be continuing and unless otherwise consented by the Tranche A-1 Lenders, on each Interest Payment Date (other than the Maturity Date), interest on the Tranche A-1 Loans shall be paid by capitalizing such interest and adding such capitalized interest to the then outstanding principal amount of the Tranche A-1 Loans, and such interest amount (together with any principal of the Tranche A-1 Loans prior to giving effect to the provisions of this Section 4.2(a)(ii)) thereafter shall form part of the Tranche A-1 Loans and shall itself bear interest as provided in Section 4.1; provided that so long as the Total Leverage Ratio of the Consolidated Group for the Computation Period most recently ended prior to such Interest Payment Date is not greater than 2.00:1.00, each Tranche A-1 Lender shall have the right (but shall not be obligated) to elect, by written notice to the Administrative Agent and the Borrower Representative delivered not earlier than three Business Days prior to such Interest Payment Date, to require that all or any portion of the interest on the Tranche A-1 Loan maintained by such Tranche A-1 Lender remain due and payable in cash (in which case such interest (or portion thereof, as applicable) shall not be so capitalized or added to the principal but shall instead remain payable in cash); provided, further, that if a Default shall have occurred and be continuing on any date on which such interest is due, the Tranche A-1 Lenders shall be entitled to elect, by notice to the Borrower Representative, either to have such interest be capitalized and added to principal as set forth herein (in which case such payment shall be so capitalized and added to principal) or to require that it remain due and payable in cash (in which case such payment shall not be so capitalized or added to principal but shall instead remain payable in cash) and, in either case, such payment shall bear interest until paid in full as provided in Section 4.1.  Each such determination by the Tranche A-1 Lenders shall be conclusive and binding on all parties hereto.  If requested by the Tranche A-1 Lenders, the Borrowers shall, within 15 days after such request, cause new Notes to be issued to the Tranche A-1 Lenders, duly executed and delivered by the Borrowers, evidencing the obligation to pay the increased principal amount of the Tranche A-1 Loans as provided in this Section 4.2(a)(ii).
b.Tranche A-2 Loans.
i.Accrued interest on each Tranche A-2 Loan shall be payable in arrears on each Interest Payment Date, upon a prepayment of such Loan, and on the date on which all or any portion of the Obligations are accelerated, and at maturity.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche A-2 Loans shall be payable on demand. Funds due in pesos will be deposited to an account with the Administrative Agent by 10:00 a.m., New York Time one Business Day prior to the Closing Date.
ii.So long as no Default or Event of Default shall have occurred and be continuing and unless otherwise consented by the Tranche A-2 Lenders, on each Interest Payment Date (other than the Maturity Date), interest on the Tranche A-2 Loans
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shall be paid by capitalizing such interest and adding such capitalized interest to the then outstanding principal amount of the Tranche A-2 Loans, and such interest amount (together with any principal of the Tranche A-2 Loans prior to giving effect to the provisions of this Section 4.2(b)(ii)) thereafter shall form part of the Tranche A-2 Loans and shall itself bear interest as provided in Section 4.1; provided that so long as the Total Leverage Ratio of the Consolidated Group for the Computation Period most recently ended prior to such Interest Payment Date is not greater than 2.00:1.00, each Tranche A-2 Lender shall have the right (but shall not be obligated) to elect, by written notice to the Administrative Agent and the Borrower Representative delivered not earlier than three Business Days prior to such Interest Payment Date, to require that all or any portion of the interest on the Tranche A-2 Loan maintained by such Tranche A-2 Lender remain due and payable in cash (in which case such interest (or portion thereof, as applicable) shall not be so capitalized or added to the principal but shall instead remain payable in cash); provided, further, that if a Default shall have occurred and be continuing on any date on which such interest is due, the Tranche A-2 Lenders shall be entitled to elect, by notice to the Borrower Representative, either to have such interest be capitalized and added to principal as set forth herein (in which case such payment shall be so capitalized and added to principal) or to require that it remain due and payable in cash (in which case such payment shall not be so capitalized or added to principal but shall instead remain payable in cash) and, in either case, such payment shall bear interest until paid in full as provided in Section 4.1.  Each such determination by the Tranche A-2 Lenders shall be conclusive and binding on all parties hereto.  If requested by the Tranche A-2 Lenders, the Borrowers shall, within 15 days after such request, cause new Notes to be issued to the Tranche A-2 Lenders, duly executed and delivered by the Borrowers, evidencing the obligation to pay the increased principal amount of the Tranche A-2 Loans as provided in this Section 4.2(b)(ii).
c.Tranche B-1 Loans.
i.Accrued interest on each Tranche B-1 Loan shall be payable upon a prepayment of such Loan, and on the date on which all or any portion of the Obligations are accelerated, and at maturity.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche B-1 Loans shall be payable on demand.
ii.If the Borrowers are required under this Agreement or under any other Loan Document to make a payment of interest in cash on the Loans on any date, then the sum payable by the Borrowers in respect of interest on the Tranche B-1 Loans shall be increased such that the Tranche B-1 Lenders receive an amount on account of interest on the Tranche B-1 Loans equal to the amount that would have resulted if interest on the Tranche B-1 Loans shall have been capitalized on each Interest Payment Date (other than the Maturity Date) and such capitalized amount added to the then outstanding principal amount of Tranche B-1 Loans.
d.Tranche B-2 Loans.
i.Accrued interest on each Tranche B-2 Loan shall be payable upon a prepayment of such Loan, and on the date on which all or any portion of the Obligations are accelerated, and at maturity.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche B-2 Loans shall be payable on demand.
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ii.If the Borrowers are required under this Agreement or under any other Loan Document to make a payment of interest in cash on the Loans on any date, then the sum payable by the Borrowers in respect of interest on the Tranche B-2 Loans shall be increased such that the Tranche B-2 Lenders receive an amount on account of interest on the Tranche B-2 Loans equal to the amount that would have resulted if interest on the Tranche B-2 Loans shall have been capitalized on each Interest Payment Date (other than the Maturity Date) and such capitalized amount added to the then outstanding principal amount of Tranche B-2 Loans. Funds due in pesos will be deposited to an account with the Administrative Agent by 10:00 a.m., New York Time one Business Day prior to the Closing Date.
e.Tranche C Loans.
i.Accrued interest on each Tranche C Loan shall be payable on the date on which all or any portion of the Obligations are accelerated, and on the Tranche C Maturity Date; provided, however that nothing herein shall restrict the Borrowers from making voluntary payments of such interest at any time prior to the Tranche C Maturity Date.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche C Loans shall be payable on demand.
ii.[Reserved]
f.Tranche D Loans.
i.Accrued interest on each Tranche D Loan shall be payable in arrears on the date on which all or any portion of the Obligations are accelerated, and on the Tranche D Maturity Date provided, however that nothing herein shall restrict the Borrowers from making voluntary payments of such interest at any time prior to the Tranche D Maturity Date.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche D Loans shall be payable on demand.
ii.[Reserved].
g.Tranche E Loans.
i.Accrued interest on each Tranche E Loan shall be payable in arrears on the date on which all or any portion of the Obligations are accelerated, and on the Tranche E Maturity Date; provided, however that nothing herein shall restrict the Borrowers from making voluntary payments of such interest at any time prior to the Tranche E Maturity Date.  After maturity, and at any time an Event of Default exists, accrued interest on all Tranche E Loans shall be payable on demand.
ii.[Reserved]
h.The provisions of this Section 4.2 represent the sole and entire agreement of the parties to capitalize interest and accept payment of interest other than in cash; provided that such agreement is subject to the terms of the Reference Subordination Agreement.  Any interest not capitalized and added to principal pursuant to Section 4.2 shall continue to be payable in cash in accordance with the terms of this Agreement and the Notes, and if unpaid when due, shall bear interest at the applicable rate provided in Section 4.1.
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Section 4.3     Computation of Interest. Interest will be computed for the actual number of days elapsed on the basis of a year of 360 days.
Section 4.4     Intent to Limit Charges to Maximum Lawful Rate. In no event will any interest rate payable under this Agreement (including, without limitation, under Section 4.1 plus any other amounts paid in connection herewith), exceed the highest rate permissible under any law that a court of competent jurisdiction, in a final determination, deems applicable. Borrowers and the Lenders, in executing and delivering this Agreement, intend legally to agree upon the rates of interest and manner of payment stated within this Agreement; provided that, notwithstanding any provision of this Agreement to the contrary, if any such rate of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, each Borrower is and will be liable only for the payment of such maximum amount as is allowed by law, and payment received from such Borrower in excess of such legal maximum, whenever received, will be applied to reduce the principal balance of the Obligations to the extent of that excess.
ARTICLE V

FEES
Section 5.1    Fee Letters. Each Borrower jointly and severally agrees to pay to the Agents and to the Lenders all such fees and expenses as are mutually agreed to from time to time by the Borrower, the Agents and the Lenders, including, without limitation, the fees and expenses set forth in the Agents Fee Letter, in each case subject to the terms of the Reference Subordination Agreement. All fees payable under the Loan Documents shall be paid on the dates due, in immediately available funds and shall not be subject to reduction by way of set-off or counterclaim. Fees paid under any Loan Document shall not be refundable under any circumstances.
Section 5.2     Facility Fee.
a.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche A-1 Lenders, for their account (to be shared ratably among the Tranche A-1 Lenders), on the earliest of (i) the Tranche A-1 Maturity Date, (ii) the date on which the Tranche A-1 Loans are paid in full in cash, and (iii) the date on which the Tranche A-1 Lenders exercise their rights under Article XVIII (such earliest date, the “Tranche A-1 Facility Fee Payment Date”), a fee (the “Tranche A-1 Facility Fee”), in an amount that results in a Tranche A-1 Total Repayment Return (after giving effect to any interest on the Tranche A-1 Loans paid on such date) equal to a rate which is 100 basis point higher that the interest rate applicable to the Tranche A-1 Loans pursuant to Section 4.1(a) in respect of the amount of the Tranche A-1 Loans required to be repaid (including by way of conversion pursuant to Article XVIII) on such date. The Tranche A-1 Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche A-1 Lenders on the Tranche A-1 Facility Fee Payment Date.
b.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche A-2 Lenders, for their account (to be shared ratably among the Tranche A-2 Lenders), on the earliest of (i) the Tranche A-2 Maturity Date, (ii) the date on which the Tranche A-2 Loans are paid in full in cash, and (iii) the date on which the Tranche A-2 Lenders exercise their rights under Article XVIII (such earliest date, the “Tranche A-2 Facility Fee Payment Date”), a fee (the “Tranche A-2 Facility Fee”), in an amount that
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results in a Tranche A-2 Total Repayment Return (after giving effect to any interest on the Tranche A-2 Loans paid on such date) equal to a rate which is 100 basis point higher that the interest rate applicable to the Tranche A-2 Loans pursuant to Section 4.1(a) in respect of the amount of the Tranche A-2 Loans required to be repaid (including by way of conversion pursuant to Article XVIII) on such date. The Tranche A-2 Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche A-2 Lenders on the Tranche A-2 Facility Fee Payment Date.
c.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche B-1 Lenders, for their account (to be shared ratably among the Tranche B-1 Lenders), on the earliest of (i) the Tranche B-1 Maturity Date, (ii) the date on which the Tranche B-1 Loans are paid in full in cash, and (iii) the date on which the Tranche B-1 Lenders exercise their rights under Article XVIII (such earliest date, the “Tranche B-1 Facility Fee Payment Date”), a fee (the “Tranche B-1 Facility Fee”), in an amount equal to 1.75% of the Tranche B-1 Commitment as of the Closing Date (prior to giving effect to any borrowing of the Tranche B-1 Loans on such date).  The Tranche B-1 Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche B-1 Lenders on the Tranche B-1 Facility Fee Payment Date.
d.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche B-2 Lenders, for their account (to be shared ratably among the Tranche B-2 Lenders), on the earliest of (i) the Tranche B-2 Maturity Date, (ii) the date on which the Tranche B-2 Loans are paid in full in cash, and (iii) the date on which the Tranche B-2 Lenders exercise their rights under Article XVIII (such earliest date, the “Tranche B-2 Facility Fee Payment Date”), a fee (the “Tranche B-2 Facility Fee”), in an amount equal to 1.75% of the Tranche B-2 Commitment as of the Closing Date (prior to giving effect to any borrowing of the Tranche B-2 Loans on such date).  The Tranche B-2 Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche B-2 Lenders on the Tranche B-2 Facility Fee Payment Date.
e.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche C Lenders, for their account (to be shared ratably among the Tranche C Lenders), on the earlier of (i) the Tranche C Maturity Date, and (ii) the date on which the interest on the Tranche C Loans is paid in full in cash (such earlier date, the “Tranche C Facility Fee Payment Date”), a fee (the “Tranche C Facility Fee”), in an amount equal to 1.75% of the Tranche C Commitment as of the Closing Date (prior to giving effect to any borrowing of the Tranche C Loans on such date).  The Tranche C Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche C Lenders on the Tranche C Facility Fee Payment Date.
f.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche D Lenders, for their account (to be shared ratably among the Tranche D Lenders), on the earlier of (i) the Tranche D Maturity Date, and (ii) the date on which the interest on the Tranche D Loans is paid in full in cash (such earlier date, the “Tranche D Facility Fee Payment Date”), a fee (the “Tranche D Facility Fee”), in an amount equal to 1.75% of the Tranche D Commitment as of the Closing Date (prior to giving effect to any borrowing of the Tranche D Loans on such date).  The Tranche D Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche D Lenders on the Tranche D Facility Fee Payment Date.
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g.Each Borrower, jointly and severally, hereby irrevocably and unconditionally agrees to pay the Tranche E Lenders, for their account (to be shared ratably among the Tranche E Lenders), on the earlier of (i) the Tranche E Maturity Date, and (ii) the date on which the interest on the Tranche E Loans is paid in full in cash (such earlier date, the “Tranche E Facility Fee Payment Date”), a fee (the “Tranche E Facility Fee”), in an amount equal to 1.75% of the Tranche E Commitment as of the Amendment No. 1 Effective Date (prior to giving effect to any borrowing of the Tranche E Loans on such date).  The Tranche E Facility Fee shall be in addition to (and not in lieu of) any other fees due and payable to the Tranche E Lenders on the Tranche E Facility Fee Payment Date.
ARTICLE VI

REDUCTION OR TERMINATION OF THE COMMITMENT; PREPAYMENTS.
Section 6.1     Reduction or Termination of the Commitment.
a.The Borrowers may not reduce or terminate the Commitments.
b.The Commitment of each Lender shall automatically terminate at 5:00 p.m. (Mexico City time) on the Termination Date.
Section 6.2     Prepayments.
6.2.1    Voluntary Prepayments. The Borrowers shall have the right at any time, and from time to time, to deliver a written notice to the Administrative Agent containing an offer by the Borrowers to prepay the Loans in whole or in part on a Business Day set forth in such notice (such date, a “Voluntary Prepayment Date”) which is not earlier than ten days following the date on which such notice is actually received by the Administrative Agent (such date, a “Voluntary Prepayment Notice Date”), and the Lenders shall have the right to accept such offer in their sole and absolute discretion; provided that such offer may only be accepted to the extent that, (a) such prepayment is permitted under the Reference Subordination Agreement, and (b) the Borrowers shall have paid in full the fees set forth under Section 5.2. Any such notice to prepay the Loans shall be irrevocable and in case the Borrowers deliver such notice and the conditions under clauses (a) and (b) above are satisfied, the Loans shall become due and payable in full on the Voluntary Prepayment Date.
6.2.2     Mandatory Prepayments.
a.Loans. Subject to the Reference Subordination Agreement, the Borrowers shall make a prepayment of the Loans until paid in full upon the occurrence of any of the following at the following times and in the following amounts:
i.concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any Disposition (other than from a Permitted Factoring Disposition), in an amount equal to 100% of such Net Cash Proceeds;
ii.concurrently with the receipt by any Loan Party of any proceeds of any issuance of its Equity Interests (other than any such issuance of Equity Interests that is described in clause (i) of the definition of “Extraordinary Receipts”), in an amount equal to 100% of the Net Cash Proceeds thereof;
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iii.concurrently with the receipt by any Loan Party of any Extraordinary Receipts, in an amount equal to 100% of such Extraordinary Receipts; provided that, in the case of any event described in clause (b) of the definition of the term “Extraordinary Receipts,” with respect to Extraordinary Receipts not to exceed US$2,000,000 in the aggregate during the term of this Agreement, if the Borrower Representative shall deliver to the Administrative Agent a certificate of a Senior Officer on behalf of the Borrowers to the effect that the Loan Parties intend to apply the Extraordinary Receipts from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Extraordinary Receipts, to acquire (or replace or rebuild) real property, equipment or other tangible or intangible assets (excluding inventory but expressly including Permitted Acquisitions) to be used in the business of the Loan Parties, and certifying that no Event of Default has occurred and is continuing, then no prepayment shall be required pursuant to this clause (iii) in respect of the Extraordinary Receipts specified in such certificate; provided, further, that to the extent any such Extraordinary Receipts therefrom that have not been so applied by the end of such 180-day period, a prepayment shall be required in an amount equal to such Extraordinary Receipts that have not been so applied unless such 180-day period is extended by the Required Lenders; provided, further, that in the case of any event described in clause (i) of the definition of the term “Extraordinary Receipts” (but only to the extent that, at the time of receipt of such Extraordinary Receipts the cash on hand of the Loan Parties is less than US$15,000,000) the amount of such Extraordinary Receipts required to be applied to make a prepayment of the Loans pursuant to this Section 6.2.2 shall be an amount equal to the positive difference between (A) the aggregate amount of such Extraordinary Receipts, and (B) the positive difference between (1) US$15,000,000 and (2) the cash on hand of the Loan Parties as of the date of receipt of such Extraordinary Receipts;
iv.concurrently with the receipt of any Business Interruption Proceeds, in an amount equal to 100% of such Business Interruption Proceeds; provided that, with respect to Business Interruption Proceeds not to exceed US$2,000,000 in the aggregate during the term of this Agreement, if the Borrower Representative shall deliver to the Administrative Agent a certificate of a Senior Officer on behalf of the Borrowers to the effect that the Loan Parties intend to apply the Business Interruption Proceeds from such event (or a portion thereof specified in such certificate), within 180 days after receipt of such Business Interruption Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible or intangible assets (excluding inventory but expressly including Permitted Acquisitions) to be used in the business of the Loan Parties or to pay operating expenses of the Loan Parties, and certifying that no Event of Default has occurred and is continuing, then no prepayment shall be required pursuant to this clause (iv) in respect of the Extraordinary Receipts specified in such certificate; provided, further, that to the extent any such Business Interruption Proceeds therefrom that have not been so applied by the end of such 180-day period, a prepayment shall be required in an amount equal to such Business Interruption Proceeds that have not been so applied unless such 180-day period is extended by the Required Lenders; and
v.Immediately upon receipt by Intermediate Holdings of the proceeds of any Permitted Cure Equity pursuant to Section 13.2, Intermediate Holdings shall prepay the outstanding principal of the Loans in accordance with Section 6.3 in an amount equal to 100% of such proceeds.
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Section 6.3     Manner and Application of Prepayments. All prepayments of the Loans under Section 6.2 shall be subject to the Reference Subordination Agreement and to Section 8.7 and shall be accompanied by payment of all accrued interest on the Loans (or portion thereof) being prepaid. All prepayments of the Loans will be applied on a pro rata basis to the Loans based on the Dollar Amount thereof.
Section 6.4     Repayments.
a.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche A-1 Lenders the outstanding principal amount of each Tranche A-1 Loan on the Tranche A-1 Maturity Date.
b.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche A-2 Lenders the outstanding principal amount of each Tranche A-2 Loan on the Tranche A-2 Maturity Date.
c.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche B-1 Lenders the outstanding principal amount of each Tranche B-1 Loan on the Tranche B-1 Maturity Date.
d.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche B-2 Lenders the outstanding principal amount of each Tranche B-2 Loan on the Tranche B-2 Maturity Date.
e.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche C Lenders the outstanding principal amount of each Tranche C Loan on the Tranche C Maturity Date.
f.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche D Lenders the outstanding principal amount of each Tranche D Loan on the Tranche D Maturity Date.
g.Each Borrower, jointly and severally, hereby unconditionally promises to repay to the Tranche E Lenders the outstanding principal amount of each Tranche E Loan on the Tranche E Maturity Date.
Section 6.5     Increase of Tranche B-1 and Tranche B-2 Loans Payment Amount.
a.If the Borrowers are required under this Agreement or under any other Loan Document to make a payment or prepayment of principal of the Loans on any date, then the sum payable by the Borrowers in respect of principal on the Tranche B-1 Loans shall be increased such that the Tranche B-1 Lenders receive an amount equal to the amount that would have resulted if interest on the Tranche B-1 Loans shall have been capitalized on each Interest Payment Date (other than the Maturity Date) and such capitalized amount added to the then outstanding principal amount of Tranche B-1 Loans
b.If the Borrowers are required under this Agreement or under any other Loan Document to make a payment or prepayment of principal of the Loans on any date, then the sum payable by the Borrowers in respect of principal on the Tranche B-2 Loans shall be increased such that the Tranche B-2 Lenders receive an amount equal to the amount that would have resulted if interest on the Tranche B-2 Loans shall have been capitalized on each Interest
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Payment Date (other than the Maturity Date) and such capitalized amount added to the then outstanding principal amount of Tranche B-2 Loans.
Section 6.6     [Reserved]. 
ARTICLE VII

MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
Section 7.1     Making of Payments.
7.1.1    Borrowers shall make all cash payments of principal or interest on the Loans, and of all fees to paid in cash, to the Administrative Agent in immediately available funds to the account designated by the Administrative Agent for such purpose, not later than 12:00 P.M. (New York time) on the date due, and funds received after that time shall be deemed to have been received by the Administrative Agent on the following Business Day, with the exception that funds due in pesos for the Peso Loans will be deposited to an account with the Administrative Agent by 10:00 a.m., New York Time one Business Day prior to the date due. Borrowers shall make all payments to the Agents and the Lenders without set-off, counterclaim, recoupment, deduction, or other defense. Subject to Section 2.5, Administrative Agent shall promptly remit to each Lender and the Collateral Agent its share of all such payments received in collected funds by Administrative Agent for the account of such Lender and the Collateral Agent; provided, that any amount received by the Administrative Agent on account of cash payments of principal or interest on the Loans, and/or of fees paid in cash shall be allocated by the Administrative Agent among the Lenders in accordance with the written instructions received by the Administrative Agent from the Lenders to such effect; provided, further, that the failure by the Lenders to give such instructions to the Administrative Agent shall not affect the obligation of the Loan Parties to make any such payment on the terms and conditions set forth in this Agreement. Notwithstanding the foregoing, Borrowers shall make all payments under Section 8.1 directly to the Lender entitled thereto. The Borrowers agree to notify the Administrative Agent and the Lenders of any cash payments of principal or interest on the Loans, and/or of any fees to paid in cash, not later than 10:00 A.M. (New York City time) three Business Days prior to the date of any such payment, which notice will be effective upon receipt by the Administrative Agent, will be irrevocable, and must specify (i) the date of such payment, (ii) the amount of such payment, and (iii) if such payment is in respect of interest and/or fees; provided, that the failure to give such notice shall not affect the obligation of the Loan Parties to make any such payment on the terms and conditions set forth in this Agreement.
7.1.2    Except to the extent otherwise provided herein (i) each payment or prepayment of principal of the Loans shall be made for the account of the Lenders of each Type pro rata in accordance with the Dollar Amount of the respective unpaid principal amounts of the Tranche A-1 Loans, Tranche A-2 Loans, Tranche B-1 Loans, Tranche B-2 Loans, Tranche C Loans, Tranche D Loans and Tranche E Loans, and within each Type shall be made for the account of the Lenders of such Type pro rata in accordance with the Dollar Amount of the respective unpaid principal amounts of the Loans of such Type held by the respective Lenders and (ii) each payment of interest by the Borrowers shall be made for the account of the Lenders of each Type pro rata in accordance with the Dollar Amount of the respective unpaid principal amounts of the Tranche A-1 Loans, Tranche A-2 Loans, Tranche B-1 Loans, Tranche B-2 Loans, Tranche C Loans, Tranche D Loans and Tranche E Loans, and within each Type shall be made for account of the Lenders of such Type pro rata in accordance with the Dollar Amount of interest on the Loans of that same Type then due and payable to the Lenders of such Type.
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Section 7.2 Application of Certain Payments.
7.2.1     So long as no Default or Event of Default has occurred and is continuing, mandatory prepayments shall be applied as set forth in Section 6.3.
7.2.2    Subject to any written agreement among Administrative Agent and the Lenders:
a.[Reserved].
b.After the occurrence and during the continuance of an Event of Default, the Administrative Agent, acting upon the written direction of the Required Lenders, shall apply all payments in respect of any Obligations and all proceeds of the Collateral, subject to the provisions of this Agreement, as follows: (i) first, ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due and payable to the Agents until paid in full; (ii) second, ratably to pay the Obligations in respect of any fees and indemnities then due and payable to the Lenders until paid in full; (iii) third, ratably to pay interest then due and payable in respect of the Loans until paid in full based on the Dollar Amount thereof; (iv) fourth, ratably to pay principal of the Loans until paid in full based on the Dollar Amount thereof; (v) fifth, to the ratable payment of all other Obligations then due and payable.
c.For purposes of Section 7.2.2(b), “paid in full” means payment in cash of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after, or that would have accrued but for, the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense reimbursements, whether or not same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
d.In the event of a direct conflict between the priority provisions of this Section 7.2.2 and other provisions contained in any other Loan Document, it is the intention of the parties to this Agreement that all such priority provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 7.2.2 shall control and govern.
Section 7.3     Due Date Extension. If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day unless the result of that extension would cause such due date to occur in another calendar month, in which case such due date shall be the immediately preceding Business Day and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.
Section 7.4     Setoff. All payments made by Borrowers hereunder or under any Loan Documents shall be made without setoff, counterclaim, or other defense. Each Borrower, for itself and each other Loan Party, agrees that each Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Borrower, for itself and each other Loan Party, agrees that at any time any Event of Default exists, each Agent and each Lender may apply to the payment of any Obligations of each Borrower and each other Loan Party under this Agreement, whether or not then due, any and all balances, credits,
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deposits, accounts, or moneys of each Borrower and each other Loan Party then or thereafter with that Agent or that Lender.
Section 7.5     Proration of Payments. Except as provided in Section 2.5, if any Lender obtains any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise), on account of principal of or interest on any Loan (but excluding (a) any payment pursuant to Article VIII or Section 15.6, or (b) payments of interest on any affected Loan) in excess of its applicable Pro Rata Share of payments and other recoveries obtained by all Lenders on account of principal of and interest on the Loans, then held by them, then that Lender shall purchase from the other Lenders such participations in the Loans held by them as are necessary to cause that purchasing Lender to share the excess payment or other recovery ratably with each of them, but if all or any portion of the excess payment or other recovery is thereafter recovered from that purchasing Lender, then that purchase will be rescinded and the purchase price restored to the extent of that recovery.
Section 7.6    Taxes.
7.6.1     The Loan Parties shall make all payments under this Agreement or under any Loan Documents without setoff, counterclaim, or other defense. All payments under this Agreement or under the Loan Documents (including any payment of principal, interest, or fees and including, for the avoidance of doubt, any payment that results from the delivery of Conversion Payment Shares) to, or for the benefit, of any Person will be made by the Loan Parties free and clear of and without deduction or withholding for, or account of, any Taxes now or hereafter imposed by any taxing authority, except as required by applicable law.
7.6.2    If Borrowers make any payment (including, for the avoidance of doubt, that results from the exercise of the conversion rights under Article XVIII) under this Agreement or under any other Loan Document in respect of which any Borrower is required by applicable law to deduct or withhold any Taxes, then (i) the Borrower shall be entitled to deduct or withhold from such payment the amount of such Taxes, (ii) the Borrower shall timely pay the full amount deducted or withheld to the relevant taxing authority in accordance with applicable law and (iii) if such Tax is an Indemnified Tax, the sum payable by such Borrower shall be increased such that after the reduction for the amount of Indemnified Taxes withheld (and any Indemnified Taxes withheld or imposed with respect to the additional payments required under this Section 7.6.2), the recipient of the payment receives an amount equal to the sum it would have received had no such withholding been made. To the extent Borrowers withhold any Taxes on payments under this Agreement or under any other Loan Document, Borrowers shall deliver to Administrative Agent within 30 days after Borrowers have made payment to that taxing authority a receipt issued by that taxing authority (or other evidence reasonably satisfactory to Administrative Agent approved by the Required Lenders) evidencing the payment of all amounts so required to be deducted or withheld from that payment.
7.6.3    If any Lender or Agent or other recipient is required by law to make any payments of any Indemnified Taxes on or in relation to any amounts received or receivable under this Agreement or under any other Loan Document, or any Indemnified Tax is assessed against a Lender or Agent or other recipient with respect to amounts received or receivable under this Agreement or under any other Loan Document, Borrowers will indemnify that Person against (i) that Indemnified Tax and (ii) any Indemnified Taxes imposed as a result of the receipt of the payment under this Section 7.6.3. A certificate prepared in good faith as to the amount of any such payment by that Lender or Agent or other recipient will, absent manifest error, be final, conclusive, and binding on all parties.
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7.6.4    Notwithstanding anything to the contrary in Sections 7.6.2 and 7.6.3, the Borrowers shall in no event be required to pay the Tranche B-1 Lender or the Tranche B-2 Lender additional amounts under clause (iii) of Section 7.6.2 with respect to U.S. federal withholding Taxes (“U.S. Withholding Tax Additional Amounts”) or to indemnify the Tranche B-1 Lender or the Tranche B-2 Lender under Section 7.6.3 against Indemnified Taxes that are U.S. federal withholding Taxes (“U.S. Withholding Tax Indemnity Payments”) to the extent the sum of any U.S. Withholding Tax Additional Amounts and any U.S. Withholding Tax Indemnity Payments paid by the Borrowers to the Tranche B-1 Lender and the Tranche B-2 Lender exceeds, in the aggregate, US$250,000.
7.6.5    a. Any Lender that is entitled to an exemption from, or reduction of, withholding Tax with respect to payments made under this Agreement or any Loan Document shall use its best efforts to deliver to the Borrower Representative and the Administrative Agent, such properly and completed executed documentation reasonably requested by the Borrower Representative or the Administrative Agent as will permit such payment to be made without withholding or at a reduced rate of withholding.
b.         Without limiting the generality of the foregoing:
(A) each Lender that is not a United States person within the meaning of Code Section 7701(a)(30) (a “Non-U.S. Lender”) shall use its best efforts to deliver to Borrower Representative and Administrative Agent on the earlier of (i) the date that is six (6) months after the Closing Date (or in the case of a Lender that is an Assignee, on the date of the assignment) and (ii) the date of delivery of Conversion Payment Shares, two accurate and complete original signed copies of IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY (or any successor or other applicable form prescribed by the IRS) for each such Lender and, as applicable, two accurate and complete original signed copies of IRS Form W-8BEN, W-8BEN-E, W-8ECI, W-8IMY or W-9 (or any successor or other applicable form prescribed by the IRS) for each of its partners or other beneficial owners certifying to the entitlement to a complete exemption from, or reduction in, U.S. federal withholding tax on interest payments to be made under this Agreement or under any Loan Document, together with such supplementary documentation as may be prescribed by applicable law to permit Borrowers or the Administrative Agent to determine the withholding or deduction to be made. If a Lender or one of its partners or other beneficial owners is claiming a complete exemption from withholding on interest pursuant to Code Sections 871(h) or 881(c), then that Lender shall deliver (along with two accurate and complete original signed copies of IRS Form W-8IMY, W-8BEN or W-8BEN-E, as applicable) a certificate in form and substance reasonably acceptable to Borrower Representative and Administrative Agent to the effect that such Person is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any 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 (any such certificate, a “Withholding Certificate”). To the extent a Lender (or its partners or other beneficial owners, as applicable) would be entitled to claim a complete exemption from withholding on interest pursuant to Code Sections 871(h) or 881(c) with respect to payments received under this Agreement or under the Loan Documents, and such Lender takes any action that could reasonably be expected to result in the loss of such exemption, the Borrowers shall not be required to pay to such Lender amounts pursuant to Section 7.6 in excess of the
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maximum amount that the Borrowers would have been required to pay pursuant to the Laws in effect on the date of this Agreement had the Lender not taken such action. In addition, each Non-U.S. Lender shall, from time to time after the Closing Date (or in the case of a Lender that is an Assignee, after the date of the assignment to that Lender) when a lapse in time (or change in circumstances occurs) renders the prior certificates delivered under this Agreement obsolete or inaccurate in any material respect, use its best efforts to deliver to Borrower Representative and Administrative Agent two new and accurate and complete original signed copies of IRS Forms W-8BEN, W-8BEN-E, W-8ECI, W-8IMY or W-9 (or any successor or other applicable forms prescribed by the IRS), and if applicable, a new Withholding Certificate, to confirm or establish the entitlement of such Lender (or its respective partner or other beneficial owner) to an exemption from, or reduction in, United States withholding tax on interest payments to be made under this Agreement or with respect to any Loan (or such Lender shall otherwise promptly notify the Borrower Representative and the Administrative Agent in writing of its legal inability to deliver such forms and/or Withholding Certificate).
(B) Each Lender that is not a Non-U.S. Lender shall provide two properly completed and duly executed copies of IRS Form W-9 (or any successor or other applicable form) to Borrower Representative and Administrative Agent certifying that that Lender is exempt from United States backup withholding Tax. To the extent that a form provided pursuant to this Section 7.6.5(b) is rendered obsolete or inaccurate in any material respect as result of change in circumstances with respect to the status of a Lender or Administrative Agent, then that Lender or Administrative Agent shall, to the extent permitted by applicable law, deliver to Borrower Representative and, as applicable, Administrative Agent revised forms necessary to confirm or establish the entitlement to that Lender’s exemption from United States backup withholding Tax (or such Lender or Administrative Agent shall otherwise promptly notify the Borrower Representative and, as applicable, the Administrative Agent in writing of its legal inability to deliver such forms).
7.6.6     Each Lender shall indemnify Administrative Agent and hold Administrative Agent harmless for the full amount of any and all present or future Taxes and related liabilities (including penalties, interest, additions to Tax and expenses, and any Taxes imposed by any jurisdiction on amounts payable to Administrative Agent under this Section 7.6) which are imposed on or with respect to principal, interest, or fees payable to that Lender under this Agreement and which are not paid by Borrowers pursuant to this Section 7.6, whether or not those Taxes or related liabilities were correctly or legally asserted. This indemnification must be made within 30 days from the date Administrative Agent makes written demand therefor.
7.6.7     If an Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section 7.6, then that Agent or that Lender, as applicable, shall pay over that refund to the Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 7.6 with respect to the Indemnified Taxes giving rise to that refund), net of any Taxes imposed by reason of receipt of that refund and all out-of-pocket expenses of that Agent or that Lender, as applicable, and without interest (other than any interest paid by the relevant Governmental Authority with respect to that refund, which interest must be paid to the Borrowers). Upon the request of any such Agent or any such Lender, Borrowers shall repay any
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amount paid to the Borrowers (plus any penalties, interest, or other charges imposed by the relevant Governmental Authority) to that Agent or that Lender in the event that Agent or that Lender is required to repay any such refund to any such Governmental Authority. Nothing in this Section 7.6.7 is to be construed to require any Agent or any Lender to make available its tax returns (or any other information which it deems confidential) to any Borrower or any other Person.
7.6.8    The Borrowers agree to pay to any Mexican Lender all applicable present and future value added taxes (Impuesto al Valor Agregado) in respect of any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document (including, without limitation, in respect of any capitalized interest under Section 4.2(a)(ii)).
7.6.9    If a payment made to a Lender under any Loan Document would be subject to U.S. federal income withholding Tax imposed by FATCA if that 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), then that Lender shall deliver to Administrative Agent (or, in the case of a Participant, to the Lender granting the participation only) at the time or times prescribed by law and at any other time or times reasonably requested by Administrative Agent (or, in the case of a Participant, the Lender granting the participation) all documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and all additional documentation reasonably requested by Administrative Agent (or, in the case of a Participant, the Lender granting the participation) as is necessary for Administrative Agent or Borrowers to comply with their obligations under FATCA and to determine that that Lender has complied with that Lender’s obligations under FATCA or to determine the amount to deduct and withhold from that payment. Solely for purposes of this Section 7.6.9, “FATCA” is deemed to include any amendments made to FATCA after the date of this Agreement.
7.6.10    For purposes of this Section 7.6, the term “applicable law” includes FATCA. Each party’s obligations under this Section 7.6 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 Commitments and the repayment, satisfaction, or discharge of all obligations under any Loan Document.
ARTICLE VIII

INCREASED COSTS
Section 8.1     Increased Costs.
a.If any Change in Law (i) imposes, modifies, or deems applicable any reserve (including any reserve imposed by the FRB), special deposit, or similar requirement against assets of, deposits with, or for the account of, or credit extended by, any Lender; (ii) subjects any Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (c) of the definition of Excluded Taxes, and (C) Connection Income Taxes) on its Loans, its Note(s) or its obligations to make Loans, or (iii) imposes on any Lender any other condition (other than Taxes) affecting its Loans, its Note(s), or its obligation to make Loans, and the result of anything described in clauses (i) through (iii) above is to increase the cost to (or to impose a cost on) that Lender of making or maintaining any Loan, or to reduce the amount of any sum received or receivable by that Lender under this Agreement or under its Note(s) with respect thereto, then upon demand by that Lender (which demand must be
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accompanied by a statement setting forth the basis for that demand and a calculation of the amount thereof in reasonable detail, a copy of which must be furnished to Administrative Agent), Borrowers shall pay directly to that Lender such additional amount as will compensate that Lender for that increased cost or that reduction, so long as the applicable amounts have accrued on or after the day that is 180 days prior to the date on which that Lender first made demand therefor.
b.If any Lender reasonably determines that any change in, or the adoption or phase-in of, any applicable law, rule, or regulation regarding capital adequacy, 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 the compliance by any Lender or any Person controlling any Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on that Lender’s or that controlling Person’s capital as a consequence of that Lender’s obligations under this Agreement to a level below that which that Lender or that controlling Person could have achieved but for that change, adoption, phase-in, or compliance (taking into consideration that Lender’s or that controlling Person’s policies with respect to capital adequacy) by an amount deemed by that Lender or that controlling Person to be material, then from time to time, upon demand by that Lender (which demand must be accompanied by a statement setting forth the basis for that demand and a calculation of the amount thereof in reasonable detail, a copy of which must be furnished to Administrative Agent), Borrowers shall pay to that Lender that additional amount as will compensate that Lender or that controlling Person for that reduction, so long as the applicable amounts have accrued on or after the day that is 180 days prior to the date on which that Lender first made demand therefor.
Section 8.2     [Reserved].
Section 8.3     Changes in Law Rendering Loans Unlawful. If, after the date of this Agreement, any change in, or the adoption of any new, law or regulation, or any change in the interpretation of any applicable law or regulation by any Governmental Authority or other regulatory body charged with the administration thereof, makes it (or in the good faith judgment of any Lender causes a substantial question as to whether it is) unlawful for any Lender to make, maintain, or fund loans in Dollars, then that Lender shall promptly notify each of the other parties to this Agreement and that Lender will not be required to make or maintain any Loan in Dollars.
Section 8.4     Right of Lenders to Fund through Other Offices. Each Lender may, if it so elects, fulfill its commitment as to any Loan by causing a foreign branch or Affiliate of that Lender to make that Loan, but each such Loan will be deemed to have been made by that Lender and the obligation of Borrowers to repay that Loan will be to that Lender and will be deemed held by the Lender, to the extent of that Loan, for the account of that branch or Affiliate.
Section 8.5     Mitigation of Circumstances; Replacement of Lenders.
a.Each Lender shall promptly notify Borrower Representative and Administrative Agent of any event of which it has knowledge that will result in, and will use reasonable commercial efforts available to it (and not, in that Lender’s sole judgment, otherwise disadvantageous to that Lender) to mitigate or avoid (i) any obligation by Borrowers to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any circumstances described in Section 8.3 (and, if any Lender has given notice of any such event described in clauses (i) or (ii)
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and thereafter that event ceases to exist, that Lender shall promptly so notify Borrower Representative and Administrative Agent). Without limiting the foregoing, each Lender shall designate a different funding office if that designation will avoid (or reduce the cost to Borrowers of) any event described in clauses (i) or (ii) and that designation will not, in that Lender’s sole judgment, be otherwise disadvantageous to that Lender.
b.If Borrowers become obligated to pay additional amounts to any Lender pursuant to Section 8.1, or any Lender gives notice of the occurrence of any circumstances described in Section 8.3, or any Lender becomes a Defaulting Lender, then Borrower Representative may designate another financial institution that is acceptable to Administrative Agent in its reasonable discretion (a “Replacement Lender”) to purchase the Loans of that Lender and that Lender’s rights under this Agreement, without recourse to or warranty by, or expense to, that Lender, for a purchase price equal to the outstanding principal amount of the Loans payable to that Lender plus any accrued but unpaid interest on those Loans and all accrued but unpaid fees owed to that Lender and any other amounts owed to that Lender under this Agreement and any other Loan Document, and to assume all the obligations of that Lender under this Agreement. Upon any such purchase and assumption (pursuant to an Assignment Agreement), the applicable Lender will no longer be a party to this Agreement or have any rights under this Agreement (other than rights with respect to indemnities and similar rights applicable to that Lender prior to the date of that purchase and assumption) and will be relieved from all obligations to Borrowers under this Agreement, and the Replacement Lender will succeed to the rights and obligations of that Lender under this Agreement.
Section 8.6    Conclusiveness of Statements; Survival of Provisions. Determinations and statements of any Lender pursuant to Section 8.1 or 8.3 shall be conclusive absent demonstrable error. Lenders may use reasonable averaging and attribution methods in determining compensation under Section 8.1, and the provisions of such Section 8.1 will survive repayment of the Obligations, cancellation of any Note(s) and termination of this Agreement.
Section 8.7    Funding Losses. Each Borrower shall, upon demand by any Lender (which demand must be accompanied by a statement setting forth the basis for the amount being claimed, a copy of which must be furnished to Administrative Agent), indemnify that Lender against any net loss or expense (including amounts incurred to terminate, settle or re-establish hedging arrangements or related trading positions (irrespective of the currency thereof)) which that Lender sustains or incurs, as reasonably determined by that Lender, as a result of any failure of any Borrower to borrow any Loan on a date specified therefor in a notice of borrowing pursuant to this Agreement. For this purpose, all notices to Administrative Agent pursuant to this Agreement will be deemed to be irrevocable.
ARTICLE IX

REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Agents and the Lenders, on behalf of itself and each of its Subsidiaries, that on the Amendment No. 3 Effective Date, and on any other date required in any Loan Document:
Section 9.1    Organization; Good Standing, Etc.. Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized or incorporated, validly existing and in good standing under the laws of the state or jurisdiction of its organization or incorporation, (ii) has all requisite power and authority to conduct its business as now conducted
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and as presently contemplated and, in the case of the Borrowers, to make the borrowings hereunder, and to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could not reasonably be expected to have a Material Adverse Effect.
Section 9.2     Authorization; Etc..
a.The execution, delivery and performance by each Loan Party of each Loan Document to which it is or will be a party, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable Requirement of Law or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties.
Section 9.3     Government Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of any Loan Document to which it is or will be a party other than (x) those which have been provided or obtained on or prior to the Amendment No. 4 Effective Date or (y) filings and recordings with respect to Collateral to be made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Amendment No. 4 Effective Date.
Section 9.4     Enforceability of Loan Documents. This Agreement is, and each other Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
Section 9.5     Capitalization. On the Amendment No. 3 Effective Date, after giving effect to the transactions contemplated hereby to occur on such date, the authorized Equity Interests of Ultimate Holdings and each of its Subsidiaries and the issued and outstanding Equity Interests of Ultimate Holdings and each of its Subsidiaries are as set forth on Schedule 9.5. All of the issued and outstanding shares of Equity Interests of Ultimate Holdings and each of its Subsidiaries have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. All Equity Interests of such Subsidiaries of Ultimate Holdings are owned by Ultimate Holdings free and clear of all Liens (other than Permitted Specified Liens). Except as described on Schedule 9.5, there are no outstanding debt or equity securities of Ultimate Holdings or any of its Subsidiaries and no outstanding obligations of Ultimate Holdings or any of its Subsidiaries convertible into or exchangeable for, or warrants, options or other rights for the purchase or acquisition from Ultimate Holdings or any of its Subsidiaries, or other obligations of Ultimate Holdings or any of its Subsidiaries to issue, directly or indirectly, any shares of Equity Interests of Ultimate Holdings or any of its Subsidiaries.
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Section 9.6    Litigation. Except as set forth in Schedule 9.6, there is no pending or, to the knowledge of any Loan Party, threatened action, suit or proceeding affecting any Loan Party or any of its properties before any court or other Governmental Authority or any arbitrator that (i) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (ii) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby.
Section 9.7    Financial Statements.
(i) The financial statements, copies of which have been delivered to each Agent and each Lender, fairly present the consolidated financial condition of Ultimate Holdings and its Subsidiaries as at the respective dates thereof and the consolidated results of operations of Ultimate Holdings and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP. All material indebtedness and other liabilities (including, without limitation, Indebtedness, liabilities for taxes, long-term leases and other unusual forward or long-term commitments), direct or contingent, of Ultimate Holdings and its Subsidiaries are set forth in the Financial Statements. Since March 31, 2022, no event or development has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
(ii) Ultimate Holdings has heretofore furnished to each Agent and each Lender (A) projected quarterly financial information of Ultimate Holdings and its Subsidiaries for the fiscal quarters ending June 30, 2022, September 30, 2022 and December 31, 2022, and (B) projected annual financial information for the 2022, 2023, 2024, 2025 and 2026 Fiscal Years, which projected financial statements shall be updated from time to time pursuant to Section 10.1(a)(vi).

Section 9.8    Compliance with Law, Etc.. No Loan Party or any of its Subsidiaries is in violation of (i) any of its Governing Documents, (ii) any Requirement of Law, or (iii) any material term of any Contractual Obligation (including, without limitation, any Material Contract) binding on or otherwise affecting it or any of its properties, and no default or event of default has occurred and is continuing thereunder.
Section 9.9    ERISA. Except as set forth on Schedule 9.9, (i) each Loan Party and each Employee Plan and Pension Plan is in compliance with all Requirements of Law in all material respects, including ERISA, the Internal Revenue Code and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, (ii) no ERISA Event has occurred nor is reasonably expected to occur with respect to any Employee Plan, Pension Plan or Multiemployer Plan, (iii) copies of each agreement entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue Service with respect to any Employee Plan or Pension Plan have been delivered to the Agents, and (iv) each Employee Plan and Pension Plan that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Internal Revenue Code and the trust related thereto is exempt from federal income tax under Section 501(a) of the Internal Revenue Code. No Loan Party or any of its ERISA Affiliates has incurred any material liability to the PBGC which remains outstanding other than the payment of premiums, and there are no premium payments which have become due and which are unpaid with respect to a Pension Plan. There are no pending or, to the best knowledge of any Loan Party, threatened material claims, actions, proceedings or lawsuits (other
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than claims for benefits in the ordinary course) asserted or instituted against (A) any Employee Plan, Pension Plan, or their respective assets, (B) any fiduciary with respect to any Employee Plan or Pension Plan, or (C) any Loan Party or any of its ERISA Affiliates with respect to any Employee Plan or Pension Plan. Except as required by Section 4980B of the Internal Revenue Code, no Loan Party maintains an employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides health benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Party or has any obligation to provide any such benefits for any current employee after such employee’s termination of employment.
Section 9.10    Taxes, Etc.. (i) All United States federal and other material Tax returns and other reports required by applicable Requirements of Law to be filed by any Loan Party have been timely filed and (ii) all Taxes imposed upon any Loan Party or any property of any Loan Party which have become due and payable on or prior to the date hereof have been paid, except (A) the Unpaid Taxes and other unpaid Taxes in an aggregate amount at any one time outstanding not in excess of $275,000, and (B) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof on the Financial Statements in accordance with GAAP.
Section 9.11    Regulations T, U and X. No Loan Party is or will be engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U and X.
Section 9.12    Nature of Business. No Loan Party is engaged in any business other than as set forth on Schedule 9.12 hereto.
Section 9.13    Adverse Agreements, Etc.. No Loan Party or any of its Subsidiaries is a party to any Contractual Obligation or subject to any restriction or limitation in any Governing Document or any judgment, order, regulation, ruling or other requirement of a court or other Governmental Authority, which (either individually or in the aggregate) has, or in the future could reasonably be expected (either individually or in the aggregate) to have, a Material Adverse Effect.
Section 9.14    Permits, etc. Each Loan Party has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations, including Environmental Permits, required for such Person lawfully to own, lease, manage or operate, or to acquire, each business and Facility currently owned, leased, managed or operated, or to be acquired, by such Person, except to the extent the failure to have or be in compliance therewith could not reasonably be expected to have a Material Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation, including any such Environmental Permit, and there is no claim that any of the foregoing is not in full force and effect.
Section 9.15    Properties. Each Loan Party has good and marketable title to, valid leasehold interests in, or valid licenses to use, all property and assets material to its business, free and clear of all Liens, except Permitted Liens. All such properties and assets are in good working order and condition, ordinary wear and tear excepted.
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Section 9.16    Employee and Labor Matters. Except as set forth on Schedule 9.16, (i) each Loan Party and its Subsidiaries is in compliance with all Requirements of Law in all material respects pertaining to employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health, (ii) no Loan Party or any Subsidiary is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of the employees of any Loan Party of Subsidiary, (iii) there is no unfair labor practice complaint pending or, to the knowledge of any Loan Party, threatened against any Loan Party or any Subsidiary before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or any Subsidiary which arises out of or under any collective bargaining agreement, (iv) there has been no strike, work stoppage, slowdown, lockout, or other labor dispute pending or threatened against any Loan Party or any Subsidiary, and (v) to the knowledge of each Loan Party, no labor organization or group of employees has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. No Loan Party or Subsidiary has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar Requirement of Law, which remains unpaid or unsatisfied. All material payments due from any Loan Party or Subsidiary on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such Loan Party or Subsidiary.
Section 9.17    Environmental Matters. Except as set forth on Schedule 9.17 hereto, (i) no Loan Party or any of its Subsidiaries is in violation of any Environmental Law, (ii) each Loan Party and each of its Subsidiaries has, and is in compliance with, all Environmental Permits for its respective operations and businesses, except to the extent any failure to have or be in compliance therewith could not reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iii) there has been no Release or threatened Release of Hazardous Materials on, in, at, under or from any properties currently or formerly owned, leased or operated by any Loan Party, its Subsidiaries or a respective predecessor in interest or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party, its Subsidiaries or any respective predecessor in interest, which in any case of the foregoing could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iv) there are no pending or threatened Environmental Claims against, or Environmental Liability of, any Loan Party, its Subsidiaries or any respective predecessor in interest that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (v) neither any Loan Party nor any of its Subsidiaries is performing or responsible for any Remedial Action that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; and (vi) the Loan Parties have made available to the Collateral Agent and Lenders true and complete copies of all material environmental reports, audits and investigations in the possession or control of any Loan Party or any of its Subsidiaries with respect to the operations and business of the Loan Parties and its Subsidiaries.
Section 9.18    Insurance. Each Loan Party maintains all insurance required by Section 10.1(h). Schedule 9.18 sets forth a list of all such insurance maintained by or for the benefit of each Loan Party on the Amendment No. 3 Effective Date.
Section 9.19    [reserved].
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Section 9.20    Solvency. After giving effect to the transactions contemplated by this Agreement and before and after giving effect to each Loan, each Loan Party is, and the Loan Parties on a consolidated basis are, Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.
Section 9.21    Intellectual Property. Except as set forth on Schedule 9.21, each Loan Party owns or licenses or otherwise has the right to use all Intellectual Property rights that are necessary for the operation of its business, without infringement upon or conflict with the rights of any other Person with respect thereto, except for such infringements and conflicts which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 9.21 is a complete and accurate list as of the Amendment No. 3 Effective Date of (i) each item of Registered Intellectual Property owned by each Loan Party; (ii) each material work of authorship owned by each Loan party and which is not Registered Intellectual Property, and (iii) each Intellectual Property Contract to which each Loan Party is bound. No trademark or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened. To the knowledge of each Loan Party, no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code pertaining to Intellectual Property is pending or proposed.
Section 9.22    Material Contracts. Set forth on Schedule 9.22 is a complete and accurate list as of the Amendment No. 3 Effective Date of all Material Contracts of each Loan Party, showing the parties and subject matter thereof and amendments and modifications thereto. Each such Material Contract (i) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and all other parties thereto in accordance with its terms, (ii) has not been otherwise amended or modified, and (iii) is not in default due to the action of any Loan Party or, to the knowledge of any Loan Party, any other party thereto.
Section 9.23    Investment Company Act. None of the Loan Parties is (i) an “investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended, or (ii) subject to regulation under any Requirement of Law that limits in any respect its ability to incur Indebtedness or which may otherwise render all or a portion of the Obligations unenforceable.
Section 9.24    Customers and Suppliers. There exists no actual or threatened termination, cancellation or limitation of, or modification to or change in the business relationship between (i) any Loan Party, on the one hand, and any material customer or any group thereof, on the other hand, or (ii) any Loan Party, on the one hand, and any material supplier or any group thereof, on the other hand, and there exists no present state of facts or circumstances that could reasonably be expected to give rise to or result in any such termination, cancellation, limitation, modification or change.
Section 9.25    [Reserved].
Section 9.26    Sanctions; Anti-Corruption and Anti-Money Laundering Laws. None of any Loan Party, any Subsidiary thereof, any of their respective directors, officers, or employees, shareholders or owners, nor any of their respective agents or Affiliates, (i) is a Sanctioned Person
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or currently the subject or target of any Sanctions, (ii) has assets located in a Sanctioned Country, (iii) conducts any business with or for the benefit of any Sanctioned Person, (iv) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons, (v) is a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision, or (vi) is a Person that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Section 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns. Each Loan Party and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by each Loan Party and its Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Anti-Corruption Laws and Anti-Money Laundering Law. Each Loan Party and each Subsidiary is in compliance with all Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws. Each Loan Party and each Affiliate, officer, employee or director acting on behalf of any Loan Party is (and is taking no action that would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA PATRIOT Act. In addition, no Loan Party or any Subsidiary is engaged in any kind of activities or business of or with any Person or in any country or territory that is subject to any sanctions administered by OFAC, the United Kingdom, the European Union, Germany, Canada, Australia or the United Nations.
Section 9.27    Anti-Bribery and Corruption.
(i) Neither any Loan Party nor any Subsidiary thereof, nor, to the knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has offered, promised, paid, given or authorized the payment or giving of any money or other thing of value, directly or indirectly, to or for the benefit of any Person, including without limitation, any employee, official or other Person acting on behalf of any Governmental Authority, or otherwise engaged in any activity that may violate any Anti-Corruption Law.
(ii) Neither any Loan Party nor any Subsidiary thereof, nor, to the knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has engaged in any activity that would breach any Anti-Corruption Laws.
(iii) To each Loan Party’s knowledge and belief, there is no pending or threatened action, suit, proceeding or investigation before any court or other Governmental Authority against any Loan Party or any Subsidiary thereof or any of their directors, officers, employees or other Person acting on their behalf that relates to a potential violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.
(iv) The Loan Parties will not directly or indirectly use, lend or contribute the proceeds of the Advances for any purpose that would breach the Anti-Bribery and Anti-Corruption Laws.

Section 9.28    Full Disclosure.
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(i) Each Loan Party has disclosed to the Agents all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Agents (other than forward-looking information and projections and information of a general economic nature and general information about Borrower’s industry) in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which it was made, not misleading.
(ii) Projections have been prepared on a reasonable basis and in good faith based on assumptions, estimates, methods and tests that are believed by the Loan Parties to be reasonable at the time such Projections were prepared and information believed by the Loan Parties to have been accurate based upon the information available to the Loan Parties at the time such Projections were furnished to the Lenders, and Ultimate Holdings is not be aware of any facts or information that would lead it to believe that such Projections are incorrect or misleading in any material respect; it being understood that (A) Projections are by their nature subject to significant uncertainties and contingencies, many of which are beyond the Loan Parties’ control, (B) actual results may differ materially from the Projections and such variations may be material and (C) the Projections are not a guarantee of performance.
ARTICLE X

AFFIRMATIVE AND NEGATIVE COVENANTS
Section 10.1    Affirmative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party will, unless the Required Lenders shall otherwise consent in writing:
(xv)Reporting Requirements. Furnish to each Agent and each Lender:
i.as soon as available, and in any event within thirty (30) days after the end of each fiscal month of Ultimate Holdings and its Subsidiaries, (x) internally prepared consolidated balance sheets, statements of operations and retained earnings and statements of cash flows as at the end of such fiscal month, and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such fiscal month, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year, and (B) the Projections, all in reasonable detail and certified by an Authorized Officer of Ultimate Holdings as fairly presenting, in all material respects, the financial position of Ultimate Holdings and its Subsidiaries as at the end of such fiscal month and the results of operations, retained earnings and cash flows of Ultimate Holdings and its Subsidiaries for such fiscal month and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments (y) a report of key performance indicators during such fiscal month with respect to the top 25 customers, headcount and billable utilization, as reasonably identified by Ultimate Holdings, for the business of Ultimate Holdings and its Subsidiaries and any additional financial information as may be reasonably requested by the Administrative Agent and (z) a Compliance Certificate;
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ii.the following:
(a)as soon as available and in any event within forty five (45) days after the end of each fiscal quarter of Ultimate Holdings and its Subsidiaries commencing with the first full fiscal quarter of Ultimate Holdings and its Subsidiaries ending after May 27, 2022, consolidated balance sheets, statements of operations and retained earnings and statements of cash flows of Ultimate Holdings and its Subsidiaries as at the end of such quarter, and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the figures for the corresponding date or period set forth in the financial statements for the immediately preceding Fiscal Year, all in reasonable detail and certified by an Authorized Officer of Ultimate Holdings as fairly presenting, in all material respects, the financial position of Holdings and its Subsidiaries as of the end of such quarter and the results of operations and cash flows of Holdings and its Subsidiaries for such quarter and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements of Ultimate Holdings and its Subsidiaries furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments, and
(b)no later than two (2) Business Days after the delivery of the financial information described in clause (A), a comparison of the financial information described in clause (A) to that in the Projections, and a report of key performance indicators during such fiscal quarter with respect to the top 25 customers, headcount and billable utilization, as reasonably identified by Ultimate Holdings, for the business of Ultimate Holdings and its Subsidiaries and any additional financial information as may be reasonably requested by the Administrative Agent at the request of the Required Lenders;
iii.the following
(a)as soon as available, and in any event within ninety (90) days after the end of each Fiscal Year of Ultimate Holdings and its Subsidiaries, consolidated balance sheets, statements of operations and retained earnings and statements of cash flows of Ultimate Holdings and its Subsidiaries as at the end of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding date or period set forth in the financial statements for the immediately preceding Fiscal Year, all in reasonable detail and prepared in accordance with GAAP, and accompanied by a report and an opinion, prepared in accordance with generally accepted auditing standards, of a “Big Four” firm or another independent certified public accountant of recognized standing selected by Ultimate Holdings and satisfactory to the Required Lenders (which report and opinion shall not include (1) any qualification, exception or explanatory paragraph expressing substantial doubt about the ability of Ultimate Holdings or any of its Subsidiaries to continue as a going concern or any qualification or exception as to the scope of such audit, or (2) any qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 10.3), and
(b)no later than two Business Days after the delivery of the financial information described in clause (A), a comparison of the financial information described in clause (A) to that in the Projections;
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iv.no later than two Business Days after the delivery of the financial statements of Ultimate Holdings and its Subsidiaries required by clauses (ii) and (iii) of this Section 10.1(a), a Compliance Certificate:
(a)stating that an Authorized Officer of Intermediate Holdings has reviewed the provisions of this Agreement and the other Loan Documents and has made or caused to be made under his or her supervision a review of the condition and operations of Ultimate Holdings and its Subsidiaries during the period covered by such financial statements with a view to determining whether Ultimate Holdings and its Subsidiaries were in compliance with all of the provisions of this Agreement and such Loan Documents at the times such compliance is required hereby and thereby, and that such review has not disclosed, and such Authorized Officer has no knowledge of, the occurrence and continuance during such period of an Event of Default or Default or, if an Event of Default or Default had occurred and continued or is continuing, describing the nature and period of existence thereof and the action which Ultimate Holdings and its Subsidiaries propose to take or have taken with respect thereto,
(b)in the case of the delivery of the financial statements of Ultimate Holdings and its Subsidiaries required by clauses (ii) and (iii) of this Section 10.1(a), (1) attaching a schedule showing the calculation of the financial covenants specified in Section 10.3, (2) a calculation of the Liquidity of Ultimate Holdings and its Subsidiaries as of the last day of such month, in form and substance satisfactory to the Required Lenders, showing compliance with Section 10.3(c) and (3) including a discussion and analysis of the financial condition and results of operations of Ultimate Holdings and its Subsidiaries for the portion of the Fiscal Year then elapsed and discussing the reasons for any significant variations from the Projections for such period and commencing with the Fiscal Year ending December 31, 2022, the figures for the corresponding period in the previous Fiscal Year, and
(c)in the case of the delivery of the financial statements of Ultimate Holdings and its Subsidiaries required by (X) clause (iii) of this Section 10.1(a), attaching an updated Perfection Certificates delivered on May 27, 2022, or the date of the most recently updated Perfection Certificate (if applicable), attaching a summary of all material insurance coverage maintained as of the date thereof by any Loan Party or any of its Subsidiaries and evidence that such insurance meets the requirements set forth in Section 10.1(h) and the other Loan Documents (or stating that there has been no change in the information most recently provided pursuant to this clause (C)), together with such other related documents and information as the Required Lenders may reasonably require;
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v.as soon as available and in any event within 10 days after the end of each fiscal month of Ultimate Holdings and its Subsidiaries commencing with the first fiscal month of Holdings and its Subsidiaries ending after May 27, 2022, reports in form and detail satisfactory to the Lenders and certified by an Authorized Officer of Intermediate Holdings as being accurate and complete (but subject to final balance sheet adjustments) (A) listing all Accounts of the Loan Parties as of such day, which shall include the amount and age of each such Account, showing separately those which are more than 30, 60, 90 and 120 days old and a description of all Liens, set-offs, defenses and counterclaims with respect thereto, together with a reconciliation of such schedule with the schedule delivered to the Agents pursuant to this clause (v)(A) for the immediately preceding fiscal month, the name and mailing address of each Account Debtor with respect to each such Account and such other information as any Agent at the request of the Required Lenders may request, (B) listing all accounts payable of the Loan Parties as of each such day which shall include the amount and age of each such account payable, the name and mailing address of each account creditor and such other information as any Agent may request at the request of the Required Lenders, and (C) listing all Inventory of the Loan Parties as of each such day, and containing a breakdown of such Inventory by type and amount, the cost and the current market value thereof (by location), the date of acquisition, the warehouse and production facility location and such other information as any Agent may request at the request of the Required Lenders, all in detail and in form satisfactory to the Required Lenders;
vi.as soon as available and in any event not later than 60 days prior to the end of each Fiscal Year, a certificate of an Authorized Officer of Ultimate Holdings (A) attaching Projections for Ultimate Holdings and its Subsidiaries, supplementing and superseding the Projections previously required to be delivered pursuant to this Agreement, prepared on a monthly basis and otherwise in form and substance satisfactory to the Agents, for the immediately succeeding Fiscal Year for Ultimate Holdings and its Subsidiaries and (B) certifying that the representations and warranties set forth in Article IX are true and correct with respect to the Projections;
vii.promptly after submission to any Governmental Authority, all documents and information furnished to such Governmental Authority in connection with any investigation of any Loan Party other than (A) routine inquiries by such Governmental Authority and (B) inquiries made in the normal course of business;
viii.as soon as possible, and in any event within three (3) days after the occurrence of an Event of Default or Default or the occurrence of any event or development that could reasonably be expected to have a Material Adverse Effect, the written statement of an Authorized Officer of Intermediate Holding setting forth the details of such Event of Default or Default or other event or development having a Material Adverse Effect and the action which the affected Loan Party proposes to take with respect thereto;
ix.as soon as possible and in any event: (A) within five (5) Business Days after a Loan Party has knowledge of the occurrence (or future occurrence) of any ERISA Event, notice of such ERISA Event (in reasonable detail), and (B) within ten (10) Business Days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to any Pension Plan, and (C) within ten (10) Business Days after any Loan Party sends notice of a plant closing or mass layoff (as defined in WARN) to employees, copies of each such notice sent by such Loan Party;
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x.promptly after the commencement thereof but in any event not later than five (5) days after service of process with respect thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of each action, suit or proceeding before any court or other Governmental Authority or other regulatory body or any arbitrator, in which the amount of damages claimed is US$600,000 (or its equivalent in another currency or currencies) or more in the aggregate for all such actions, suits or proceedings;
xi.as soon as possible and in any event within five (5) days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with any Material Contract;
xii.as soon as possible and in any event within five (5) days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with the sale or other Disposition of the Equity Interests of, or all or substantially all of the assets of, any Loan Party;
xiii.as soon as possible and in any event within five (5) days after the delivery thereof to Ultimate Holdings’ Board of Directors, copies of all reports or other information so delivered in connection with a meeting of such Board of Directors (other than any such reports or other information that are subject to attorney-client or other legal privilege); provided that all such reports and other information is subject to Section 15.9;
xiv.promptly after (A) the sending or filing thereof, copies of all statements, reports and other information any Loan Party sends to any holders of its Indebtedness or its securities or files with the SEC or any national (domestic or foreign) securities exchange and (B) the receipt thereof, a copy of any material notice received from any holder of its Indebtedness;
xv.promptly upon receipt thereof, copies of all financial reports (including, without limitation, management letters), if any, submitted to any Loan Party by its auditors in connection with any annual or interim audit of the books thereof;
xvi.promptly upon request, any certification or other evidence requested from time to time by any Lender in its sole discretion, confirming Intermediate Holdings’ compliance with Section 10.2(r);
xvii.[reserved];
xviii.simultaneously with the delivery of the financial statements of Ultimate Holdings and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 10.1(a), if, as a result of any change in accounting principles and policies from those used in the preparation of the financial statements that is permitted by Section 10.2(q), the consolidated financial statements of Ultimate Holdings and its Subsidiaries delivered pursuant to clauses (i), (ii) and (iii) of this Section 10.1(a) will differ from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance satisfactory to the Lenders;
xix.(A) as soon as available, and in any event within three (3) Business Days after the end of each fiscal month of Ultimate Holdings and its Subsidiaries, (1) a
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calculation of the Liquidity of Ultimate Holdings and its Subsidiaries as of the last day of such month, in form and substance satisfactory to the Agents and (2) a 13-week cash flow forecast of Ultimate Holdings and its Subsidiaries in form and substance satisfactory to the Lenders (the “13-Week Cash Flow”) and (B) if the Liquidity of Ultimate Holdings and its Subsidiaries is less than $8,400,000 at any time during a week, then commencing on Wednesday of the following week and for every week thereafter until the Liquidity of Ultimate Holdings and its Subsidiaries for each day in the prior week is greater than $8,400,000, (1) a calculation of the Liquidity of Ultimate Holdings and its Subsidiaries as of the last day of the preceding week in form and substance satisfactory to the Agents and (2) a 13-Week Cash Flow; and
xx.promptly upon request, such other information concerning the condition or operations, financial or otherwise, of any Loan Party (including, without limitation, any Environmental, Social, and Corporate Governance information) as any Lender may from time to time may reasonably request.
b.Additional Borrowers, Guarantors and Collateral Security. Cause:
i.each Subsidiary of any Loan Party not in existence on May 27, 2022 (other than any Immaterial Subsidiary and/or any Excluded Foreign Subsidiary), to execute and deliver to the Collateral Agent promptly and in any event within 30 days after the formation, acquisition or change in status thereof, (A) a Joinder Agreement, pursuant to which such Subsidiary shall be made a party to this Agreement as a Borrower or Guarantor, (B) a supplement to the Guaranty and Collateral Agreement, together with (1) certificates evidencing all of the Equity Interests of any Person owned by such Subsidiary required to be pledged under the terms of the Guaranty and Collateral Agreement, (2) undated stock powers for such Equity Interests executed in blank with signature guaranteed, and (3) such opinions of counsel as the Collateral Agent at the request of the Required Lenders may reasonably request, (C) to the extent required under the terms of this Agreement, one or more Mortgages creating on the real property of such Subsidiary a perfected, first priority Lien (in terms of priority, subject only to Permitted Liens) on such real property and such other Real Property Deliverables as may be required by the Collateral Agent at the request of the Required Lenders with respect to each such real property, and (D) such other agreements, instruments, approvals or other documents reasonably requested by the Collateral Agent at the Request of the Required Lenders in order to create, perfect, establish the first priority of or otherwise protect any Lien purported to be covered by any such Guaranty and Collateral Agreement or a Mortgage or otherwise to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that all property and assets of such Subsidiary shall become Collateral for the Obligations; and
ii.each owner of the Equity Interests of any such Subsidiary to execute and deliver promptly and in any event within 30 days after the formation or acquisition of such Subsidiary a Pledge Amendment (as defined in the Guaranty and Collateral Agreement), together with (A) certificates evidencing all of the Equity Interests of such Subsidiary required to be pledged under the terms of the Guaranty and Collateral Agreement, (B) undated stock powers or other appropriate instruments of assignment for such Equity Interests executed in blank, (C) such opinions of counsel as the Collateral Agent may reasonably request and (D) such other agreements, instruments, approvals or other documents requested by the Collateral Agent.
c.Compliance with Laws; Payment of Taxes.
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i.Comply, and cause each of its Subsidiaries to comply, with all Requirements of Law, judgments and awards (including any settlement of any claim that, if breached, could give rise to any of the foregoing).
ii.Pay, and cause each of its Subsidiaries to pay, in full before delinquency or before the expiration of any extension period, all Taxes imposed upon any Loan Party or any of its Subsidiaries or any property of any Loan Party or any of its Subsidiaries, except (i) unpaid Taxes in an aggregate amount at any one time not in excess of US$300,000, and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.
d.Preservation of Existence, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except to the extent that the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
e.Keeping of Records and Books of Account. Keep, and cause each of its Subsidiaries to keep, adequate records and books of account, with complete entries made to permit the preparation of financial statements in accordance with GAAP.
f.Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the agents and representatives of any Lender at any time and from time to time during normal business hours and with reasonable notice to Intermediate Holdings, at the expense of Intermediate Holdings, to examine and make copies of and abstracts from its records and books of account, to visit and inspect its properties, to verify materials, leases, notes, accounts receivable, deposit accounts and its other assets, to conduct audits, physical counts, valuations, appraisals or examinations and to discuss its affairs, finances and accounts with any of its directors, officers, managerial employees, independent accountants or any of its other representatives. In furtherance of the foregoing, each Loan Party hereby authorizes its independent accountants, and the independent accountants of each of its Subsidiaries, to discuss the affairs, finances and accounts of such Person (independently or together with representatives of such Person) with the agents and representatives of any Lender in accordance with this Section 10.1(f).
g.Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear and casualty excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder, except to the extent the failure to so maintain and preserve or so comply could not reasonably be expected to have a Material Adverse Effect.
h.Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, cyber, hazard, flood, rent, worker’s compensation and business interruption insurance) with respect to the Collateral and its other properties (including all real property leased or owned by it) and business, in such amounts
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and covering such risks as is (i) carried generally in accordance with sound business practice by companies in similar businesses similarly situated, (ii) required by any Requirement of Law, (iii) required by any Material Contract and (iv) in any event in amount, adequacy and scope reasonably satisfactory to the Collateral Agent.
i.Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations that are necessary or useful in the proper conduct of its business, in each case, except to the extent the failure to obtain, maintain, preserve or take such action could not reasonably be expected to have a Material Adverse Effect.
j.Environmental.
i.Keep the Collateral free of any Environmental Lien;
ii.Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all Environmental Permits that are necessary or useful in the proper conduct of its business, and comply, and cause each of its Subsidiaries to comply, with all Environmental Laws and Environmental Permits;
iii.Take all commercially reasonable steps to prevent any Release or threatened Release of Hazardous Materials in violation of any Environmental Law or Environmental Permit at, in, on, under or from any property owned, leased or operated by any Loan Party or its Subsidiaries;
iv.Provide the Collateral Agent with written notice within ten (10) days of any of the following: (A) discovery of any Release of a Hazardous Material or environmental condition at, in, on, under or from any property currently or formerly owned, leased or operated by any Loan Party, Subsidiary or predecessor in interest or any violation of Environmental Law or Environmental Permit that in any case could reasonably be expected to result in any material Environmental Claim or Environmental Liability; (B) notice that an Environmental Lien has been filed against any Collateral; or (C) an Environmental Claim or Environmental Liabilities; and provide such reports, documents and information as the Collateral Agent may reasonably request from time to time with respect to any of the foregoing.
k.Fiscal Year. Cause the Fiscal Year of Ultimate Holdings and its Subsidiaries to end on December 31 of each calendar year unless the Required Lenders consent to a change in such Fiscal Year (and appropriate related changes to this Agreement).
l.Landlord Waivers; Collateral Access Agreements. At any time any Collateral with a book value in excess of US$300,000 (when aggregated with all other Collateral at the same location) is located on any real property of a Loan Party located in the United States (whether such real property is now existing or acquired after May 27, 2022) which is not owned by a Loan Party, or is stored on the premises of a bailee, warehouseman, or similar party, use its best efforts to obtain written subordinations or waivers or collateral access agreements, as the case may be, in form and substance satisfactory to the Collateral Agent and the Required Lenders.
m.After Acquired Real Property. Upon the acquisition by it or any of its Subsidiaries after the date hereof of any interest (whether fee or leasehold) in any real property
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(wherever located) (each such interest being a “New Facility”) with a Current Value (as defined below) in excess of US$600,000 in the case of a fee interest immediately so notify the Lenders, setting forth with specificity a description of the interest acquired, the location of the real property, any structures or improvements thereon and either an appraisal or such Loan Party’s good-faith estimate of the current value of such real property (for purposes of this Section, the “Current Value”). The Lenders shall notify such Loan Party whether they intend to require a Mortgage (and any other Real Property Deliverables or landlord’s waiver (pursuant to Section 10.1(l) hereof) with respect to such New Facility. Upon receipt of such notice requesting a Mortgage (and any other Real Property Deliverables) or landlord’s waiver, the Person that has acquired such New Facility shall promptly furnish the same to the Collateral Agent. Intermediate Holdings shall pay all fees and expenses, including, without limitation, reasonable attorneys’ fees and expenses, and all title insurance charges and premiums, in connection with each Loan Party’s obligations under this Section 10.1(m).
n.Anti-Corruption Laws; Anti-Money Laundering Laws; Sanctions.
i.Maintain, and cause each of its Subsidiaries to maintain, policies and procedures designed to promote compliance by each Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with all Anti-Corruption Laws and Anti-Money Laundering Laws.
ii.Comply, and cause each of its Subsidiaries to comply, with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.
iii.Neither Loan Party nor, to the best knowledge of any Loan Party, any director, officer, employee or any Person acting on behalf of any Loan Party will engage in any activity that would breach any Anti-Corruption Law.
iv.Promptly notify the Administrative Agent of any action, suit or investigations by any court or Governmental Authority in relation to an alleged breach of the Anti-Corruption Law.
v.Not directly or indirectly use, lend or contribute the proceeds of any Loan for any purpose that would breach any Anti-Corruption Law.
vi.Each Loan Party and Affiliate, officer, employee or director, acting on behalf of the Loan Party is (and will take no action which would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other reasonable internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA PATRIOT Act. In addition, none of the activities or business of any Loan Party includes any kind of activities or business of or with any Person or in any country or territory that is subject to any Sanctions.
vii.In order to comply with the “know your customer/borrower” requirements of the Anti-Money Laundering Laws, promptly provide to the Administrative Agent upon its reasonable request from time to time (A) information relating to individuals and entities affiliated with any Loan Party that maintain a business relationship with the Administrative Agent, and (B) such identifying information and documentation as may be
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available for such Loan Party in order to enable the Administrative Agent or any Lender to comply with Anti-Money Laundering Laws.
o.Lender Meetings. Upon the request of any Agent or the Required Lenders (which request, so long as no Event of Default shall have occurred and be continuing, shall not be made more than once during each fiscal quarter and shall not occur until after the earnings call for the most recently ended fiscal quarter), participate in a meeting with the Agents and the Lenders at Ultimate Holding’s corporate offices (or at such other location as may be agreed to by Intermediate Holdings and such Agent or the Required Lenders) at such time as may be agreed to by Intermediate Holdings and such Agent or the Required Lenders to discuss the financial condition and results of operation of Ultimate Holdings and its Subsidiaries for the most recently ended fiscal quarter.
p.Board Information Rights. The Lenders shall be timely notified of the time and place of any regular or special meetings (regular meetings shall be held no less than once per quarter) and will be given written notice of all proposed actions to be taken by the Board of Directors (or any relevant committee thereof) of Ultimate Holdings (or its direct or indirect parent holding company) and any of its Subsidiaries at such meeting as if the Lenders were a member thereof. Such notice shall describe in reasonable detail the nature and substance of the matters to be discussed and/or voted upon at such meeting (or the proposed actions to be taken by written consent without a meeting). The Lenders shall have the right to, and shall, receive all information provided to the members of the Board of Directors or any similar group performing an executive oversight or similar function (or any relevant committee thereof) of Ultimate Holdings (or its direct or indirect parent holding company) and any of its Subsidiaries in anticipation of or at such meeting (regular or special and whether telephonic or otherwise), in addition to copies of the records of the proceedings or minutes of such meeting, when provided to the members other than such information subject to attorney-client or other legal privilege; provided that, the Lenders shall keep such materials and information confidential in accordance with Section 15.9 of this Agreement.
q.Further Assurances. Take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as any Agent at the instruction or request of the Required Lenders may require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected Liens any of the Collateral or any other property of any Loan Party and its Subsidiaries, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Secured Party the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable law, each Loan Party (i) authorizes each Agent to execute any such agreements, instruments or other documents in such Loan Party’s name and to file such agreements, instruments or other documents in any appropriate filing office, (ii) authorizes each Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Loan Party, and (iii) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Loan Party prior to the date hereof.
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Section 10.2    Negative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:
a.Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired; file or suffer to exist under the Uniform Commercial Code or any Requirement of Law of any jurisdiction, a financing statement (or the equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or suffer to exist any security agreement authorizing any secured party thereunder to file such financing statement (or the equivalent thereof) other than, as to all of the above, Permitted Liens.
b.Indebtedness. Create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to, or permit any of its Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise become or remain liable with respect to, any Indebtedness other than Permitted Indebtedness.
c.Fundamental Changes; Dispositions.
i.Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any Person, including by means of a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, or permit any of its Subsidiaries to do (or agree to do) any of the foregoing; provided, however, that (x) any Wholly Owned Subsidiary of any Loan Party (other than Intermediate Holdings) may be merged into any Loan Party (other than Ultimate Holdings or the Mexican Loan Party), (y) any Wholly Owned Subsidiary that is not a Loan Party may be merged into another Wholly Owned Subsidiary of such Loan Party, so long as (A) no other provision of this Agreement would be violated thereby, (B) such Loan Party gives the Agents and Lenders at least 30 days’ prior written notice of such merger, consolidation or amalgamation accompanied by true, correct and complete copies of all material agreements, documents and instruments relating to such merger, consolidation or amalgamation, including, without limitation, the certificate or certificates of merger or amalgamation to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), (C) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such transaction, (D) the Lenders’ rights in any Collateral, including, without limitation, the existence, perfection and priority of any Lien thereon, are not adversely affected by such merger, consolidation or amalgamation, and (E) the surviving Subsidiary, if any, if not already a Loan Party, is joined as a Loan Party hereunder pursuant to a Joinder Agreement and is a party to a Guaranty and Collateral Agreement and the Equity Interests of such Subsidiary is the subject to the Guaranty and Collateral Agreement, in each case, which is in full force and effect on the date of and immediately after giving effect to such merger, consolidation or amalgamation, and (z) any winding-up, liquidation or dissolution contemplated as a party of Project Thunder may be done so long as (A) no other provision of this Agreement would be violated thereby, (B) such Loan Party gives the Agents and Lenders at least 30 days’ prior written notice thereof (and provide the Agents copies of any certificate of dissolution as filed promptly after such filing), (C) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such transaction, (D) the Lenders’ rights in any Collateral, including, without limitation, the existence, perfection and priority of any Lien thereon, are not adversely affected thereby; and
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ii.Make any Disposition, whether in one transaction or a series of related transactions, of all or any part of its business, property or assets, whether now owned or hereafter acquired (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the foregoing; provided, however, that any Loan Party and its Subsidiaries may make Permitted Dispositions.
d.Change in Nature of Business. Make or permit any of its Subsidiaries to make, any change in the nature of its business as conducted on the date hereof.
e.Loans, Advances, Investments, Etc. Make or commit or agree to make, or permit any of its Subsidiaries make or commit or agree to make, any Investment in any other Person except for Permitted Investments.
f.Sale and Leaseback Transactions. Enter into, or permit any of its Subsidiaries to enter into, any Sale and Leaseback Transaction.
g.[Reserved].
h.Restricted Payments. Make or permit any of its Subsidiaries to make any Restricted Payment other than Permitted Restricted Payments.
i.Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X of the Board.
j.Transactions with Affiliates. Enter into, renew, extend or be a party to, or permit any of its Subsidiaries to enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) transactions consummated in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s-length transaction with a Person that is not an Affiliate thereof, and that are fully disclosed to the Agents and Lenders prior to the consummation thereof, if they involve one or more payments by Ultimate Holdings or any of its Subsidiaries in excess of US$120,000 for any single transaction or series of related transactions, (ii) transactions with another Loan Party (other than the Mexican Loan Party); (iii) transactions permitted by Section 10.2(e) and Section 10.2(h), (iv) sales of Qualified Equity Interests of Ultimate Holdings to Affiliates of Ultimate Holdings not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith, (v) payments under the New Senior Credit Agreement, and (vi) reasonable and customary director and officer compensation (including bonuses and stock option programs), benefits and indemnification arrangements, in each case approved by the Board of Directors (or a committee thereof) of such Loan Party or such Subsidiary.
k.Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to make any other distribution on any shares of Equity Interests of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries,
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(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing; provided, however, that nothing in any of clauses (i) through (iv) of this Section 10.2(k) shall prohibit or restrict compliance with:
A.this Agreement, the other Loan Documents and the New Senior Credit Agreement;
B.any agreement described on Schedule 7.02(k) to the New Senior Credit Agreement (as in effect on May 27, 2022), or any extension, replacement or continuation of any such agreement; provided that, any such encumbrance or restriction contained in such extended, replaced or continued agreement is no less favorable to the Agents and the Lenders than the encumbrance or restriction under or pursuant to the agreement so extended, replaced or continued;
C.any applicable law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances);
D.in the case of clause (iv), (1) customary restrictions on the subletting, assignment or transfer of any specified property or asset set forth in a lease, license, asset sale agreement or similar contract for the conveyance of such property or asset and (2) instrument or other document evidencing a Permitted Lien (or the Indebtedness secured thereby) from restricting on customary terms the transfer of any property or assets subject thereto;
E.customary restrictions on dispositions of real property interests in reciprocal easement agreements;
F.customary restrictions in agreements for the sale of assets on the transfer or encumbrance of such assets during an interim period prior to the closing of the sale of such assets; or
G.customary restrictions in contracts that prohibit the assignment of such contract.
l.Limitations on Negative Pledges. Enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Loan Party or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) this Agreement and the other Loan Documents, (ii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by Section 10.2(b) of this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iii) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, and (iv) customary provisions in leases restricting the assignment or sublet thereof.
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m.Modifications of Indebtedness, Organizational Documents and Certain Other Agreements; Etc.
i.Amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) any of the provisions of any of its or its Subsidiaries’ Indebtedness or of any instrument or agreement (including, without limitation, any purchase agreement, indenture, loan agreement or security agreement) relating to any such Indebtedness if such amendment, modification or change would shorten the final maturity or average life to maturity of, or require any payment to be made (other than any payment to be made in Equity Interests consisting of common stock) earlier than the date originally scheduled on, such Indebtedness, would increase the interest rate applicable to such Indebtedness, would add any covenant or event of default, would change the subordination provision, if any, of such Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such Indebtedness in any material respect.
ii.except for the Obligations and the Unpaid Taxes,
(A)     make any voluntary or optional payment (including, without limitation, any payment of interest in cash that, at the option of the issuer, may be paid in cash or in kind), prepayment, redemption, defeasance, sinking fund payment or other acquisition for value of any of its or its Subsidiaries’ Indebtedness (other than Indebtedness under the Loan Documents) (including, without limitation, by way of depositing money or securities with the trustee therefor before the date required for the purpose of paying any portion of such Indebtedness when due),
(B)     refund, refinance, replace or exchange any other Indebtedness for any such Indebtedness (other than with respect to Permitted Refinancing Indebtedness),
(C)     make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Existing Warrants, any Subordinated Indebtedness, or any Existing Earn-Out Obligations, or
(D)     make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Indebtedness as a result of any asset sale, change of control, issuance and sale of debt or equity securities or similar event, or give any notice with respect to any of the foregoing;
provided, that notwithstanding anything to the contrary contained herein,
(1)    so long as, immediately prior to and after giving effect to such payment, prepayment, redemption, defeasance, sinking fund payment or repurchase (x) the First Lien Leverage Ratio of Ultimate Holdings and its Subsidiaries does not exceed 2.50 to 1.00 (in the case of clause (y) below, calculated on a pro forma basis after giving effect to the related Equity Issuance and the application of the proceeds thereof), (y) Ultimate Holdings and its Subsidiaries are in compliance of each of the financial covenants contained in Section 10.3, and (z) no Event of Default has occurred and is continuing, this clause (ii) shall not be deemed to restrict any payments, prepayments, repayments, repurchases or redemptions of:
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(x)     the Existing Warrants in an aggregate amount not to exceed $3,000,000, and
(y)     so long as such payment, prepayment, repayment, repurchase or redemption is made solely with the Net Cash Proceeds of any Equity Issuance, (i) the AN Extend Earn-Out or (ii) any Subordinated Indebtedness, in each case, in an aggregate amount not to exceed 25% of the Net Cash Proceeds of such Equity Issuance (after giving effect to any mandatory prepayment hereunder),
(2)    so long as, immediately prior to and after giving effect to such payment, prepayment, redemption, defeasance, sinking fund payment or repurchase (x) the First Lien Leverage Ratio of Ultimate Holdings and its Subsidiaries does not exceed 3.20 to 1.00, (y) Ultimate Holdings and its Subsidiaries are in compliance of each of the financial covenants contained in Section 10.3, and (z) no Event of Default has occurred and is continuing, this clause (ii) shall not be deemed to restrict any payments of the Deferred Monroe Fees,
(3)    the Existing Warrants, Subordinated Debt and Existing Earn-Out Obligations may be paid or prepaid solely with Equity Interests of Ultimate Holdings (and not in cash), and
(4)    payments of the Exitus Renewal Fee.

iii.amend, modify or otherwise change any of its Governing Documents (including, without limitation, by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it) with respect to any of its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to any of its Equity Interests, except any such amendments, modifications or changes or any such new agreements or arrangements pursuant to this clause (iii) that either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect; provided that no such amendment, modification or change or new agreement or arrangement shall provide for any plan of division pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any similar statute or provision under applicable law); or
iv.agree to any amendment, modification or other change to or waiver of any of its rights under any Material Contract if such amendment, modification, change or waiver would be materially adverse to any Loan Party or any of its Subsidiaries or the Agents and the Lenders.
Anything herein to the contrary notwithstanding, and in any event subject to the Reference Subordination Agreement, each Loan Party shall not make any voluntary or optional payment or prepayment of any of its or its Subsidiaries’ Subordinated Indebtedness, except if the aggregate cash available to the Loan Parties and their Subsidiaries to make such payment or prepayment is applied on a pro rata basis to prepay the Loans and such other Subordinated Indebtedness (determined on the basis of the aggregate outstanding principal amount of the Loans and such other Subordinated Indebtedness at the time of such payment).

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n.Investment Company Act of 1940. Engage in any business, enter into any transaction, use any securities or take any other action or permit any of its Subsidiaries to do any of the foregoing, that would cause it or any of its Subsidiaries to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.
o.ERISA. (i) Cause or fail to prevent, or permit any of its ERISA Affiliates to cause or fail to prevent, an ERISA Event that individually or in the aggregate has, or could reasonably be expected to have a Material Adverse Effect, or (ii) adopt any employee welfare benefit plan within the meaning of Section 3(1) of ERISA that provides benefits to employees after termination of employment other than as required by Section 601 of ERISA or other Requirements of Law.
p.Environmental. Permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials on, in, at, under or from any property owned, leased or operated by it or any of its Subsidiaries, except in compliance with Environmental Laws.
q.Accounting Methods. Modify or change, or permit any of its Subsidiaries to modify or change, its method of accounting or accounting principles from those utilized in the preparation of the financial statements (other than as may be required to conform to GAAP).
r.Sanctioned Persons; Anti-Corruption Laws; Anti-Money Laundering Laws.
i.Conduct, nor permit any of its Subsidiaries to conduct, any business or engage in any transaction or deal with or for the benefit of any Sanctioned Person, including the making or receiving of any contribution of funds, goods or services to, from or for the benefit of any Sanctioned Person; or
ii.Use, nor permit any of its Subsidiaries to use, directly or indirectly, any of the proceeds of any Loan, (A) to fund any activities or business of or with any Sanctioned Person or in any other manner that would result in a violation of any Sanctions by any Person (including by any Person participating in any Loan, whether as underwriter, advisor, investor or otherwise), or (B) for the purpose 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 Law.
s.Accounts Payable. On and after the date that is 45 days after May 27, 2022, have, or permit any of its Subsidiaries to have, any accounts payable that are more than 60 days past due in an aggregate amount greater than or equal to $1,560,000.
Section 10.3     Financial Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:
a.Revenue. Permit Revenue of Ultimate Holdings and its Subsidiaries for any period of four consecutive fiscal quarters of Ultimate Holdings and its Subsidiaries for which the last fiscal month ends on a date set forth below to be less than the amount set forth opposite such date:
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Fiscal Month EndRevenue
June 30, 2022U.S.$130,000,000
September 30, 2022U.S.$130,000,000
December 31, 2022U.S.$130,000,000
March 31, 2023 and each fiscal month ending thereafterU.S.$130,000,000

b.First Lien Leverage Ratio. Permit the First Lien Leverage Ratio for any period of 4 consecutive fiscal quarters of Ultimate Holdings and its Subsidiaries for ending on the date set forth below to be greater than the ratio set forth opposite such date:
Fiscal Quarter EndFirst Lien Leverage Ratio
December 31, 20224.80:1.00
March 31, 20234.50:1.00
June 30, 2023 and each fiscal quarter ending thereafter4.20:1.00

c.Liquidity. Permit Liquidity to be less than US$3,000,000 at any time on and after the date that is ten (10) Business Days after May 27, 2022.
ARTICLE XI

[RESERVED]

ARTICLE XII

EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The effectiveness of this Agreement and the obligation of each Lender to make its Loans is subject to the satisfaction of the following conditions precedent by no later than 5:00 p.m. (Mexico City Time) on November 29, 2021:
Section 12.1    Credit Extension. The effectiveness of this Agreement, and the obligation of the Lenders to make the Loans, are, in addition to the conditions precedent specified in Section 12.2 subject to satisfaction of the following conditions precedent, it being agreed that the request by Borrower Representative for the making of the Loans on the Closing Date will be
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deemed to constitute a representation and warranty by Borrowers that the conditions precedent set forth in this Section 12.1 will be satisfied at the time of the making of those Loans (unless waived in writing by the Required Lenders):
12.1.1        Agreement, Notes and other Loan Documents. Administrative Agent has received the following, each duly executed and effective as of the Closing Date (or any earlier date satisfactory to the Required Lenders), in form and substance satisfactory to the Required Lenders in their discretion (a) this Agreement, and (b) the Notes made payable to each applicable Lender.
12.1.2        Authorization Documents. For each Loan Party, Administrative Agent has received the following, each in form and substance satisfactory to the Required Lenders in their discretion (a) that Person’s charter (or similar formation document), certified by the appropriate Governmental Authority, (b) good standing certificates in that Person’s state of incorporation (or formation) and in each other state in which that Person is qualified to do business if reasonably requested by the Required Lenders, (c) that Person’s bylaws (or similar governing document), (d) except for each Mexican Loan Party, resolutions of its board of directors (or similar governing body) approving and authorizing that Person’s execution, delivery, and performance of the Loan Documents to which it is party and the transactions contemplated thereby, and (e) signature and incumbency certificates of that Person’s officers and/or managers executing any of the Loan Documents (which certificates Administrative Agent and each Lender may conclusively rely on until formally advised by a like certificate of any changes in any such certificate), all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without modification.
12.1.3        Consents, etc. Administrative Agent has received certified copies of all documents evidencing any necessary company action, consents and governmental approvals (if any) required for the execution, delivery, and performance by the Loan Parties of the documents referred to in this Section 12, each in form and substance satisfactory to the Required Lenders.
12.1.4        Letter of Direction. Administrative Agent has received a Funds Flow Memorandum containing funds flow information with respect to the proceeds of the Loans on the Closing Date, duly executed and dated on or prior the Closing Date.
12.1.5        Opinions of Counsel. Administrative Agent has received opinions of New York and Mexican counsel for each Loan Party, each duly executed and dated as of the Closing Date, in form and substance satisfactory to Administrative Agent and the Lenders.
12.1.6        Payment of Fees. Administrative Agent has received evidence of payment by Borrowers of all accrued and unpaid fees, costs, and expenses to the extent then due and payable on the Closing Date (including, without limitation, fees under the Agents Fee Letter), together with all Attorney Costs of Administrative Agent and the Lenders to the extent invoiced prior to the Closing Date, plus all additional amounts of Attorney Costs that constitute Administrative Agent’s and Lender’s reasonable estimate of Attorney Costs incurred or to be incurred by Administrative Agent and the Lenders through the closing proceedings (but no such estimate will preclude a final settling of accounts between Borrowers and Administrative Agent and between Borrowers and the Lenders in respect of those Attorney Costs).
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12.1.7        Solvency Certificate. Administrative Agent has received a solvency certificate, in form and substance satisfactory to the Required Lenders in their discretion, executed by a Senior Officer of the Borrower Representative.
12.1.8        Search Results; Lien Terminations. Administrative Agent has received certified copies of Uniform Commercial Code search reports dated a date reasonably near to the Closing Date, listing all effective financing statements which name any Loan Party organized under the laws of any state of the United States (under their present names and any previous names) as debtors, together with copies of all such financing statements.
12.1.9        Closing Certificate. Administrative Agent has received a certificate, in form and substance satisfactory to the Required Lenders in their discretion executed by a Senior Officer of Borrower Representative on behalf of Borrowers certifying the matters set forth in Sections 12.1 and 12.2 as of the Closing Date.
12.1.10    No Material Adverse Change. There has not occurred since December 31, 2020, any developments or events that, individually or in the aggregate with any other circumstances, has had or could reasonably be expected to have a Material Adverse Effect.
12.1.11    Process Agent. The Administrative Agent shall have received evidence, in form and substance satisfactory to the Lenders, that: (i) each Mexican Loan Party has irrevocably appointed the Process Agent for a period ending one year after the Maturity Date, (ii) the Process Agent has accepted such appointment, and (iii) all fees in connection therewith have been paid for the entire term of the appointment.
12.1.12    Other. The Lenders have received all other documents identified on that certain closing checklist prepared by counsel to the Lenders for the transactions contemplated hereby and all other documents reasonably requested by the Lenders.
The parties hereto hereby agree and acknowledge that the Closing Date has not occurred as of the date of this Agreement. Notwithstanding anything to the contrary set forth herein, Section 13.1(q), Section 14, and Sections 15.5, 15.8, 15.17, 15.18 and 15.19 shall be deemed effective as of the date of this Agreement, upon receipt by the Administrative Agent of duly executed counterparts by the parties hereto.
Section 12.2    Conditions Precedent to all Loans. The obligation of each Lender to make each of the Loans, is subject to the following further conditions precedent that:
12.2.1        Compliance with Warranties/No Default. Both before and after giving effect to any borrowing of the Loans the following shall be true and correct:
a.the representations and warranties of each Loan Party set forth in this Agreement and the other Loan Documents are true and correct in all material respects (unless any such representation or warranty is by its terms qualified by concepts of materiality, in which that representation or warranty is true and correct in all respects) with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case that representation or warranty is true and correct in all material respects or in all respects, as applicable, as of that earlier date); and
b.no Default or Event of Default shall have then occurred and be continuing or would result from such borrowing.
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12.2.2        Confirmatory Certificate. If requested by any Agent or any Lender, Administrative Agent has received (in sufficient counterparts to provide one to Administrative Agent and each Lender) a certificate dated the Closing Date and signed by a duly authorized representative of Borrower Representative as to the matters set out in Section 12.2.1 (it being understood that each request by Borrower Representative for the making of a Loan will be deemed to constitute a representation and warranty by Borrowers that the conditions precedent set forth in Section 12.2.1 will be satisfied at the time of the making of that Loan), together with such other documents as any Agent or any Lender may reasonably request in support thereof.
12.2.3        Ratification and Authorization Documents. Process Agent Power of Attorney. For each Mexican Loan Party, Administrative Agent has received the following, each in form and substance satisfactory to the Required Lenders in their discretion (a)  resolutions adopted by its partners or shareholders’ and/or of its board of directors (or similar governing body), approving, authorizing and further ratifying that Person’s execution, delivery, and performance of the Loan Documents to which it is party and the transactions contemplated thereby, and (b) the public deed evidencing that such Mexican Loan Party has granted a Mexican law irrevocable special power of attorney for lawsuits and collections (poder especial irrevocable para pleitos y cobranzas) before a Mexican notary public in favor of the Process Agent.
ARTICLE XIII

EVENTS OF DEFAULT AND THEIR EFFECT
Section 13.1     Events of Default. Each of the following events shall constitute an event of default (each, an “Event of Default”):
a.the Borrower shall fail to pay, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), (i) any interest on any Loan, or any fee, indemnity or other amount payable under this Agreement (other than any portion thereof constituting principal of the Loans) or any other Loan Document, and such failure continues for a period of five (5) Business Days or (ii) all or any portion of the principal of the Loans.
b.any representation or warranty made or deemed made by or on behalf of any Loan Party or by any officer of the foregoing under or in connection with any Loan Document or under or in connection with any certificate or other writing delivered to any Secured Party pursuant to any Loan Document shall have been incorrect in any material respect (or in any respect if such representation or warranty is qualified or modified as to materiality or “Material Adverse Effect” in the text thereof) when made or deemed made;
c.any Loan Party shall fail to perform or comply with any covenant or agreement contained in (i) Section 10.1(a), 10.1(b), Section 10.1(c), Section 10.1(d), Section 10.1(f), Section 10.1(h), Section 10.1(k), Section 10.1(m), Section 10.1(o), Section 10.2, Section 10.3, or (ii) any Loan Party shall fail to perform or comply with any covenant or agreement contained in any Collateral Document to which it is a party and such failure, in the case of this clause (c)(ii) shall remain unremedied for two (2) Business Days;
d.any Loan Party shall fail to perform or comply with any other term, covenant or agreement contained in any Loan Document to be performed or observed by it and, except as set forth in subsections (a), (b) and (c) of this Section 13.1, such failure, if capable of
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being remedied, shall remain unremedied for 30 days after the earlier of the date a senior officer of any Loan Party has knowledge of such failure and the date written notice of such default shall have been given by any Agent to such Loan Party;
e.(i) Ultimate Holdings or any of its Subsidiaries shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of Indebtedness (excluding Indebtedness evidenced by this Agreement), which Indebtedness is in an aggregate amount at least equal to US$600,000, and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or any other default under any agreement or instrument relating to any such Indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof;
f.Ultimate Holdings or any of its Subsidiaries (i) shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, (ii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iii) shall make a general assignment for the benefit of creditors, or (iv) shall take any action to authorize or effect any of the actions set forth above in this subsection (f);
g.any proceeding shall be instituted against Ultimate Holdings or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 30 days (or, in the case of a Foreign Subsidiary, 60 days) or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such Person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur;
h.any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or the validity or enforceability thereof shall be contested by any Loan Party that is party thereto, or a proceeding shall be commenced by any Loan Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any liability or obligation purported to be created under any Loan Document;
i.any Collateral Document or any other security document, after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected and,
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except to the extent permitted by the terms hereof or thereof, first priority Lien in favor of the Collateral Agent for the benefit of the Agents and the Lenders on any Collateral purported to be covered thereby;
j.one or more judgments, orders or awards (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order or award) for the payment of money exceeding $600,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has been notified and has not denied coverage) shall be rendered against Ultimate Holdings or any of its Subsidiaries and remain unsatisfied and (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment, order, award or settlement or (ii) there shall be a period of 10 consecutive days (or, in the case of a Foreign Subsidiary, a period of 30 consecutive days) after entry thereof during which (A) a stay of enforcement thereof is not be in effect or (B) the same is not vacated, discharged, stayed or bonded pending appeal;
k.Ultimate Holdings or any of its Subsidiaries is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than 15 days;
l.any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than 15 consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of any Loan Party, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect;
m.the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by Ultimate Holdings or any of its Subsidiaries, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
n.the indictment, or the threatened indictment of Ultimate Holdings or any of its Subsidiaries or any senior officer thereof under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against Ultimate Holdings or any of its Subsidiaries or any senior officer thereof, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of Ultimate Holdings or any such Subsidiary or any property that such senior officer holds in his or her capacity as an officer;
o.(i) there shall occur one or more ERISA Events that individually or in the aggregate results in, or could reasonably be expected to result in liability of any Loan Party or any of its ERISA Affiliates in excess of $600,000, or (ii) there exists any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or Section 4068 of ERISA upon the property or rights to property of any Loan Party or any of its ERISA Affiliates;
p.(i) there shall occur and be continuing any “Event of Default” (or any comparable term) under, and as defined in the documents evidencing or governing the New Senior Credit Agreement or any Subordinated Indebtedness, (ii) any holder of Subordinated Indebtedness shall fail to perform or comply with any Subordination Agreement applicable
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thereto, or (iii) the Subordination Agreement with respect to any Subordinated Indebtedness shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable Subordinated Indebtedness; or
q.a Change of Control shall have occurred;
then, and in any such event, the Collateral Agent shall at the request of the Required Lenders, by notice to the Borrower, (i) terminate or reduce all Commitments, whereupon all Commitments shall immediately be so terminated or reduced, (ii) declare all or any portion of the Loans then outstanding to be accelerated and due and payable, whereupon all or such portion of the aggregate principal of all Loans, all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and the other Loan Documents shall become due and payable immediately, together with the payment of the interest, if any, with respect to the Commitments so terminated and the Loans so repaid, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (iii) exercise any and all of its other rights and remedies under applicable law, hereunder and under the other Loan Documents; provided, however, that upon the occurrence of any Event of Default described in subsection (f) or (g) of this Section 13.1 with respect to any Loan Party, without any notice to any Loan Party or any other Person or any act by any Agent or any Lender, all Commitments shall automatically terminate and all Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other amounts due under this Agreement and the other Loan Documents, including, without limitation, interest, if any, shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by each Loan Party.
Section 13.2     Cure Right. In the event that Ultimate Holdings fails to comply with the requirements of the financial covenant set forth in Section 10.3(a) or 10.3(b), during the period from the date that is 60 days prior to and until the expiration of the 10th Business Days after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, Ultimate Holdings shall have the right to (a) issue Permitted Cure Equity for cash or otherwise receive cash contributions to the capital of Ultimate Holdings or (b) incur Additional Second Lien Indebtedness, and to have all of such cash contributions and Additional Second Lien Indebtedness deemed, for purposes of said Sections, to be both Revenue and EBITDA for such fiscal quarter (and for the avoidance of doubt, only for such fiscal quarter), including for purposes of calculating compliance with such Sections as of the last day of any subsequent fiscal quarter (the “Cure Right”); provided that (i) such proceeds are actually received by Ultimate Holdings during the period from the date that is 60 days prior to and until the expiration of the 10th Business Days after the date on which financial statements are required to be delivered with respect to such fiscal quarter hereunder, (ii) the Cure Right shall not be exercised more than five (5) times during the term of the Loans, (iii) the Cure Right shall not be exercised in consecutive fiscal quarters, (iv) such proceeds shall be applied to prepay Indebtedness of the Loan Parties and (v) each such Permitted Cure Equity or Additional Second Lien Indebtedness shall be designated at the time of issuance or incurrence for application under the “Cure Right” pursuant to this Section 13.2. If, after giving effect to the treatment of such cash contributions or Additional Second Lien Indebtedness as Revenue and EBITDA, Holdings is in compliance with the financial covenant set forth in Sections 10.3(a) and 10.3(b), Holdings shall be deemed to have satisfied the requirements of each such Section as of the relevant date of determination with the same effect as though there had been no failure to comply on such date, and the applicable breach or default of such Section 10.3(a) and/or Section 10.3(b) that had occurred shall be deemed cured for purposes of this Agreement. The parties hereby
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acknowledge that this Section may not be relied on for purposes of calculating any financial ratios other than as applicable to Sections 10.3(a) and 10.3(b).
ARTICLE XIV

AGENCY
Section 14.1    Appointment and Authorization. Each Lender hereby irrevocably (subject to Section 14.10) appoints, designates, and authorizes each Agent to take any action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise any powers and perform any duties as are expressly delegated to it, as applicable, by the terms of this Agreement or any other Loan Document, together with all powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, none of the Agents will have any duty or responsibility except those expressly set forth in this Agreement, nor will any Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations, or liabilities are to be read into this Agreement or any other Loan Document or otherwise exist against such Agent, as applicable. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Agreement and in other Loan Documents with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, that term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
Section 14.2     [Reserved].
Section 14.3    Delegation of Duties. Each Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees, or attorneys-in-fact and is entitled to advice of counsel and other consultants or experts concerning all matters pertaining to those duties. No Agent will be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.
Section 14.4    Exculpation of Agents. None of the Agents and their respective directors, officers, employees, and agents (a) will be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except to the extent resulting from its own gross negligence or willful misconduct in connection with its duties expressly set forth in this Agreement as determined by a final, non-appealable judgment by a court of competent jurisdiction), or (b) will be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any Affiliate of any Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement, or other document referred to or provided for in, or received by such Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability, or sufficiency of this Agreement or any other Loan Document (or the creation, perfection, or priority of any Lien or security interest therein), or for any failure of any Borrower or any other party to any Loan Document to perform its Obligations under this Agreement or under any other Loan Documents. None of the Agents is or will be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document or to inspect the properties, books, or records of any of the Loan Parties and their Subsidiaries and Affiliates.
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The duties of each of the Administrative Agent and the Collateral Agent under the Loan Documents are solely mechanical and administrative in nature. The Administrative Agent and the Collateral Agent shall be entitled to request written instructions, or clarification of any instruction, from the Required Lenders (or, if the relevant Loan Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Administrative Agent and the Collateral Agent may refrain from acting unless and until it receives those written instructions or that clarification. In the absence of written instructions, the Administrative Agent or the Collateral Agent, as applicable, may act (or refrain from acting) as it considers to be in the best interests of the Lenders.
The Agents are not obliged to expend or risk their own funds or otherwise
incur any financial liability in the performance of their respective duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if they have grounds for believing the repayment of such funds or indemnity satisfactory to such Agent against, or security for, such risk or liability is not reasonably assured to such Agent. The Agents shall not be responsible in any manner for the validity, enforceability or sufficiency of this Agreement or the Loan Documents or any Collateral delivered, or for the value or collectability of any obligations or other instrument, if any, so delivered, or for any representations made or obligations assumed by any party other than the Agent. The Agents shall not be bound to examine or inquire into or be liable for any defect or failure in the right or title of the grantors to all or any of the assets whether such defect or failure was known to the Agents or might have been discovered upon examination or inquiry and whether capable of remedy or not.

The Agents shall not be responsible for any unsuitability, inadequacy, expiration or unfitness of any security interest created hereunder or pursuant to any other security documents pertaining to this matter nor shall it be obligated to make any investigation into, and shall be entitled to assume, the adequacy and fitness of any security interest created hereunder or pursuant to any other security document pertaining to this matter.

The Agents shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith or for any mistake in act or law, or for anything which it may do or refrain from doing in connection herewith, in each case except for its own gross negligence or willful misconduct.

In no event shall any Agent be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if such loss or damage was foreseeable or it has been advised of the likelihood of such loss or damage and regardless of the form of action.

The Agents shall be entitled to seek written directions from the Required Lenders prior to taking any action under this Agreement, any Collateral instrument or any of the Loan Documents.

Except with respect to its own gross negligence or willful misconduct, no Agent shall be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any security document or any other instrument or document furnished pursuant thereto.

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No Agent shall have responsibility for or liability with respect to monitoring compliance of any other party to the Loan Documents or any other document related hereto or thereto. The Agents have no duty to monitor the value or rating of any Collateral on an ongoing basis.

Whenever in the administration of the Loan Documents any Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, such Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, may conclusively rely upon instructions from the Required Lenders.

Any Agent may request that the Required Lenders or other parties deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to the Loan Documents.

Money held by any Agent in trust hereunder need not be segregated from other funds except to the extent required by law. No Agent shall be under any liability for interest on any money received by it hereunder except as otherwise agreed in writing.

Beyond the exercise of reasonable care in the custody thereof, no Agent shall have any duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and no Agent shall be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. Each Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords similar collateral and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee.

No Agent shall be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of such Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. No Agent shall have any duty to ascertain or inquire as to or monitor the performance or observance of any of the terms of the Loan Documents by any other Person.

In the event that, following a foreclosure in respect of any Mortgaged property, the Agent acquires title to any portion of such property or takes any managerial action of any kind in regard thereto in order to carry out any fiduciary or trust obligation for the benefit of another, which in such Agent’s sole discretion may cause such Agent to be considered an “owner or operator” under the provisions of CERCLA or otherwise cause such Agent to incur liability under CERCLA or any other Federal, state or local law, such Agent reserves the right, instead of taking such action, to either resign as Agent or arrange for the transfer of the title or control of the asset to a court-appointed receiver.

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Each Agent reserves the right to conduct an environmental audit prior to foreclosing on any real estate Collateral or mortgage Collateral. The Agents reserve the right to forebear from foreclosing in their own name if to do so may expose them to undue risk.

In no event shall any Agent be responsible or liable for any failure (e) or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, pandemics, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services.

For the avoidance of doubt and notwithstanding anything contrary in any Loan Document, in the event of inconsistency between the terms of this Agreement and any other Loan Document, the terms in this Agreement shall prevail.

Notwithstanding anything in the Loan Documents to the contrary, the Collateral Agent shall have no responsibility for the preparation, filing or recording of any instrument, document or financing statement or for the perfection or maintenance of any security interest created hereunder.

Section 14.5    Reliance by Agents. Each Agent may rely, and will be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, electronic mail message, affidavit, letter, telegram, facsimile, telex or telephone message, statement, or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers), independent accountants, and other experts selected by such Agent. Each Agent will be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless such Agent first receives all advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, confirmation from the Lenders of their obligation to indemnify such Agent against any and all liability and expense which might be incurred by such Agent by reason of taking or continuing to take any such action. Each Agent will in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and each such request and any action taken or failure to act pursuant thereto will be binding upon each Lender. For purposes of determining compliance with the conditions specified in Section 12, each Lender that has signed this Agreement will 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 any Agent has received written notice from that Lender prior to the proposed Closing Date specifying its objection thereto.
Section 14.6    Notice of Default. None of the Agents will be deemed to have knowledge or notice of the occurrence of any Event of Default or Default except with respect to defaults in the payment of principal, interest and fees required to be paid to such Agent for the account of the Lenders, unless such Agent has received written notice from a Lender or a Borrower referring to this Agreement, describing that Event of Default or Default and stating that that notice is a “notice of default.” Each Agent shall promptly notify the Lenders of its receipt of any such notice. Each Agent shall take all such actions with respect to each such Event of Default or Default as requested by the Required Lenders in accordance with Section 13, but unless and until such Agent has received any such request, such Agent may (but will not be required to) take any
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action, or refrain from taking any action, with respect to any Event of Default or Default as such Agent deems advisable or in the best interest of the Lenders.
Section 14.7    Credit Decision. Each Lender acknowledges that none of the Agents has made any representation or warranty to it, and that no act by any Agent hereafter taken, including any consent and acceptance of any assignment or review of the affairs of the Loan Parties, will be deemed to constitute any representation or warranty by such Agent to any Lender as to any matter, including whether such Agent has disclosed material information in its possession. Each Lender represents to each Agent that it has, independently and without reliance upon such Agent and based on documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition, and creditworthiness of the Loan Parties, and made its own decision to enter into this Agreement and to extend credit to Borrowers under this Agreement. Each Lender also represents to each Agent that it will, independently and without reliance upon such Agent and based on documents and information as it deems appropriate at the time, continue to make its own credit analysis, appraisals, and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make all investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition, and creditworthiness of Borrowers. Except for notices, reports and other documents expressly required in this Agreement to be furnished to the Lenders by any Agent, such Agent will not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial or other condition or creditworthiness of any Borrower which may come into the possession of such Agent.
Section 14.8    Indemnification. Whether or not the transactions contemplated by this Agreement are consummated, each Lender shall indemnify upon demand each Agent and its directors, officers, employees and agents (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so), according to its applicable Pro Rata Share, from and against any and all Indemnified Liabilities, except that no Lender will be liable for any payment to any such Person of any portion of the Indemnified Liabilities to the extent determined by a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the applicable Person’s own gross negligence or willful misconduct. No action taken in accordance with the directions of the Required Lenders will be deemed to constitute gross negligence or willful misconduct for purposes of this Section 14.8. Without limitation of the foregoing, each Lender shall reimburse each Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs and Taxes) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to in this Agreement, to the extent that such Agent is not reimbursed for any such expenses by or on behalf of Borrowers. The undertaking in this Section 14.8 will survive repayment of the Loans, cancellation of the Notes, any foreclosure under, or modification, release or discharge of, any or all of the Collateral Documents, termination of this Agreement and the resignation or replacement of any Agent.
Section 14.9    Agents in their Individual Capacity. Each of the Persons serving as Collateral Agent and Administrative Agent and their respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Loan Parties and Affiliates as though such Person were not an Agent under this Agreement and without notice to or consent of any Lender. Each Lender acknowledges that,
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pursuant to those activities, the Person serving as an Agent or its Affiliates might receive information regarding Borrowers or their Affiliates (including information that is subject to confidentiality obligations in favor of any Borrower or any such Affiliate) and acknowledges that none of the Agents will be under any obligation to provide any such information to them. With respect to their Loans (if any), each of the Persons serving as Collateral Agent and Administrative Agent and their respective Affiliates have the same rights and powers under this Agreement as any other Lender and may exercise the same as though such Person were not an Agent, and the terms “Lender” and “Lenders” include such Person and its Affiliates, to the extent applicable, in their individual capacities.
Section 14.10    Successor Agents. Any may resign as such upon 30 days’ notice to the Lenders. If any Agent resigns under this Agreement, the Required Lenders shall, with (so long as no Event of Default exists) the consent of Borrower Representative (which may not be unreasonably withheld or delayed), appoint from among the Lenders a successor Agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of an Agent, such Agent may appoint, after consulting with the Lenders and Borrower Representative, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent under this Agreement, that successor agent will succeed to all the rights, powers, and duties of the retiring Agent and the term “Administrative Agent” or “Collateral Agent,” as applicable, will mean that successor agent, and the retiring Agent’s appointment, powers and duties as Agent will be terminated. After any retiring Agent’s resignation under this Agreement as an Agent, the provisions of this Section 14.10 and Sections 15.5 and 15.17 will inure to its benefit as to any actions taken or omitted to be taken by it while it was an Agent under this Agreement. If no successor agent has accepted appointment as successor agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation will nevertheless thereupon become effective and the Required Lenders shall perform all of the duties of the retiring Agent under this Agreement until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
Section 14.11    Collateral Matters. Each Lender authorizes and directs Collateral Agent to enter into the Collateral Documents (other than the Mexican Collateral Agreements or the Mexican Collateral Amendment and Reaffirmation Agreements) for the benefit of the Agents and the Lenders. Each Lender hereby agrees that, except as otherwise set forth in this Agreement, any action taken by any Agent or Required Lenders in accordance with the provisions of this Agreement or the other Loan Documents, and the exercise by such Agent or Required Lenders of the powers set forth in this Agreement or therein, together with all other powers as are reasonably incidental thereto, will be authorized by, and binding upon, all Lenders. Collateral Agent is hereby authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender to take any action with respect to any Collateral (other than Collateral located in Mexico) or Loan Documents (other than the Mexican Collateral Agreements or the Mexican Collateral Amendment and Reaffirmation Agreements) which may be necessary to perfect and maintain perfected the Liens upon the Collateral granted pursuant to this Agreement and the such other Loan Documents. The Lenders irrevocably authorize Collateral Agent, at its option and in its discretion, to do any and all of the following: (a) to release any Lien granted to or held by Collateral Agent under any Collateral Document (other than the Mexican Collateral Agreements) (i) upon Payment in Full; (ii) upon property sold or to be sold or disposed of as part of or in connection with any disposition permitted under this Agreement (including the release of any Guarantor in connection with any such disposition); or (iii) subject to Section 15.1 if approved in writing by the Required Lenders; or (b) to subordinate its interest in any Collateral (other than Collateral located in Mexico) to any holder of a Lien on that Collateral which secures purchase money debt (it being understood that Collateral Agent
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may conclusively rely on a certificate from Borrower Representative in determining whether the Debt secured by any such Lien is permitted hereunder). Upon request by Collateral Agent at any time, the Lenders will confirm in writing Administrative Agent’s authority to release, or subordinate its interest in, particular types or items of Collateral pursuant to this Section 14.11.
Section 14.12    Restriction on Actions by Lenders. Each Lender shall not, without the express written consent of each Agent, and shall, upon the written request of any Agent (to the extent it is lawfully entitled to do so), set-off against the Obligations, any amounts owing by that Lender to a Loan Party or any deposit accounts of any Loan Party now or hereafter maintained with that Lender. Each Lender shall not, unless specifically requested to do so in writing by each Agent, take or cause to be taken any action, including the commencement of any legal or equitable proceedings, to foreclose any loan or otherwise enforce any security interest in any of the Collateral or to enforce all or any part of this Agreement or the other Loan Documents. All enforcement actions under this Agreement and the other Loan Documents (other than the Mexican Collateral Agreements or the Mexican Collateral Amendment and Reaffirmation Agreements) against the Loan Parties or any third party with respect to the Obligations or the Collateral may be taken by only Administrative Agent or Collateral Agent (at the direction of the Required Lenders or as otherwise permitted in this Agreement) or by their respective agents at the direction of such Agent.
Section 14.13    Administrative Agent May File Proofs of Claim.
14.13.1    In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, or other judicial proceeding relative to any Loan Party (including any Insolvency Proceeding), Administrative Agent (irrespective of whether the principal of any Loan is then due and payable as expressed in this Agreement or by declaration or otherwise and irrespective of whether Administrative Agent has made any demand on Borrowers) may, by intervention in any such proceeding or otherwise, do any and all of the following:
a.to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and Administrative Agent and its respective agents and counsel and all other amounts due the Lenders and Administrative Agent under Article V, Sections  15.5 and 15.17) allowed in such judicial proceedings; and
b.to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
14.13.2    Any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other similar official in any such proceeding is hereby authorized by each Lender to make all payments to Administrative Agent and, in the event that Administrative Agent consents to the making of such payments directly to the Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Article V, Sections  15.5, and 15.17.
14.13.13    Nothing contained in this Agreement will be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any
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plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
Section 14.14    Other Agents; Arrangers and Managers. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger,” if any, has any right, power, obligation, liability, responsibility, or duty under this Agreement other than, in the case of any Lender, those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified has or is deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action under this Agreement.
Section 14.15    [Reserved]
.
Section 14.16    Mexican Powers of Attorney. The Administrative Agent agrees that it will not exercise any rights under any power of attorney granted under or in connection with the Mexican Loan Documents unless an Event of Default has occurred and is continuing.
ARTICLE XV

GENERAL
Section 15.1    Waiver; Amendments.
o.No amendment, modification, or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents will be effective unless it is in writing and acknowledged by Lenders having an aggregate Pro Rata Shares of not less than the aggregate Pro Rata Shares expressly designated in this Agreement with respect thereto or, in the absence of any such designation as to any provision of this Agreement, by the Required Lenders. Any amendment, modification, waiver, or consent will be effective only in the specific instance and for the specific purpose for which given.
a.The Agents Fee Letter may be amended, waived, consented to, or modified by the parties thereto.
b.No amendment, modification, waiver, or consent may extend or increase the Commitment of any Lender without the written consent of that Lender.
c.No amendment, modification, waiver, or consent may extend the date scheduled for payment of any principal (excluding mandatory prepayments) of or interest on the Loans or any fees payable under this Agreement without the written consent of each Lender directly affected thereby.
d.No amendment, modification, waiver, or consent may reduce the principal amount of any Loan, the rate of interest thereon, or any fees payable under this Agreement without the consent of each Lender directly affected thereby.
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o.No amendment, modification, waiver, or consent may do any of the following without the written consent of each Lender (i) release any Borrower or any Guarantor from its obligations, other than as part of or in connection with any disposition permitted under this Agreement, (ii) release all or any substantial part of the Collateral granted under the Collateral Documents (except as permitted by Section 14.11), (iii) change the definitions of Pro Rata Share or Required Lenders, any provision of this Section 15.1, or reduce the aggregate Pro Rata Share required to effect an amendment, modification, waiver, or consent.
a.No provision of Sections 6.2.2, 6.3, or 7.2.2(b) with respect to the timing or application of mandatory prepayments of the Loans may be amended, modified, or waived without the consent of Lenders having a majority of the aggregate Pro Rata Shares of the Loans affected thereby.
b.No provision of Section 14 or other provision of this Agreement affecting any Agent in its capacity as such may be amended, modified, or waived without the consent of such Agent.
c.[Reserved]
d.[Reserved]
e.If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all Lenders, the consent of the Required Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained is referred to as a “Non-Consenting Lender”), then, so long as Administrative Agent is not a Non-Consenting Lender, Administrative Agent and/or one or more Persons reasonably acceptable to Administrative Agent may (but will not be required to) purchase from that Non-Consenting Lender, and that Non-Consenting Lenders shall, upon Administrative Agent’s request, sell and assign to Administrative Agent and/or any such Person, all of the Loans and Commitments of that Non-Consenting Lender for an amount equal to the principal balance of all such Loans and Commitments held by that Non-Consenting Lender and all accrued interest, fees, expenses, and other amounts then due with respect thereto through the date of sale, which purchase and sale will be consummated pursuant to an executed Assignment Agreement.
Section 15.2    Confirmations. Each Borrower and each holder of a Note agree from time to time, upon written request received by it from the other, to confirm to the other in writing (with a copy of each such confirmation to Administrative Agent) the aggregate unpaid principal amount of the Loans then outstanding under that Note.
Section 15.3    Notices.
15.3.1        Generally. Except as otherwise provided in Section 2.2, all notices under this Agreement must be in writing (including facsimile transmission) and must be sent to the applicable party at its address shown on Annex B or at any other address as the receiving party designates, by written notice received by the other parties, as its address for that purpose. Notices sent by facsimile transmission will be deemed to have been given when sent; notices sent by mail will be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier service will be deemed to have been given when received. For purposes of Section 2.2, Administrative Agent will be entitled to rely on written instructions from any person that
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Administrative Agent in good faith believes is an authorized officer or employee of Borrower Representative, and Borrowers shall hold Administrative Agent and each other Lender harmless from any loss, cost, or expense resulting from any such reliance.
15.3.2    Electronic Communications.
a.Notices and other communications to any Lender under this Agreement may be delivered or furnished by electronic communication (including email and Internet or intranet websites) pursuant to procedures approved by Administrative Agent, but the foregoing does not apply to notices to any Lender pursuant to Section 2.2 if that Lender has notified Administrative Agent and Borrower Representative that it is incapable of receiving notices under Section 2.2 by electronic communication. Administrative Agent or any Loan Party may, in its respective sole discretion, agree to accept notices and other communications to it under this Agreement by electronic communications pursuant to procedures approved by it, and approval of any such procedures may be limited to particular notices or communications.
b.Unless otherwise agreed by the sender and the intended recipient, (i) notices and other communications sent to an email address will be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email, or other written acknowledgement), (ii) notices or communications posted to an Internet or intranet website will be deemed received upon the deemed receipt by the intended recipient, at its email address as described in the foregoing clause (i), of notification that the notice or communication is available and identifying the website address therefor; and (iii) for both clauses (i) and (ii) of this Section 15.3.2(b), any notice, email or other communication that is not sent during the normal business hours of the intended recipient will be deemed to have been sent at the opening of business on the next Business Day for the intended recipient.
Section 15.4    Computations. Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, that determination or calculation will, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied, but if Borrower Representative notifies Administrative Agent that Borrowers wish to amend any covenant in Article X (or any related definition) to eliminate or to take into account the effect of any change in GAAP on the operation of that covenant (or if Administrative Agent notifies Borrower Representative that the Required Lenders wish to amend Article X (or any related definition) for that purpose), then Borrowers’ compliance with that covenant will be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either the applicable notice under this Section 15.4 is withdrawn or the applicable covenant (or related definition) is amended in a manner satisfactory to Borrowers and the Required Lenders.
Section 15.5    Costs, Expenses and Taxes. Each Loan Party, jointly and severally, shall pay on demand all reasonable out-of-pocket costs and expenses of each Agent (including Attorney Costs and Taxes) in connection with the preparation, execution, primary syndication, delivery and administration (including perfection and protection of any Collateral and the costs of IntraLinks (or other similar service), if applicable) of this Agreement, the other Loan Documents, and all other documents provided for in this Agreement or delivered or to be delivered under or in connection with this Agreement (including any amendment, supplement, or waiver to any Loan Document), whether or not the transactions contemplated hereby or thereby are consummated, including, without limitation, all documented out-of-pocket costs and
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expenses incurred pursuant to Section 10.2, and all reasonable out-of-pocket costs and expenses (including Attorney Costs and any Taxes) incurred by any Agent and each Lender after an Event of Default in connection with the collection of the Obligations or the enforcement of this Agreement the other Loan Documents or any such other documents or during any workout, restructuring, or negotiations in respect thereof; provided, however, that the Loan Parties shall not be liable for any stamp, documentary, recording, filing or similar Taxes that are Other Connection Taxes imposed with respect to an assignment of the Loans and Commitments (other than an assignment at the request of a Loan Party). In addition, each Loan Party shall pay, and shall save and hold harmless each Agent and the Lenders from all liability for, any fees of Loan Parties’ auditors in connection with any reasonable exercise by such Agent and the Lenders of their rights pursuant to Section 10.2. All Obligations provided for in this Section 15.5 will survive repayment of the Loans, cancellation of the Notes and termination of this Agreement.
Section 15.6    Assignments; Participations.
15.6.1        Assignments.
a.Any Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any portion of that Lender’s Loans and Commitments, with the prior written consent of Administrative Agent and, other than for any assignment to an Eligible Assignee and so long as no Event of Default exists, Borrower Representative (which consent of Borrower Representative may not be unreasonably withheld or delayed). Except as Administrative Agent otherwise agrees, any such assignment must be in a minimum aggregate amount equal to US$1,000,000 (which minimum will be US$500,000 if the assignment is to an Affiliate of the assigning Lender) or, if less, the remaining Commitment and Loans held by the assigning Lender. Borrowers and Administrative Agent will be entitled to continue to deal solely and directly with the assigning Lender in connection with the interests so assigned to an Assignee until Administrative Agent has received and accepted an effective assignment agreement in substantially the form of Exhibit J (an “Assignment Agreement”) executed, delivered, and fully completed by the applicable parties thereto and a processing fee of US$3,500. For so long as no Default or Event of Default shall have occurred and is continuing at the time of such assignment, the Borrowers shall not be required to pay to any assignee Lender amounts pursuant to Section 7.6 in excess of the amounts that the Borrowers would have been obligated to pay to the assigning Lender if the assigning Lender had not assigned such Loan to such assignee, unless the circumstances giving rise to such excess payment result from a Change in Law after the date of such assignment. Any attempted assignment not made in accordance with this Section 15.6.1 will be treated as the sale of a participation under Section 15.6.2.
b.From and after the date on which the conditions described above have been met, (i) the Assignee will be deemed automatically to have become a party to this Agreement and, to the extent that rights and obligations under this Agreement have been assigned to that Assignee pursuant to the Assignment Agreement, will have the rights and obligations of a Lender under this Agreement, and (ii) the assigning Lender, to the extent that rights and obligations under this Agreement have been assigned by it pursuant to that Assignment Agreement, will be released from its rights (other than its indemnification rights) and obligations under this Agreement. Upon the request of the Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, Borrowers shall execute and deliver to Administrative Agent for delivery to the Assignee (and, as applicable, the assigning Lender) one or more Notes in accordance with Section 3.1 to reflect the amounts assigned to that Assignee and the amounts, if any, retained by the assigning Lender. Each such Note will be dated the effective date of the applicable assignment. Upon receipt by Administrative Agent of
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any such Note, the assigning Lender shall return to Borrower Representative any applicable prior Note held by it.
c.Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of that Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 15.6.1 will not apply to any such pledge or assignment of a security interest. No such pledge or assignment of a security interest will release a Lender from any of its obligations under this Agreement or substitute any such pledgee or assignee for that Lender as a party to this Agreement
15.6.2         Participations. Any Lender may at any time sell to one or more Persons participating interests in its Loans, Commitments or other interests under this Agreement (any such Person, a “Participant”), but solely to the extent that such Participant is not a Loan Party or an Affiliate of a Loan Party. In the event of a sale by a Lender of a participating interest to a Participant (a) that Lender’s obligations under this Agreement will remain unchanged for all purposes, (b) Borrowers and Administrative Agent shall continue to deal solely and directly with that Lender in connection with that Lender’s rights and obligations under this Agreement, and (c) all amounts payable by Borrowers will be determined as if that Lender had not sold that participation and will be paid directly to that Lender. No Participant will have any direct or indirect voting rights under this Agreement except with respect to any event described in Section 15.1 expressly requiring the unanimous vote of all Lenders or, as applicable, all affected Lenders. Each Lender agrees to incorporate the requirements of the preceding sentence into each participation agreement which that Lender enters into with any Participant. Borrowers agree that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant will be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement, but that right of set-off is subject to the obligation of each Participant to share with the Lenders, and the Lenders shall share with each Participant, as provided in Section 7.5. Participant shall be entitled to the benefits of Section 7.6 or Article VIII to the same extent as if it were a Lender (but no Participant will be entitled to any greater compensation pursuant to Section 7.6 and Article VIII than would have been paid to the participating Lender on the date of participation if no participation had been sold), and each Participant must comply with Section 7.6.4 as if it were an Assignee.
Section 15.7    Register. (a) Administrative Agent shall maintain, and deliver a copy to Borrower Representative upon written request, a copy of each Assignment Agreement delivered and accepted by it and register (the “Register”) for the recordation of names and addresses of the Lenders and the Commitment of, and principal amount of (and stated interest on) the Loans owing to, each Lender from time to time and whether that Lender is the original Lender or the Assignee. No assignment will be effective unless and until the Assignment Agreement is accepted and registered in the Register. All records of transfer of a Lender’s interest in the Register will be conclusive, absent manifest error, as to the ownership of the interests in the Loans. Administrative Agent will not incur any liability of any kind with respect to any Lender with respect to the maintenance of the Register. It is the parties’ intention that the Loans and Commitments be treated as registered obligations and in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code, and that the right, title, and interest of the Lenders in and to those Loans and Commitments be transferable only in accordance with the terms of this Agreement.
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b.    Each Lender that sells a participation to a Participant shall, acting solely for this purpose as an agent of each Borrower, maintain at one of its offices a register for the recordation of the names and addresses of each such Participant, and the Commitments of, and principal amount of (and stated interest on) the Loans owing to, such Participant (the “Participant Register”), but no Lender will be required to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Loans, Commitments, or its other obligations under any Loan Document) to any Person except to the extent that disclosure is required to establish that such a participation is in registered form (as described above). The entries in the Participant Register will be conclusive absent manifest error, and the applicable Lender shall treat each Person whose name is recorded in the Participant Register as the owner of that participation for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 15.8     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 15.9    Confidentiality. As required by federal law and Administrative Agent’s policies and practices, Administrative Agent may need to obtain, verify, and record certain customer identification information and documentation in connection with opening or maintaining accounts, or establishing or continuing to provide services. Administrative Agent and each Lender shall use commercially reasonable efforts (equivalent to the efforts Administrative Agent or that Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to them by any Loan Party hereunder and designated as confidential, except that Administrative Agent and each Lender may disclose any information as follows: (a) to Persons employed or engaged by Administrative Agent or that Lender or that Lender’s Affiliates or Approved Funds in evaluating, approving, structuring, or administering the Loans and the Commitments, (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 15.9 (and any such assignee or participant or potential assignee or participant may disclose any such information to Persons employed or engaged by them as described in clause (a) of this Section 15.9, (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by Administrative Agent or that Lender to be compelled by any court decree, subpoena, or legal or administrative order or process, but Administrative Agent or that Lender, as applicable, shall (i) use reasonable efforts to give the applicable Loan Party written notice prior to disclosing the information to the extent permitted by that requirement, request, court decree, subpoena, or legal or administrative order or process, and (ii) disclose only that portion of the confidential information as Administrative Agent or that Lender reasonably believes, or as counsel for Administrative Agent or that Lender, as applicable, advises Administrative Agent or that Lender, that it must disclose pursuant to that requirement, (d) as Administrative Agent or that Lender reasonably believes, or on the advice of Administrative Agent’s or that Lender’s counsel, is required by law, (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with any litigation to which Administrative Agent or that Lender is a party, (f) to any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to that Lender, (g) to that Lender’s independent auditors and other professional advisors as to which that information has been identified as confidential, or (h) if that information ceases to be confidential through no fault of Administrative Agent or any Lender. Notwithstanding the foregoing, Borrowers consent to the publication by Administrative Agent or any Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement, and
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Administrative Agent reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements. If any provision of any confidentiality agreement, non-disclosure agreement, or other similar agreement between any Borrower and any Lender conflicts with or contradicts this Section 15.9 with respect to the treatment of confidential information, then this Section 15.9 will supersede all such prior or contemporaneous agreements and understandings between the parties.
Section 15.10    Severability. Whenever possible each provision of this Agreement is to be interpreted so as to be effective and valid under applicable law, but if any provision of this Agreement is prohibited by or invalid under applicable law, that provision will be ineffective to the extent of that prohibition or invalidity, without invalidating the remainder of that provision or the remaining provisions of this Agreement. All obligations of the Loan Parties and rights of the Agents and the Lenders, in each case, expressed in this Agreement or in any other Loan Document are in addition to, and not in limitation of, those provided by applicable law.
Section 15.11    Nature of Remedies. All Obligations of the Loan Parties and rights of Agents and the Lenders expressed in this Agreement or in any other Loan Document are in addition to and not in limitation of those provided by applicable law. No failure to exercise, and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power, or privilege under this Agreement will operate as a waiver thereof, and no single or partial exercise of any right, remedy, power, or privilege under this Agreement will preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
Section 15.12    Entire Agreement. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties to this Agreement and supersedes all prior or contemporaneous agreements and understandings of all such Persons, verbal or written, relating to the subject matter hereof and thereof (except as relates to the fees described in Section 5.1) and any prior arrangements made with respect to the payment by the Loan Parties of (or any indemnification for) any fees, costs, or expenses payable to or incurred (or to be incurred) by or on behalf of the Agents or the Lenders.
Section 15.13    Counterparts. This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts. Each such counterpart will be deemed to be an original, but all such counterparts will together constitute but one and the same Agreement. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission will constitute effective delivery thereof. Electronic records of executed Loan Documents maintained by the Lenders will be deemed to be originals.
Section 15.14    Successors and Assigns. This Agreement binds the Loan Parties, the Lenders, the Agents, and their respective successors and assigns and will inure to the benefit of the Loan Parties, the Lenders, and the Agents and the successors and assigns of the Lenders and the Agents. No other Person is or is intended to be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. No Loan Party may assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of each Agent and each Lender.
Section 15.15    Captions. Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.
Section 15.16    Customer Identification – USA PATRIOT Act Notice. Each Lender (each for itself and not on behalf of any other party) hereby notifies the Loan Parties that, pursuant to
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the requirements of the USA PATRIOT Act, it is required to obtain, verify, and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow that Lender to identify the Loan Parties in accordance with the USA PATRIOT Act.
Section 15.17    INDEMNIFICATION BY LOAN PARTIES. In consideration of the execution and delivery of this Agreement by the Agents and the Lenders and the agreement to extend the Commitments provided under this Agreement, each Borrower hereby agrees to indemnify, exonerate, and hold harmless each Agent, each Lender and each of the officers, directors, employees, Affiliates, agents, and Approved Funds of each Agent and each Lender (each, a “Lender Party” or “Indemnitee”) from and against any and all actions, causes of action, suits, losses, liabilities, damages, and expenses, including Attorney Costs (collectively, the “Indemnified Liabilities”), incurred by the Lender Parties or any of them as a result of, or arising out of, or relating to (a) any tender offer, merger, purchase of Equity Interests, purchase of assets or other similar transaction financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds of any of the Loans; (b) the use, handling, release, emission, discharge, transportation, storage, treatment or disposal of any Hazardous Substance at any property owned or leased by any Loan Party; (c) any violation of any Environmental Laws with respect to conditions at any property owned or leased by any Loan Party or the operations conducted thereon; (d) the investigation, cleanup or remediation of offsite locations at which any Loan Party or their respective predecessors are alleged to have directly or indirectly disposed of Hazardous Substances; or (e) the execution, delivery, performance, or enforcement of this Agreement or any other Loan Document by any of the Lender Parties, in each case except for any such Indemnified Liabilities arising on account of the applicable Lender Party’s gross negligence or willful misconduct as determined by a final, non-appealable judgment by a court of competent jurisdiction. If and to the extent that the foregoing undertaking is unenforceable for any reason, each Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. All obligations provided for in this Section 15.17 will survive repayment of the Loans, cancellation of the Notes, any foreclosure under, or any modification, release, or discharge of, any or all of the Collateral Documents and termination of this Agreement. This Section 15.17 shall not apply with respect to Taxes other than any Taxes that represent Indemnified Liabilities arising from any non-Tax claim.
Section 15.18    Nonliability of Lenders. The relationship between Borrowers on the one hand and the Lenders and the Agents on the other hand is solely that of borrower and lender. Neither any Agent nor any Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and the Agents and the Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor. Neither any Agent nor any Lender undertakes any responsibility to any Loan Party to review or inform any Loan Party of any matter in connection with any phase of any Loan Party’s business or operations. Each Loan Party agrees, on behalf of itself and each other Loan Party, that neither any Agent nor any Lender has any liability to any Loan Party (whether sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission, or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that those losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. No Lender Party will be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information
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transmission systems in connection with this Agreement. No Lender Party will have any liability with respect to, and each Loan Party, on behalf of itself and each other Loan Party, hereby waives, releases, and agrees not to sue for, any special, punitive, exemplary, indirect, or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date). Each Loan Party acknowledges that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party. No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Loan Parties and the Lenders.
Section 15.19    FORUM SELECTION AND CONSENT TO JURISDICTION.
a.Any litigation based hereon, or arising out of, under, or in connection with this Agreement or any other Loan Document (except for the Mexican Loan Documents, which shall be governed under their own terms), will be brought and maintained exclusively in the courts of the State of New York or in the United States District Court of the Southern District of New York. Each party hereto hereby expressly and irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and of the United States District Court of the Southern District of New York for the purpose of any such litigation as set forth above and waives any right to any other jurisdiction to which each such party may be entitled to by reason of their present or future domicile or otherwise.
b.Each Mexican Loan Party hereby irrevocably designated and appoints (i) IT Global Holding LLC (the “Process Agent”), with an office on the date hereof at 222 Urban Towers, Suite 1650 E, Irving, TX 75039 as its agent and true and lawful attorney-in-fact in its name, place and stead to accept on its behalf service of copies of the summons and complaint and any other process that may be served in any such suit, action or proceeding brought in any court referred to in clause (a); and (ii) as its conventional address the address of the Process Agent referred above or any other address notified in writing in the future by the Process Agent to such Loan Party, to receive on its behalf service of all process in any proceedings brought pursuant to the Loan Documents in any court, such service being hereby acknowledged by such Loan Party to be effective and binding service in every respect, and agrees that the failure of the Process Agent to give any notice of any such service of process to it shall not impair or affect the validity of such service or, to the extent permitted by applicable law, the enforcement of any judgment based thereon. Each Mexican Loan Party shall maintain such appointment until the satisfaction in full of all Obligations, except that if for any reason the Process Agent appointed hereby ceases to be able to act as such, then each Mexican Loan Party shall, by an instrument reasonably satisfactory to the Required Lenders, appoint another Person in the Borough of Manhattan as such Process Agent subject to the approval of the Required Lenders. Each Mexican Loan Party covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents, that may be necessary to continue the designation of the Process Agent pursuant to this paragraph in full force and effect and to cause the Process Agent to act as such.
c.Each Loan Party further irrevocably consents to the service of process by registered mail, postage prepaid, or by personal service within or without the State of New York. Each Loan Party hereby expressly and irrevocably waives, to the fullest extent permitted by law, any objection that it now has or hereafter might have to the laying of venue of any such litigation brought in any such court referred to above and any claim that any such litigation has been brought in an inconvenient forum.
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Section 15.20    WAIVER OF JURY TRIAL. EACH LOAN PARTY, EACH AGENT, AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, AND ANY AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT DELIVERED OR WHICH MIGHT IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Section 15.21    Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement, or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in that EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.
ARTICLE XVI

JOINT AND SEVERAL LIABILITY
Section 16.1    Joint and Several Liability
16.1.1        Each Loan Party and each Person comprising a Loan Party hereby acknowledges and agrees that all of the representations, warranties, covenants, obligations, conditions, agreements, and other terms contained in this Agreement are applicable to and binding upon each Person comprising a Loan Party unless expressly otherwise stated in this Agreement.
16.1.2        Each Loan Party is jointly and severally liable for all of the Obligations of each other Loan Party, regardless of which Loan Party actually receives the proceeds or other benefits of the Loans or other extensions of credit under this Agreement or the manner in which Loan Parties, any Agent, or any Lender accounts therefor in their respective books and records.
16.1.3        Each Loan Party acknowledges that it shall enjoy significant benefits from the business conducted by each other Loan Party because of, inter alia, their combined ability to bargain with other Persons, including, without limitation, their ability to receive the Loans and other credit extensions under this Agreement and the other Loan Documents which would not have been available to any Loan Party acting alone. Each Loan
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Party has determined that it is in its best interest to procure the credit facilities contemplated under this Agreement, with the credit support of each other Loan Party as contemplated by this Agreement and the other Loan Documents.
16.1.4        Each of the Agents and the Lenders have advised each Loan Party that it is unwilling to enter into this Agreement and the other Loan Documents and make available the credit facilities extended hereby or thereby to any Loan Party unless each Loan Party agrees, among other things, to be jointly and severally liable for the due and proper payment of the Obligations of each other Loan Party. Each Loan Party has determined that it is in its best interest and in pursuit of its purposes that it so induce the Lenders to extend credit pursuant to this Agreement and the other documents executed in connection with this Agreement (a) because of the desirability to each Loan Party of the credit facilities under this Agreement and the interest rates and the modes of borrowing available under this Agreement and under those other documents; (b) because each Loan Party might engage in transactions jointly with other Loan Parties; and (c) because each Loan Party might require, from time to time, access to funds under this Agreement for the purposes set forth in this Agreement. Each Loan Party, individually, expressly understands, agrees, and acknowledges that the credit facilities contemplated under this Agreement would not be made available on the terms of this Agreement in the absence of the collective credit of all the Loan Parties, and the joint and several liability of all the Loan Parties. Accordingly, each Loan Party acknowledges that the benefit of the accommodations made under this Agreement to the Loan Parties, as a whole, constitutes reasonably equivalent value, regardless of the amount of the indebtedness actually borrowed by, advanced to, or the amount of credit provided to, or the amount of collateral provided by, any one Loan Party.
16.1.5        To the extent that applicable law otherwise would render the full amount of the joint and several obligations of any Loan Party under this Agreement and under the other Loan Documents invalid or unenforceable, such Person’s obligations under this Agreement and under the other Loan Documents shall be limited to the maximum amount that does not result in any such invalidity or unenforceability, but each Loan Party’s obligations under this Agreement and under the other Loan Documents shall be presumptively valid and enforceable to their fullest extent in accordance with the terms hereof or thereof, as if this Section 16 were not a part of this Agreement.
16.1.6        To the extent that any Loan Party makes a payment under this Section 16 of all or any of the Obligations (a “Joint Liability Payment”) that, taking into account all other Joint Liability Payments then previously or concurrently made by any other Loan Party, exceeds the amount that Loan Party would otherwise have paid if each Loan Party had paid the aggregate Obligations satisfied by those Joint Liability Payments in the same proportion that such Person’s Allocable Amount (as determined immediately prior to those Joint Liability Payments) bore to the aggregate Allocable Amounts of each Loan Party as determined immediately prior to the making of those Joint Liability Payments, then, following payment in full in cash of the Obligations (other than contingent indemnification Obligations not then asserted) and the termination of the Commitments, that Loan Party shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Party for the amount of that excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to the applicable Joint Liability Payments. As of any date of determination, the “Allocable Amount” of any Loan Party is equal to the maximum amount of the claim that could then be recovered from that Loan Party under this Section 16 without rendering that claim voidable or avoidable under § 548 of Chapter 11 of the Bankruptcy Code or under any applicable
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state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, or similar statute or common law.
16.1.7        Each Loan Party assumes responsibility for keeping itself informed of the financial condition of each other Loan Party, and any and all endorsers and/or guarantors of any instrument or document evidencing all or any part of each other Loan Party’s Obligations, and of all other circumstances bearing upon the risk of nonpayment by each other Loan Party of its Obligations, and each Loan Party agrees that neither any Agent nor any Lender has or shall have any duty to advise that Loan Party of information known to any Agent or any Lender regarding any such condition or any such circumstances or to undertake any investigation not a part of its regular business routine. If any Agent or any Lender, in its discretion, undertakes at any time or from time to time to provide any such information to a Loan Party, neither any Agent nor any Lender shall be under any obligation to update any such information or to provide any such information to that Loan Party or any other Person on any subsequent occasion.
16.1.8        Subject to Section 15.1, Administrative Agent upon written direction from the Required Lenders is hereby authorized to, at any time and from time to time, to do any and all of the following: (a) in accordance with the terms of this Agreement, renew, extend, accelerate, or otherwise change the time for payment of, or other terms relating to, Obligations incurred by any Loan Party, otherwise modify, amend or change the terms of any promissory note or other agreement, document or instrument now or hereafter executed by any Loan Party and delivered to Administrative Agent or any Lender; (b) accept partial payments on an Obligation incurred by any Loan Party; (c) take and hold security or collateral for the payment of an Obligation incurred by any Loan Party under this Agreement or for the payment of any guaranties of an Obligation incurred by any Loan Party or other liabilities of any Loan Party and exchange, enforce, waive, and release any such security or collateral; (d) in accordance with the terms of the Loan Documents, apply any such security or collateral and direct the order or manner of sale thereof; and (e) with the prior consent of the Lenders, settle, release, compromise, collect, or otherwise liquidate an Obligation incurred by any Loan Party and any security or collateral therefor in any manner, without affecting or impairing the obligations of any other Loan Party. In accordance with the terms of this Agreement, the Required Lenders have the exclusive right to determine the time and manner of application of any payments or credits, whether received by the Administrative Agent from a Borrower or any other source, and any such determination shall be binding on each Loan Party. In accordance with the terms of this Agreement, all such payments and credits may be applied, reversed and reapplied, in whole or in part, to any of an Obligation incurred by any Loan Party as the Required Lenders determine in their discretion and instruct the Administrative Agent, without affecting the validity or enforceability of the Obligations of any other Loan Party. Nothing in this Section 16.1.8 modifies any right of any Loan Party or any Lender to consent to any amendment or modification of this Agreement or the other Loan Documents in accordance with the terms hereof or thereof.
16.1.9        Each Loan Party hereby agrees that, except as otherwise expressly provided in this Agreement, its obligations under this Agreement are and shall be unconditional, irrespective of (a) the absence of any attempt to collect an Obligation incurred by any Loan Party from any Loan Party or any guarantor or other action to enforce the same; (b) failure by Collateral Agent or Lenders, as applicable, to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for an Obligation incurred by any Loan Party; (c) any Insolvency Proceeding by or against any Loan Party, or any Agent’s or any Lender’s election in any such proceeding of the application of § 1111(b)(2) of the Bankruptcy Code; (d) any borrowing or grant of a security interest by any Loan Party as debtor-in-possession
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under § 364 of the Bankruptcy Code; (e) the disallowance, under § 502 of the Bankruptcy Code, of all or any portion of any Agent’s or any Lender’s claim(s) for repayment of any of an Obligation incurred by any Loan Party; or (f) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor unless that legal or equitable discharge or defense is that of a Loan Party in its capacity as a Loan Party.
16.1.10    Any notice given by Borrower Representative under this Agreement shall constitute and be deemed to be notice given by all Loan Parties, jointly and severally. Notice given by any Agent or any Lender to Borrower Representative under this Agreement or pursuant to any other Loan Documents in accordance with the terms of this Agreement or of any applicable other Loan Document shall constitute notice to each Loan Party. The knowledge of any Loan Party shall be imputed to all Loan Parties and any consent by Borrower Representative or any Loan Party shall constitute the consent of, and shall bind, all Loan Parties.
16.1.11    This Section 16 is intended only to define the relative rights of Loan Parties and nothing set forth in this Section 16 is intended to or shall impair the obligations of Loan Parties, jointly and severally, to pay any amounts as and when the same become due and payable in accordance with the terms of this Agreement or any other Loan Documents. Nothing contained in this Section 16 limits the liability of any Loan Party to pay the credit facilities made directly or indirectly to that Loan Party and accrued interest, fees, and expenses with respect thereto for which that Loan Party is primarily liable.
16.1.12    The parties to this Agreement acknowledge that the rights of contribution and indemnification under this Section 16 constitute assets of each Loan Party to which any such contribution and indemnification is owing. The rights of any indemnifying Loan Party against the other Loan Parties under this Section 16 shall be exercisable upon the full and payment of the Obligations, and the termination of the Commitments.
16.1.13    No payment made by or for the account of a Loan Party, including, without limitation, (a) a payment made by that Loan Party on behalf of an Obligation of another Loan Party, or (b) a payment made by any other Person under any guaranty, shall entitle that Loan Party, by subrogation or otherwise, to any payment from that other Loan Party or from or out of property of that other Loan Party and that Loan Party shall not exercise any right or remedy against that other Loan Party or any property of that other Loan Party by reason of any performance of that Loan Party of its joint and several obligations hereunder, until, in each case, the termination of the Commitments, the expiration, termination, or Cash Collateralization of all letters of credit, and Payment in Full of all Obligations (other than contingent indemnification Obligations not then asserted).
ARTICLE XVII
APPOINTMENT OF BORROWER REPRESENTATIVE
17.1.1        Each Loan Party hereby irrevocably (until Payment in Full or a change pursuant to Section 17.1.4) appoints and constitutes Borrower Representative as its agent to request and receive the proceeds of advances in respect of the Loans (and to otherwise act on behalf of that Loan Party pursuant to this Agreement and the other Loan Documents) from the Lenders in the name or on behalf of that Loan Party. Administrative Agent may disburse those proceeds to the bank account of Borrower Representative (or any other Borrower) without notice to any other Borrower or any other Loan Party.
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17.1.2        Each Loan Party hereby irrevocably (until Payment in Full or a change pursuant to Section 17.1.4) appoints and constitutes the Borrower Representative as its agent to (a) receive statements of account and all other notices from Administrative Agent with respect to the Obligations or otherwise under or in connection with this Agreement and the other Loan Documents, (b) execute and deliver Compliance Certificates and all other notices, certificates and documents to be executed and/or delivered by any Loan Party under this Agreement or the other Loan Documents; and (c) otherwise act on behalf of that Loan Party pursuant to this Agreement and the other Loan Documents.
17.1.3        The authorizations contained in this Section 17 are coupled with an interest and are irrevocable until Payment in Full or a change pursuant to Section 17, and Administrative Agent may rely on any notice, request, information supplied by the Borrower Representative, every document executed by the Borrower Representative, every agreement made by the Borrower Representative or other action taken by the Borrower Representative in respect of any Borrower or other Loan Party as if the same were supplied, made or taken by that Borrower or Loan Party. Without limiting the generality of the foregoing, the failure of one or more Borrowers or other Loan Parties to join in the execution of any writing in connection with this Agreement will not relieve any Borrower or other Loan Party from obligations in respect of that writing.
17.1.4        No purported termination of or change in the appointment of Borrower Representative as agent will be effective without the prior written consent of Administrative Agent.
ARTICLE XVIII
CONVERSION RIGHTS
Section 18.1    Conversion on the Maturity Date. Subject to Section 18.3, each Tranche A-1 Lender, Tranche A-2 Lender, Tranche C Lender, Tranche D Lender and Tranche E Lender shall have a right to convert all or any portion of the Outstanding Obligations due to such Lender into Conversion Payment Shares on the Maturity Date applicable to such Lender’s Tranche A-1 Loans, Tranche A-2 Loans, Tranche C Loans, Tranche D Loans or Tranche E Loans, as applicable (such Maturity Date, a “Maturity Conversion Date”). In order to exercise its conversion rights under this Section 18.1, such Tranche A-1 Lender, Tranche A-2 Lender, Tranche C Lender, Tranche D Lender or Tranche E Lender must provide written notice (a “Maturity Conversion Notice”), which shall be irrevocable, to Ultimate Holdings on or prior to the second Business Day immediately preceding the Maturity Conversion Date specifying the percentage of the Outstanding Obligations due to such Lender that the Lender is electing to convert into Conversion Payment Shares pursuant to this Section 18.1. Subject to Section 18.3, all of the Outstanding Obligations due to any Tranche B-1 Lender or Tranche B-2 Lender shall automatically convert into Conversion Payment Shares on the Maturity Date applicable to such Lender’s Tranche B-1 Loans or Tranche B-2 Loans, as applicable, without any notice or election by such Lender.
Section 18.2    Early Conversion. Subject to Section 18.3, each Lender shall have a right to convert all or any portion of the Outstanding Obligations due to such Lender into Conversion Payment Shares at any time.  In order to exercise its conversion rights under this Section 18.2, a Lender must provide written notice (an “Optional Conversion Notice”), which shall be irrevocable, to Ultimate Holdings specifying the percentage of the Outstanding Obligations due
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to such Lender that the Lender is electing to convert into Conversion Payment Shares pursuant to this Section 18.2.
Section 18.3    Limitation on Conversion. Notwithstanding anything contained herein to the contrary, no conversion under Section 18.1 or Section 18.2 shall be effective unless Ultimate Holdings has received (or is deemed to have obtained) the Requisite Shareholder Approval prior to the Applicable Conversion Date to the extent required under the rules of the Applicable Exchange with respect to a conversion of Outstanding Obligations. If a conversion under Section 18.1 is not effective pursuant to this Section 18.3, the applicable Loans will convert as provided under Section 18.1 to the extent the Applicable Exchange Rules allow and the remainder of the Loan will mature on the applicable Maturity Date as if Section 18.1 did not apply to such remainder. If a conversion under Section 18.2 is not effective pursuant to this Section 18.3, the applicable Optional Conversion Notice shall be deemed null and void but Section 18.2 shall continue to apply to any future conversions. Ultimate Holdings hereby agrees to use its best efforts to obtain the Requisite Shareholder Approval (which may be deemed Requisite Shareholder Approval under the definition thereof) by the earlier of (a) the AgileThought, Inc. 2023 Annual Meeting of Stockholders or (b) May 15, 2023; provided however, that Ultimate Holdings hereby agrees to request from the Applicable Exchange as promptly as is commercially reasonable after the Amendment No. 4 Effective Date an interpretation of the applicable listing standards of the Applicable Exchange, which states that such shareholder approval is not required for Ultimate Holdings to issue Conversion Payment Shares upon conversion of the Outstanding Obligations (both in the aggregate and with respect to any individual Lender).
Section 18.4    Conversions Generally. Upon a Converting Lender’s receipt of the Conversion Payment Shares required to be delivered to such Converting Lender under Section 18.1 or Section 18.2, the Outstanding Obligations owed to such Converting Lender that have been converted shall be deemed to have Paid in Full.
Section 18.5    Mergers. Notwithstanding anything to the contrary herein, Ultimate Holdings may not consummate any (i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination), (ii) any consolidation, merger or combination or similar transaction involving Ultimate Holdings, (iii) any sale, lease or other transfer to a third party of the consolidated assets of Ultimate Holdings and Ultimate Holdings’ Subsidiaries substantially as an entirety, or (iv) any statutory share exchange (any such event, a “Merger Event”) unless the resulting, surviving or transferee Person (the “Successor Company”), if not Ultimate Holdings, shall expressly assume all of the obligations of Ultimate Holdings under this Article XVIII; provided, however, that nothing in this Section 18.5 shall be construed to permit any event or transaction otherwise prohibited under this Agreement.
Section 18.6    Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.
18.6.1        In the case of: any Merger Event as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), at and after the effective time of such Merger Event, (a) the right to convert Outstanding Obligations in Conversion Payment Shares shall be changed into a right to convert such Outstanding Obligations into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that holders of shares of Common Stock are entitled to receive (the “Reference Property,” with each
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“unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Merger Event and (b) unless context requires otherwise, all references to “Common Stock” hereunder shall be deemed references to the Reference Property. At and after the effective time of any such Merger Event, any shares of Common Stock that Ultimate Holdings would have been required to deliver upon conversion of the Outstanding Obligations under Article XVIII shall instead be deliverable in Reference Property.
18.6.2        If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Outstanding Obligations will be convertible shall be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock.
18.6.3        If, in the case of any Merger Event, the Reference Property includes shares of stock, securities or other property or assets of a Person other than Ultimate Holdings or the successor or purchasing corporation (excluding, for the avoidance of doubt, cash paid by such surviving company, successor or purchaser corporation, as the case may be, in such Merger Event), then such other Person shall execute such documentation with respect to the conversion of Outstanding Obligations as the Lenders and Ultimate Holdings in good faith determine to be commercially reasonable. The definitive agreement with respect to any Merger Event shall include such additional provisions as are reasonably necessary to protect the conversion rights of the Lenders under this Article XVIII.
18.6.4        If the Successor Issuer (if not Ultimate Holdings) following a Merger Event is a Public Issuer, such Successor Issuer shall grant to each Lender registration rights (to be effective upon such Lender becoming a Converting Lender) that are no less favorable to such Lender than any registration rights granted to any other Person in connection with such Merger Event. If the Successor Issuer (if not Ultimate Holdings) following a Merger Event is not a Public Issuer, such Successor Issuer shall grant each Lender registration rights (to be effective upon such Lender becoming a Converting Lender) that are no less favorable to such Lender than any registration rights granted in connection with such Merger Event to any other holder of the shares; provided that in no event shall such registration rights be less favorable to any Lender than the registration rights set forth in any Registration Rights Agreement then in effect. Following the consummation of any Merger Event in which Ultimate Holdings is not the Successor Issuer, all references in this Article XVIII to Ultimate Holdings shall be deemed replaced with references to the Successor Issuer.
18.6.5        Ultimate Holdings shall provide written notice of any Merger Event to the Lenders as promptly as practicable after the public announcement thereof.
18.6.6        Ultimate Holdings shall not become a party to any Merger Event unless its terms are consistent with this Section 18.6 and this Section 18.6 shall similarly apply to successive Merger Events.
18.6.7        If any change in the number, type or classes of the securities into which the Outstanding Obligations are convertible shall occur between the date hereof and any applicable Maturity Date by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, distribution of shares, or
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any stock dividend, the Applicable Price shall be appropriately and proportionately adjusted to reflect such change. In addition, if any other dividend or distribution is made by the Company, then, as of the date of such dividend or distribution, the Applicable Price shall be adjusted using an adjustment factor customary for public company convertible instruments.
Section 18.7    Delivery of Conversion Payment Shares. Ultimate Holdings shall deliver any Conversion Payment Shares required to be delivered to a Lender under this Article XVIII on the earlier of the applicable Maturity Date with respect to the Loans being converted and the applicable Optional Conversion Date. The Conversion Payment Shares will be issued in book-entry form and issued and delivered to the transfer agent for Ultimate Holdings and identified by restricted legends identifying the Conversion Payment Shares as restricted securities. A Converting Lender shall be deemed to be the holder of record of such Conversion Payment Shares as of 5:00 p.m. (New York City time) on the date the Conversion Payment Shares are required to be issued and delivered to the Converting Lender under this Section 18.7.
Section 18.8    Reservation of Shares; Listing. Ultimate Holdings shall keep reserved a sufficient number of shares of Common Stock to satisfy the conversion of all Outstanding Obligations. No later than the Business Day immediately following any Applicable Conversion Date, Ultimate Holdings shall take all action necessary, including amending its governing documents, to authorize and reserve sufficient Conversion Payment Shares such that (a) all Conversion Payment Shares required to be delivered by Ultimate Holdings in connection with such Applicable Conversion Date (1) shall be duly and validly authorized, reserved and available for issuance on or prior to the date such Conversion Payment Shares are delivered to any Converting Lender in accordance with Section 18.4 and (2) shall, upon issuance, be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable securities laws and (b) the issuance of such Conversion Payment Shares shall not be subject to any preemptive or similar rights. On or prior to the Amendment No. 4 Effective Date, Ultimate Holdings shall provide notice to the Nasdaq Capital Market with respect to the listing of a number of shares of Common Stock to satisfy the conversion of all Outstanding Obligations. Ultimate Holdings shall use its best efforts to effect and maintain the listing on a Permitted Exchange of its Common Stock.
Section 18.9    Calculations. Ultimate Holdings and any Converting Lenders shall, acting in good faith and in a commercially reasonable manner, jointly determine the number of Conversion Payment Shares with respect to any Conversion; provided that if Ultimate Holdings and such Converting Lenders cannot promptly agree on the number of Conversion Payment Shares with respect to such Conversion then they shall use their good faith efforts to jointly appoint a Calculation Agent to determine such number with respect to such Conversion; provided, further, that any failure to agree or related delay in the calculation of the number of Conversion Payment Shares shall extend the time provided for delivery of the any disputed number of Conversion Payment Shares (but, for the avoidance of doubt, not the number of Conversion Payment Shares not in dispute) until the second Business Day following the determination of the calculation as provided in this Section 18.9, and such extension or delay in payment with respect to the disputed portion of Conversion Payment Shares shall not be deemed a breach of any provision of this Agreement. If Ultimate Holdings and any Converting Lenders are not able to promptly agree on a Calculation Agent with respect to a Conversion, then Ultimate Holdings shall appoint one Calculation Agent and the Converting Lenders shall appoint a second Calculation Agent and such appointed Calculation Agents shall each promptly determine the number of Conversion Payment Shares for such Conversion and the Conversion Payment Shares for such Conversion shall be deemed to be the average of the amounts determined by such Calculation Agents or, if only one Calculation Agent provides a
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determination of the Conversion Payment Shares prior to the date Conversion Payment Shares are required to be delivered in connection with the relevant Conversion, the number of Conversion Payment Shares determined by such Calculation Agent. Any determination of the Conversion Payment Shares pursuant to the terms of this Section 18.9 shall be final absent manifest error. All calculations under this Article XVIII shall be rounded to the nearest 1/10,000th, with 0.00005 rounded up to 0.0001; provided that the number of Conversion Payment Shares to be delivered to any Converting Lender shall be rounded up the nearest whole number.
Section 18.10    Conversion Information. Ultimate Holdings shall use commercially reasonable efforts to promptly provide any information to any Lender, or any Calculation Agent for purposes of Section 18.9, that such Lender or Calculation Agent determines in good faith to be reasonably necessary to make any calculations under this Article XVIII.
Section 18.11    Taxes. Ultimate Holdings shall pay any and all transfer, stamp and similar Taxes imposed by, or levied by or on behalf of, any governmental authority or agency having the power to tax that may be payable with respect to the issuance and delivery of the Conversion Payment Shares to any Converting Lender in connection with any Conversion. For the avoidance of doubt, Ultimate Holdings shall not be responsible for any such transfer, stamp and similar Taxes that may be payable with respect to the issuance and delivery of the Conversion Payment Shares to any Person that is not the Converting Lender, including any nominee, assignee or transferee of the Converting Lender, if such Taxes would not have been imposed or be payable had the Conversion Payment Shares been issued in the name of the Converting Lender.
Section 18.12    Peso Loans. Conversions of Outstanding Obligations hereunder shall be made by reference to the Dollar amount thereof. In the case of any Outstanding Obligations denominated in Pesos, the Dollar amount thereof shall be determined by reference to the Conversion Rate as of the relevant Applicable Conversion Date.
Section 18.13    Additional Definitions. When used in this Article XVIII, the following terms shall have the following meanings:
“Applicable Conversion Date” means, (a) with respect to a conversion by a Lender under Section 18.1, the Maturity Date applicable to such Lender’s Loans, and (b) with respect to a conversion by a Lender under Section 18.2, the applicable Optional Conversion Date.
“Applicable Exchange” means, at any time, the principal United States exchange on which the Common Stock is then listed.
“Applicable Price” means U.S.$4.64; and provided further that notwithstanding anything to the contrary, a Converting Lender and Ultimate Holdings may agree in writing to use any Applicable Price with respect to any Conversion by such Converting Lender, subject to compliance with any Requirement of Law, including the rules and regulations of the Applicable Exchange. Following any Merger Event pursuant to which the Outstanding Obligations become convertible into Reference Property, the Applicable Price will be with respect to one unit of Reference Property.
“Calculation Agent” means a leading international financial institution that is not an Affiliate of Ultimate Holdings or any Lender.
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“Common Stock” means Class A Common Stock, $0.0001 par value per share, of Ultimate Holdings.
“Conversion” means the exercise (including automatic exercise) of a conversion right under Section 18.1 or Section 18.2 by any Lender.
“Conversion Payment Shares” means, with respect to any Conversion by a Lender, a number of shares of Common Stock equal to the portion of such Lender’s Outstanding Obligations being converted divided by the Applicable Price with respect to the relevant Applicable Conversion Date. Following any Merger Event pursuant to which the Outstanding Obligations become convertible into Reference Property, each Conversion Payment Share will be deemed replaced with one unit of Reference Property.
“Converting Lender” means, with respect to any conversion of Outstanding Obligations, the Lender that has elected to convert under Section 18.1 or Section 18.2.
“Market Disruption Event” means (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts traded on any U.S. exchange relating to the Common Stock.
“Optional Conversion Date” means, with respect to a Lender, the second Scheduled Trading Date following the date such Lender delivers written notice to Ultimate Holdings electing to convert under Section 18.2.
“Outstanding Obligations” means the then-outstanding aggregate principal amounts of the Loans (including any interest previously capitalized and added to principal), together with any accrued interest to, but excluding, the Applicable Conversion Date and any fees payable pursuant to Section 5.2 hereof.
“Permitted Exchange” means the New York Stock Exchange, NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (or any of their respective successors).
“Public Issuer” means a Successor Issuer in a Merger Event a class of whose common stock or equivalent Equity Interests is listed or admitted for trading on a Permitted Exchange.
“Requisite Shareholder Approval” means advance shareholder approval with respect to the issuance of Conversion Payment Shares upon conversion of the Outstanding Obligations (a) to any officer, director (including any director that is an Affiliate of a Lender), employee or consultant for issuances that would constitute a discounted issuance of Common Stock pursuant to Rule 5635(c) of the Nasdaq Stock Market; (b) to any Lender to the extent such issuance would constitute a change of control pursuant to Rule 5635(b) of the Nasdaq Stock Market (or such similar rules of the Applicable Exchange); (c) to the extent such issuance would be a “20% Issuance” at a price that is less than the “Minimum Price” pursuant to, and as such terms are defined under, Rule 5635(c) of the Nasdaq Stock Market; and (d) as otherwise required
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by the Applicable Exchange; provided, however, that the applicable Requisite Shareholder Approval will be deemed to be obtained if, due to (A) any amendment or binding change in the interpretation of the applicable listing standards of the Applicable Exchange or (B) the receipt by Ultimate Holdings from the Applicable Exchange of an interpretation of the applicable listing standards of the Applicable Exchange, which states that such shareholder approval is not required for Ultimate Holdings to issue Conversion Payment Shares upon conversion of all Outstanding Obligations.
“Scheduled Trading Day” means any day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded. If the Common Stock is not so listed or traded, then “Scheduled Trading Day” means a Business Day.
“Successor Issuer” means a Person who is a successor of Ultimate Holdings or a Person who issues common stock or equivalent Equity Interests in any Merger Event in which the shares of the Common Stock are converted into or exchanged for, in whole or in part, common stock or equivalent Equity Interests of such Person.
“Trading Day” means any day on which (A) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded; and (B) there is no Market Disruption Event. If the Common Stock is not so listed or traded, then “Trading Day” means a Business Day.
ARTICLE XIX
GUARANTY
Section 19.1     Guaranty. Each Guarantor hereby jointly and severally and unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all Obligations of the Borrowers now or hereafter existing under any Loan Document, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of the Borrowers, whether or not a claim for post-filing interest is allowed in such Insolvency Proceeding) fees, commissions, expense reimbursements, indemnifications or otherwise (such obligations, to the extent not paid by the Borrowers, being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under the guaranty set forth in this Article XIX. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrowers to the Secured Parties under any Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving the Borrowers. Notwithstanding any of the foregoing, Guaranteed Obligations shall not include any Excluded Swap Obligations. In no event shall the obligation of any Guarantor hereunder exceed the maximum amount such Guarantor could guarantee under any Debtor Relief Law.
Section 19.2    Guaranty Absolute. Each Guarantor jointly and severally guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any
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jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. Each Guarantor agrees that this Article XIX constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be made by any Agent or any Lender to any Collateral. The obligations of each Guarantor under this Article XIX are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce such obligations, irrespective of whether any action is brought against any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of each Guarantor under this Article XIX shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:
a.any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;
b.any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;
c.any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
d.the existence of any claim, set-off, defense or other right that any Guarantor may have at any time against any Person, including, without limitation, any Secured Party;
e.any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or
f.any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Secured Parties that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.
This Article XIX shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by Secured Parties or any other Person upon the insolvency, bankruptcy or reorganization of the Borrowers or otherwise, all as though such payment had not been made.
Section 19.3    Waiver. Each Guarantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Article XIX and any requirement that the Secured Parties exhaust any right or take any action against any Loan Party or any other Person or any Collateral, (iii) any right to compel or direct any Secured Party to seek payment or recovery of any amounts owed under this Article XIX from any one particular fund or source or to exhaust any right or take any action against any other Loan Party, any other Person or any Collateral, (iv) any requirement that any Secured Party protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any Loan Party, any other Person or any Collateral, and (v) any other defense available to any Guarantor. Each Guarantor agrees that the Secured
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Parties shall have no obligation to marshal any assets in favor of any Guarantor or against, or in payment of, any or all of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 19.3 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Article XIX, and acknowledges that this Article XIX is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
Section 19.4    Continuing Guaranty; Assignments. This Article XIX is a continuing guaranty and shall (a) remain in full force and effect until the later of the cash payment in full of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XIX and the New Senior Credit Agreement Final Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Secured Parties and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitments, its Loans owing to it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted such Lender herein or otherwise, in each case as provided in Section 15.6.
Section 19.5    Subrogation. No Guarantor will exercise any rights that it may now or hereafter acquire against any Loan Party or any other guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Article XIX, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Secured Parties against any Loan Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XIX shall have been paid in full in cash and the New Senior Credit Agreement Final Maturity Date shall have occurred. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XIX and the New Senior Credit Agreement Final Maturity Date such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Article XIX, whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Article XIX thereafter arising. If (i) any Guarantor shall make payment to the Secured Parties of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Article XIX shall be paid in full in cash and (iii) the New Senior Credit Agreement Final Maturity Date shall have occurred, the Secured Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
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Section 19.6    Contribution. All Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Article XIX. Accordingly, in the event any payment or distribution is made on any date by a Guarantor under this Article XIX such that its Aggregate Payments exceeds its Fair Share as of such date, such Guarantor shall be entitled to a contribution from each of the other Guarantors in an amount sufficient to cause each Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to any Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Guarantor, to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Guarantors multiplied by, (b) the aggregate amount paid or distributed on or before such date by all Guarantors under this Article XIX in respect of the Guaranteed Obligations. “Fair Share Contribution Amount” means, with respect to any Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Guarantor under this Article XIX that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Guarantor for purposes of this Section 19.6, any assets or liabilities of such Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to any Guarantor as of any date of determination, an amount equal to (A) the aggregate amount of all payments and distributions made on or before such date by such Guarantor in respect of this Article XIX (including, without limitation, in respect of this Section 19.6), minus (B) the aggregate amount of all payments received on or before such date by such Guarantor from the other Guarantors as contributions under this Section 19.6. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Guarantor. The allocation among Guarantors of their obligations as set forth in this Section 19.6 shall not be construed in any way to limit the liability of any Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 19.6.
[SIGNATURE PAGES FOLLOW]

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EXHIBIT B

[omitted]
Exhibit 10.8
WAIVER AND AMENDMENT NO. 1
TO FINANCING AGREEMENT
WAIVER AND AMENDMENT NO. 1 TO FINANCING AGREEMENT, dated as of August 10, 2022 (this “Amendment”), to the Financing Agreement, dated as of May 27, 2022 (as amended by the Amendment, and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), by and among AgileThought, Inc., a Delaware corporation (“Holdings”), AN Global, LLC, a Delaware limited liability company (“the Borrower”), each subsidiary of Holdings listed as a “Guarantor” on the signature pages thereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” thereunder, each a “Guarantor” and collectively, the “Guarantors”), the lenders from time to time party thereto (each a “Lender” and collectively, the “Lenders”), Blue Torch Finance LLC, a Delaware limited liability company (“Blue Torch”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), and Blue Torch, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent” and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”).
WHEREAS, the Agents delivered a Reservation of Rights Letter to the Loan Parties on July 27, 2022, notifying the Loan Parties of certain breaches and defaults under the Financing Agreement, as specified on Schedule 1 attached hereto (collectively, the “Specified Defaults”); and
WHEREAS, the Loan Parties have requested that the Agents and the Required Lenders amend certain terms and conditions of the Financing Agreement and waive the Specified Defaults; and
WHEREAS, the Agents and the Required Lenders are willing to amend such terms and conditions of the Financing Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.Definitions. All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement.
2.Amendments. The Financing Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text and stricken text) and (ii) to add the blue or green double-underlined text (indicated textually in the same manner as the following examples: double-underlined text and double-underlined text), in each case, as set forth in the marked copy of the Financing Agreement attached as Annex A hereto and made a part hereof for all purposes.
3.Waiver. Subject to the satisfaction in full of the conditions to effectiveness set forth in Section 5 below and in reliance upon the representations and warranties of the Loan Parties contained herein, the Agents and the Lenders party hereto hereby waive the Specified Defaults and the collection of the Post-Default Rate interest payable in connection with such Specified Defaults having occurred and continued (the “Waiver”). The waivers set forth in this Section 3 shall be effective only in


this specific instance, shall apply only for the defaults that have occurred prior to the date hereof and only for the specific purpose set forth herein and, for the avoidance of doubt, do not allow for any other or further departure from the terms and conditions of the Financing Agreement (after giving effect to the Amendment) or any other Loan Document, including the application and collection of the interest at the Post-Default Rate, which terms and conditions shall continue in full force and effect. For the avoidance of doubt, Section 7.01(r) of the Financing Agreement (as amended by the Amendment) remains in full force and effect and no covenants contained therein are waived by the Waiver.
4.Representations and Warranties. Each Loan Party hereby represents and warrants to the Agents and the Lenders as follows:
(a)Representations and Warranties; No Event of Default. The representations and warranties herein, in Article VI of the Financing Agreement and in each other Loan Document on or immediately prior to the Amendment No. 1 Effective Date, but after giving effect to the Waiver, are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date), and no Default or Event of Default has occurred and is continuing as of the Amendment No. 1 Effective Date or would result from this Amendment becoming effective in accordance with its terms.
(b)Organization, Good Standing, Etc. Each Loan Party (i) is a corporation, limited liability company or sociedad anonima duly organized, validly existing and, other than the Mexican Loan Parties, in good standing under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated, and to execute and deliver this Amendment, and to consummate the transactions contemplated by this Amendment and by the Financing Agreement, as amended by this Amendment, and (iii) is duly qualified to do business in, and is in good standing in each jurisdiction where the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and be in good standing could not reasonably be expected to have a Material Adverse Effect.
(c)Authorization, Etc. The execution and delivery by each Loan Party of this Amendment and the performance by it of the Financing Agreement, as amended by this Amendment, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable material Requirement of Law, or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its


operations or any of its properties, except in the case of clauses (ii)(C) and (iv) hereof, to the extent that such contravention, default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal could not reasonably be expected to have a Material Adverse Effect.
(d)Enforceability of Loan Documents. This Amendment and the Financing Agreement (as amended by this Amendment) is and will be a legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
(e)Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of any Loan Document to which it is or will be a party.
5.Conditions to Effectiveness. Except as set forth in Section 5(a), this Amendment shall become effective only upon satisfaction in full, in a manner satisfactory to the Agents, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied being hereinafter referred to as the “Amendment No. 1 Effective Date”):
(f)Payment of Fees, Etc. The Borrowers shall have paid on or before August 11, 2022, (i) an amendment fee to the Administrative Agent, for the ratable benefit of the Lenders, in an amount equal to $145,000, which fee shall be deemed earned in full on the Amendment No. 1 Effective Date and shall be non-refundable, and (ii) all other fees, costs, expenses and taxes then payable, if any, pursuant to Section 2.07 or 12.04 of the Financing Agreement, in each case, the failure of which shall render the Waiver null and void.
(g)Representations and Warranties. After giving effect to the Waiver, the representations and warranties contained in this Amendment and in Article VI of the Financing Agreement and in each other Loan Document shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to “materiality” or “Material Adverse Effect” in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of the Amendment No. 1 Effective Date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct on and as of such earlier date).
(h)No Default; Event of Default. After giving effect to the Waiver, no Default or Event of Default shall have occurred and be continuing on the Amendment No. 1 Effective Date or result from this Amendment becoming effective in accordance with its terms.
(i)Delivery of Documents. The Agents shall have received on or before the Amendment No. 1 Effective Date this Amendment, duly executed by the Loan Parties, each Agent and the Required Lenders, in form and substance satisfactory to the Agents.
(j)Approvals. All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person


required in connection with any Loan Document or the transactions contemplated thereby or the conduct of the Loan Parties’ business shall have been obtained or made and shall be in full force and effect. There shall exist no claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or derivative litigation) pending or, to the knowledge of any Loan Party, threatened in any court or before any arbitrator or Governmental Authority which (i) relates to the Loan Documents or the transactions contemplated thereby, or (ii) could reasonably be expected to have a Material Adverse Effect.
(f)    Amendment No. 4 to Existing Second Lien Credit Facility. The Agents shall have received a fully executed copy of Amendment No. 4 to the Credit Agreement, dated as of the date hereof, by and among the Loan Parties party thereto, the Existing Second Lien Collateral Agent, GLAS USA LLC, as administrative agent, and the Existing Second Lien Lenders, in form and substance satisfactory to the Agents.
6.Continued Effectiveness of the Financing Agreement and Other Loan Documents. Each Loan Party hereby (a) acknowledges and consents to this Amendment, (b) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Amendment No. 1 Effective Date, all references in any such Loan Document to “the Financing Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended by this Amendment, and (c) confirms and agrees that, to the extent that any such Loan Document purports to assign or pledge to the Collateral Agent, for the benefit of the Agents and the Lenders, or to grant to the Collateral Agent, for the benefit of the Agents and the Lenders, a security interest in or Lien on any Collateral as security for the Obligations of the Loan Parties from time to time existing in respect of the Financing Agreement (as amended by this Amendment) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects. This Amendment does not and shall not affect any of the obligations of the Loan Parties, other than as expressly provided herein, including, without limitation, the Loan Parties’ obligations to repay the Loans in accordance with the terms of Financing Agreement or the obligations of the Loan Parties under any Loan Document to which they are a party, all of which obligations shall remain in full force and effect. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Agent or any Lender under the Financing Agreement or any other Loan Document nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.
7.No Representations by Agents or Lenders. Each Loan Party hereby acknowledges that it has not relied on any representation, written or oral, express or implied, by any Agent or any Lender, other than those expressly contained herein, in entering into this Amendment.
8.No Novation. Nothing herein contained shall be construed as a substitution or novation of the Obligations outstanding under the Financing Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby.
9.Release. Each Loan Party hereby acknowledges and agrees that: (a) neither it nor any of its Subsidiaries has any claim or cause of action against any Agent or any Lender (or any of the directors, officers, employees, agents, attorneys or consultants of any of the foregoing), and (b) the Agents and the Lenders have heretofore properly performed and satisfied in a timely manner all of their obligations to the Loan Parties, and all of their Subsidiaries and Affiliates. Notwithstanding the


foregoing, the Agents and the Lenders wish (and the Loan Parties agree) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of their rights, interests, security and/or remedies. Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, each Loan Party (for itself and its Subsidiaries and Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release, waive and forever discharge the Agents and the Lenders, together with their respective Affiliates and Related Funds, and each of the directors, officers, employees, agents, attorneys and consultants of each of the foregoing (collectively, the “Released Parties”), from any and all debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done, in each case, on or prior to the Amendment No. 1 Effective Date directly arising out of, connected with or related to this Amendment, the Financing Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of any Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of any Loan Party, or the making of any Loans or other advances, or the management of such Loans or other advances or the Collateral. Each Loan Party represents and warrants that it has no knowledge of any claim by any Releasor against any Released Party or of any facts or acts or omissions of any Released Party which on the date hereof would be the basis of a claim by any Releasor against any Released Party which would not be released hereby.
10.Further Assurances. The Loan Parties shall execute any and all further documents, agreements and instruments, and take all further actions, as may be required under Applicable Law or as any Agent may reasonably request, in order to effect the purposes of this Amendment.
11.Miscellaneous.
(k)This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by facsimile or electronic mail shall be equally effective as delivery of an original executed counterpart of this Amendment.
(l)Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
(m)This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.
(n)Each Loan Party hereby acknowledges and agrees that this Amendment constitutes a “Loan Document” under the Financing Agreement. Accordingly, it shall be an immediate Event of Default under the Financing Agreement if (i) any representation or warranty made by any Loan Party under or in connection with this Amendment shall have been incorrect in any respect when made or


deemed made, or (ii) any Loan Party shall fail to perform or observe any term, covenant or agreement contained in this Amendment.
(o)Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
[Remainder of page intentionally left blank.]




IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

BORROWER:
AN GLOBAL LLC
By:/s/ Manuel Senderos
Name:Manuel Senderos
Title:President

[Signature Page to Amendment No. 1 to Financing Agreement]



GUARANTORS:
AGILETHOUGHT, INC.
By: /s/ Manuel Senderos
Name:Manuel Senderos
Title:President
AGILETHOUGHT, LLC
By:/s/ Manuel Senderos
Name:Manuel Senderos
Title:Manager
4TH SOURCE, LLC
By:/s/ Diana Abril
Name:Diana Abril







COLLATERAL AGENT AND ADMINISTRATIVE AGENT:
BLUE TORCH FINANCE LLC, as Collateral Agent and Administrative Agent
By: Blue Torch Capital LP, its managing member
By:Kevin Genda
Name: Kevin Genda
Title: CEO

[Signature Page to Amendment No. 1 to Financing Agreement]

LENDERS:
BLUE TORCH CREDIT OPPORTUNITIES FUND II LP
By: Blue Torch Credit Opportunities GP II LLC, its
general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
SWISS CAPITAL BTC OL PRIVATE DEBT FUND L.P.
By:Kevin Genda
Name: Kevin Genda in his capacity as authorized signatory of Blue Torch Capital LP, as agent and attorney-in-fact for Swiss Capital BTC OL Private Debt Fund L.P.
BLUE TORCH CREDIT OPPORTUNITIES FUND III LP
By: Blue Torch Credit Opportunities GP III LLC, its
general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
BTC HOLDINGS FUND II, LLC
By: Blue Torch Credit Opportunities Fund II LP, its sole member
By: Blue Torch Credit Opportunities GP II LLC, its general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
[Signature Page to Amendment No. 1 to Financing Agreement]

BTC HOLDINGS SBAF FUND LLC
By: Blue Torch Credit Opportunities SBAF Fund LP, its sole member
By: Blue Torch Credit Opportunities SBAF GP LLC, its general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
BTC HOLDINGS KRS FUND LLC
By: Blue Torch Credit Opportunities KRS Fund LP, its sole member
By: Blue Torch Credit Opportunities KRS GP LLC, its general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
BLUE TORCH CREDIT OPPORTUNITIES SBAF FUND LP
By: Blue Torch Credit Opportunities SBAF GP LLC, its general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
[Signature Page to Amendment No. 1 to Financing Agreement]

BLUE TORCH CREDIT OPPORTUNITIES KRS FUND LP
By: Blue Torch Credit Opportunities KRS GP LLC, its general partner
By: KPG BTC Management LLC, its sole member
By:Kevin Genda
Name: Kevin Genda
Title: Managing Member
[Signature Page to Amendment No. 1 to Financing Agreement]

SCHEDULE A
Specified Defaults
1. On or prior to June 6, 2022, the Loan Parties were required to enter into an amendment to the Second Lien Credit Facility, in form and substance satisfactory to the Administrative Agent, which failure to deliver such amendment constituted an Event of Default pursuant to Section 9.01(d) of the Financing Agreement on July 6, 2022.
2. On or prior to June 21, 2022, the Loan Parties were required to cause Monroe Capital Management Advisors, LLC to assign any and all rights it has under that certain Irrevocable Trust Contract Number F/3757, dated as of November 15, 2018 (as amended, supplemented or otherwise modified from time to time, the “Trust Agreement”), by and among Invertis, S.A. de C.V., AgileThought, Inc., QMX Investment Holdings USA, Inc., IT Global Holding, LLC., AgileThought Digital Solutions, S.A.P.I de C.V., Entrepids Technology, Inc., 4th Source, LLC and Monroe Capital Management Advisors, LLC, as trustee (in such capacity, the “Trustee”) and other persons from time to time party thereto, which failure to assign such rights constituted an Event of Default pursuant to Section 9.01(d) of the Financing Agreement on July 21, 2022.



ANNEX A
Amended Financing Agreement
(See Attached)

[Signature Page to Amendment No. 1 to Financing Agreement]
749048546.2


ANNEX A TO AMENDMENT NO. 1 TO FINANCING AGREEMENT

Conformed through Amendment No. 1
FINANCING AGREEMENT
Dated as of May 27, 2022
by and among
AGILETHOUGHT, INC.,
as Holdings,
AN GLOBAL LLC,
as the Borrower,
EACH OTHER SUBSIDIARY OF HOLDINGS
LISTED AS A GUARANTOR ON THE SIGNATURE PAGES HERETO,
as Guarantors,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
BLUE TORCH FINANCE LLC,
as Administrative Agent and Collateral Agent



Table of Contents
Page
Article I DEFINITIONS; CERTAIN TERMS
Section 1.01    Definitions
Section 1.02    Terms Generally
Section 1.03    Certain Matters of Construction
Section 1.04    Accounting and Other Terms
Section 1.05    Time References
Section 1.06    Obligation to Make Payments in Dollars
Article II THE LOANS
Section 2.01    Commitments
Section 2.02    Making the Loans
Section 2.03    Repayment of Loans; Evidence of Debt
Section 2.04    Interest
Section 2.05    Increase in Revolving Credit Commitment.
Section 2.06    Reduction of Commitment; Prepayment of Loans
Section 2.07    Fees
Section 2.08    SOFR Option
Section 2.09    Funding Losses
Section 2.10    Taxes
Section 2.11    Increased Costs and Reduced Return
Section 2.12    Changes in Law; Impracticability or Illegality
Article III [INTENTIONALLY OMITTED]
Article IV APPLICATION OF PAYMENTS; DEFAULTING LENDERS
Section 4.01    Payments; Computations and Statements
Section 4.02    Sharing of Payments
Section 4.03    Apportionment of Payments
Section 4.04    Defaulting Lenders
Article V CONDITIONS TO LOANS
Section 5.01    Conditions Precedent to Effectiveness
Section 5.02    Conditions Precedent to All Loans
Article VI REPRESENTATIONS AND WARRANTIES
Section 6.01    Representations and Warranties
Article VII COVENANTS OF THE LOAN PARTIES AND OTHER COLLATERAL MATTERS
Section 7.01    Affirmative Covenants
Section 7.02    Negative Covenants
Section 7.03    Financial Covenants
Article VIII CASH MANAGEMENT ARRANGEMENTS AND OTHER COLLATERAL MATTERS
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Section 8.01    Cash Management Arrangements
Article IX EVENTS OF DEFAULT
Section 9.01    Events of Default
Section 9.02    Cure Right
Article X AGENTS
Section 10.01    Appointment
Section 10.02    Nature of Duties; Delegation
Section 10.03    Rights, Exculpation, Etc.
Section 10.04    Reliance
Section 10.05    Indemnification
Section 10.06    Agents Individually
Section 10.07    Successor Agent
Section 10.08    Collateral Matters
Section 10.09    Agency for Perfection
Section 10.10    No Reliance on any Agent’s Customer Identification Program
Section 10.11    No Third Party Beneficiaries
Section 10.12    No Fiduciary Relationship
Section 10.13    Reports; Confidentiality; Disclaimers
Section 10.14    Collateral Custodian
Section 10.15    Intercreditor Agreement
Section 10.16    Collateral Agent May File Proofs of Claim
Section 10.17    Erroneous Distribution
Article XI GUARANTY
Section 11.01    Guaranty
Section 11.02    Guaranty Absolute
Section 11.03    Waiver
Section 11.04    Continuing Guaranty; Assignments
Section 11.05    Subrogation
Section 11.06    Contribution
Article XII MISCELLANEOUS
Section 12.01    Notices, Etc.
Section 12.02    Amendments, Etc.
Section 12.03    No Waiver; Remedies, Etc.
Section 12.04    Expenses; Taxes; Attorneys’ Fees
Section 12.05    Right of Set-off
Section 12.06    Severability
Section 12.07    Assignments and Participations.
Section 12.08    Counterparts
Section 12.09    GOVERNING LAW
Section 12.10    CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE
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Section 12.11    WAIVER OF JURY TRIAL, ETC.
Section 12.12    Consent by the Agents and Lenders
Section 12.13    No Party Deemed Drafter
Section 12.14    Reinstatement; Certain Payments
Section 12.15    Indemnification; Limitation of Liability for Certain Damages
Section 12.16    Records
Section 12.17    Binding Effect
Section 12.18    Highest Lawful Rate
Section 12.19    Confidentiality
Section 12.20    Public Disclosure
Section 12.21    Integration
Section 12.22    USA PATRIOT Act



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SCHEDULES AND EXHIBITS
Schedule 1.01(A)    Lenders and Lenders’ Commitments
Schedule 1.01(B)    Facilities
Schedule 1.01(C)    Permitted Intercompany Investments
Schedule 6.01(e)    Capitalization; Subsidiaries
Schedule 6.01(f)    Litigation
Schedule 6.01(i)    ERISA
Schedule 6.01(j)    Unpaid Taxes
Schedule 6.01(l)    Nature of Business
Schedule 6.01(p)    Employee and Labor Matters
Schedule 6.01(q)    Environmental Matters
Schedule 6.01(r)    Insurance
Schedule 6.01(u)    Intellectual Property
Schedule 6.01(v)    Material Contracts
Schedule 7.01(r)    Post-Closing Matters
Schedule 7.02(a)    Existing Liens
Schedule 7.02(b)    Existing Indebtedness
Schedule 7.02(c)    Project Thunder
Schedule 7.02(e)    Existing Investments
Schedule 7.02(j)    Affiliate Transactions
Schedule 7.02(k)    Limitations on Dividends and Other Payment Restrictions
Schedule 8.01        Cash Management Accounts

Exhibit A        Form of Joinder Agreement
Exhibit B        Form of Assignment and Acceptance
Exhibit C        Form of Notice of Borrowing
Exhibit D        Form of SOFR Notice
Exhibit E        Form of Compliance Certificate
Exhibit 2.09(d)     Forms of U.S. Tax Compliance Certificate

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FINANCING AGREEMENT
Financing Agreement, dated as of May 27, 2022, by and among AgileThought, Inc., a Delaware corporation (“Holdings”), AN Global LLC, a Delaware limited liability company (the “Borrower”), each subsidiary of Holdings listed as a “Guarantor” on the signature pages hereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” hereunder, each a “Guarantor” and collectively, the “Guarantors”), the lenders from time to time party hereto (each a “Lender” and collectively, the “Lenders”), Blue Torch Finance LLC, a Delaware limited liability company (“Blue Torch”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”), and Blue Torch, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent” and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”).
RECITALS
The Borrower has asked the Lenders to extend credit to the Borrower consisting of (a) a term loan in the aggregate principal amount of $55,000,000, and (b) a revolving credit facility in an aggregate principal amount not to exceed $3,000,000 at any time outstanding. The proceeds of the term loan and any loans made under the revolving credit facility shall be used (i) to refinance existing indebtedness of the Borrower, (ii) to pay up to $9,000,000 of certain past-due accounts payable of the Loan Parties, (iii) for general working capital purposes and (iv) to pay fees and expenses related to this Agreement. The Lenders are severally, and not jointly, willing to extend such credit to the Borrower subject to the terms and conditions hereinafter set forth.
In consideration of the premises and the covenants and agreements contained herein, the parties hereto agree as follows:
Article I
DEFINITIONS; CERTAIN TERMS
Section 1.01     Definitions. As used in this Agreement, the following terms shall have the respective meanings indicated below:
“Account” or “Accounts” is defined in the UCC.
“Account Debtor” means, with respect to any Person, each debtor, customer or obligor in any way obligated on or in connection with any Account of such Person.
“Acquisition” means the acquisition (whether by means of a merger, amalgamation, consolidation or otherwise) of Equity Interests of any Person or all or substantially all of the assets of (or any division or business line of) any Person.
“Action” has the meaning specified therefor in Section 12.12.
“Additional Amount” has the meaning specified therefor in Section 2.10(a).
“Additional Second Lien Indebtedness” means Indebtedness of any Loan Party (other than the Mexican Loan Parties) that is secured on a junior basis to the Obligations, the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are satisfactory to the Agents and the Required Lenders and


which is subject to an intercreditor agreement in form and substance satisfactory to the Agents and the Required Lenders.
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment.
“Administrative Agent” has the meaning specified therefor in the preamble hereto.
“Administrative Agent’s Accounts” means one or more accounts designated by the Administrative Agent at a bank designated by the Administrative Agent from time to time as the accounts into which the Loan Parties shall make all payments to the Administrative Agent for the benefit of the Agents and the Lenders under this Agreement and the other Loan Documents.
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the Equity Interests having ordinary voting power for the election of members of the Board of Directors of such Person or (b) direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Notwithstanding anything herein to the contrary, in no event shall any Agent or any Lender be considered an “Affiliate” of any Loan Party.
“Agent” and “Agents” have the respective meanings specified therefor in the preamble hereto.
“Aggregate Payments” has the meaning specified therefor in Section 11.06.
“Agreement” means this Financing Agreement, including all amendments, restatements, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Agreement as the same may be in effect at the time such reference becomes operative.
“AGS Indebtedness” means Indebtedness in the aggregate principal amount of $673,000 pursuant to that certain Subordinated Promissory Note, dated as of June 24, 2021 by Holdings in favor of AGS Group LLC.
“AGS Subordination Agreement” means that certain Subordination Agreement, dated as of June 24, 2021, by and among the Borrower, Holdings, the Administrative Agent (as successor to the administrative agent under the Existing First Lien Credit Facility) and AGS Group LLC, with respect to the AGS Indebtedness, as said agreement may be supplemented by an agreement in which AGS Group LLC confirms the subordination provided thereby with respect to the Obligations.
“Amendment No. 1” means that certain Amendment No. 1 to Financing Agreement, dated as of August 10, 2022, between Holdings, the Borrower, the other Guarantors party thereto, the Agents and the Lenders party thereto.
“Amendment No. 1 Effective Date” means August 10, 2022.
“AN Extend Earn-Out” means certain earn-out payments owed by AN Extend, S.A. de C.V. and Holdings to certain Persons that were sellers of AN Extend, S.A. de C.V. in respect of the sale of AN Extend, S.A. de C.V. in an amount equal to $1,750,333 (as of March 31, 2022), together with interest thereon.
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“Anti-Corruption Laws” means all Requirements of Law concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the UK Bribery Act of 2010, and the anti-bribery and anti-corruption laws and regulations of those jurisdictions in which the Loan Parties do business.
“Anti-Money Laundering Laws” means all Requirements of Law concerning or relating to terrorism or money laundering, including, without limitation, the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956-1957), the USA PATRIOT Act and the Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5332 and 12 U.S.C. §§ 1818(s), 1820(b) and §§ 1951-1959) and the rules and regulations thereunder, and any law prohibiting or directed against the financing or support of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B).
“Applicable Margin” means, as of any date of determination, with respect to the interest rate of any Revolving Loan or the Term Loan (or any portion thereof):
(a)    From the Effective Date until the date on which quarterly financial statements and a Compliance Certificate are received by the Administrative Agent in accordance with Section 7.01(a)(ii) and Section 7.01(a)(iv) for the first fiscal quarter ending after the Effective Date (the “Initial Applicable Margin Period”), the relevant Applicable Margin shall be set at Level I in the table below.
(b)    After the Initial Applicable Margin Period, the relevant Applicable Margin shall be set at the respective level indicated below based upon the First Lien Leverage Ratio set forth opposite thereto, which ratio shall be calculated as of the end of the most recent fiscal quarter of Holdings and its Subsidiaries for which quarterly financial statements and a Compliance Certificate are received by the Administrative Agent in accordance with Section 7.01(a)(ii) and Section 7.01(a)(iv):
LevelFirst Lien Leverage Ratio

Reference Rate Loans
SOFR Loans
IGreater than or equal to 4.00 to 1.008.00%9.00%
IILess than 4.00 to 1:00 and equal to or greater than 3.00 to 1.007.00%8.00%
IIILess than 3.00 to 1.00 and equal to or greater than 2.00 to 1.006.50%7.50%
IVLess than 2.00 to 1.006.00%7.00%

(c)    Subject to clause (d) below, the adjustment of the Applicable Margin (if any) will occur two (2) Business Days after the date the Administrative Agent receives the quarterly financial statements and a Compliance Certificate in accordance with Section 7.01(a)(iv) and Section 7.01(a)(iv).
(d)    Notwithstanding the foregoing:
(i)    the Applicable Margin shall be Level I in the table above (x) upon the occurrence and during the continuation of a Default or Event of Default, or (y) if for any period, the Administrative Agent does not receive the quarterly financial statements and Compliance Certificate described in clause (c) above, for the period commencing on the date such quarterly financial statements and Compliance Certificate were required to be delivered
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pursuant to clause (c) above through the date on which such quarterly financial statements and Compliance Certificate are actually received by the Administrative Agent; and
(ii)    in the event that any quarterly financial statement or such Compliance Certificate described in clause (c) above is inaccurate (regardless of whether this Agreement or any Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any fiscal period, then the Applicable Margin for such fiscal period shall be adjusted retroactively (to the effective date of the determination of the Applicable Margin that was based upon the delivery of such inaccurate quarterly financial statement or Compliance Certificate) to reflect the correct Applicable Margin, and the Borrower shall promptly make payments to the Administrative Agent to reflect such adjustment.
“Applicable Premium” means
(a)    as of the date of the occurrence of an Applicable Premium Trigger Event specified in clause (c), (d) or (e) of the definition thereof:
(i)    during the period from and after the Effective Date up to and including the date that is the twelve (12) month anniversary of the Effective Date (the “First Period”), an amount equal to 3.00% times the sum of (A) the aggregate principal amount of the Term Loans outstanding on the date of such Applicable Premium Trigger Event and (B) the aggregate amount of Revolving Credit Commitments immediately prior to such Applicable Premium Trigger Event;
(ii)    during the period after the First Period up to and including the date that is the twenty-four (24) month anniversary of the Effective Date (the “Second Period”), an amount equal to 2.00% times the sum of (A) the aggregate principal amount of the Term Loans outstanding on the date of such Applicable Premium Trigger Event and (B) the aggregate amount of Revolving Credit Commitments immediately prior to such Applicable Premium Trigger Event;
(iii)    during the period after the Second Period up to and including the date that is the thirty-six (36) month anniversary of the Effective Date (the “Third Period”), an amount equal to 1.00% times the sum of (A) the aggregate principal amount of the Term Loans outstanding on the date of such Applicable Premium Trigger Event and (B) the aggregate amount of Revolving Credit Commitments immediately prior to such Applicable Premium Trigger Event; and
(iv)    thereafter, zero;
(b)    as of the date of the occurrence of an Applicable Premium Trigger Event specified in clause (a) of the definition thereof:
(i)    during the First Period, an amount equal to 3.00% times the amount of the permanent reduction of the Total Revolving Credit Commitments on such date;
(ii)    during the Second Period, an amount equal to 2.00% times the amount of the permanent reduction of the Total Revolving Credit Commitments on such date;
(iii)    during the Third Period, an amount equal to 1.00% times the amount of the permanent reduction of the Total Revolving Credit Commitments on such date; and
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(iii)    thereafter, zero;
(c)    as of the date of the occurrence of an Applicable Premium Trigger Event specified in clause (b) of the definition thereof:
(i)    during the First Period, an amount equal to 3.00% times the amount of the aggregate principal amount of the Term Loans being paid on such date;
(ii)    during the Second Period, an amount equal to 2.00% times the amount of the aggregate principal amount of the Term Loans being paid on such date;
(iii)    during the Third Period, an amount equal to 1.00% times the amount of the aggregate principal amount of the Term Loans being paid on such date; and
(iii)    thereafter, zero.
“Applicable Premium Trigger Event” means
(a)    any permanent reduction of the Total Revolving Credit Commitment pursuant to Section 2.06 or Section 9.01;
(b)    any payment by any Loan Party of all, or any part, of the principal balance of any Term Loan for any reason (including, without limitation, any optional prepayment or mandatory prepayment other than (x) any prepayment made pursuant to Section 2.06(c)(i) or Section 2.06(c)(iv) and (y) any regularly scheduled amortization payment made pursuant to the first sentence of Section 2.03(b)) whether before or after (i) the occurrence of an Event of Default, or (ii) the commencement of any Insolvency Proceeding, and notwithstanding any acceleration (for any reason) of the Obligations;
(c)    the acceleration of the Obligations for any reason, including, without limitation, acceleration in accordance with Section 9.01, including as a result of the commencement of an Insolvency Proceeding;
(d)    the satisfaction, release, payment, restructuring, reorganization, replacement, reinstatement, defeasance or compromise of any of the Obligations in any Insolvency Proceeding, foreclosure (whether by power of judicial proceeding or otherwise) or deed in lieu of foreclosure or the making of a distribution of any kind in any Insolvency Proceeding to any Agent, for the account of the Lenders in full or partial satisfaction of the Obligations; or
(e)    the termination of this Agreement for any reason.
“Assignment and Acceptance” means an assignment and acceptance entered into by an assigning Lender and an assignee, and accepted by the Administrative Agent, in accordance with Section 12.07 hereof and substantially in the form of Exhibit B hereto or such other form acceptable to the Administrative Agent.
“Assignment of Business Interruption Insurance Policy” means that certain Assignment of Business Interruption Insurance Policy as Collateral Security, dated as of the date hereof, made by Holdings in favor of the Collateral Agent, in form and substance reasonably satisfactory to the Collateral Agent.
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“Authorized Officer” means, with respect to any Person, the chief executive officer, chief operating officer, chief financial officer, treasurer or other financial officer performing similar functions, secretary, president or executive vice president of such Person.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
“Availability” means, at any time, the difference between (a) the Total Revolving Credit Commitment and (b) the aggregate outstanding principal amount of all Revolving Loans.
“Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time and any successor statute or any similar federal or state law for the relief of debtors.
“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event and a replacement of the applicable Benchmark has occurred pursuant to Section 2.08(f), then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.08(f).
“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent and the Required Lenders as the replacement Benchmark in their reasonable discretion; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Reference Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Replacement Date” means a date and time determined by the Administrative Agent, which date shall be no later than the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative.
“Benchmark Transition Event” means, with respect to any then-current Benchmark the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator
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of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide all Available Tenors of such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark or (b) all Available Tenors of such Benchmark are or will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.
“Blue Torch” has the meaning specified therefor in the preamble hereto.
“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor).
“Board of Directors” means with respect to (a) any corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) a partnership, the board of directors of the general partner of the partnership, (c) a limited liability company, the managing member or members, any controlling committee or board of directors of such company, the manager or board of managers, the sole member or the managing member thereof, and (d) any other Person, the board or committee of such Person serving a similar function.
“Borrower” has the meaning specified therefor in the preamble hereto.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required to close; provided that for purposes of determining the borrowing, payment or continuation of, or determination of interest rate on, SOFR Loans, “Business Day” shall exclude any day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Capital Expenditures” means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset account on its balance sheet, whether such expenditures are paid in cash or financed, including all Capitalized Lease Obligations, obligations under synthetic leases and capitalized software costs that are paid or due and payable during such period and (b) to the extent not covered by clause (a) above, the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or fixed assets of, or the Equity Interests of, any other Person.
“Capitalized Lease” means, with respect to any Person, any lease of (or other arrangement conveying the right to use) real or personal property by such Person as lessee that is required under GAAP to be capitalized on the balance sheet of such Person.
“Capitalized Lease Obligations” means, with respect to any Person, obligations of such Person and its Subsidiaries under Capitalized Leases, and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
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“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within six months from the date of acquisition thereof; (b) commercial paper, maturing not more than 270 days after the date of issue rated P 1 by Moody’s or A 1 by Standard & Poor’s; (c) certificates of deposit maturing not more than 270 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (c) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof; (e) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000, which assets are primarily comprised of Cash Equivalents described in another clause of this definition; and (f) marketable tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s, in each case, maturing within 270 days from the date of acquisition thereof.
“Cash Management Accounts” means the bank accounts of each Loan Party (other than the Mexican Loan Parties) maintained at one or more Cash Management Banks listed on Schedule 8.01 hereto.
“Cash Management Bank” has the meaning specified therefor in Section 8.01(a).
“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, judicial ruling, judgment 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 concerning capital adequacy 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 shall, in each case, be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means each occurrence of any of the following:
a.the acquisition, directly or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) other than a Permitted Holder of beneficial ownership of more than 33% of the aggregate outstanding voting or economic power of the Equity Interests of Holdings;
b.during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Holdings (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of Holdings was approved by a vote of at least a majority of the directors of Holdings then still in office who were either directors at the beginning of such period, or whose election or nomination for election was previously approved) cease for any reason to constitute a majority of the Board of Directors of Holdings;
c.(i) Holdings shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting or economic power of the
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Equity Interests of the Borrower and (ii) Holdings shall cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of 100% (or such lesser percentage as may be set forth on Schedule 6.01(e)) of the aggregate voting or economic power of the Equity Interests of each other Loan Party and each of its Subsidiaries (other than in connection with any transaction permitted pursuant to Section 7.02(c)(i)), free and clear of all Liens (other than Permitted Specified Liens); or
d.a “Change of Control” (or any comparable term or provision) under or with respect to any of the Equity Interests or Indebtedness of Holdings or any of its Subsidiaries, including, for the avoidance of doubt, the Existing Second Lien Credit Facility.
“Collateral” means all of the property and assets and all interests therein and proceeds thereof now owned or hereafter acquired by any Person upon which a Lien is granted or purported to be granted by such Person as security for all or any part of the Obligations.
“Collateral Agent” has the meaning specified therefor in the preamble hereto.
“Collateral Agent Advances” has the meaning specified therefor in Section 10.08(a).
“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).
“Commitments” means, with respect to each Lender, such Lender’s Revolving Credit Commitment and Term Loan Commitment.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” means a Compliance Certificate, substantially in the form of Exhibit E, duly executed by an Authorized Officer of Holdings.
“Connection Income Taxes” means Other Connection Taxes that are imposed or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Adjusted EBITDA” shall mean, for any period, the Consolidated EBITDA for such period plus or minus, as applicable, to the extent a Permitted Acquisition or a Disposition of assets by Holdings or its Subsidiaries has been consummated during such period, the Consolidated EBITDA attributable to such Permitted Acquisition or such Disposition, as the case may be (but only that portion of the Consolidated EBITDA attributable to the portion of such period that occurred prior to the date of consummation of such Permitted Acquisition or such Disposition, as the case may be).
“Consolidated EBITDA” means, with respect to any Person for any period:
(a)    the Consolidated Net Income of such Person for such period, plus
(b)    without duplication, the sum of the following amounts for such period to the extent deducted in the calculation of Consolidated Net Income for such period:
(i)    any provision for United States federal income taxes or other taxes measured by net income (including any potential surcharges related to the timing
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difference of the provisional tax payments and the annual tax payments that would otherwise been paid as a tax expense),
(ii)    Consolidated Net Interest Expense,
(iii)    any loss from extraordinary items or non-recurring items; provided that the aggregate amount of all addbacks pursuant to this clause (iii), together with all addbacks for non-recurring items pursuant to clause (viii)(B) below, shall not exceed 5% of Consolidated EBITDA of Holdings in any period,
(iv)    any non-cash loss related to fair value adjustments (including with respect to the Existing Warrants),
(v)     any depreciation and amortization expense,
(vi)    any aggregate net loss on the Disposition of property (other than accounts and Inventory) outside the ordinary course of business, and
(vii)    any other non-cash expenditure, charge or loss for such period (other than any non-cash expenditure, charge or loss relating to write-offs, write-downs or reserves with respect to accounts and Inventory),
(viii)    non-recurring cash restructuring expenses and other transaction expenses (including in connection with Project Thunder) in an aggregate amount (A) for the Fiscal Year ending December 31, 2022, not to exceed $3,000,000, and (B) for any subsequent period, not to exceed (together with all addbacks for non-recurring items pursuant to clause (iii)(B) above), 5% of Consolidated EBITDA of Holdings for the most recently concluded fiscal quarter for which financial statements were delivered or were required to be delivered in accordance with Section 7.01(a)(ii),
(ix)     any non-cash losses relating to currency translation adjustments when converting the results of Foreign Subsidiaries to Dollars for such period,
(x)    the actual amount of reasonable and documented out-of-pocket fees, costs, and expenses paid during such period in connection with the negotiation, execution, and delivery of (A) this Agreement and the other Loan Documents, and (B) amendments to the Existing Second Lien Credit Facility in connection with this Agreement, in each case, to the extent such amounts are invoiced and paid on or prior to the Effective Date (or within 120 days thereafter); provided that the aggregate amount of all addbacks for non-recurring items pursuant to this clause (x) shall not exceed $5,250,000,
(xi)    any additional addbacks satisfactory to the Administrative Agent in its sole discretion, minus
(c)    without duplication, the sum of the following amounts for such period to the extent included in the calculation of such Consolidated Net Income for such period:
(i)    any credit for United States federal income taxes or other taxes measured by net income,
(ii)    any gain from extraordinary items,
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(iii)    any aggregate net gain from the Disposition of property (other than accounts and Inventory) outside the ordinary course of business,
(iv)    any other non-cash gain, including any reversal of a charge referred to in clause (b)(vi) above by reason of a decrease in the value of any Equity Interest;
in each case, determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Income” means, with respect to any Person, for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period; provided, however, that the following shall be excluded: (a) the net income of any other Person in which such Person or one of its Subsidiaries has a joint interest with a third-party (which interest does not cause the net income of such other Person to be consolidated into the net income of such Person), except to the extent of the amount of dividends or distributions paid to such Person or Subsidiary, (b) the net income of any Subsidiary of such Person that is, on the last day of such period, subject to any restriction or limitation on the payment of dividends or the making of other distributions, to the extent of such restriction or limitation, and (c) the net income of any other Person arising prior to such other Person becoming a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries.
“Consolidated Net Interest Expense” means, with respect to any Person for any period, (a) gross interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis and in accordance with GAAP (including, without limitation, interest expense paid to Affiliates of such Person), less (b) the sum of (i) interest income for such period and (ii) gains for such period on Hedging Agreements (to the extent not included in interest income above and to the extent not deducted in the calculation of gross interest expense), plus (c) the sum of (i) losses for such period on Hedging Agreements (to the extent not included in gross interest expense) and (ii) the upfront costs or fees for such period associated with Hedging Agreements (to the extent not included in gross interest expense), in each case, determined on a consolidated basis and in accordance with GAAP.
“Contingent Indemnity Obligations” means any Obligation constituting a contingent indemnification obligation of any Loan Party, in each case, to the extent (a) such obligation has not accrued and is not yet due and payable and (b) no claim has been made with respect thereto.
“Contingent Obligation” means, with respect to any Person, any obligation of such Person guaranteeing or intending to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of a primary obligor, (b) the obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement, and (c) any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include any product warranties extended in the ordinary course
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of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation with respect to which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto (assuming such Person is required to perform thereunder), as determined by such Person in good faith.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control Agreement” means, with respect to any deposit account, any securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance satisfactory to the Collateral Agent, among the Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party (other than the Mexican Loan Parties) maintaining such account, effective to grant “control” (as defined under the applicable UCC) over such account to the Collateral Agent.
“Controlled Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in control of, is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Cure Right” has the meaning specified in Section 9.02.
“Current Value” has the meaning specified therefor in Section 7.01(m).
“Debtor Relief Law” means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States or other applicable jurisdiction from time to time in effect.
“Default” means an event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“Deferred Monroe Fees” means fees owed to Monroe Capital Management Advisors, LLC in respect of fees accrued prior to the Effective Date under the Existing First Lien Credit Agreement in an amount equal to $3,448,385.
“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower, or the Administrative Agent 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
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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, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), 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, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity. Notwithstanding anything to the contrary herein, 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 permits 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 clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower and each Lender.
“Disbursement Letter” means a disbursement letter, in form and substance satisfactory to the Collateral Agent, by and among the Loan Parties, the Agents, the Lenders and the other Persons party thereto, and the related funds flow memorandum describing the sources and uses of all cash payments in connection with the transactions contemplated to occur on the Effective Date.
“Disposition” means any transaction, or series of related transactions, pursuant to which any Person or any of its Subsidiaries sells (including, without limitation, any sale leaseback transaction), assigns, transfers, leases, licenses (as licensor) or otherwise disposes of any property or assets (whether now owned or hereafter acquired) to any other Person, in each case, whether or not the consideration therefor consists of cash, securities or other assets owned by the acquiring Person. For purposes of clarification, “Disposition” shall include (a) the sale or other disposition for value of any contracts, (b) any disposition of property through a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, or (c) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification).
“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends or distributions in cash, or (d) is convertible into or exchangeable for (i) Indebtedness or (ii) any other Equity Interests that would constitute Disqualified Equity Interests, in each case of clauses (a) through (d), prior to the date that is 91 days after the Final Maturity Date.
“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United States of America.
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“Domestic Subsidiary” means any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.
“Earn-out Obligations” means seller notes, earn-outs or other obligations (other than customary purchase price adjustments and indemnification obligations) in connection with an Acquisition.
“ECF Percentage” means, for the fiscal year of Holdings ending on December 31, 2022 and each fiscal year thereafter, (i) 50.0% if the First Lien Leverage Ratio is greater than or equal to 2.50:1.00 as of the last day of such fiscal year, and (ii) 25.0% if the First Lien Leverage Ratio is less than 2.50:1.00 as of the last day of such fiscal year.
“Effective Date” has the meaning specified therefor in Section 5.01.
“Employee Plan” means an employee benefit plan within the meaning of Section 3(3) of ERISA (other than a Multiemployer Plan), regardless of whether subject to ERISA, that any Loan Party maintains, sponsors or contributes to or is obligated to contribute to.
“Environmental Claim” means any action, suit, complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter or other communication, from any Person or Governmental Authority relating to or arising out of any threatened, alleged or actual (a) violation of, non-compliance with, or liability under, any Environmental Law, or (b) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Law” means any Requirement of Law relating to, regulating or governing (i) the pollution or protection of the environment, any environmental media, natural resources, human health or safety, or (ii) the manufacture, use, handling, processing, distribution, labeling, generation, transportation, storage, treatment, Release, threatened Release, disposal or arranging for the disposal of, or exposure to, any Hazardous Materials.
“Environmental Liability” means all liabilities (contingent or otherwise, known or unknown), monetary obligations, losses (including monies paid in settlement), damages, natural resource damages, costs and expenses (including all reasonable fees, costs, client charges and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest arising directly or indirectly as a result of, from, or based upon (a) any Environmental Claim, (b) any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, (c) any actual, alleged or threatened Release of, or exposure to, Hazardous Materials, (d) any Remedial Action, (e) any adverse environmental condition or (f) any contract, agreement or other arrangement pursuant to which liability is assumed or imposed contractually or by operation of law with respect to any of the foregoing clauses (a)-(e).
“Environmental Lien” means any Lien in favor of any Governmental Authority arising out of any Environmental Liability.
“Environmental Permit” means any permit, license, authorization, approval, registration or entitlement required by or issued pursuant to any Environmental Law or by any Governmental Authority pursuant to Environmental Law.
“Equity Interests” means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or
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equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting and (b) all securities convertible into or exchangeable for any of the foregoing and all warrants, options or other rights to purchase, subscribe for or otherwise acquire any of the foregoing, whether or not presently convertible, exchangeable or exercisable.
“Equity Issuance” means either (a) the sale or issuance by any Loan Party or any of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by Holdings of any cash capital contributions.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case, as in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.
“ERISA Affiliate” means, with respect to any Person, any trade or business (whether or not incorporated) which is a member of a group of which such Person is a member and which would be deemed to be a “controlled group” or under “common control” within the meaning of Sections 414(b), (c) (m) or (o) of the Internal Revenue Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA.
“ERISA Event” means (a) the occurrence of a Reportable Event with respect to any Pension Plan; (b) the failure to meet the minimum funding standards of Section 412 or 430 of the Internal Revenue Code or Section 302 or 303 of ERISA with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code or Section 302(c) of ERISA) or the failure to make a contribution or installment required under Section 412 or Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) a determination that any Pension Plan is, or is expected to be, in “at risk” status (as defined in Section 430 of the Internal Revenue Code or Section 303 of ERISA); (d) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or “endangered” status under Section 432 of the Internal Revenue Code or Section 305 of ERISA; (e) the filing of a notice of intent to terminate a Pension Plan or the treatment of an amendment to a Pension Plan as a termination under Section 4041 of ERISA; (f) the withdrawal by any Loan Party or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any Loan Party or any of its ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (g) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition that might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (h) the imposition of liability on any Loan Party or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069(a) of ERISA or by reason of the application of Section 4212(c) of ERISA; (i) the withdrawal of any Loan Party or any of its ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan or the receipt by any Loan Party or any of its ERISA Affiliates of notice from any Multiemployer Plan that it is insolvent pursuant to Section 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (j) the occurrence of an act or omission which could give rise to the imposition on any Loan Party of material fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Plan or Pension Plan; (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent, upon any Loan Party or any of its ERISA Affiliates; (l) the assertion of a claim (other than routine claims for benefits) against any Employee Plan or the assets thereof, or against any Loan Party or any of its ERISA Affiliates in connection with any Pension Plan or Multiemployer Plan; (m) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Plan intended to be qualified under Section 401(a) of the
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Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any such Pension Plan (or such other Employee Plan) to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (n) the imposition on any Loan Party of any material fine, excise tax or penalty with respect to any Employee Plan, Pension Plan, or Multiemployer Plan resulting from any noncompliance with any Requirements of Law; (o) the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan; or (p) the occurrence of any Foreign Plan Event.
“Erroneous Distribution” has the meaning specified therefor in Section 10.18.
“Event of Default” has the meaning specified therefor in Section 9.01.
“Excess Cash Flow” means, with respect to any Person for any period, (a) Consolidated EBITDA of such Person and its Subsidiaries for such period, less (b) the sum of, without duplication, (i) all cash principal payments (excluding any principal payments made pursuant to Section 2.06(c)) on the Loans made during such period (but, in the case of the Revolving Loans, only to the extent that the Total Revolving Credit Commitment is permanently reduced by the amount of such payments), and all cash principal payments on Indebtedness (other than Indebtedness incurred under this Agreement) of such Person or any of its Subsidiaries during such period to the extent such other Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement (but, in the case of revolving loans, only to the extent that the revolving credit commitment in respect thereof is permanently reduced by the amount of such payments), (ii) all cash payment made in respect of Existing Earn-Out Obligations to the extent such payment is permitted by this Agreement, and all cash payments made in respect of Permitted Future Earn-Out Obligations, (iii) all Consolidated Net Interest Expense to the extent paid or payable in cash during such period, (iv) the cash portion of Capital Expenditures made by such Person and its Subsidiaries during such period to the extent permitted to be made under this Agreement (excluding Capital Expenditures to the extent financed through the incurrence of Indebtedness or through an Equity Issuance), (v) all scheduled loan servicing fees and other similar fees in respect of Indebtedness of such Person or any of its Subsidiaries paid in cash during such period, to the extent such Indebtedness is permitted to be incurred, and such payments are permitted to be made, under this Agreement, (vi) income taxes paid in cash by such Person and its Subsidiaries for such period, (vii) provisions for income and franchise taxes payable by such Person and its Subsidiaries for such period, (viii) Tax Distributions, (ix) all cash expenses, cash charges, cash losses and other cash items that were added back in the determination of Consolidated EBITDA for such period and (x) the excess, if any, of Working Capital at the end of such period over Working Capital at the beginning of such period (or minus the excess, if any, of Working Capital at the beginning of such period over Working Capital at the end of such period).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Account” means (a) any deposit account specifically and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Loan Party’s employees and (b) any Petty Cash Accounts.
“Excluded Equity Issuance” means (a) in the event that Holdings or any of its Subsidiaries forms any Subsidiary in accordance with this Agreement, the issuance by such Subsidiary of Equity Interests to Holdings or such Subsidiary, as applicable, (b) the issuance of Equity Interests by Holdings to any Person that is an equity holder of Holdings prior to such issuance (an “Equity Holder”) so long as such Equity Holder did not acquire any Equity Interests of Holdings so as to become an Equity Holder concurrently with, or in contemplation of, the issuance of such Equity Interests to such Equity Holder, (c) the issuance of Equity Interests of
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Holdings to directors, officers and employees of Holdings and its Subsidiaries pursuant to employee stock option plans (or other employee incentive plans or other compensation arrangements) approved by the Board of Directors of Holdings, and (d) the issuance of Equity Interests by a Subsidiary of Holdings to its parent or member in connection with the contribution by such parent or member to such Subsidiary of the proceeds of an issuance described in clauses (a) – (c) above.
“Excluded Foreign Subsidiary” means any Foreign Subsidiary that is not a Mexican Loan Party as of the Amendment No. 1 Effective Date.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any 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 Guarantor’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the guarantee of such Guarantor becomes effective with respect to such related Swap Obligation.
“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, U.S. 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 Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.10, 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 2.10(d) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
“Existing Earn-Out Obligations” means the Indebtedness listed on Schedule 7.02(b)(ii), including, for the avoidance of doubt, the AN Extend Earn-Out.
“Existing First Lien Credit Facility” means that certain Amended and Restated Credit Agreement, dated as of July 18, 2019 (as amended, restated or otherwise modified prior to the date hereof) by and among the Loan Parties party thereto, the lenders party thereto and Monroe Capital Management Advisors, LLC, as administrative agent and lead arranger.
“Existing First Lien Lenders” means the lenders party to the Existing First Lien Credit Facility.
“Existing Second Lien Collateral Agent” means GLAS Americas LLC.
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“Existing Second Lien Credit Facility” means that certain Credit Agreement, dated as of November 22, 2021 (as (v) amended by that certain Amendment No. 1 to the Credit Agreement dated as of December 9, 2021, (w) amended by that certain Amendment No. 2 to the Credit Agreement dated as of March 30, 2022, (x) amended by that certain Amendment No. 3 to the Credit Agreement dated as of the date of this Agreement, (y) amended by that certain Amendment No. 4 to the Credit Agreement dated as of August 10, 2022 and (z) further amended, restated or otherwise modified from time to time in accordance with the Intercreditor Agreement) by and among the Loan Parties party thereto, the lenders party thereto, the Existing Second Lien Collateral Agent, as collateral agent and GLAS USA LLC, as administrative agent.
“Existing Second Lien Lenders” means the lenders party to the Existing Second Lien Credit Facility.
“Existing Warrants” means warrants for Class A ordinary shares of Holdings that have been issued prior to the Effective Date to the Existing First Lien Lenders.
“Exitus Indebtedness” means Indebtedness in the aggregate principal amount of $3,700,000 pursuant to that certain Simple Loan Facility Agreement and related promissory note, in each case, dated as of July 26, 2021 by AgileThought Digital Solutions S.A.P.I. de C.V. in favor of Exitus Capital, S.A.P.I. de C.V.
“Exitus Renewal Fee” means certain renewal fees with respect to the Exitus Indebtedness, in an aggregate amount not to exceed $444,000 in the aggregate.
“Exitus Subordination Agreement” means that certain Subordination Agreement, dated as of July 26, 2021, by and among the Administrative Agent (as successor to the administrative agent under the Existing First Lien Credit Facility), Holdings, the Borrower, AgileThought Digital Solutions S.A.P.I. de C.V. and Exitus Capital, S.A.P.I. de C.V., as said agreement may be supplemented by an agreement in which Exitus Capital, S.A.P.I. de C.V. confirms the subordination provided thereby with respect to the Obligations.
“Extraordinary Receipts” means any cash received by Holdings or any of its Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.06(c)(ii) or (iii) hereof or proceeds of Indebtedness), including, without limitation, (a) foreign, United States, state or local tax refunds, (b) pension plan reversions, (c) proceeds of insurance (other than to the extent such insurance proceeds are (i) immediately payable to a Person that is not Holdings or any of its Subsidiaries in accordance with applicable Requirements of Law or with Contractual Obligations entered into in the ordinary course of business or (ii) received by Holdings or any of its Subsidiaries as reimbursement for any out-of-pocket costs incurred or made by such Person prior to the receipt thereof directly related to the event resulting from the payment of such proceeds), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) condemnation awards (and payments in lieu thereof), (f) indemnity payments (other than to the extent such indemnity payments are (i) immediately payable to a Person that is not an Affiliate of Holdings or any of its Subsidiaries or (ii) received by Holdings or any of its Subsidiaries as reimbursement for any costs previously incurred or any payment previously made by such Person) and (g) any purchase price adjustment received in connection with any purchase agreement.
“Facility” means the real property identified on Schedule 1.01(B) and any New Facility hereafter acquired by Holdings or any of its Subsidiaries, including, without limitation, the land on which each such facility is located, all buildings and other improvements thereon, and all fixtures located thereat or used in connection therewith.
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“Fair Share Contribution Amount” has the meaning specified therefor in Section 11.06.
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue 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) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any fiscal, tax or regulatory legislation, rules or official practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of Sections 1471 through 1474 of the Internal Revenue Code and the Treasury Regulations thereunder.
“FCPA” has the meaning specified therefor in the definition of Anti-Corruption Laws.
“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Letter” means the fee letter, dated as of the date hereof, among the Borrower, the Lenders and the Administrative Agent.
“Final Maturity Date” means the earlier of (a) May 27, 2026, and (b) May 1, 2023; provided that, this clause (b) shall not apply if (i) Requisite Shareholder Approval (as defined in the Existing Second Lien Credit Facility) has been obtained or is deemed to have been obtained, in each case, in accordance with the terms of the Existing Second Lien Credit Facility, on or prior to May 1, 2023 or (ii) the Outstanding Obligations due to the Tranche B-1 Lender and the Tranche B-2 Lender (each as defined under the Existing Second Lien Credit Facility) have been converted into Conversion Payment Shares (as defined in the Existing Second Lien Credit Facility) on or before June 15, 2023. If any such date in this definition is not a Business Day, the immediately preceding Business Day shall be deemed to be the “Final Maturity Date” hereunder.
“Financial Statements” means (a) the audited consolidated balance sheet of Holdings and its Subsidiaries for the Fiscal Year ended December 31, 2021, and the related consolidated statement of operations, shareholders’ equity and cash flows for the Fiscal Year then ended, and (b) the unaudited consolidated balance sheet of Holdings and its Subsidiaries for the fiscal quarter ended March 31, 2022, and the related consolidated statement of operations, shareholder’s equity and cash flows for the fiscal quarter then ended.
“First Lien Leverage Ratio” means, with respect to any Person and its Subsidiaries for any period, the ratio of (a) all Indebtedness described in clauses (a), (b), (c), (d), (e) and (f) in the definition thereof of such Person and its Subsidiaries as of the end of such period that is secured by a Lien on assets of such Person and its Subsidiaries as of such date which is pari passu with or senior to the Liens securing the Obligations as of such date (other than Indebtedness under the Existing Second Lien Credit Facility) to (b) Consolidated EBITDA of such Person and its Subsidiaries for such period.
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“First Period” has the meaning specified therefor in the definition of “Applicable Premium”.
“Fiscal Quarter” means a fiscal quarter of a Fiscal Year.
“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on December 31 of each year.
“Floor” means a rate of interest equal to 1.00% per annum.
“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party that is subject to any Requirements of Laws other than, or in addition to, the laws of the United States or any state thereof or the laws of the District of Columbia.
“Foreign Plan Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any Requirement of Law, or in excess of the amount that would be permitted absent a waiver from a Governmental Authority, (b) the failure to make any required contribution or payment under any Requirement of Law within the time permitted by any Requirement of Law for such contributions or payments, (c) the receipt of a notice from a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any liability by any Loan Party or any Subsidiary under any law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, or (e) the occurrence of any transaction with respect to a Foreign Plan that is prohibited under any Requirement of Law and that could reasonably be expected to result in the incurrence of any liability by any Loan Party or any Subsidiary, or the imposition on any Loan Party or any Subsidiary of any material fine, excise tax or penalty with respect to a Foreign Plan resulting from any noncompliance with any Requirement of Law.
“Foreign Subsidiary” means any Subsidiary of Holdings that is not a Domestic Subsidiary.
“Funding Losses” has the meaning specified therefor in Section 2.09.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States, applied on a consistent basis, provided that for the purpose of Section 7.03 hereof and the definitions used therein, “GAAP” shall mean generally accepted accounting principles in effect on the date hereof and consistent with those used in the preparation of the Financial Statements, provided, further, that if there occurs after the date of this Agreement any change in GAAP that affects in any respect the calculation of any covenant contained in Section 7.03 hereof, the Collateral Agent and the Borrower shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant with the intent of having the respective positions of the Lenders and the Borrower after such change in GAAP conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, the covenants in Section 7.03 hereof shall be calculated as if no such change in GAAP has occurred.
“Governing Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the operating agreement or limited liability company agreement
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(or equivalent or comparable constitutive documents); (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture, declaration or other applicable agreement or documentation evidencing or otherwise relating to its formation or organization, governance and capitalization; and (d) with respect to any of the entities described above, any other agreement, instrument, filing or notice with respect thereto filed in connection with its formation, incorporation or organization with the applicable Governmental Authority in the jurisdiction of its formation, incorporation or organization.
“Governmental Authority” means any nation or government, any foreign, Federal, state, territory, provincial, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency 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).
“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.
“Guarantor” means (a) Holdings, and each other Subsidiary of Holdings listed as a “Guarantor” on the signature pages hereto, and (b) each other Person which guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of the Obligations. For the avoidance of doubt, no Excluded Foreign Subsidiary or Immaterial Subsidiary shall be a Guarantor.
“Guaranty” means (a) the guaranty of each Guarantor party hereto contained in Article XI hereof and (b) each other guaranty, in form and substance satisfactory to the Collateral Agent, made by any other Guarantor in favor of the Collateral Agent for the benefit of the Agents and the Lenders guaranteeing all or part of the Obligations.
“Hazardous Material” means any element, material, substance, waste, compound or chemical that is defined, listed or otherwise classified as a contaminant, pollutant, toxic or hazardous substance, hazardous waste, universal waste, special waste, or solid waste or is otherwise characterized by words of similar import under any Environmental Law or that is regulated under, or for which liability or standards of care are imposed, pursuant to any Environmental Law, including, without limitation, petroleum, polychlorinated biphenyls; asbestos-containing materials, lead or lead-containing materials, urea formaldehyde-containing materials, radioactive materials, radon, per- and polyfluoroalkyl substances and mold.
“Hedging Agreement” means any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
“Highest Lawful Rate” means, with respect to any Agent or any Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Obligations under laws applicable to such Agent or such Lender which are currently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.
“Holdout Lender” has the meaning specified therefor in Section 12.02(c).
“Immaterial Subsidiary” means any Subsidiary that, as of the last day of the most recently ended fiscal quarter of Holdings, when taken together with all other Immaterial
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Subsidiaries, have not, in the aggregate, contributed greater than 3% of the Consolidated EBITDA of Holdings for the period of four consecutive fiscal quarters then most recently ended or greater than 3% of the total assets of Holdings and its Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of Holdings delivered pursuant to Section 6.01(a)(ii) or (iii); provided that, if at any time the aggregate amount of that portion of Consolidated EBITDA of all Subsidiaries that are not Loan Parties exceeds 3% of Consolidated EBITDA of Holdings and its Subsidiaries or greater than 3% of the total assets of Holdings and its Subsidiaries for any such period, the Borrower shall designate sufficient Subsidiaries as “Loan Parties” to cause that portion of Consolidated EBITDA of Holdings generated by Immaterial Subsidiaries to equal or be less than 3% of EBITDA and the portion of total assets of Holdings and its Subsidiaries to equal or be less than 3%, and Holdings shall cause all such Subsidiaries so designated to become a Guarantor and deliver all applicable Loan Documents in accordance with Section 7.01(b)(i).
“Incremental Revolving Loan” has the meaning specified therefor in Section 2.05(a).
“Indebtedness” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables or other accounts payable incurred in the ordinary course of such Person’s business and not outstanding for more than 90 days after the date such payable was created and any earn-out, purchase price adjustment or similar obligation until such obligation appears in the liabilities section of the balance sheet of such Person); (c) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments or upon which interest payments are customarily made; (d) all reimbursement, payment or other obligations and liabilities of such Person created or arising under any conditional sales or other title retention agreement with respect to property used and/or acquired by such Person, even though the rights and remedies of the lessor, seller and/or lender thereunder may be limited to repossession or sale of such property; (e) all Capitalized Lease Obligations of such Person; (f) all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities; (g) all obligations and liabilities, calculated on a basis satisfactory to the Collateral Agent and in accordance with accepted practice, of such Person under Hedging Agreements; (h) all monetary obligations under any receivables factoring, receivable sales or similar transactions and all monetary obligations under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing; (i) all Contingent Obligations; (j) all Disqualified Equity Interests; and (k) all obligations referred to in clauses (a) through (j) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. The Indebtedness of any Person shall include the Indebtedness of any partnership of or joint venture in which such Person is a general partner or a joint venturer.
“Indemnified Matters” has the meaning specified therefor in Section 12.15.
“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 any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitees” has the meaning specified therefor in Section 12.15.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of any Debtor Relief Law.
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“Intellectual Property” has the meaning specified therefor in the Security Agreement.
“Intellectual Property Contracts” means all agreements concerning Intellectual Property, including without limitation license agreements, technology consulting agreements, confidentiality agreements, co-existence agreements, consent agreements and non-assertion agreements.
“Intercompany Subordination Agreement” means an Intercompany Subordination Agreement made by Holdings and its Subsidiaries in favor of the Collateral Agent for the benefit of the Agents and the Lenders, in form and substance reasonably satisfactory to the Collateral Agent.
“Intercreditor Agreement” means the Intercreditor and Subordination Agreement, dated as of the date hereof, by and among the Loan Parties, the Collateral Agent and the Existing Second Lien Collateral Agent.
“Interest Period” means, with respect to each SOFR Loan, a period commencing on the date of the making of such Term SOFR Loan (or the continuation of a SOFR Loan or the conversion of a Reference Rate Loan to a SOFR Loan) and ending three months thereafter; provided, however, that (a) if any Interest Period would end on a day that is not a Business Day, such Interest Period shall be extended (subject to clauses (c)-(e) below) to the next succeeding Business Day, (b) interest shall accrue at the applicable rate based upon the Term SOFR Reference Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (c) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (d) with respect to an Interest Period 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), the Interest Period shall end on the last Business Day of the calendar month that is one or three months after the date on which the Interest Period began, as applicable, and (e) the Borrower may not elect an Interest Period which will end after the Final Maturity Date.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
“Inventory” means, with respect to any Person, all goods and merchandise of such Person leased or held for sale or lease by such Person, including, without limitation, all raw materials, work-in-process and finished goods, and all packaging, supplies and materials of every nature used or usable in connection with the shipping, storing, advertising or sale of such goods and merchandise, whether now owned or hereafter acquired, and all such other property the sale or other disposition of which would give rise to an Account or cash.
“Investment” means, with respect to any Person, (a) any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances or other extensions of credit (excluding Accounts arising in the ordinary course of business), capital contributions or acquisitions of Indebtedness (including, any bonds, notes, debentures or other debt securities), Equity Interests, or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), (b) the purchase or ownership of any futures contract or liability for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or (c) any investment in any other items that are or would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP.
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“Joinder Agreement” means a Joinder Agreement, substantially in the form of Exhibit A, duly executed by a Subsidiary of a Loan Party made a party hereto pursuant to Section 7.01(b).
“Lease” means any lease, sublease or license of, or other agreement granting a possessory interest in, real property to which any Loan Party or any of its Subsidiaries is a party as lessor, lessee, sublessor, sublessee, licensor or licensee.
“Lender” has the meaning specified therefor in the preamble hereto.
“Lien” means any mortgage, deed of trust, deed to secure debt, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature, including, without limitation, any conditional sale or title retention arrangement, any Capitalized Lease and any collateral assignment, deposit arrangement or financing lease intended as, or having the effect of, security.
“Liquidity” means Availability plus Qualified Cash.
“Loan” means the Term Loan or any Revolving Loan made by an Agent or a Lender to the Borrower pursuant to Article II hereof.
“Loan Account” means an account maintained hereunder by the Administrative Agent on its books of account at the Payment Office, and with respect to the Borrower, in which the Borrower will be charged with all Loans made to, and all other Obligations incurred by, the Borrower.
“Loan Document” means this Agreement, the Assignment of Business Interruption Insurance Policy, any Control Agreement, the Disbursement Letter, the Fee Letter, any Guaranty, the Intercompany Subordination Agreement, the Intercreditor Agreement, the AGS Subordination Agreement, the Exitus Subordination Agreement, any Joinder Agreement, any Mortgage, any Security Agreement, any UCC Filing Authorization Letter, the VCOC Management Rights Agreement, any landlord waiver, any collateral access agreement, any Perfection Certificate and any other agreement, instrument, certificate, report and other document executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation, in each case, as amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time.
“Loan Party” means the Borrower and any Guarantor.
“Material Adverse Effect” means any event, development, state of facts, change, circumstance, occurrence, condition or effect that, either individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on any of (a) the operations, assets, liabilities, financial condition or prospects of the Loan Parties and their respective Subsidiaries, taken as a whole, (b) the ability of the Loan Parties to perform any of their obligations under any Loan Document, (c) the legality, validity or enforceability of this Agreement or any other Loan Document, (d) the rights and remedies of any Agent or any Lender under any Loan Document, or (e) the validity, perfection or priority of a Lien in favor of the Collateral Agent for the benefit of the Agents and the Lenders on Collateral having a fair market value in excess of $250,000.
“Material Contract” means, with respect to any Person, (a) each contract listed on Schedule 6.01(v), (b) each contract or agreement to which such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such Person or such Subsidiary of $250,000 or more in any Fiscal Year (other than purchase orders in the ordinary course of the
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business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium), and (c) each other contract or agreement as to which the breach, nonperformance, cancellation or failure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect.
“Mexican Loan Parties” means AgileThought Digital Solutions, S.A.P.I. de C.V. and AgileThought Mexico, S.A. de C.V..
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage” means a mortgage (including, without limitation, a leasehold mortgage), deed of trust or deed to secure debt, in form and substance satisfactory to the Collateral Agent, made by a Loan Party in favor of the Collateral Agent for the benefit of the Agents and the Lenders, securing the Obligations and delivered to the Collateral Agent.
“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has contributed, or has been obligated to contribute, to at any time during the preceding six calendar years.
“Net Cash Proceeds” means, with respect to, any issuance or incurrence of any Indebtedness, any Equity Issuance, any Disposition or the receipt of any Extraordinary Receipts by any Person or any of its Subsidiaries, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Person or such Subsidiary, in connection therewith after deducting therefrom only (a) in the case of any Disposition or the receipt of any Extraordinary Receipts consisting of insurance proceeds or condemnation awards, the amount of any Indebtedness secured by any Permitted Lien on any asset (other than Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection therewith (other than Indebtedness under this Agreement), (b) reasonable expenses related thereto incurred by such Person or such Subsidiary in connection therewith, (c) transfer taxes paid to any taxing authorities by such Person or such Subsidiary in connection therewith, and (d) net income taxes to be paid in connection therewith (after taking into account any tax credits or deductions and any tax sharing arrangements), in each case, to the extent, but only to the extent, that the amounts so deducted are (i) actually paid to a Person that, except in the case of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of its Subsidiaries and (ii) properly attributable to such transaction or to the asset that is the subject thereof.
“New Facility” has the meaning specified therefor in Section 7.01(m).
“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).
“Obligations” means all present and future indebtedness, obligations, and liabilities of each Loan Party to the Agents and the Lenders arising under or in connection with this Agreement or any other Loan Document, whether or not the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 9.01. Without limiting the generality of the foregoing, the Obligations of each Loan Party under the Loan Documents include (a) the obligation (irrespective of whether a claim therefor is allowed in an Insolvency Proceeding) to pay principal, interest, charges, expenses, fees, premiums (including the Applicable Premium), attorneys’ fees and disbursements, indemnities and other amounts payable by such Person under the Loan Documents, and (b) the obligation of such Person to reimburse
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any amount in respect of any of the foregoing that any Agent or any Lender (in its sole discretion) may elect to pay or advance on behalf of such Person.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“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 or 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.
“Participant Register” has the meaning specified therefor in Section 12.07(i).
“Payment Office” means the Administrative Agent’s office located at 150 East 58th Street, 18th Floor, New York, New York 10155, or at such other office or offices of the Administrative Agent as may be designated in writing from time to time by the Administrative Agent to the Collateral Agent and the Borrower.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means an “employee pension benefit plan” as defined in Section 3(2) of ERISA that is subject to Section 412 of the Internal Revenue Code, Section 302 of ERISA or Title IV of ERISA maintained, sponsored or contributed to, or for which there is an obligation to contribute to, by any Loan Party or any of its ERISA Affiliates at any time during the preceding six calendar years.
“Perfection Certificate” means a certificate in form and substance satisfactory to the Collateral Agent providing information with respect to the property of each Loan Party.
“Permitted Acquisition” means any Acquisition by a Loan Party (other than the Mexican Loan Parties) to the extent that each of the following conditions shall have been satisfied:
(a)no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition;
(b)to the extent the Acquisition will be financed in whole or in part with the proceeds of any Loan, the conditions set forth in Section 5.02 shall have been satisfied;
(c)the Borrower shall have furnished to the Agents at least ten (10) Business Days prior to the consummation of such Acquisition (i) an executed term sheet and/or commitment letter (setting forth in reasonable detail the terms and conditions of such Acquisition) and, at the request of any Agent, such other information and documents that any Agent may request, including, without limitation, executed counterparts of the respective agreements, instruments or other documents pursuant to which such Acquisition is to be
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consummated (including, without limitation, any related management, non-compete, employment, option or other material agreements), any schedules to such agreements, instruments or other documents and all other material ancillary agreements, instruments or other documents to be executed or delivered in connection therewith, (ii) pro forma financial statements of Holdings and its Subsidiaries after the consummation of such Acquisition, (iii) a certificate of the chief financial officer of Holdings, demonstrating on a pro forma basis compliance, as at the end of the most recently ended fiscal quarter for which internally prepared financial statements are available, with all covenants set forth in Section 7.03 hereof after the consummation of such Acquisition, and (iv) copies of such other agreements, instruments or other documents as any Agent shall reasonably request;
(d)the agreements, instruments and other documents referred to in paragraph (c) above shall provide that (i) neither the Loan Parties nor any of their Subsidiaries shall, in connection with such Acquisition, assume or remain liable in respect of any Indebtedness of the Seller or Sellers, or other obligation of the Seller or Sellers (except for Permitted Indebtedness), and (ii) all property to be so acquired in connection with such Acquisition shall be free and clear of any and all Liens, except for Permitted Liens (and if any such property is subject to any Lien not permitted by this clause (ii) then concurrently with such Acquisition such Lien shall be released);
(e)such Acquisition shall be effected in such a manner so that the acquired assets or Equity Interests are owned either by a Loan Party (other than the Mexican Loan Parties) or a wholly-owned Domestic Subsidiary of a Loan Party and, if effected by merger or consolidation involving a Loan Party (other than the Mexican Loan Parties), such Loan Party shall be the continuing or surviving Person;
(f)the Loan Parties shall have Liquidity in an amount equal to or greater than $10,000,000 immediately after giving effect to the consummation of the proposed Acquisition;
(g)the assets being acquired or the Person whose Equity Interests are being acquired did not have negative Consolidated EBITDA during the 12 consecutive month period most recently concluded prior to the date of the proposed Acquisition;
(h)the assets being acquired, or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of the Loan Parties and their Subsidiaries or a business reasonably related thereto;
(i)the assets being acquired are located within the United States or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States;
(j)such Acquisition shall be consensual and shall have been approved by the board of directors of the Person whose Equity Interests or assets are proposed to be acquired and shall not have been preceded by an unsolicited tender offer for such Equity Interests by, or proxy contest initiated by, Holdings or any of its Subsidiaries or an Affiliate thereof;
(k)any such Domestic Subsidiary (and its equityholders) shall execute and deliver the agreements, instruments and other documents required by Section 7.01(b) on or prior to the date of the consummation of such Acquisition; and
(l)the Purchase Price payable in respect of any single Acquisition or series of related Acquisitions shall not exceed an amount equal to 15% of Revenue of the Borrower for the period of four consecutive fiscal quarters most recently ended prior to the date of such Acquisition; and.
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“Permitted Cure Equity” means Qualified Equity Interests of Holdings.
“Permitted Disposition” means:
(a)sale of Inventory in the ordinary course of business;
(b)licensing, on a non-exclusive basis, Intellectual Property rights in the ordinary course of business;
(c)leasing or subleasing assets in the ordinary course of business;
(d)(i) the lapse of Registered Intellectual Property of Holdings and its Subsidiaries to the extent not economically desirable in the conduct of their business or (ii) the abandonment of Intellectual Property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Secured Parties;
(e)any involuntary loss, damage or destruction of property;
(f)any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;
(g)so long as no Event of Default has occurred and is continuing or would result therefrom, transfers of assets (i) from Holdings or any of its Subsidiaries to a Loan Party (other than Holdings or the Mexican Loan Parties), and (ii) from any Subsidiary of Holdings that is not a Loan Party (or is the Mexican Loan Parties) to any other Subsidiary of Holdings;
(h)Permitted Factoring Dispositions;
(i)Disposition of obsolete or worn-out equipment in the ordinary course of business, in an aggregate amount not to exceed, for all Loan Parties and their Subsidiaries, $250,000 in any Fiscal Year; and
(j)Disposition of property or assets not otherwise permitted in clauses (a) through (i) above for cash in the ordinary course of business for not less than the fair market value of such property or assets, in an aggregate amount not to exceed, for all Loan Parties and their Subsidiaries, $500,000 in any Fiscal Year;
provided that the Net Cash Proceeds of such Dispositions are paid to the Administrative Agent for the benefit of the Agents and the Lenders pursuant to the terms of Section 2.06(c)(ii) or applied as provided in Section 2.06(c)(vi).
“Permitted Factoring Dispositions” means any Disposition of Accounts via a factoring, reverse factoring or confirming arrangement to any Person that is not an Affiliate of any Loan Party or Subsidiary thereof, in the ordinary course of business and consistent with past practices, so long as the aggregate face value of all such Accounts that have been so factored, reversed factored or confirmed and not been paid by the account debtor thereof shall not exceed $1,500,000 at any one time outstanding.
“Permitted Future Earn-out Obligations” means, collectively, the aggregate outstanding amount of all Earn-out Obligations incurred after the Effective Date (other than, for avoidance of doubt, the Existing Earn-out Obligations), whether payable in Equity Interests or cash or Cash Equivalents, so long as (a) such Earn-out Obligations are incurred in connection
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with a Permitted Acquisition, and (b) the aggregate outstanding amount of all such Earn-out Obligations payable in cash does not exceed $10,000,000 and the holders of such Earn-out Obligations have agreed to subordinate their claims with respect thereto to the prior payment of the Obligations pursuant to a subordination agreement reasonably satisfactory to the Administrative Agent.
    “Permitted Holder” means each of (i) Macfran S.A. de C.V., (ii) Invertis LLC., (iii) Diego Zavala, (iv) Mauricio Rioseco, (v) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the trust No. F/17938-6 (Credit Suisse), (vi) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the trust No. F/17937-8 (Credit Suisse), (vii) Banco Nacional de México, S.A., Member of Grupo Financiero Banamex, División Fiduciaria, in its capacity as trustee of the irrevocable trust for the issuance of senior bonds No. F/173183 (Nexxus), (viii) Nexxus Capital Private Equity Fund, VI, LP, (ix) Mauricio Garduño González Elizondo, (x) Rodrigo Franco Hernández, (xi) MZM Estrategia, S.A.P.I. de C.V., (xii) Isabelle Richard, (xiii) Georgina Rojas Aboumrad, (xiv) Alejandro Rojas Domene, (xv) Miguel Angel Ambrosi Herrera, (xvi) Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero acting as trustee pursuant to the Contrato de Fideicomiso Irrevocable de Emisión de Cert. Bursátiles Fid. de Desarrollo N.F2416 (LIV Mexico Growth IV N.F2416) and (xvii) LIV Mexico Growth Fund IV, L.P.
“Permitted Indebtedness” means:
(a)any Indebtedness owing to any Agent or any Lender under this Agreement and the other Loan Documents;
(b)any other Indebtedness listed on Schedule 7.02(b), and any Permitted Refinancing Indebtedness in respect of such Indebtedness;
(c)Permitted Purchase Money Indebtedness and any Permitted Refinancing Indebtedness in respect of such Indebtedness;
(d)Permitted Intercompany Investments;
(e)Indebtedness incurred in the ordinary course of business under performance, surety, statutory, and appeal bonds;
(f)Indebtedness owed to any Person providing, or providing financing for, property, casualty, liability, or other insurance to the Loan Parties, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the period in which such Indebtedness is incurred and such Indebtedness is outstanding only during such period;
(g)the incurrence by any Loan Party of Indebtedness under Hedging Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with such Loan Party’s operations and not for speculative purposes;
(h)Indebtedness incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) or other similar cash management services, in each case, incurred in the ordinary course of business;
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(i)contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions;
(j)Indebtedness of a Person whose assets or Equity Interests are acquired by Holdings or any of its Domestic Subsidiaries in a Permitted Acquisition in an aggregate amount not to exceed $250,000 at any one time outstanding; provided, that such Indebtedness (i) is either Permitted Purchase Money Indebtedness or a Capitalized Lease with respect to equipment or mortgage financing with respect to a Facility, (ii) was in existence prior to the date of such Permitted Acquisition, and (iii) was not incurred in connection with, or in contemplation of, such Permitted Acquisition;
(k)unsecured Indebtedness of Holdings or any of its Subsidiaries that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness does not mature prior to the date that is 12 months after the Final Maturity Date, (iv) such unsecured Indebtedness does not amortize until 12 months after the Final Maturity Date, (v) such unsecured Indebtedness does not provide for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 12 months after the Final Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to the Collateral Agent and the Required Lenders;
(l)the Existing Earn-Out Obligations;
(m)Permitted Future Earn-Out Obligations;
(n)Subordinated Indebtedness;
(o)Indebtedness under the Existing Second Lien Credit Facility (and any refinancing thereof to the extent permitted under the Intercreditor Agreement), in an aggregate principal amount not to exceed $23,000,000, plus the aggregate amount of interest on such Indebtedness that is capitalized or accrued in accordance with the terms of the Existing Second Lien Credit Facility; provided that such Indebtedness is subject to, and permitted by, the Intercreditor Agreement;
(p)Indebtedness arising from Permitting Factoring Dispositions;
(q)the AGS Indebtedness; provided that such Indebtedness is subject to, and permitted by, the AGS Subordination Agreement;
(r)the Exitus Indebtedness; provided that such Indebtedness is subject to, and permitted by, the Exitus Subordination Agreement;
(s)to the extent constituting Indebtedness, the Unpaid Taxes;
(t)PPP Indebtedness, in an aggregate amount not to exceed $312,041;
(u)Indebtedness in respect of letters of credit issued by third party financial institutions, so long as the maximum aggregate face amount of such letters of credit shall not exceed $2,000,000 at any time; and
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(v)other unsecured Indebtedness owed to any Person that is not an Affiliate of the Borrower or any of its Subsidiaries, in an aggregate outstanding amount not to exceed $4,000,000 at any time.
“Permitted Intercompany Investments” means Investments made by (a) a Loan Party to or in another Loan Party (other than the Mexican Loan Parties), (b) a Loan Party to or in a Subsidiary that is not a Loan Party (or to the Mexican Loan Parties) so long as either (i) such Investment is made in the ordinary course of business, or (ii) the aggregate amount of all Investments made pursuant to this clause (b)(ii) does not exceed $500,000 at any one time outstanding, (c) a Subsidiary that is not a Loan Party (or that is the Mexican Loan Parties) to or in another Subsidiary that is not a Loan Party (or to the Mexican Loan Parties), and (d) a Subsidiary that is not a Loan Party (or the Mexican Loan Parties) to or in a Loan Party (including the Investments listed on Schedule 1.01(C)), so long as, in the case of a loan or advance, the parties thereto are party to the Intercompany Subordination Agreement.
“Permitted Investments” means:
a.Investments in cash and Cash Equivalents;
b.Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business;
c.advances made in connection with purchases of goods or services in the ordinary course of business;
d.Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries;
e.Investments existing on the date hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the amount thereof as set forth in such Schedule or any other modification of the terms thereof;
f.Permitted Intercompany Investments; and
g.Permitted Acquisitions.
“Permitted Liens” means:
(a)Liens securing the Obligations;
(b)Liens for taxes, assessments and governmental charges the payment of which is not required under Section 7.01(c)(ii);
(c)Liens imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and other similar Liens arising in the ordinary course of business and securing obligations (other than Indebtedness for borrowed money) that are not overdue by more than 30 days or are being contested in good faith and by appropriate proceedings promptly initiated and diligently conducted, and a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor;
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(d)Liens described on Schedule 7.02(a), provided that any such Lien shall only secure the Indebtedness that it secures on the Effective Date and any Permitted Refinancing Indebtedness in respect thereof;
(e)purchase money Liens on equipment acquired or held by any Loan Party or any of its Subsidiaries in the ordinary course of its business to secure Permitted Purchase Money Indebtedness so long as such Lien only (i) attaches to such property and (ii) secures the Indebtedness that was incurred to acquire such property or any Permitted Refinancing Indebtedness in respect thereof;
(f)deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts (other than for the payment of money) and statutory obligations or (iii) obligations on surety or appeal bonds, but only to the extent such deposits or pledges are made or otherwise arise in the ordinary course of business and secure obligations not past due;
(g)with respect to any Facility, easements, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto that do not (i) secure obligations for the payment of money or (ii) materially impair the value of such property or its use by any Loan Party or any of its Subsidiaries in the normal conduct of such Person’s business;
(h)Liens of landlords and mortgagees of landlords (i) arising by statute or under any Lease or related Contractual Obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, or (iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;
(i)the title and interest of a lessor or sublessor in and to personal property leased or subleased (other than through a Capitalized Lease), in each case extending only to such personal property;
(j)non-exclusive licenses of Intellectual Property rights in the ordinary course of business;
(k)judgment liens (other than for the payment of taxes, assessments or other governmental charges) securing judgments and other proceedings not constituting an Event of Default under Section 9.01(j);
(l)rights of set-off or bankers’ liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts in the ordinary course of business;
(m)Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness;
(n)Liens assumed by Holdings or any of its Domestic Subsidiaries in connection with a Permitted Acquisition that secure Indebtedness permitted by clause (j) of the definition of Permitted Indebtedness; and
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(o)Liens solely on any cash earnest money deposits made by any Loan Party in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition;
(p)Liens on cash collateral securing Indebtedness and obligations relating thereto that is permitted, and not securing any obligations in excess of the amount that is permitted, under clause (u) of the definition of Permitted Indebtedness;
(q)Liens securing the Existing Second Lien Credit Facility, to the extent subject to the Intercreditor Agreement; and
(r)other Liens granted to any Person that is not an Affiliate of the Borrower or any Subsidiary of the Borrower in the ordinary course of business, so long as such Liens secure obligations in an aggregate outstanding amount that does not exceed $100,000 at any time;
provided that in no event shall any Loan Party or any Subsidiary of a Loan Party grant a Lien on (x) any property of any Loan Party or Subsidiary of a Loan Party that is organized under the law of Mexico, or (y) any Equity Interests of any Loan Party or any Subsidiary of a Loan Party that is organized under the law of Mexico unless, in each such case, such Lien secures the Obligations and (subject to the provisions of the Intercreditor Agreement) obligations under the Existing Second Lien Credit Facility.

“Permitted Purchase Money Indebtedness” means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations) incurred to finance the acquisition of any fixed assets secured by a Lien permitted under clause (e) of the definition of “Permitted Liens”; provided that:
(a)     such Indebtedness is incurred within 30 days after such acquisition,
(b)     such Indebtedness when incurred shall not exceed the purchase price of the asset financed and
(c)     the aggregate principal amount of all such Indebtedness shall not exceed $750,000 at any time outstanding.
“Permitted Refinancing Indebtedness” means the extension of maturity, refinancing or modification of the terms of Indebtedness so long as:
(a)after giving effect to such extension, refinancing or modification, the amount of such Indebtedness is not greater than the amount of Indebtedness outstanding immediately prior to such extension, refinancing or modification (other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto);
(b)such extension, refinancing or modification does not result in a shortening of the average weighted maturity (measured as of the extension, refinancing or modification) of the Indebtedness so extended, refinanced or modified;
(c)such extension, refinancing or modification is pursuant to terms that are not less favorable to the Loan Parties and the Lenders than the terms of the Indebtedness (including, without limitation, terms relating to the collateral (if any) and subordination (if any)) being extended, refinanced or modified; and
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(d)the Indebtedness that is extended, refinanced or modified is not recourse to any Loan Party or any of its Subsidiaries that is liable on account of the obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.
“Permitted Restricted Payments” means any of the following Restricted Payments made by:
(a)any Loan Party to Holdings in amounts necessary to pay taxes and other customary expenses as and when due and owing by Holdings in the ordinary course of its business as a public holding company (including salaries and related reasonable and customary expenses incurred by employees of Holdings), so long as no Default or Event of Default shall have occurred and be continuing or would result from the making of such payment,
(b)any Loan Party to any other Loan Party (other than Holdings and the Mexican Loan Parties),
(c)any Subsidiary of the Borrower that is not a Loan Party (or that is the Mexican Loan Parties) to any other Subsidiary of the Borrower,
(d)Holdings to pay dividends in the form of common Equity Interests, and
(e)Permitted Second Lien Loan Payments constituting Restricted Payments.
“Permitted Second Lien Loan Payments” means, collectively, the "Permitted Second Lien Loan Payments," as defined in the Intercreditor Agreement.
“Permitted Specified Liens” means Permitted Liens described in clauses (a), (b) and (c) of the definition of Permitted Liens, and, solely in the case of Section 7.01(b)(i), including clauses (g), (h) and (i) of the definition of Permitted Liens.
“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.
“Petty Cash Accounts” means Cash Management Accounts with deposits at any time in an aggregate amount not in excess of $50,000 for any one account and $150,000 in the aggregate for all such accounts.
“Post-Default Rate” means a rate of interest per annum equal to the rate of interest otherwise in effect from time to time pursuant to the terms of this Agreement plus 2.00%, or, if a rate of interest is not otherwise in effect, interest at the highest rate specified herein for any Loan then outstanding prior to an Event of Default plus 2.00%.
“PPP Indebtedness” means, collectively, certain Indebtedness pursuant to the Paycheck Protection Program of the Small Business Administration (a) between Bank of America, as lender, and AgileThought, LLC, as borrower, in the original aggregate principal amount of $310,000, (b) between Bank of America, as lender, and AN USA LLC, as borrower, in the original aggregate principal amount of $42,000 and (c) between Bank of America, as lender, and AGS Alpama Global Services LLC, as borrower, in the original aggregate principal amount of $8,000.
“Pro Rata Share” means, with respect to:
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(a)a Lender’s obligation to make Revolving Loans and the right to receive payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing (A) such Lender’s Revolving Credit Commitment, by (B) the Total Revolving Credit Commitment, provided, that, if the Total Revolving Credit Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s Revolving Loans (including Collateral Agent Advances) and the denominator shall be the aggregate unpaid principal amount of all Revolving Loans (including Collateral Agent Advances),
(b)a Lender’s obligation to make the Term Loan and the right to receive payments of interest, fees, and principal with respect thereto, the percentage obtained by dividing (i) such Lender’s Term Loan Commitment, by (ii) the Total Term Loan Commitment, provided that if the Total Term Loan Commitment has been reduced to zero, the numerator shall be the aggregate unpaid principal amount of such Lender’s portion of the Term Loan and the denominator shall be the aggregate unpaid principal amount of the Term Loan, and
(c)all other matters (including, without limitation, the indemnification obligations arising under Section 10.05), the percentage obtained by dividing (i) the sum of such Lender’s Revolving Credit Commitment and the unpaid principal amount of such Lender’s portion of the Term Loan, by (ii) the sum of the Total Revolving Credit Commitment and the aggregate unpaid principal amount of the Term Loan, provided, that, if such Lender’s Revolving Credit Commitment shall have been reduced to zero, such Lender’s Revolving Credit Commitment shall be deemed to be the aggregate unpaid principal amount of such Lender’s Revolving Loans (including Collateral Agent Advances) and if the Total Revolving Credit Commitment shall have been reduced to zero, the Total Revolving Credit Commitment shall be deemed to be the aggregate unpaid principal amount of all Revolving Loans (including Collateral Agent Advances).
“Projections” means financial projections of Holdings and its Subsidiaries delivered pursuant to Section 6.01(g)(ii), as updated from time to time pursuant to Section 7.01(a)(vii).
“Project Thunder” means the fundamental changes described on Schedule 7.02(c).
“Purchase Price” means, with respect to any Acquisition, an amount equal to the sum of (a) the aggregate consideration, whether cash, property or securities (including, without limitation, the fair market value of any Equity Interests of any Loan Party or any of its Subsidiaries issued in connection with such Acquisition), paid or delivered by a Loan Party or any of its Subsidiaries (whether as initial consideration or through the payment or disposition of deferred consideration, including, without limitation, in the form of seller financing, royalty payments, payments allocated towards non-compete covenants, payments to principals for consulting services or other similar payments) in connection with such Acquisition, plus (b) the aggregate amount of liabilities of the acquired business (net of current assets of the acquired business) that would be reflected on a balance sheet (if such were to be prepared) of Holdings and its Subsidiaries after giving effect to such Acquisition, plus (c) the aggregate amount of all transaction fees, costs and expenses incurred by Holdings or any of its Subsidiaries in connection with such Acquisition.
“Qualified Cash” means, as of any date of determination, the aggregate amount of unrestricted cash on-hand of the Loan Parties (other than the Mexican Loan Parties) maintained in deposit accounts in the name of a Loan Party in the United States as of such date, which deposit accounts are, subject to Section 7.01(r), subject to Control Agreements.
“Qualified Equity Interests” means, with respect to any Person, all Equity Interests of such Person that are not Disqualified Equity Interests.
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“Real Property Deliverables” means each of the following agreements, instruments and other documents in respect of each Facility, each in form and substance reasonably satisfactory to the Collateral Agent:
(a)a Mortgage duly executed by the applicable Loan Party,
(b)evidence of the recording of each Mortgage in such office or offices as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect the Lien purported to be created thereby or to otherwise protect the rights of the Collateral Agent and the Lenders thereunder;
(c)a Title Insurance Policy or bring-down of the existing Title Insurance Policy with respect to each Mortgage, dated as of the date such Title Insurance Policy is required to be delivered to the Collateral Agent hereunder;
(d)a current ALTA survey and a surveyor’s certificate, certified to the Collateral Agent and to the issuer of the Title Insurance Policy with respect thereto by a professional surveyor licensed in the state in which such Facility is located and reasonably satisfactory to the Collateral Agent;
(e)in the case of a leasehold interest, a certified copy of the Lease between the landlord and such Person with respect to such real property in which such Person has a leasehold interest;
(f)a zoning report issued by a provider reasonably satisfactory to the Collateral Agent or a copy of each letter issued by the applicable Governmental Authority, evidencing each Facility’s compliance with all applicable Requirements of Law, together with a copy of all certificates of occupancy issued with respect to each Facility;
(g)an opinion of counsel, satisfactory to the Collateral Agent, in the state where such Facility is located with respect to the enforceability of the Mortgage to be recorded and such other matters as the Collateral Agent may reasonably request;
(h)a Phase I Environmental Site Assessment prepared in accordance with the United States Environmental Protection Agency Standards and Practices for “All Appropriate Inquiries” under Section 101(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act as referenced in 40 CFR Part 312 and ASTM E-1527-13 “Standard Practice for Environmental Assessments” (“Phase I ESA” (and if reasonably requested by the Collateral Agent based upon the results of such Phase I ESA, a Phase II Environmental Site Assessment), by a nationally-recognized environmental consulting firm, reasonably satisfactory to the Collateral Agent; and
(i)such other agreements, instruments, appraisals and other documents (including guarantees and opinions of counsel) as the Collateral Agent may reasonably require.
“Recipient” means any Agent and any Lender, as applicable.
“Reference Rate” means, for any period, the greatest of (a) 2.00% per annum, (b) the Federal Funds Rate plus 0.50% per annum, (c) Adjusted Term SOFR (which rate shall be calculated based upon an Interest Period of one month and shall be determined on a daily basis) plus 1.00% per annum, and (d) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no
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longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Reference Rate shall be effective from and including the date such change is publicly announced as being effective.
“Reference Rate Loan” means each portion of a Loan that bears interest at a rate determined by reference to the Reference Rate.
“Register” has the meaning specified therefor in Section 12.07(f).
“Registered Intellectual Property” means Intellectual Property that is issued, registered, renewed or the subject of a pending application.
“Regulation T”, “Regulation U” and “Regulation X” mean, respectively, Regulations T, U and X of the Board or any successor, as the same may be amended or supplemented from time to time.
“Related Fund” means, with respect to any Person, an Affiliate of such Person, or a fund or account managed by such Person or an Affiliate of such Person.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the direct and indirect equityholders, partners, directors, officers, employees, agents, consultants, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Material) into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through or in any environmental media, including the indoor or outdoor air, soil, surface or ground water, sediments or property.
“Remedial Action” means any action (a) to correct, mitigate, or address any actual, alleged or threatened violation of or non-compliance with any Environmental Law or Environmental Permit, or (b) to clean up, remove, remediate, mitigate, abate, contain, treat, monitor, assess, evaluate, investigate, prevent, minimize or in any other way address any environmental condition or the actual, alleged or threatened presence, Release or threatened Release of any Hazardous Materials (including the performance of pre-remedial studies and investigations and post-remedial operation and maintenance activities).
“Replacement Lender” has the meaning specified therefor in Section 12.02(c).
“Reportable Event” means an event described in Section 4043 of ERISA (other than an event not subject to the provision for 30-day notice to the PBGC under the regulations promulgated under such Section).
“Required Lenders” means Lenders whose Pro Rata Shares (calculated in accordance with clause (c) of the definition thereof) aggregate at least 50.1%.
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“Required Prepayment Date” shall have the meaning assigned to such term in Section 2.06(g).
“Requirements of Law” means, with respect to any Person, collectively, the common law and any and all federal, state, provincial, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities), and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of any Governmental Authority, in each case that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Restricted Payment” means (a) the declaration or payment of any dividend or other distribution, direct or indirect, on account of any Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding, together with any payment or distribution pursuant to a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, (b) the making of any repurchase, redemption, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Loan Party or any direct or indirect parent of any Loan Party, now or hereafter outstanding, (c) the making of any payment to retire, or to obtain the surrender of, any outstanding warrants, options or other rights for the purchase or acquisition of shares of any class of Equity Interests of any Loan Party, now or hereafter outstanding, (d) the return of any Equity Interests to any shareholders or other equity holders of any Loan Party or any of its Subsidiaries, or the making of any other distribution of property, assets, shares of Equity Interests, warrants, rights, options, obligations or securities thereto as such or (e) the payment of any management, consulting, monitoring or advisory fees or any other fees or expenses (including the reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to any management, consulting, monitoring, advisory or other services agreement to any of the shareholders or other equityholders of any Loan Party or any of its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party.
“Revenue” means, for any period, the aggregate amount received by Holdings and its Subsidiaries during such period for the sale of good and/or the provision of services, determined in compliance with Accounting Standards Codification 606 (Revenue from Contracts with Customers) published by the Financial Accounting Standards Board.
“Revolving Credit Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans to the Borrower in the amount set forth opposite such Lender’s name in Schedule 1.01(A) hereto or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amount may be terminated, reduced or increased (pursuant to Section 2.05) from time to time in accordance with the terms of this Agreement.
“Revolving Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.01(a)(i) and any Incremental Revolving Loans.
“Revolving Loan Lender” means a Lender with a Revolving Credit Commitment or a Revolving Loan.
“Revolving Loan Obligations” means any Obligations with respect to the Revolving Loans (including without limitation, the principal thereof, the interest thereon, and the fees and expenses specifically related thereto).
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“Sale and Leaseback Transaction” means, with respect to Holdings or any of its Subsidiaries, any arrangement, directly or indirectly, with any Person whereby Holdings or any of its Subsidiaries shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
“Sanctioned Country” means, at any time, a country or territory that is the subject or target of any Sanctions that broadly prohibit dealings with that country or territory (which, as of the Effective Date, include Crimea, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in OFAC’s Specially Designated Nationals and Blocked Persons List, OFAC’s Sectoral Sanctions Identification List, and any other Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom, Germany, Canada, Australia, or other relevant sanctions authority, (b) a Person that resides in, is organized in or located in, or has a place of business in, a country or territory named on any list referred to in clause (a) of this definition or a country or territory that is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through any such jurisdiction (each of the foregoing in this clause (b), a “Sanction Target”), or a Person that owns 50% or more of the Equity Interests of, or is otherwise controlled by, or is acting on behalf of, one or more Sanction Targets, (c) any Person with whom or with which a U.S. Person is prohibited from dealing under any of the Sanctions, or (d) any Person owned or controlled by any Person or Persons described in clause (a) or (b).
“Sanctions” means Requirements of Law concerning or relating to economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by OFAC, the U.S. Department of State, the European Union, or Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.
“Second Period” has the meaning specified therefor in the definition of “Applicable Premium”.
“Secured Party” means any Agent and any Lender.
“Securities Act” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time. “Securitization” has the meaning specified therefor in Section 12.07(l).
“Security Agreement” means that certain Pledge and Security Agreement, in form and substance satisfactory to the Collateral Agent, made by the Loan Parties (other than the Mexican Loan Parties in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations).
“Seller” means any Person that sells Equity Interests or other property or assets to a Loan Party or a Subsidiary of a Loan Party in a Permitted Acquisition.
“Settlement Period” has the meaning specified therefor in Section 2.02(d)(i) hereof.
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“SOFR” means a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).
“SOFR Deadline” has the meaning specified therefor in Section 2.08(a) hereof.
“SOFR Loan” means a Loan that bears interest at a rate based on Adjusted Term SOFR.
“SOFR Notice” has the meaning specified therefor in Section 2.08(a) hereof.
“SOFR Option” has the meaning specified therefor in Section 2.08(a) hereof.
“Solvent” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is not less than the total amount of the 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 existing debts as they become absolute and matured, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (e) 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 unreasonably small capital.
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc. and any successor thereto.
“Subordinated Indebtedness” means Indebtedness of any Loan Party the terms of which (including, without limitation, payment terms, interest rates, covenants, remedies, defaults and other material terms) are satisfactory to the Collateral Agent and the Required Lenders and which has been expressly subordinated in right of payment to all Indebtedness of such Loan Party under the Loan Documents (a) by the execution and delivery of a subordination agreement, in form and substance satisfactory to the Collateral Agent and the Required Lenders, or (b) otherwise on terms and conditions satisfactory to the Collateral Agent and the Required Lenders.
“Subsidiary” means, with respect to any Person at any date, any corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity (a) the accounts of which would be consolidated with those of such Person in such Person’s consolidated financial statements if such financial statements were prepared in accordance with GAAP or (b) of which more than 50% of (i) the outstanding Equity Interests having (in the absence of contingencies) ordinary voting power to elect a majority of the Board of Directors of such Person, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such Person. References to a Subsidiary shall mean a Subsidiary of the Loan Parties (including, for the avoidance of doubt, Excluded Foreign Subsidiaries and Immaterial Subsidiaries) unless the context expressly provides otherwise.
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“Swap Obligation” means, with respect to any Guarantor, 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.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, with Holdings (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” means, collectively, the loans made by the Term Loan Lenders to the Borrower on the Effective Date pursuant to Section 2.01(a)(ii).
“Term Loan Commitment” means, with respect to each Lender, the commitment of such Lender to make the Term Loan to the Borrower in the amount set forth in Schedule 1.01(A) hereto or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as the same may be terminated or reduced from time to time in accordance with the terms of this Agreement.
“Term Loan Lender” means a Lender with a Term Loan Commitment or a Term Loan.
“Term Loan Obligations” means any Obligations with respect to the Term Loan (including, without limitation, the principal thereof, the interest thereon, and the fees and expenses specifically related thereto).
“Term SOFR” means the Term SOFR Reference Rate for a three-month tenor on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding Business Day is not more than three (3) Business Days prior to such Periodic Term SOFR Determination Day; provided that if Term SOFR as so determined shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.
“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Term SOFR Adjustment” means a percentage per annum equal to 0.26161% for the Interest Period of three months.
“Termination Date” means the first date on which all of the Obligations are paid in full in cash and the Commitments of the Lenders are terminated.
“Third Period” has the meaning specified therefor in the definition of “Applicable Premium”.
“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance satisfactory to the Collateral Agent, together with all endorsements made from time to time thereto, issued to the Collateral Agent by or on behalf of a title insurance company selected by or otherwise satisfactory to the Collateral Agent, insuring the Lien created by a Mortgage in an
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amount and on terms and with such endorsements satisfactory to the Collateral Agent, delivered to the Collateral Agent.
“Total Commitment” means the sum of the Total Revolving Credit Commitment and the Total Term Loan Commitment.
“Total Revolving Credit Commitment” means the sum of the amounts of the Lenders’ Revolving Credit Commitments.
“Total Term Loan Commitment” means the sum of the amounts of the Lenders’ Term Loan Commitments.
“UCC Filing Authorization Letter” means a letter duly executed by each Loan Party authorizing the Collateral Agent to file appropriate financing statements on Form UCC-1 without the signature of such Loan Party in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Agreement and each Mortgage.
“Holdings” has the meaning specified therefor in the preamble hereto.
“Uniform Commercial Code” or “UCC” has the meaning specified therefor in Section 1.04.
“Unpaid Taxes” means the liabilities listed on Schedule 6.01(j).
“Unused Line Fee” has the meaning specified therefor in Section 2.07(b).
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of 2001 (Title III of Pub. L. 107-56, Oct. 26, 2001)) as amended by the USA Patriot Improvement and Reauthorization Act of 2005 (Pub. L. 109-177, March 9, 2006) and as the same may have been or may be further renewed, extended, amended, or replaced.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code.
“VCOC Management Rights Agreement” has the meaning specified therefor in Section 5.01(d).
“Waivable Mandatory Prepayment” shall have the meaning assigned to such term in Section 2.06(g).
“WARN” has the meaning specified therefor in Section 6.01(p).
“Withholding Agent” means any Loan Party and the Administrative Agent.
“Working Capital” means, at any date of determination thereof, (a) the sum, for any Person and its Subsidiaries, of (i) the unpaid face amount of all Accounts of such Person and its Subsidiaries as at such date of determination, plus (ii) the aggregate amount of prepaid expenses and other current assets of such Person and its Subsidiaries as at such date of determination (other than cash, Cash Equivalents and any Indebtedness owing to such Person or any of its Subsidiaries by Affiliates of such Person), minus (b) the sum, for such Person and its Subsidiaries, of (i) the unpaid amount of all accounts payable of such Person and its Subsidiaries as at such date of determination, plus (ii) the aggregate amount of all accrued expenses of such
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Person and its Subsidiaries as at such date of determination (other than the current portion of long-term debt and all accrued interest and taxes).
Section 1.02    Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) 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 and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
Section 1.03    Certain Matters of Construction. References in this Agreement to “determination” by any Agent include good faith estimates by such Agent (in the case of quantitative determinations) and good faith beliefs by such Agent (in the case of qualitative determinations). A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders. Any Lien referred to in this Agreement or any other Loan Document as having been created in favor of any Agent, any agreement entered into by any Agent pursuant to this Agreement or any other Loan Document, any payment made by or to or funds received by any Agent pursuant to or as contemplated by this Agreement or any other Loan Document, or any act taken or omitted to be taken by any Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of the Agents and the Lenders. Wherever the phrase “to the knowledge of any Loan Party” or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or any other Loan Document, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained if such officer had engaged in good faith and diligent performance of such officer’s duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Loan Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.
Section 1.04    Accounting and Other Terms.
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(a)Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP. For purposes of determining compliance with any incurrence or expenditure tests set forth in Section 7.01, Section 7.02 and Section 7.03, any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence or expenditure test regulates the aggregate amount outstanding at any time and it is expressed in terms of Dollars, all outstanding amounts originally incurred or spent in currencies other than Dollars shall be converted into Dollars on the basis of the exchange rates (as shown on the Bloomberg currency page for such currency or, if the same does not provide such exchange rate, by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Agents or, in the event no such service is selected, on such other basis as is reasonably satisfactory to the Agents) as in effect on the date of any new incurrence or expenditures made under any provision of any such Section that regulates the Dollar amount outstanding at any time). Notwithstanding the foregoing, (i) with respect to the accounting for leases as either operating leases or capital leases and the impact of such accounting in accordance with FASB ASC 842 on the definitions and covenants herein, GAAP as in effect on December 31, 2018 shall be applied, (ii) for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of Holdings 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 and (iii) with respect to revenue recognition and the impact of such accounting in accordance with FASB ASC 606 on the definitions and covenants herein, GAAP as in effect on December 31, 2017 shall be applied.
(b)All terms used in this Agreement which are defined in Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to time in the State of New York (the “Uniform Commercial Code” or the “UCC”) and which are not otherwise defined herein shall have the same meanings herein as set forth therein, provided that terms used herein which are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as any Agent may otherwise determine.
Section 1.05     Time References. Unless otherwise indicated herein, all references to time of day refer to Eastern Standard Time or Eastern daylight saving time, as in effect in New York City on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; provided, however, that with respect to a computation of fees or interest payable to any Secured Party, such period shall in any event consist of at least one full day.
Section 1.06    Obligation to Make Payments in Dollars. All payments to be made by any Loan Party of principal, interest, fees and other Obligations under any Loan Document shall be made in Dollars in same day funds, and no obligation of any Loan Party to make any such payment shall be discharged or satisfied by any payment other than payments made in Dollars in same day funds.
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Article II
THE LOANS
Section 2.01     Commitments. (a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth:
(i)each Revolving Loan Lender severally agrees to make Revolving Loans to the Borrower at any time and from time to time during the term of this Agreement, in an aggregate principal amount of Revolving Loans at any time outstanding not to exceed the amount of such Lender’s Revolving Credit Commitment; and
(ii)each Term Loan Lender severally agrees to make the Term Loan to the Borrower on the Effective Date, in an aggregate principal amount not to exceed the amount of such Lender’s Term Loan Commitment.
No portion of any Loan will be funded (initially or through participation, assignment, transfer or securitization) with plan assets of any plan covered by ERISA or Section 4975 of the Internal Revenue Code if it would cause the Borrower or any Guarantor to incur any prohibited transaction excise tax penalties under Section 4975 of the Internal Revenue Code.
(b)     Notwithstanding the foregoing:
(i)The aggregate principal amount of Revolving Loans outstanding at any time to the Borrower shall not exceed the Total Revolving Credit Commitment. The Revolving Credit Commitment of each Lender shall automatically and permanently be reduced to zero on the Final Maturity Date. Within the foregoing limits, the Borrower may borrow, repay and reborrow, the Revolving Loans on or after the Effective Date and prior to the Final Maturity Date, subject to the terms, provisions and limitations set forth herein. No Revolving Loans shall be advanced on the Effective Date.
(ii)The aggregate principal amount of the Term Loan made on the Effective Date shall not exceed the Total Term Loan Commitment. Any principal amount of the Term Loan which is repaid or prepaid may not be reborrowed.
Section 2.02     Making the Loans. (a) The Borrower shall give the Administrative Agent prior notice in writing, in substantially the form of Exhibit C hereto (a “Notice of Borrowing”) or such other form approved by the Administrative Agent, not later than 12:00 noon (New York City time) on the date which is (i) in the case of the Term Loan, three (3) Business Days prior to the Effective Date and (ii) three (3) Business Days prior to the date of the proposed Revolving Loan (or such shorter period as the Administrative Agent is willing to accommodate from time to time, but in no event later than 12:00 noon (New York City time) on the borrowing date of the proposed Loan). Such Notice of Borrowing shall be irrevocable and shall specify (i) the principal amount of the proposed Loan, (ii) whether such Loan is requested to be a Revolving Loan or the Term Loan, (iii) whether the Loan is requested to be a Reference Rate Loan or a SOFR Loan, (iv) the use of the proceeds of such proposed Loan, (v) Borrower’s account wiring instructions, and (vi) the proposed borrowing date, which must be a Business Day, and, with respect to the Term Loan, must be the Effective Date. The Administrative Agent and the Lenders may act without liability upon the basis of written notice believed by the Administrative Agent in good faith to be from the Borrower (or from any Authorized Officer thereof designated in writing purportedly from the Borrower to the Administrative Agent). The Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such Notice of Borrowing. The Administrative Agent and each Lender shall be entitled to
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rely conclusively on any Authorized Officer’s authority to request a Loan on behalf of the Borrower until the Administrative Agent receives written notice to the contrary. The Administrative Agent and the Lenders shall have no duty to verify the authenticity of the signature appearing on any written Notice of Borrowing.
(b)Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable and the Borrower shall be bound to make a borrowing in accordance therewith. Each Revolving Loan shall be made in a minimum amount of $500,000 and shall be in an integral multiple of $100,000.
(c)(i)Except as otherwise provided in this Section 2.02(c), all Loans under this Agreement shall be made by the Lenders simultaneously and proportionately to their Pro Rata Shares of the Total Revolving Credit Commitment or the Total Term Loan Commitment, as the case may be, it being understood that no Lender shall be responsible for any default by any other Lender in that other Lender’s obligations to make a Loan requested hereunder, nor shall the Commitment of any Lender be increased or decreased as a result of the default by any other Lender in that other Lender’s obligation to make a Loan requested hereunder, and each Lender shall be obligated to make the Loans required to be made by it by the terms of this Agreement regardless of the failure by any other Lender.
ii.Notwithstanding any other provision of this Agreement, and in order to reduce the number of fund transfers among the Borrower, the Agents and the Lenders, the Borrower, the Agents and the Lenders agree that the Administrative Agent may (but shall not be obligated to), and the Borrower and the Lenders hereby irrevocably authorize the Administrative Agent to, fund, on behalf of the Revolving Loan Lenders, Revolving Loans pursuant to Section 2.01, subject to the procedures for settlement set forth in Section 2.02(d); provided, however, that (A) the Administrative Agent shall in no event fund any such Revolving Loans if the Administrative Agent shall have received written notice from the Collateral Agent or the Required Lenders on the Business Day prior to the date of the proposed Revolving Loan that one or more of the conditions precedent contained in Section 5.02 will not be satisfied at the time of the proposed Revolving Loan, and (B) the Administrative Agent shall not otherwise be required to determine that, or take notice whether, the conditions precedent in Section 5.02 have been satisfied. If the Borrower gives a Notice of Borrowing requesting a Revolving Loan and the Administrative Agent elects not to fund such Revolving Loan on behalf of the Revolving Loan Lenders, then promptly after receipt of the Notice of Borrowing requesting such Revolving Loan, the Administrative Agent shall notify each Revolving Loan Lender of the specifics of the requested Revolving Loan and that it will not fund the requested Revolving Loan on behalf of the Revolving Loan Lenders. If the Administrative Agent notifies the Revolving Loan Lenders that it will not fund a requested Revolving Loan on behalf of the Revolving Loan Lenders, each Revolving Loan Lender shall make its Pro Rata Share of the Revolving Loan available to the Administrative Agent, in immediately available funds, in the Administrative Agent’s Accounts no later than 3:00 p.m. (New York City time) (provided that the Administrative Agent requests payment from such Revolving Loan Lender not later than 1:00 p.m. (New York City time)) on the date of the proposed Revolving Loan. The Administrative Agent will make the proceeds of such Revolving Loans available to the Borrower on the day of the proposed Revolving Loan by causing an amount, in immediately available funds, equal to the proceeds of all such Revolving Loans received by the Administrative Agent in the Administrative Agent’s Accounts or the amount funded by the Administrative Agent on behalf of the Revolving Loan Lenders to be wired to an account designated by the Borrower.
iii.If the Administrative Agent has notified the Revolving Loan Lenders that the Administrative Agent, on behalf of the Revolving Loan Lenders, will not fund a particular Revolving Loan pursuant to Section 2.02(c)(ii), the Administrative Agent may assume that each such Revolving Loan Lender has made such amount available to the Administrative
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Agent on such day and the Administrative Agent, in its sole discretion, may, but shall not be obligated to, cause a corresponding amount to be made available to the Borrower on such day. If the Administrative Agent makes such corresponding amount available to the Borrower and such corresponding amount is not in fact made available to the Administrative Agent by any such Revolving Loan Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Revolving Loan Lender together with interest thereon, for each day from the date such payment was due until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for three (3) Business Days and thereafter at the Reference Rate. During the period in which such Revolving Loan Lender has not paid such corresponding amount to the Administrative Agent, notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, the amount so advanced by the Administrative Agent to the Borrower shall, for all purposes hereof, be a Revolving Loan made by the Administrative Agent for its own account. Upon any such failure by a Revolving Loan Lender to pay the Administrative Agent, the Administrative Agent shall promptly thereafter notify the Borrower of such failure and the Borrower shall immediately pay such corresponding amount to the Administrative Agent for its own account.
iv.Nothing in this Section 2.02(c) shall be deemed to relieve any Revolving Loan Lender from its obligations to fulfill its Revolving Credit Commitment hereunder or to prejudice any rights that the Administrative Agent or the Borrower may have against any Revolving Loan Lender as a result of any default by such Revolving Loan Lender hereunder.
(d)(i)    With respect to all periods for which the Administrative Agent has funded Revolving Loans pursuant to Section 2.02(c), on Friday of each week, or if the applicable Friday is not a Business Day, then on the following Business Day, or such shorter period as the Administrative Agent may from time to time select (any such week or shorter period being herein called a “Settlement Period”), the Administrative Agent shall notify each Revolving Loan Lender of the unpaid principal amount of the Revolving Loans outstanding as of the last day of each such Settlement Period. In the event that such amount is greater than the unpaid principal amount of the Revolving Loans outstanding on the last day of the Settlement Period immediately preceding such Settlement Period (or, if there has been no preceding Settlement Period, the amount of the Revolving Loans made on the date of such Revolving Loan Lender’s initial funding), each Revolving Loan Lender shall promptly (and in any event not later than 2:00 p.m. (New York City time) if the Administrative Agent requests payment from such Lender not later than 12:00 noon (New York City time) on such day) make available to the Administrative Agent its Pro Rata Share of the difference in immediately available funds. In the event that such amount is less than such unpaid principal amount, the Administrative Agent shall promptly pay over to each Revolving Loan Lender its Pro Rata Share of the difference in immediately available funds. In addition, if the Administrative Agent shall so request at any time when a Default or an Event of Default shall have occurred and be continuing, or any other event shall have occurred as a result of which the Administrative Agent shall determine that it is desirable to present claims against the Borrower for repayment, each Revolving Loan Lender shall promptly remit to the Administrative Agent or, as the case may be, the Administrative Agent shall promptly remit to each Revolving Loan Lender, sufficient funds to adjust the interests of the Revolving Loan Lenders in the then outstanding Revolving Loans to such an extent that, after giving effect to such adjustment, each such Revolving Loan Lender’s interest in the then outstanding Revolving Loans will be equal to its Pro Rata Share thereof. The obligations of the Administrative Agent and each Revolving Loan Lender under this Section 2.02(d) shall be absolute and unconditional. Each Revolving Loan Lender shall only be entitled to receive interest on its Pro Rata Share of the Revolving Loans which have been funded by such Revolving Loan Lender.
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ii.In the event that any Revolving Loan Lender fails to make any payment required to be made by it pursuant to Section 2.02(d)(i), the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Revolving Loan Lender together with interest thereon, for each day from the date such payment was due until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for three (3) Business Days and thereafter at the Reference Rate. During the period in which such Revolving Loan Lender has not paid such corresponding amount to the Administrative Agent, notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, the amount so advanced by the Administrative Agent to the Borrower shall, for all purposes hereof, be a Revolving Loan made by the Administrative Agent for its own account. Upon any such failure by a Revolving Loan Lender to pay the Administrative Agent, the Administrative Agent shall promptly thereafter notify the Borrower of such failure and the Borrower shall immediately pay such corresponding amount to the Administrative Agent for its own account. Nothing in this Section 2.02(d)(ii) shall be deemed to relieve any Revolving Loan Lender from its obligation to fulfill its Revolving Credit Commitment hereunder or to prejudice any rights that the Administrative Agent or the Borrower may have against any Revolving Loan Lender as a result of any default by such Revolving Loan Lender hereunder.
Section 2.03     Repayment of Loans; Evidence of Debt. (a) The outstanding principal of all Revolving Loans shall be due and payable on the Final Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.
(b)The outstanding principal amount of the Term Loan shall be repayable in consecutive quarterly installments on the last Business Day of each fiscal quarter of Holdings and its Subsidiaries starting with the fiscal quarter ending December 31, 2023, each in an amount equal to $687,500.00; provided, however, that the last such installment shall be in the amount necessary to repay in full the unpaid principal amount of the Term Loan. The outstanding unpaid principal amount of the Term Loan, and all accrued and unpaid interest thereon, shall be due and payable on the earliest of (i) the termination of the Total Revolving Credit Commitment, (ii) the Final Maturity Date and (iii) the date on which the Term Loan is declared due and payable pursuant to the terms of this Agreement.
(c)Each Lender shall maintain, in accordance with its usual practice, an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(d)The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(e)The entries made in the accounts maintained pursuant to Section 2.03(c) or Section 2.03(d) shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that (i) the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement and (ii) in the event of any conflict between the entries made in the accounts maintained pursuant to Section 2.03(c) and the accounts maintained pursuant to Section 2.03(d), the accounts maintained pursuant to Section 2.03(d) shall govern and control.
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(f)Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in a form furnished by the Collateral Agent and reasonably acceptable to the Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 12.07) be represented by one or more promissory notes in such form payable to the payee named therein (or to such payee and its registered assigns).
Section 2.04 Interest.
(a)Revolving Loans. Subject to the terms of this Agreement, at the option of the Borrower, each Revolving Loan shall be either a Reference Rate Loan or a SOFR Loan. Each Revolving Loan that is a Reference Rate Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of such Loan until repaid, at a rate per annum equal to the Reference Rate plus the Applicable Margin. Each Revolving Loan that is a SOFR Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of such Loan until repaid, at a rate per annum equal to Adjusted Term SOFR plus the Applicable Margin.
(b)Term Loan. Subject to the terms of this Agreement, at the option of the Borrower, the Term Loan or any portion thereof shall be either a Reference Rate Loan or a SOFR Loan. Each portion of the Term Loan that is a Reference Rate Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of the Term Loan until repaid, at a rate per annum equal to the Reference Rate plus the Applicable Margin, and each portion of the Term Loan that is a SOFR Loan shall bear interest on the principal amount thereof from time to time outstanding, from the date of the Term Loan until repaid, at a rate per annum equal to Adjusted Term SOFR plus the Applicable Margin.
(c)Default Interest. To the extent permitted by law and notwithstanding anything to the contrary in this Section, upon the occurrence and during the continuance of an Event of Default, the principal of, and all accrued and unpaid interest on, all Loans, fees, indemnities or any other Obligations of the Loan Parties under this Agreement and the other Loan Documents, shall bear interest, from the date such Event of Default occurred until the date such Event of Default is cured or waived in writing in accordance herewith, at a rate per annum equal at all times to the Post-Default Rate.
(d)Interest Payment. Interest on each Loan shall be payable (i) in the case of a Reference Rate Loan, monthly, in arrears, on the last Business Day of each month, commencing on the last Business Day of the month following the month in which such Loan is made, (ii) in the case of a SOFR Loan, on the last day of the then effective Interest Period applicable to such Loan and (iii) in the case of each Loan, at maturity (whether upon demand, by acceleration or otherwise). Interest at the Post-Default Rate shall be payable on demand. The Borrower hereby authorizes the Administrative Agent to, and the Administrative Agent may, from time to time, charge the Loan Account pursuant to Section 4.01 with the amount of any interest payment due hereunder.
(e)General. All interest shall be computed on the basis of a year of 360 days for the actual number of days, including the first day but excluding the last day, elapsed. For the avoidance of doubt, no date of payment shall be included in any computation.
Section 2.05     Increase in Revolving Credit Commitment.
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a.The Borrower may request an increase in Revolving Credit Commitments from the existing Revolving Loan Lenders from time to time upon not less than 15 days’ written notice to Administrative Agent and the Revolving Loan Lenders, as long as (i) the requested increase is offered on the same terms as the existing Revolving Credit Commitments, (ii) such new Revolving Credit Commitments shall be available at any time prior to the Final Maturity Date, (iii) the Revolving Loan made pursuant to such Revolving Credit Commitments are used for the general corporate purposes of the Borrower (including in connection with Permitted Acquisitions), and (iv) the Administrative Agent and the Revolving Loan Lenders consent in their sole discretion to such increase at the time of the request thereof (any Revolving Loans extended pursuant to this Section 2.05, “Incremental Revolving Loans”).
b.Upon satisfaction of the criteria set forth in Section 2.05(a), Administrative Agent shall promptly notify the existing Revolving Loan Lenders of the requested increase and, within 3 Business Days thereafter, each existing Revolving Loan Lender shall notify Administrative Agent in writing if and to what extent such existing Revolving Loan Lenders commits to increase its Revolving Credit Commitment. Any existing Revolving Loan Lenders not responding within such period shall be deemed to have declined an increase. For the avoidance of doubt, no existing Revolving Loan Lender shall be obligated to participate in any extension of Incremental Revolving Loans. All such increased Revolving Credit Commitments among committing Revolving Loan Lenders in connection with Incremental Revolving Loans shall be allocated on a pro rata basis (in accordance with such Revolving Loan Lenders Pro Rata Shares of the current Revolving Credit Commitments) between such participating Revolving Loan Lenders (or on such other basis as the participating Revolving Loan Lenders agree in their sole discretion). The Total Revolving Credit Commitment shall be increased by the requested amount (or such lesser amount committed) on a date agreed upon by Administrative Agent, the participating Revolving Loan Lenders and the Borrower and all such Incremental Revolving Loans made shall be deemed a “Revolving Loan” hereunder. The Administrative Agent, the Borrower, and the existing Revolving Loan Lenders making new Revolving Loans shall execute and deliver such customary documents and agreements as Administrative Agent deems reasonably appropriate to evidence the increase in and allocations of Revolving Credit Commitments. On the effective date of any such increase, the outstanding Revolving Loans and other exposures under the Revolving Credit Commitments shall be reallocated among Revolving Loan Lenders, and settled by Administrative Agent as necessary, in accordance with Revolving Loan Lenders’ adjusted shares of such Revolving Credit Commitments.
Section 2.06    Reduction of Commitment; Prepayment of Loans.
(a)Reduction of Commitments.
(i)Revolving Credit Commitments. The Total Revolving Credit Commitment shall terminate on the Final Maturity Date. The Borrower may reduce the Total Revolving Credit Commitment to an amount (which may be zero) not less than the sum of (A) the aggregate unpaid principal amount of all Revolving Loans then outstanding, and (B) the aggregate principal amount of all Revolving Loans not yet made as to which a Notice of Borrowing has been given by the Borrower under Section 2.02. Each such reduction shall be (1) in an amount which is an integral multiple of $1,000,000 (or by the full amount of the Total Revolving Credit Commitment in effect immediately prior to such reduction if such amount at that time is less than $1,000,000), (2) made by providing prior to 5:00 p.m. New York City time, not less than five (5) Business Days’ prior written notice to the Administrative Agent, (3) irrevocable and (4) accompanied by the payment of the Applicable Premium, if any, payable in connection with such reduction of the Total Revolving Credit Commitment. Once reduced, the Total Revolving Credit Commitment may not be increased. Each such reduction of the Total Revolving Credit Commitment shall reduce the Revolving Credit Commitment of each Lender proportionately in accordance with its Pro Rata Share thereof.
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(ii)Term Loan. The Total Term Loan Commitment shall terminate at 5:00 p.m. (New York City time) on the Effective Date.
(b)Optional Prepayment.
(i)Revolving Loans. The Borrower may, at any time and from time to time, upon written notice delivered by 5:00 p.m. New York City time, ten Business Days’ prior to the proposed prepayment date, prepay the principal of any Revolving Loan, in whole or in part. Each prepayment made pursuant to this Section 2.06(b)(i) in connection with a reduction of the Total Revolving Credit Commitment pursuant to Section 2.06(a)(i) above shall be accompanied by the payment of the Applicable Premium, if any, payable in connection with such reduction of the Total Revolving Credit Commitment.
(ii)Term Loan. The Borrower may, at any time and from time to time, by 5:00 p.m. (New York City time) upon at least five (5) Business Days’ prior written notice to the Administrative Agent, prepay the principal of the Term Loan, in whole or in part. Each prepayment made pursuant to this Section 2.06(b)(ii) shall be accompanied by the payment of (A) accrued interest to the date of such payment on the amount prepaid and (B) the Applicable Premium, if any, payable in connection with such prepayment of the Term Loan. Each such prepayment shall be applied against the remaining installments of principal due on the Term Loan in the inverse order of maturity.
(iii)Termination of Agreement. The Borrower may, upon at least 30 days prior written notice to the Administrative Agent, terminate this Agreement by paying to the Administrative Agent, in full in cash, the Obligations, plus the Applicable Premium, if any, payable in connection with such termination of this Agreement. If the Borrower has sent a notice of termination pursuant to this Section 2.06(b)(iii), then the Lenders’ obligations to extend credit hereunder shall terminate and the Borrower shall be obligated to repay the Obligations, in full in cash, plus the Applicable Premium, if any, payable in connection with such termination of this Agreement on the date set forth as the date of termination of this Agreement in such notice.
(c)Mandatory Prepayment.
(i)Within three (3) Business Days after the delivery to the Agents and the Lenders of audited annual financial statements pursuant to Section 7.01(a)(iii), commencing with the delivery to the Agents and the Lenders of the financial statements for the Fiscal Year ended December 31, 2022 or, if such financial statements are not delivered to the Agents and the Lenders on the date such statements are required to be delivered pursuant to Section 7.01(a)(iii), by the date three (3) Business Days after the date such statements are required to be delivered to the Agents and the Lenders pursuant to Section 7.01(a)(iii), the Borrower shall prepay the outstanding principal amount of the Loans in accordance with Section 2.06(d) in an amount equal to the result of (to the extent positive) (1) ECF Percentage of Holdings and its Subsidiaries for such Fiscal Year minus (2) the aggregate principal amount of all payments made by the Borrower pursuant to Section 2.06(b) for such Fiscal Year (in the case of payments made by the Borrower pursuant to Section 2.06(b)(i), only to the extent that the Total Revolving Credit Commitment is permanently reduced by the amount of such payments).
(ii)Immediately upon any Disposition (excluding Dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d), (e), (f), (g), (h) or (j) of the definition of Permitted Disposition) by any Loan Party or its Subsidiaries, the Borrower shall prepay the outstanding principal amount of the Loans in accordance with Section 2.06(d) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such Disposition to the extent that the aggregate amount of Net Cash Proceeds received by all Loan Parties and their Subsidiaries (and not paid to the Administrative Agent as a prepayment of
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the Loans) shall exceed for all such Dispositions $250,000 in any Fiscal Year. Nothing contained in this Section 2.06(c)(ii) shall permit any Loan Party or any of its Subsidiaries to make a Disposition of any property other than in accordance with Section 7.02(c)(ii).
(iii)Immediately upon the receipt of Net Cash Proceeds (A) from the issuance or incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), the Borrower shall prepay the outstanding amount of the Loans in accordance with Section 2.06(d) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith or (B) upon an Equity Issuance (other than any Excluded Equity Issuances), the Borrower shall prepay the outstanding amount of the Loans in accordance with Section 2.06(d) in an amount equal to 25% of the Net Cash Proceeds received by such Person in connection therewith. The provisions of this Section 2.06(c)(iii) shall not be deemed to be implied consent to any such issuance, incurrence or sale otherwise prohibited by the terms and conditions of this Agreement.
(iv)Immediately upon the receipt by any Loan Party or any of its Subsidiaries of any Extraordinary Receipts, the Borrower shall prepay the outstanding principal of the Loans in accordance with Section 2.06(d) in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection therewith.
(v)Immediately upon receipt by the Borrower of the proceeds of any Permitted Cure Equity pursuant to Section 9.02, the Borrower shall prepay the outstanding principal of the Loans in accordance with Section 2.06(d) in an amount equal to 100% of such proceeds.
(vi)Notwithstanding the foregoing, with respect to Net Cash Proceeds received by any Loan Party or any of its Subsidiaries in connection with a Disposition or the receipt of Extraordinary Receipts consisting of insurance proceeds or condemnation awards that are required to be used to prepay the Obligations pursuant to Section 2.06(c)(ii) or Section 2.06(c)(iv), as the case may be, up to $250,000 in the aggregate in any Fiscal Year of the Net Cash Proceeds from all such Dispositions and Extraordinary Receipts shall not be required to be so used to prepay the Obligations to the extent that such Net Cash Proceeds are used to replace, repair or restore properties or assets (other than current assets) used in such Person’s business, provided that, (A) no Default or Event of Default has occurred and is continuing on the date such Person receives such Net Cash Proceeds, (B) the Borrower delivers a certificate to the Administrative Agent within five (5) days after such Disposition or loss, destruction or taking, as the case may be, stating that such Net Cash Proceeds shall be used to replace, repair or restore properties or assets used in such Person’s business within a period specified in such certificate not to exceed 120 days after the date of receipt of such Net Cash Proceeds (which certificate shall set forth estimates of the Net Cash Proceeds to be so expended); provided that such Net Cash Proceeds shall actually be reinvested within an additional 90 days thereafter, (C) such Net Cash Proceeds are deposited in an account subject to a Control Agreement, and (D) upon the earlier of (1) the expiration of the period specified in the relevant certificate furnished to the Administrative Agent pursuant to clause (B) above or (2) the occurrence of a Default or an Event of Default, such Net Cash Proceeds, if not theretofore so used, shall be used to prepay the Obligations in accordance with Section 2.06(c)(ii) or Section 2.06(c)(iv) as applicable.
(d)Application of Payments. Each prepayment pursuant to subsections (c)(i), (c)(ii), (c)(iii), (c)(iv) and (c)(v) above shall be applied, first, to the Term Loan, until paid in full, and second, to the Revolving Loans (with a corresponding permanent reduction in the Revolving Credit Commitments), until paid in full in cash. Each such prepayment of the Term Loan shall be applied against the remaining installments of principal of the Term Loan in the inverse order of maturity. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default, if the Administrative Agent has elected, or has been directed by the
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Collateral Agent or the Required Lenders, to apply payments in respect of any Obligations in accordance with Section 4.03(b), prepayments required under Section 2.06(c) shall be applied in the manner set forth in Section 4.03(b).
(e)Interest and Fees. Any prepayment made pursuant to this Section 2.06 shall be accompanied by (i) accrued interest on the principal amount being prepaid to the date of prepayment, (ii) any Funding Losses payable pursuant to Section 2.09, (iii) the Applicable Premium, if any, payable in connection with such prepayment of the Loans to the extent required under Section 2.07(c) and (iv) if such prepayment would reduce the amount of the outstanding Loans to zero at a time when the Total Revolving Credit Commitment has been terminated, such prepayment shall be accompanied by the payment of all fees accrued to such date pursuant to Section 2.07.
(f)Cumulative Prepayments. Except as otherwise expressly provided in this Section 2.06, payments with respect to any subsection of this Section 2.06 are in addition to payments made or required to be made under any other subsection of this Section 2.06.
(g)Waivable Mandatory Prepayments. Anything contained herein to the contrary notwithstanding, in the event that the Borrower are required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Loans pursuant to Section 2.06(c), not less than 12:00 noon (New York City time) two (2) Business Days prior to the date on which the Borrower are required to make such Waivable Mandatory Prepayment (the “Required Prepayment Date”), the Borrower shall notify the Administrative Agent in writing of the amount of such prepayment, and the Administrative Agent will promptly thereafter notify each Lender of the amount of such Lender’s Pro Rata Share of such Waivable Mandatory Prepayment and such Lender’s option to refuse such amount. Each such Lender may exercise such option by giving written notice to the Borrower and the Administrative Agent of its election to do so on or before 12:00 noon (New York City time) one Business Day prior to the Required Prepayment Date (it being understood that any Lender that does not notify the Borrower and the Administrative Agent of its election to exercise such option on or before 12:00 noon (New York City time) one Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrower shall pay to the Administrative Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied (i) in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Lenders that have elected not to exercise such option, to prepay the Loans of such Lenders (which prepayment shall be applied to prepay the outstanding principal amount of the Obligations in accordance with Section 2.06(d)) and (ii) to the extent of any excess, to the Borrower for working capital and general corporate purposes.
Section 2.07     Fees.
(a)[Reserved].
(b)Unused Line Fee. The Borrower agrees to pay to the Administrative Agent an unused line fee (the “Unused Line Fee”) for the account of each Revolving Loan Lender, which shall accrue at a rate per annum equal to 2% on the amount of the undrawn portion of the Revolving Credit Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders’ Revolving Credit Commitments terminate. The Unused Line Fee shall accrue through and including the last day of March, June, September and December of each year shall be due and payable in arrears on the such last day and on the date on which the Revolving Credit Commitments terminate, commencing on the first such date to occur after the date hereof.
(c)Applicable Premium.
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(i)Upon the occurrence of an Applicable Premium Trigger Event, the Borrower shall pay to the Administrative Agent, for the account of the Lenders in accordance with their Pro Rata Shares, the Applicable Premium.
(ii)Any Applicable Premium payable in accordance with this Section 2.07(c) shall be presumed to be equal to the liquidated damages sustained by the Lenders as the result of the occurrence of the Applicable Premium Trigger Event and the Loan Parties agree that it is reasonable under the circumstances currently existing. THE LOAN PARTIES EXPRESSLY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING APPLICABLE PREMIUM IN CONNECTION WITH ANY ACCELERATION.
(iii)The Loan Parties expressly agree that: (A) the Applicable Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Lenders and the Loan Parties giving specific consideration in this transaction for such agreement to pay the Applicable Premium; (D) the Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this paragraph; (E) their agreement to pay the Applicable Premium is a material inducement to Lenders to provide the Commitments and make the Loans, and (F) the Applicable Premium represents a good faith, reasonable estimate and calculation of the lost profits or damages of the Agents and the Lenders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Agents and the Lenders or profits lost by the Agents and the Lenders as a result of such Applicable Premium Trigger Event.
(iv)Nothing contained in this Section 2.07(c) shall permit any prepayment of the Loans or reduction of the Commitments not otherwise permitted by the terms of this Agreement or any other Loan Document.
(d)Audit and Collateral Monitoring Fees. The Borrower acknowledges that pursuant to Section 7.01(f), representatives of the Agents may, upon reasonable advance notice, visit any or all of the Loan Parties and/or conduct inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations of any or all of the Loan Parties at any reasonable time and from time to time. The Borrower agrees to pay (i) $1,500 per day per examiner plus the examiner’s out-of-pocket costs and reasonable expenses incurred in connection with all such visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations and (ii) the cost of all visits, inspections, audits, physical counts, valuations, appraisals, environmental site assessments and/or examinations conducted by a third party on behalf of the Agents).
(e)Fee Letter. As and when due and payable under the terms of the Fee Letter, the Borrower shall pay the fees set forth in the Fee Letter.
Section 2.08    SOFR Option.
(a)The Borrower may, at any time and from time to time, so long as no Default or Event of Default has occurred and is continuing, elect to have interest on all or a portion of the Loans be charged at a rate of interest based upon Adjusted Term SOFR (the “SOFR Option”) by notifying the Administrative Agent in writing prior to 11:00 a.m. (New York City time) at least three (3) Business Days prior to (i) the proposed borrowing date of a Loan (as provided in Section 2.02), (ii) in the case of the conversion of a Reference Rate Loan to a SOFR Loan, the commencement of the proposed Interest Period or (iii) in the case of the continuation of a SOFR Loan as a SOFR Loan, the last day of the then current Interest Period (the “SOFR
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Deadline”). Notice of the Borrower’s election of the SOFR Option for a permitted portion of the Loans pursuant to this Section 2.08(a) shall be made by delivery to the Administrative Agent of (A) a Notice of Borrowing (in the case of the initial making of a Loan) in accordance with Section 2.02 or (B) a notice in writing, in substantially the form of Exhibit D hereto (a “SOFR Notice”) prior to the SOFR Deadline. Promptly upon its receipt of each such SOFR Notice, the Administrative Agent shall provide a copy thereof to each of the Lenders. Each SOFR Notice shall be irrevocable and binding on the Borrower.
(b)Interest on SOFR Loans shall be payable in accordance with Section 2.04(d). On the last day of each applicable Interest Period, unless the Borrower properly have exercised the SOFR Option with respect thereto, the interest rate applicable to such SOFR Loans automatically shall convert to the rate of interest then applicable to Reference Rate Loans of the same type hereunder. At any time that a Default or an Event of Default has occurred and is continuing, the Borrower no longer shall have the option to request that any portion of the Loans bear interest at Adjusted Term SOFR and the Administrative Agent shall have the right (but not the obligation) to convert the interest rate on all outstanding SOFR Loans to the rate of interest then applicable to Reference Rate Loans of the same type hereunder on the last day of the then current Interest Period.
(c)Notwithstanding anything to the contrary contained in this Agreement, the Borrower (i) shall have not more than three (3) SOFR Loans in effect at any given time, and (ii) only may exercise the SOFR Option for SOFR Loans of at least $500,000 and integral multiples of $100,000 in excess thereof.
(d)The Borrower may prepay SOFR Loans at any time; provided, however, that in the event that SOFR Loans are prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any mandatory prepayment pursuant to Section 2.06(c) or any application of payments or proceeds of Collateral in accordance with Section 4.03 or Section 4.04 or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, the Borrower shall indemnify, defend, and hold the Agents and the Lenders and their participants harmless against any and all Funding Losses in accordance with Section 2.09.
(e)[Reserved].
(f)Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, the Administrative Agent and the Required Lenders may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. The parties shall use commercially reasonable efforts to satisfy any applicable IRS guidance, including Treasury Regulation Section 1.1001-6 and any future guidance, to the effect that the implementation of a Benchmark Replacement will not result in a deemed exchange for U.S. federal income tax purposes of any Loan under this Agreement for U.S. federal income tax purposes.
(g)In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(h)The Administrative Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation
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of a Benchmark Replacement. Any determination, decision or election that may be made by the Administrative Agent and the Required Lenders pursuant to this Section 2.08, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document.
(i)Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(j)Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to Reference Rate Loans.
Section 2.09    Funding Losses. In connection with each SOFR Loan, the Borrower shall indemnify, defend, and hold the Agents and the Lenders harmless against any loss, cost, or expense incurred by any Agent or any Lender as a result of (a) the payment of any principal of any SOFR Loan other than on the last day of an Interest Period applicable thereto (including as a result of a Default or an Event of Default or any mandatory prepayment required pursuant to Section 2.06(c)), (b) the conversion of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of a Default or an Event of Default), or (c) the failure to borrow, convert, continue or prepay any SOFR Loan on the date specified in any Notice of Borrowing or SOFR Notice delivered pursuant hereto (such losses, costs, and expenses, collectively, “Funding Losses”). Funding Losses shall, with respect to any Agent or any Lender, be deemed to equal the amount reasonably determined by such Agent or such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such SOFR Loan had such event not occurred, at Adjusted Term SOFR that would have been applicable thereto, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period therefor), minus (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Agent or such Lender would be offered were it to be offered, at the commencement of such period, Dollar deposits of a comparable amount and period in the London interbank market. A certificate of an Agent or a Lender delivered to the Borrower setting forth any amount or
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amounts that such Agent or such Lender is entitled to receive pursuant to this Section 2.09) shall be conclusive absent manifest error.
Section 2.10    Taxes. (a) Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any and all Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of any Withholding Agent) requires the deduction or withholding of any Taxes from or in respect of any such payment, (i) the applicable Withholding Agent shall make such deduction or withholding, (ii) the applicable Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and (iii) if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased by the amount (an “Additional Amount”) necessary such that after making such deduction or withholding (including deductions and with Holdings applicable to Additional Amount payable under this Section 2.10) the applicable Recipient receives the amount equal to the sum it would have received had no such deduction or withholding been made.
(b)In addition, each Loan Party shall pay to the relevant Governmental Authority in accordance with applicable law any Other Taxes, or at the option of the Administrative Agent timely reimburse it for the payment of any Other Taxes by any Secured Party.
(c)The Loan Parties hereby jointly and severally indemnify and agree to hold each Secured Party harmless from and against Indemnified Taxes (including, without limitation, Indemnified Taxes imposed on any amounts payable under this Section 2.10) paid or payable by such Secured Party or required to be withheld or deducted from a payment to such Secured Party and any expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which any such Person makes written demand therefor specifying in reasonable detail the nature and amount of such Indemnified Taxes. A certificate as to the amount of such payment or liability delivered to the Borrower by a Secured Party (with a copy to the Administrative Agent) or on behalf of another Secured Party shall be conclusive absent manifest error.
(d)(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 and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower 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 Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.10(d)(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,
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(A)any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)any Lender that is not a U.S. Person (a “Foreign Lender”) shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(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 copies of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2)executed 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 Internal Revenue Code, (x) a certificate substantially in the form of Exhibit 2.09(d)-1 hereto to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or
(4)to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 2.09(d)-2 or Exhibit 2.09(d)-3, IRS Form W-9, 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 2.09(d)-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 and the Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
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were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower 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 Administrative Agent in writing of its legal inability to do so.
(e)Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 12.07(i) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental 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 set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).
(f)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 2.10 (including by the payment of Additional Amounts pursuant to this Section 2.10), 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 2.10 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 (f) (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 (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) 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 (f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
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(g)The obligations of the Loan Parties under this Section 2.10 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(h)Promptly after any payment of Taxes by the Loan Parties to a Governmental Authority pursuant to this Section 2.10, the Loan Parties 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.
Section 2.11    Increased Costs and Reduced Return. (a) If any Secured Party shall have determined that any Change in Law shall (i) subject such Secured Party, or any Person controlling such Secured Party to any tax, duty or other charge with respect to this Agreement or any Loan made by such Agent or such Lender (except for (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes), (ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against any Loan or against assets of or held by, or deposits with or for the account of, or credit extended by, such Secured Party or any Person controlling such Secured Party or (iii) impose on such Secured Party or any Person controlling such Secured Party any other condition regarding this Agreement or any Loan, and the result of any event referred to in clauses (i), (ii) or (iii) above shall be to increase the cost to such Secured Party of making any Loan, or agreeing to make any Loan, or to reduce any amount received or receivable by such Secured Party hereunder, then, upon demand by such Secured Party, the Borrower shall pay to such Secured Party such additional amounts as will compensate such Secured Party for such increased costs or reductions in amount.
(b)If any Secured Party shall have determined that any Change in Law either (i) affects or would affect the amount of capital required or expected to be maintained by such Secured Party or any Person controlling such Secured Party, and such Secured Party determines that the amount of such capital is increased as a direct or indirect consequence of any Loans made or maintained, such Secured Party’s or such other controlling Person’s other obligations hereunder, or (ii) has or would have the effect of reducing the rate of return on such Secured Party’s or such other controlling Person’s capital to a level below that which such Secured Party or such controlling Person could have achieved but for such circumstances as a consequence of any Loans made or maintained, or any agreement to make Loans, or such Secured Party’s or such other controlling Person’s other obligations hereunder (in each case, taking into consideration, such Secured Party’s or such other controlling Person’s policies with respect to capital adequacy), then, upon demand by such Secured Party, the Borrower shall pay to such Secured Party from time to time such additional amounts as will compensate such Secured Party for such cost of maintaining such increased capital or such reduction in the rate of return on such Secured Party’s or such other controlling Person’s capital.
(c)All amounts payable under this Section 2.11 shall bear interest from the date that is 10 days after the date of demand by any Secured Party until payment in full to such Secured Party at the Reference Rate. A certificate of such Secured Party claiming compensation under this Section 2.11, specifying the event herein above described and the nature of such event shall be submitted by such Secured Party to the Borrower, setting forth the additional amount due and an explanation of the calculation thereof, and such Secured Party’s reasons for invoking the provisions of this Section 2.11, and shall be final and conclusive absent manifest error.
(d)Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section 2.11 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section 2.11 for any increased
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costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’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 nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e)The obligations of the Loan Parties under this Section 2.11 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
Section 2.12    Changes in Law; Impracticability or Illegality.
(a)Adjusted Term SOFR may be adjusted by the Administrative Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including changes in tax laws (except to the extent such changes result in the Lender becoming liable for Indemnified Taxes or Excluded Taxes) and changes in the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any successor), which additional or increased costs would increase the cost of funding loans bearing interest at Adjusted Term SOFR. In any such event, the affected Lender shall give the Borrower and the Administrative Agent notice of such a determination and adjustment and the Administrative Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, the Borrower may, by notice to such affected Lender (i) require such Lender to furnish to the Borrower a statement setting forth the basis for adjusting such Adjusted Term SOFR and the method for determining the amount of such adjustment, or (ii) repay the SOFR Loans with respect to which such adjustment is made (together with any amounts due under Section 2.10).
(b)In the event that any change in market conditions or any law, regulation, treaty, or directive, or any change therein or in the interpretation of application thereof, shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for such Lender to fund or maintain SOFR Loans or to continue such funding or maintaining, or to determine or charge interest rates at Adjusted Term SOFR, such Lender shall give notice of such changed circumstances to the Borrower and the Administrative Agent, and the Administrative Agent promptly shall transmit the notice to each other Lender and (i) in the case of any SOFR Loans of such Lender that are outstanding, the date specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such SOFR Loans, and interest upon the SOFR Loans of such Lender thereafter shall accrue interest at the rate then applicable to Reference Rate Loans of the same type hereunder, and (ii) the Borrower shall not be entitled to elect the SOFR Option (including in any borrowing, conversion or continuation then being requested) until such Lender determines that it would no longer be unlawful or impractical to do so.
(c)The obligations of the Loan Parties under this Section 2.12 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
Article III
[INTENTIONALLY OMITTED]
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Article IV

APPLICATION OF PAYMENTS; DEFAULTING LENDERS
Section 4.01     Payments; Computations and Statements. (a) The Borrower will make each payment under this Agreement not later than 12:00 noon (New York City time) on the day when due, in lawful money of the United States of America and in immediately available funds, to the Administrative Agent’s Accounts. All payments received by the Administrative Agent after 12:00 noon (New York City time) on any Business Day, may, in the Administrative Agent’s sole discretion, be credited to the Loan Account on the next succeeding Business Day. All payments shall be made by the Borrower without set-off, counterclaim, recoupment, deduction or other defense to the Agents and the Lenders. Except as provided in Section 2.02, after receipt, the Administrative Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal ratably to the Lenders in accordance with their Pro Rata Shares and like funds relating to the payment of any other amount payable to any Lender to such Lender, in each case to be applied in accordance with the terms of this Agreement. The Lenders and the Borrower hereby authorize the Administrative Agent to, and the Administrative Agent may, from time to time, charge the Loan Account of the Borrower with any amount due and payable by the Borrower under any Loan Document. Each of the Lenders and the Borrower agrees that the Administrative Agent shall have the right to make such charges whether or not any Default or Event of Default shall have occurred and be continuing or whether any of the conditions precedent in Section 5.02 have been satisfied. Any amount charged to the Loan Account of the Borrower shall be deemed a Revolving Loan hereunder made by the Revolving Loan Lenders to the Borrower, funded by the Administrative Agent on behalf of the Revolving Loan Lenders and subject to Section 2.02 of this Agreement. The Lenders and the Borrower confirm that any charges which the Administrative Agent may so make to the Loan Account of the Borrower as herein provided will be made as an accommodation to the Borrower and solely at the Administrative Agent’s discretion, provided that the Administrative Agent shall from time to time upon the request of the Collateral Agent, charge the Loan Account of the Borrower with any amount due and payable under any Loan Document. Whenever any payment to be made under any such Loan Document shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. All computations of fees shall be made by the Administrative Agent on the basis of a year of 360 days for the actual number of days. Each determination by the Administrative Agent of an interest rate or fees hereunder shall be conclusive and binding for all purposes in the absence of manifest error.
(b)If requested, the Administrative Agent shall provide the Borrower, after the end of a calendar month, a summary statement (in the form from time to time used by the Administrative Agent) of the opening and closing daily balances in the Loan Account of the Borrower during such month, the amounts and dates of all Loans made to the Borrower during such month, the amounts and dates of all payments on account of the Loans to the Borrower during such month and the Loans to which such payments were applied, the amount of interest accrued on the Loans to the Borrower during such month, and the amount and nature of any charges to the Loan Account made during such month on account of fees, commissions, expenses and other Obligations. All entries on any such statement shall be presumed to be correct and, 30 days after the same is sent, shall be final and conclusive absent manifest error.
Section 4.02     Sharing of Payments. Except as provided in Section 2.02 hereof, if any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of any Obligation in excess of its ratable share of payments on account of similar obligations obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in such similar obligations held by
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them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that (a) if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and each Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid by the purchasing Lender in respect of the total amount so recovered and (b) the provisions of this Section shall not be construed to apply to (i) any payment made by the Borrower 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 and any payment of an amendment, consent or waiver fee to consenting Lenders pursuant to an effective amendment, consent or waiver with respect to this Agreement), or (ii) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans, other than to any Loan Party or any Subsidiary thereof (as to which the provisions of this Section shall apply). The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all of its rights (including the Lender’s right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.
Section 4.03     Apportionment of Payments. Subject to Section 2.02 hereof:
(a)All payments of principal and interest in respect of outstanding Loans, all payments of fees (other than the fees set forth in Section 2.07 hereof) and all other payments in respect of any other Obligations, shall be allocated by the Administrative Agent among such of the Lenders as are entitled thereto, in proportion to their respective Pro Rata Shares or otherwise as provided herein or, in respect of payments not made on account of Loans, as designated by the Person making payment when the payment is made.
(b)After the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and upon the direction of the Collateral Agent or the Required Lenders shall, apply all payments in respect of any Obligations, including without limitation, all proceeds of the Collateral, subject to the provisions of this Agreement, (i) first, ratably to pay the Obligations in respect of any fees, expense reimbursements, indemnities and other amounts then due and payable to the Agents until paid in full; (ii) second, to pay interest then due and payable in respect of the Collateral Agent Advances until paid in full; (iii) third, to pay principal of the Collateral Agent Advances until paid in full; (iv) fourth, ratably to pay the Revolving Loan Obligations in respect of any fees (other than any Applicable Premium), expense reimbursements, indemnities and other amounts then due and payable to the Revolving Loan Lenders until paid in full; (v) fifth, ratably to pay interest then due and payable in respect of the Revolving Loans until paid in full; (vi) sixth, ratably to pay principal of the Revolving Loans until paid in full; (vii) seventh, ratably to pay the Term Loan Obligations in respect of any fees (other than any Applicable Premium), expense reimbursements, indemnities and other amounts then due and payable to the Term Loan Lenders until paid in full; (viii) eighth, ratably to pay interest then due and payable in respect of the Term Loan until paid in full; (ix) ninth, ratably to pay principal of the Term Loan until paid in full; (x) tenth, ratably to pay the Obligations in respect of any Applicable Premium then due and payable to the Lenders until paid in full; and (xi) eleventh, to the ratable payment of all other Obligations then due and payable.
(c)For purposes of Section 4.03(b) “paid in full” means payment in cash of all amounts owing under the Loan Documents according to the terms thereof, including loan fees, service fees, professional fees, interest (and specifically including interest accrued after the commencement of any Insolvency Proceeding), default interest, interest on interest, and expense
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reimbursements, whether or not the same would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
(d)In the event of a direct conflict between the priority provisions of this Section 4.03 and other provisions contained in any other Loan Document, it is the intention of the parties hereto that both such priority provisions in such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of Section 4.03 shall control and govern.
Section 4.04     Defaulting Lenders. 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:
(a)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 Section 12.02.
(b)The Administrative Agent shall not be obligated to transfer to such Defaulting Lender any payments made by the Borrower to the Administrative Agent for such Defaulting Lender’s benefit, and, in the absence of such transfer to such Defaulting Lender, the Administrative Agent shall transfer any such payments to each other non-Defaulting Lender ratably in accordance with their Pro Rata Shares (without giving effect to the Pro Rata Shares of such Defaulting Lender) (but only to the extent that such Defaulting Lender’s Loans were funded by the other Lenders) or, if so directed by the Borrower and if no Default or Event of Default has occurred and is continuing (and to the extent such Defaulting Lender’s Loans were not funded by the other Lenders), retain the same to be re-advanced to the Borrower as if such Defaulting Lender had made such Loans to the Borrower. Subject to the foregoing, the Administrative Agent may hold and, in its discretion, re-lend to the Borrower for the account of such Defaulting Lender the amount of all such payments received and retained by the Administrative Agent for the account of such Defaulting Lender.
(c)Any such failure to fund by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle the Administrative Agent to replace the Defaulting Lender with one or more substitute Lenders, and the Defaulting Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Defaulting Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given. Prior to the effective date of such replacement, the Defaulting Lender shall execute and deliver an Assignment and Acceptance, subject only to the Defaulting Lender being repaid its share of the outstanding Obligations without any premium or penalty of any kind whatsoever. If the Defaulting Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, the Defaulting Lender shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Defaulting Lender shall be made in accordance with the terms of Section 12.07.
(d)The operation of this Section shall not be construed to increase or otherwise affect the Commitments of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by the Borrower of its duties and obligations hereunder to the Administrative Agent or to the Lenders other than such Defaulting Lender.
(e)This Section shall remain effective with respect to such Lender until either (i) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable or (ii) the non-Defaulting Lenders, the Agents, and the Borrower
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shall have waived such Defaulting Lender’s default in writing, and the Defaulting Lender makes its Pro Rata Share of the applicable defaulted Loans and pays to the Agents all amounts owing by such Defaulting Lender in respect thereof; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; 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 such Lender’s having been a Defaulting Lender.
ARTICLE V
CONDITIONS TO LOANS
Section 5.01     Conditions Precedent to Effectiveness. This Agreement shall become effective as of the Business Day (the “Effective Date”) when each of the following conditions precedent shall have been satisfied in a manner satisfactory to the Agents:
(a)Payment of Fees, Etc. The Borrower shall have paid on or before the Effective Date all fees, costs, expenses and taxes then due and payable pursuant to Section 2.07 and Section 12.04.
(b)Representations and Warranties; No Event of Default. The following statements shall be true and correct: (i) the representations and warranties contained in Article VI and in each other Loan Document, certificate or other writing delivered to any Secured Party pursuant hereto or thereto on or prior to the Effective Date are true and correct on and as of the Effective Date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct on and as of such earlier date) and (ii) no Default or Event of Default shall have occurred and be continuing on the Effective Date or would result from this Agreement or the other Loan Documents becoming effective in accordance with its or their respective terms.
(c)Legality. The making of the Loans on the Effective Date shall not contravene any law, rule or regulation applicable to any Secured Party.
(d)Delivery of Documents. The Collateral Agent shall have received on or before the Effective Date the following, each in form and substance satisfactory to the Collateral Agent and, unless indicated otherwise, dated the Effective Date and, if applicable, duly executed by the Persons party thereto:
(i)the Security Agreement;
(ii)a UCC Filing Authorization Letter, together with evidence satisfactory to the Collateral Agent of the filing of appropriate financing statements on form UCC-1, in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by the Security Agreement;
(iii)the results of searches for any effective UCC financing statements, tax Liens or judgment Liens filed against any Loan Party or its property, (x) which results shall not show any such Liens (other than Permitted Liens acceptable to the Collateral Agent) or (y) shall be accompanied by evidence reasonably satisfactory to the Collateral Agent that the Liens indicated in all such financing statements and other filings (or similar document) have been
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released or will be released on the Effective Date concurrently with the funding of the Loans hereunder;
(iv)a Perfection Certificate;
(v)the Disbursement Letter;
(vi)the Fee Letter;
(vii)the Intercompany Subordination Agreement;
(viii)the Intercreditor Agreement, the AGS Subordination Agreement and the Exitus Subordination Agreement;
(ix)[Reserved];
(x)[Reserved];
(xi)the management rights letter, dated as of the date hereof, among the Loan Parties and the Agents, as amended, amended and restated, supplemented or otherwise modified from time to time (the “VCOC Management Rights Agreement”);
(xii)a certificate of an Authorized Officer of each Loan Party, certifying (A) as to copies of the Governing Documents of such Loan Party, together with all amendments thereto (including, without limitation, a true and complete copy of the charter, certificate of formation, certificate of limited partnership or other publicly filed organizational document (or applicable equivalent) of each Loan Party certified as of a recent date not more than 30 days prior to the Effective Date by an appropriate official of the jurisdiction of organization of such Loan Party which shall set forth the same complete name of such Loan Party as is set forth herein and the organizational number of such Loan Party, if an organizational number is issued in such jurisdiction), (B) as to a copy of the resolutions or written consents of such Loan Party authorizing (1) the borrowings hereunder and the transactions contemplated by the Loan Documents to which such Loan Party is or will be a party, and (2) the execution, delivery and performance by such Loan Party of each Loan Document to which such Loan Party is or will be a party and the execution and delivery of the other documents to be delivered by such Person in connection herewith and therewith, (C) the names and true signatures of the representatives of such Loan Party authorized to sign each Loan Document (in the case of the Borrower, including, without limitation, Notices of Borrowing, SOFR Notices and all other notices under this Agreement and the other Loan Documents) to which such Loan Party is or will be a party and the other documents to be executed and delivered by such Loan Party in connection herewith and therewith, together with evidence of the incumbency of such authorized officers and (D) as to the matters set forth in Section 5.01(b), 5.01(c), 5.01(e), 5.01(f), 5.01(j) and 5.01(k);
(xiii)a certificate of the chief financial officer of Holdings (A) setting forth in reasonable detail the calculations required to establish compliance, on a pro forma basis after giving effect to the Loans, with each of the financial covenants contained in Section 7.03 (as if the covenants applicable to the fiscal month ending April 30, 2022 applied on the Effective Date), (B) certifying that all United States federal and other material tax returns required to be filed by the Loan Parties have been filed and all taxes (other than the Unpaid Taxes) upon the Loan Parties or their properties, assets, and income (including real property taxes and payroll taxes) have been paid, (C) attaching a copy of the Financial Statements and the Projections described in Section 6.01(g)(ii) hereof and certifying as to the compliance with the representations and warranties set forth in Section 6.01(g)(i) and Section 6.01(g)(ii) and (D)
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certifying that after giving effect to all Loans to be made on the Effective Date, all liabilities of the Loan Parties (other than any accounts payable that are past due and expressly permitted pursuant to Section 7.02(s)) are current;
(xiv)a certificate of the chief financial officer of Holdings, certifying on behalf of the Loan Parties, that the Loan Parties (on a consolidated basis), after giving effect to the Loans made on the Effective Date, are Solvent;
(xv)a certificate of an Authorized Officer of the Borrower certifying that (A) the attached copies of the Material Contracts as in effect on the Effective Date are true, complete and correct copies thereof and (B) such agreements remain in full force and effect and that none of the Loan Parties has breached or defaulted in any of its obligations under such agreements;
(xvi)a certificate of the appropriate official(s) of the jurisdiction of organization and, except to the extent such failure to be so qualified could not reasonably be expected to have a Material Adverse Effect, each jurisdiction of foreign qualification of each Loan Party, certifying as of a recent date not more than 30 days prior to the Effective Date as to the subsistence in good standing of, and the payment of Taxes by, such Loan Party in such jurisdictions;
(xvii)an opinion of (i) Mayer Brown LLP, New York, Delaware and California counsel to the Loan Parties, and (ii) Carlton Fields, P.A., Florida counsel to the Loan Parties, as to such matters as the Collateral Agent may reasonably request;
(xviii)evidence of the insurance coverage required by Section 7.01 and the terms of each Security Agreement and each Mortgage and such other insurance coverage with respect to the business and operations of the Loan Parties as the Collateral Agent may reasonably request, together with evidence of the payment of all premiums due in respect thereof for such period as the Collateral Agent may request; and
(xix)evidence of the payment in full of all Indebtedness under the Existing First Lien Credit Facility (other than the Deferred Monroe Fees), together with (A) a termination and release agreement with respect to the Existing First Lien Credit Facility and all related documents, duly executed by the Loan Parties and the Existing First Lien Lenders, (B) a termination of security interest in Intellectual Property for each assignment for security recorded by the Existing First Lien Lenders at the United States Patent and Trademark Office or the United States Copyright Office and covering any intellectual property of the Loan Parties, and (C) UCC-3 termination statements for all UCC-1 financing statements filed by the Existing Lenders and covering any portion of the Collateral.
(e)Material Adverse Effect. The Collateral Agent shall have determined, in its sole judgment, that no event or development shall have occurred since December 31, 2021 which could reasonably be expected to have a Material Adverse Effect.
(f)Approvals. All consents, authorizations and approvals of, and filings and registrations with, and all other actions in respect of, any Governmental Authority or other Person required in connection with the making of the Loans, or the conduct of the Loan Parties’ business, or the consummation of any of the underlying transactions shall have been obtained and shall be in full force and effect.
(g)Proceedings; Receipt of Documents. All proceedings in connection with the making of the initial Loans and the other transactions contemplated by this Agreement and the other Loan Documents, and all documents incidental hereto and thereto, shall be satisfactory
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to the Collateral Agent and its counsel, and the Collateral Agent and such counsel shall have received all such information and such counterpart originals or certified or other copies of such documents as the Collateral Agent or such counsel may reasonably request.
(h)Management Reference Checks. The Collateral Agent shall have received satisfactory reference checks for, and shall have had an opportunity to meet with, key management of each Loan Party.
(i)[Reserved].
(j)Security Interests. The Loan Documents shall create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable first priority security interest in the Collateral secured thereby (subject only to Permitted Liens).
(k)Litigation. There shall exist no claim, action, suit, investigation, litigation or proceeding (including, without limitation, shareholder or derivative litigation) pending or threatened in any court or before any arbitrator or Governmental Authority which relates to the Loans or which, in the opinion of the Collateral Agent, is reasonably likely to be adversely determined, and that, if adversely determined, would reasonably be expected to have a Material Adverse Effect.
(l)Notice of Borrowing. The Administrative Agent shall have received a Notice of Borrowing pursuant to Section 2.02 hereof.
(m)Patriot Act Compliance. The Administrative Agent shall have received, at least two (2) Business Days prior to the Effective Date, a duly executed IRS Form W-9 (or other applicable tax form) of Holdings and the Borrower, and all documentation and other information with respect to the Loan Parties required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act, that has been reasonably requested in writing by the Administrative Agent at least three (3) Business Days prior to the Effective Date.
(n)Meeting with Management. The Agents shall have had a meeting at Holdings’ corporate offices (or at such other location as may be agreed to by the Borrower and the Agents) at such time as may be agreed to by the Borrower and the Agents to discuss the financial condition and results of operation of Holdings and its Subsidiaries.
Section 5.02     Conditions Precedent to All Loans. The obligation of any Agent or any Lender to make any Loan after the Effective Date is subject to the fulfillment, in a manner satisfactory to the Administrative Agent, of each of the following conditions precedent:
(a)Payment of Fees, Etc. The Borrower shall have paid all fees, costs, expenses and material taxes then payable by the Borrower pursuant to this Agreement and the other Loan Documents, including, without limitation, Section 2.07 and Section 12.04 hereof.
(b)Representations and Warranties; No Event of Default. The following statements shall be true and correct, and the submission by the Borrower to the Administrative Agent of a Notice of Borrowing with respect to each such Loan, and the Borrower’s acceptance of the proceeds of such Loan, shall each be deemed to be a representation and warranty by each Loan Party on the date of such Loan that: (i) the representations and warranties contained in Article VI and in each other Loan Document, certificate or other writing delivered to any Secured Party pursuant hereto or thereto on or prior to the date of such Loan are true and correct on and as of such date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such
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representation or warranty shall be true and correct on and as of such earlier date), (ii) at the time of and after giving effect to the making of such Loan and the application of the proceeds thereof, no Default or Event of Default has occurred and is continuing or would result from the making of the Loan to be made, on such date and (iii) the conditions set forth in this Section 5.02 have been satisfied as of the date of such request.
(c)Legality. The making of such Loan shall not contravene any law, rule or regulation applicable to any Secured Party.
(d)Notices. The Administrative Agent shall have received a Notice of Borrowing pursuant to Section 2.02 hereof.
(e)Proceedings; Receipt of Documents. All proceedings in connection with the making of such Loan and the other transactions contemplated by this Agreement and the other Loan Documents, and all documents incidental hereto and thereto, shall be satisfactory to the Agents and their counsel, and the Agents and such counsel shall have received such other agreements, instruments, approvals, opinions and other documents, each in form and substance satisfactory to the Agents, as any Agent may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01    Representations and Warranties. Each Loan Party hereby represents and warrants to the Secured Parties as follows:
(a)Organization, Good Standing, Etc. Each Loan Party (i) is a corporation, limited liability company or limited partnership duly organized or incorporated, validly existing and in good standing under the laws of the state or jurisdiction of its organization or incorporation, (ii) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and, in the case of the Borrower, to make the borrowings hereunder, and to execute and deliver each Loan Document to which it is a party, and to consummate the transactions contemplated thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except (solely for the purposes of this subclause (iii)) where the failure to be so qualified and in good standing could not reasonably be expected to have a Material Adverse Effect.
(b)Authorization, Etc. The execution, delivery and performance by each Loan Party of each Loan Document to which it is or will be a party, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable Requirement of Law or (C) any Contractual Obligation binding on or otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties.
(c)Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required in connection with the due execution, delivery and performance by any Loan Party of any Loan Document to which it is or will be a party other than (x) those which have been provided or obtained on or prior to
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the Effective Date or (y) filings and recordings with respect to Collateral to be made, or otherwise delivered to the Collateral Agent for filing or recordation, on the Effective Date.
(d)Enforceability of Loan Documents. This Agreement is, and each other Loan Document to which any Loan Party is or will be a party, when delivered hereunder, will be, a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
(e)Capitalization. On the Effective Date, after giving effect to the transactions contemplated hereby to occur on the Effective Date, the authorized Equity Interests of Holdings and each of its Subsidiaries and the issued and outstanding Equity Interests of Holdings and each of its Subsidiaries are as set forth on Schedule 6.01(e). All of the issued and outstanding shares of Equity Interests of Holdings and each of its Subsidiaries have been validly issued and are fully paid and nonassessable, and the holders thereof are not entitled to any preemptive, first refusal or other similar rights. All Equity Interests of such Subsidiaries of Holdings are owned by Holdings free and clear of all Liens (other than Permitted Specified Liens). Except as described on Schedule 6.01(e), there are no outstanding debt or equity securities of Holdings or any of its Subsidiaries and no outstanding obligations of Holdings or any of its Subsidiaries convertible into or exchangeable for, or warrants, options or other rights for the purchase or acquisition from Holdings or any of its Subsidiaries, or other obligations of Holdings or any of its Subsidiaries to issue, directly or indirectly, any shares of Equity Interests of Holdings or any of its Subsidiaries.
(f)Litigation. Except as set forth in Schedule 6.01(f), there is no pending or, to the knowledge of any Loan Party, threatened action, suit or proceeding affecting any Loan Party or any of its properties before any court or other Governmental Authority or any arbitrator that (i) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (ii) relates to this Agreement or any other Loan Document or any transaction contemplated hereby or thereby.
(g)Financial Statements.
(i)The Financial Statements, copies of which have been delivered to each Agent and each Lender, fairly present the consolidated financial condition of Holdings and its Subsidiaries as at the respective dates thereof and the consolidated results of operations of Holdings and its Subsidiaries for the fiscal periods ended on such respective dates, all in accordance with GAAP. All material indebtedness and other liabilities (including, without limitation, Indebtedness, liabilities for taxes, long-term leases and other unusual forward or long-term commitments), direct or contingent, of Holdings and its Subsidiaries are set forth in the Financial Statements. Since March 21, 2022, no event or development has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
(ii)Holdings has heretofore furnished to each Agent and each Lender (A) projected quarterly financial information of Holdings and its Subsidiaries for the fiscal quarters ending June 30, 2022, September 30, 2022 and December 31, 2022, and (B) projected annual financial information for the 2022, 2023, 2024, 2025 and 2026 Fiscal Years, which projected financial statements shall be updated from time to time pursuant to Section 7.01(a)(vii).
(h)Compliance with Law, Etc. No Loan Party or any of its Subsidiaries is in violation of (i) any of its Governing Documents, (ii) any Requirement of Law, or (iii) any material term of any Contractual Obligation (including, without limitation, any Material
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Contract) binding on or otherwise affecting it or any of its properties, and no default or event of default has occurred and is continuing thereunder.
(i)ERISA. Except as set forth on Schedule 6.01(i), (i) each Loan Party and each Employee Plan and Pension Plan is in compliance with all Requirements of Law in all material respects, including ERISA, the Internal Revenue Code and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, (ii) no ERISA Event has occurred nor is reasonably expected to occur with respect to any Employee Plan, Pension Plan or Multiemployer Plan, (iii) copies of each agreement entered into with the PBGC, the U.S. Department of Labor or the Internal Revenue Service with respect to any Employee Plan or Pension Plan have been delivered to the Agents, and (iv) each Employee Plan and Pension Plan that is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Internal Revenue Code and the trust related thereto is exempt from federal income tax under Section 501(a) of the Internal Revenue Code. No Loan Party or any of its ERISA Affiliates has incurred any material liability to the PBGC which remains outstanding other than the payment of premiums, and there are no premium payments which have become due and which are unpaid with respect to a Pension Plan. There are no pending or, to the best knowledge of any Loan Party, threatened material claims, actions, proceedings or lawsuits (other than claims for benefits in the ordinary course) asserted or instituted against (A) any Employee Plan, Pension Plan, or their respective assets, (B) any fiduciary with respect to any Employee Plan or Pension Plan, or (C) any Loan Party or any of its ERISA Affiliates with respect to any Employee Plan or Pension Plan. Except as required by Section 4980B of the Internal Revenue Code, no Loan Party maintains an employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides health benefits (through the purchase of insurance or otherwise) for any retired or former employee of any Loan Party or has any obligation to provide any such benefits for any current employee after such employee’s termination of employment.
(j)Taxes, Etc. (i) All United States federal and other material Tax returns and other reports required by applicable Requirements of Law to be filed by any Loan Party have been timely filed and (ii) all Taxes imposed upon any Loan Party or any property of any Loan Party which have become due and payable on or prior to the date hereof have been paid, except (A) the Unpaid Taxes and other unpaid Taxes in an aggregate amount at any one time outstanding not in excess of $250,000, and (B) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof on the Financial Statements in accordance with GAAP.
(k)Regulations T, U and X. No Loan Party is or will be engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation T, U or X), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U and X.
(l)Nature of Business. No Loan Party is engaged in any business other than as set forth on Schedule 6.01(l) hereto.
(m)Adverse Agreements, Etc. No Loan Party or any of its Subsidiaries is a party to any Contractual Obligation or subject to any restriction or limitation in any Governing Document or any judgment, order, regulation, ruling or other requirement of a court or other Governmental Authority, which (either individually or in the aggregate) has, or in the future could reasonably be expected (either individually or in the aggregate) to have, a Material Adverse Effect.
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(n)Permits, Etc. Each Loan Party has, and is in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations, including Environmental Permits, required for such Person lawfully to own, lease, manage or operate, or to acquire, each business and Facility currently owned, leased, managed or operated, or to be acquired, by such Person, except to the extent the failure to have or be in compliance therewith could not reasonably be expected to have a Material Adverse Effect. No condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement or accreditation, including any such Environmental Permit, and there is no claim that any of the foregoing is not in full force and effect.
(o)Properties. Each Loan Party has good and marketable title to, valid leasehold interests in, or valid licenses to use, all property and assets material to its business, free and clear of all Liens, except Permitted Liens. All such properties and assets are in good working order and condition, ordinary wear and tear excepted.
(p)Employee and Labor Matters. Except as set forth on Schedule 6.01(p), (i) each Loan Party and its Subsidiaries is in compliance with all Requirements of Law in all material respects pertaining to employment and employment practices, terms and conditions of employment, wages and hours, and occupational safety and health, (ii) no Loan Party or any Subsidiary is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of the employees of any Loan Party of Subsidiary, (iii) there is no unfair labor practice complaint pending or, to the knowledge of any Loan Party, threatened against any Loan Party or any Subsidiary before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or any Subsidiary which arises out of or under any collective bargaining agreement, (iv) there has been no strike, work stoppage, slowdown, lockout, or other labor dispute pending or threatened against any Loan Party or any Subsidiary, and (v) to the knowledge of each Loan Party, no labor organization or group of employees has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. No Loan Party or Subsidiary has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar Requirement of Law, which remains unpaid or unsatisfied. All material payments due from any Loan Party or Subsidiary on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of such Loan Party or Subsidiary.
(q)Environmental Matters. Except as set forth on Schedule 6.01(q) hereto, (i) no Loan Party or any of its Subsidiaries is in violation of any Environmental Law, (ii) each Loan Party and each of its Subsidiaries has, and is in compliance with, all Environmental Permits for its respective operations and businesses, except to the extent any failure to have or be in compliance therewith could not reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iii) there has been no Release or threatened Release of Hazardous Materials on, in, at, under or from any properties currently or formerly owned, leased or operated by any Loan Party, its Subsidiaries or a respective predecessor in interest or at any disposal or treatment facility which received Hazardous Materials generated by any Loan Party, its Subsidiaries or any respective predecessor in interest, which in any case of the foregoing could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (iv) there are no pending or threatened Environmental Claims against, or Environmental Liability of, any Loan Party, its Subsidiaries or any respective predecessor in interest that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; (v) neither any Loan Party nor any of its
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Subsidiaries is performing or responsible for any Remedial Action that could reasonably be expected to result in any adverse consequence to any Loan Party (other than immaterial consequences) or any Secured Party; and (vi) the Loan Parties have made available to the Collateral Agent and Lenders true and complete copies of all material environmental reports, audits and investigations in the possession or control of any Loan Party or any of its Subsidiaries with respect to the operations and business of the Loan Parties and its Subsidiaries.
(r)Insurance. Each Loan Party maintains all insurance required by Section 7.01(h). Schedule 6.01(r) sets forth a list of all such insurance maintained by or for the benefit of each Loan Party on the Effective Date.
(s)Use of Proceeds. The proceeds of the Loans shall be used to (a) refinance the Existing First Lien Credit Facility (excluding the payment of Deferred Monroe Fees) and other existing indebtedness of the Borrower, (b) pay fees and expenses in connection with the transactions contemplated hereby, (c) pay up to $9,000,000 of certain past-due accounts payable of the Loan Parties and (d) fund working capital of the Borrower.
(t)Solvency. After giving effect to the transactions contemplated by this Agreement and before and after giving effect to each Loan, each Loan Party is, and the Loan Parties on a consolidated basis are, Solvent. No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.
(u)Intellectual Property. Except as set forth on Schedule 6.01(u), each Loan Party owns or licenses or otherwise has the right to use all Intellectual Property rights that are necessary for the operation of its business, without infringement upon or conflict with the rights of any other Person with respect thereto, except for such infringements and conflicts which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Set forth on Schedule 6.01(u) is a complete and accurate list as of the Effective Date of (i) each item of Registered Intellectual Property owned by each Loan Party; (ii) each material work of authorship owned by each Loan party and which is not Registered Intellectual Property, and (iii) each Intellectual Property Contract to which each Loan Party is bound. No trademark or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by any Loan Party infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened. To the knowledge of each Loan Party, no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code pertaining to Intellectual Property is pending or proposed.
(v)Material Contracts. Set forth on Schedule 6.01(v) is a complete and accurate list as of the Effective Date of all Material Contracts of each Loan Party, showing the parties and subject matter thereof and amendments and modifications thereto. Each such Material Contract (i) is in full force and effect and is binding upon and enforceable against each Loan Party that is a party thereto and all other parties thereto in accordance with its terms, (ii) has not been otherwise amended or modified, and (iii) is not in default due to the action of any Loan Party or, to the knowledge of any Loan Party, any other party thereto.
(w)Investment Company Act. None of the Loan Parties is (i) an “investment company” or an “affiliated person” or “promoter” of, or “principal underwriter” of or for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended, or (ii) subject to regulation under any Requirement of Law that limits in any respect its ability to incur Indebtedness or which may otherwise render all or a portion of the Obligations unenforceable.
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(x)Customers and Suppliers. There exists no actual or threatened termination, cancellation or limitation of, or modification to or change in the business relationship between (i) any Loan Party, on the one hand, and any material customer or any group thereof, on the other hand, or (ii) any Loan Party, on the one hand, and any material supplier or any group thereof, on the other hand, and there exists no present state of facts or circumstances that could reasonably be expected to give rise to or result in any such termination, cancellation, limitation, modification or change.
(y)Senior Indebtedness, Etc. Each of the applicable Loan Parties has the power and authority to incur the Indebtedness provided for under the Existing Second Lien Credit Facility and has duly authorized, executed and delivered the Existing Second Lien Credit Facility. The Existing Second Lien Credit Facility constitutes the legal, valid and binding obligation of Holdings and its Subsidiaries enforceable against Holdings and its Subsidiaries in accordance with its terms. The subordination provisions of the Intercreditor Agreement are and will be enforceable against the Existing Second Lien Lenders by the Secured Parties which have not effectively waived the benefits thereof. All Obligations, including, without limitation, those to pay principal of and interest (including post-petition interest) on the Loans and fees and expenses in connection therewith, constitute the Senior Credit Facility (as defined in the Existing Second Lien Credit Facility), and all such Obligations are entitled to the benefits of the subordination created by the Intercreditor Agreement. Holdings and each of its Subsidiaries acknowledges that the Agents and the Lenders are entering into this Agreement, and extending their Commitments, in reliance upon the subordination provisions of the Intercreditor Agreement and this Section 6.01(y).
(z)Sanctions; Anti-Corruption and Anti-Money Laundering Laws. None of any Loan Party, any Subsidiary thereof, any of their respective directors, officers, or employees, shareholders or owners, nor any of their respective agents or Affiliates, (i) is a Sanctioned Person or currently the subject or target of any Sanctions, (ii) has assets located in a Sanctioned Country, (iii) conducts any business with or for the benefit of any Sanctioned Person, (iv) directly or indirectly derives revenues from investments in, or transactions with, Sanctioned Persons, (v) is a “Foreign Shell Bank” within the meaning of the USA Patriot Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision, or (vi) is a Person that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Section 311 or 312 of the USA Patriot Act as warranting special measures due to money laundering concerns. Each Loan Party and its Subsidiaries has implemented and maintains in effect policies and procedures designed to ensure compliance by each Loan Party and its Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Anti-Corruption Laws and Anti-Money Laundering Law. Each Loan Party and each Subsidiary is in compliance with all Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws. Each Loan Party and each Affiliate, officer, employee or director acting on behalf of any Loan Party is (and is taking no action that would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA Patriot Act. In addition, no Loan Party or any Subsidiary is engaged in any kind of activities or business of or with any Person or in any country or territory that is subject to any sanctions administered by OFAC, the United Kingdom, the European Union, Germany, Canada, Australia or the United Nations.
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(aa)Anti-Bribery and Corruption.
(i)Neither any Loan Party nor any Subsidiary thereof, nor, to the knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has offered, promised, paid, given or authorized the payment or giving of any money or other thing of value, directly or indirectly, to or for the benefit of any Person, including without limitation, any employee, official or other Person acting on behalf of any Governmental Authority, or otherwise engaged in any activity that may violate any Anti-Corruption Law.
(ii)Neither any Loan Party nor any Subsidiary thereof, nor, to the knowledge of any Loan Party, any director, officer, employee, or any other Person acting on behalf of any Loan Party, has engaged in any activity that would breach any Anti-Corruption Laws.
(iii)To each Loan Party’s knowledge and belief, there is no pending or threatened action, suit, proceeding or investigation before any court or other Governmental Authority against any Loan Party or any Subsidiary thereof or any of their directors, officers, employees or other Person acting on their behalf that relates to a potential violation of any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions.
(iv)The Loan Parties will not directly or indirectly use, lend or contribute the proceeds of the Advances for any purpose that would breach the Anti-Bribery and Corruption Laws.
(bb)Full Disclosure.
(i)Each Loan Party has disclosed to the Agents all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Agents (other than forward-looking information and projections and information of a general economic nature and general information about Borrower’s industry) in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which it was made, not misleading.
(ii)Projections have been prepared on a reasonable basis and in good faith based on assumptions, estimates, methods and tests that are believed by the Loan Parties to be reasonable at the time such Projections were prepared and information believed by the Loan Parties to have been accurate based upon the information available to the Loan Parties at the time such Projections were furnished to the Lenders, and Holdings is not be aware of any facts or information that would lead it to believe that such Projections are incorrect or misleading in any material respect; it being understood that (A) Projections are by their nature subject to significant uncertainties and contingencies, many of which are beyond the Loan Parties’ control, (B) actual results may differ materially from the Projections and such variations may be material and (C) the Projections are not a guarantee of performance.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES AND OTHER COLLATERAL MATTERS
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Section 7.01    Affirmative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party will, unless the Required Lenders shall otherwise consent in writing:
(a)Reporting Requirements. Furnish to each Agent and each Lender:
(i)as soon as available, and in any event within thirty (30) days after the end of each fiscal month of Holdings and its Subsidiaries commencing with the first full fiscal month of Holdings and its Subsidiaries ending after the Effective Date, (x) internally prepared consolidated balance sheets, statements of operations and retained earnings and statements of cash flows as at the end of such fiscal month, and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such fiscal month, setting forth in each case in comparative form the figures for the corresponding date or period set forth in (A) the financial statements for the immediately preceding Fiscal Year, and (B) the Projections, all in reasonable detail and certified by an Authorized Officer of Holdings as fairly presenting, in all material respects, the financial position of Holdings and its Subsidiaries as at the end of such fiscal month and the results of operations, retained earnings and cash flows of Holdings and its Subsidiaries for such fiscal month and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments (y) a report of key performance indicators during such fiscal month with respect to the top 25 customers, headcount and billable utilization, as reasonably identified by Holdings, for the business of Holdings and its Subsidiaries and any additional financial information as may be reasonably requested by the Administrative Agent and (z) a Compliance Certificate;
(ii)the following:
(A)as soon as available and in any event within forty five (45) days after the end of each fiscal quarter of Holdings and its Subsidiaries commencing with the first full fiscal quarter of Holdings and its Subsidiaries ending after the Effective Date, consolidated balance sheets, statements of operations and retained earnings and statements of cash flows of Holdings and its Subsidiaries as at the end of such quarter, and for the period commencing at the end of the immediately preceding Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the figures for the corresponding date or period set forth in the financial statements for the immediately preceding Fiscal Year, all in reasonable detail and certified by an Authorized Officer of Holdings as fairly presenting, in all material respects, the financial position of Holdings and its Subsidiaries as of the end of such quarter and the results of operations and cash flows of Holdings and its Subsidiaries for such quarter and for such year-to-date period, in accordance with GAAP applied in a manner consistent with that of the most recent audited financial statements of Holdings and its Subsidiaries furnished to the Agents and the Lenders, subject to the absence of footnotes and normal year-end adjustments, and
(B)no later than two (2) Business Days after the delivery of the financial information described in clause (A), a comparison of the financial information described in clause (A) to that in the Projections, and a report of key performance indicators during such fiscal quarter with respect to the top 25 customers, headcount and billable utilization, as reasonably identified by Holdings, for the business of Holdings and its Subsidiaries and any additional financial information as may be reasonably requested by the Administrative Agent;
(iii)the following
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(A)as soon as available, and in any event within ninety (90) days after the end of each Fiscal Year of Holdings and its Subsidiaries, consolidated balance sheets, statements of operations and retained earnings and statements of cash flows of Holdings and its Subsidiaries as at the end of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding date or period set forth in the financial statements for the immediately preceding Fiscal Year, all in reasonable detail and prepared in accordance with GAAP, and accompanied by a report and an opinion, prepared in accordance with generally accepted auditing standards, of a “Big Four” firm or another independent certified public accountant of recognized standing selected by Holdings and satisfactory to the Agents (which report and opinion shall not include (1) any qualification, exception or explanatory paragraph expressing substantial doubt about the ability of Holdings or any of its Subsidiaries to continue as a going concern or any qualification or exception as to the scope of such audit, or (2) any qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7.03), and
(B)no later than two Business Days after the delivery of the financial information described in clause (A), a comparison of the financial information described in clause (A) to that in the Projections;
(iv)no later than two Business Days after the delivery of the financial statements of Holdings and its Subsidiaries required by clauses (ii) and (iii) of this Section 7.01(a), a Compliance Certificate:
(A)stating that an Authorized Officer of the Borrower has reviewed the provisions of this Agreement and the other Loan Documents and has made or caused to be made under his or her supervision a review of the condition and operations of Holdings and its Subsidiaries during the period covered by such financial statements with a view to determining whether Holdings and its Subsidiaries were in compliance with all of the provisions of this Agreement and such Loan Documents at the times such compliance is required hereby and thereby, and that such review has not disclosed, and such Authorized Officer has no knowledge of, the occurrence and continuance during such period of an Event of Default or Default or, if an Event of Default or Default had occurred and continued or is continuing, describing the nature and period of existence thereof and the action which Holdings and its Subsidiaries propose to take or have taken with respect thereto,
(B)in the case of the delivery of the financial statements of Holdings and its Subsidiaries required by clauses (ii) and (iii) of this Section 7.01(a), (1) attaching a schedule showing the calculation of the financial covenants specified in Section 7.03 and the calculation of the First Lien Leverage Ratio for the applicable period for purposes of determining the Applicable Margin in accordance with the terms of the definition thereof, (2) a calculation of the Liquidity of Holdings and its Subsidiaries as of the last day of such month, in form and substance satisfactory to the Agents, showing compliance with Section 7.03(c) and (3) including a discussion and analysis of the financial condition and results of operations of Holdings and its Subsidiaries for the portion of the Fiscal Year then elapsed and discussing the reasons for any significant variations from the Projections for such period and commencing with the Fiscal Year ending December 31, 2022, the figures for the corresponding period in the previous Fiscal Year, and
(C)in the case of the delivery of the financial statements of Holdings and its Subsidiaries required by (X) clause (iii) of this Section 7.01(a), attaching (1) the calculation of the Excess Cash Flow in accordance with the terms of Section 2.06(c)(i) and (2) confirmation that there have been no changes to the information contained in each of the Perfection Certificates delivered on the Effective Date or the date of the most
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recently updated Perfection Certificate delivered pursuant to this clause (iv) and/or attaching an updated Perfection Certificate identifying any such changes to the information contained therein, and (Y) clause (ii) of this Section 7.01(a), attaching a summary of all material insurance coverage maintained as of the date thereof by any Loan Party or any of its Subsidiaries and evidence that such insurance meets the requirements set forth in Section 7.01(h), each Security Agreement and each Mortgage (or stating that there has been no change in the information most recently provided pursuant to this clause (C)(Y)), together with such other related documents and information as the Administrative Agent may reasonably require;
(v)as soon as available and in any event within 10 days after the end of each fiscal month of Holdings and its Subsidiaries commencing with the first fiscal month of Holdings and its Subsidiaries ending after the Effective Date, reports in form and detail satisfactory to the Agents and certified by an Authorized Officer of the Administrative Borrower as being accurate and complete (but subject to final balance sheet adjustments) (A) listing all Accounts of the Loan Parties as of such day, which shall include the amount and age of each such Account, showing separately those which are more than 30, 60, 90 and 120 days old and a description of all Liens, set-offs, defenses and counterclaims with respect thereto, together with a reconciliation of such schedule with the schedule delivered to the Agents pursuant to this clause (v)(A) for the immediately preceding fiscal month, the name and mailing address of each Account Debtor with respect to each such Account and such other information as any Agent may request, (B) listing all accounts payable of the Loan Parties as of each such day which shall include the amount and age of each such account payable, the name and mailing address of each account creditor and such other information as any Agent may request, and (C) listing all Inventory of the Loan Parties as of each such day, and containing a breakdown of such Inventory by type and amount, the cost and the current market value thereof (by location), the date of acquisition, the warehouse and production facility location and such other information as any Agent may request, all in detail and in form satisfactory to the Agents;
(vi)as soon as available and in any event not later than 60 days prior to the end of each Fiscal Year, a certificate of an Authorized Officer of Holdings (A) attaching Projections for Holdings and its Subsidiaries, supplementing and superseding the Projections previously required to be delivered pursuant to this Agreement, prepared on a monthly basis and otherwise in form and substance satisfactory to the Agents, for the immediately succeeding Fiscal Year for Holdings and its Subsidiaries and (B) certifying that the representations and warranties set forth in Section 6.01(ii)(ii) are true and correct with respect to the Projections;
(vii)promptly after submission to any Governmental Authority, all documents and information furnished to such Governmental Authority in connection with any investigation of any Loan Party other than (A) routine inquiries by such Governmental Authority and (B) inquiries made in the normal course of business;
(viii)as soon as possible, and in any event within three (3) days after the occurrence of an Event of Default or Default or the occurrence of any event or development that could reasonably be expected to have a Material Adverse Effect, the written statement of an Authorized Officer of the Borrower setting forth the details of such Event of Default or Default or other event or development having a Material Adverse Effect and the action which the affected Loan Party proposes to take with respect thereto;
(ix)as soon as possible and in any event: (A) within five (5) Business Days after a Loan Party has knowledge of the occurrence (or future occurrence) of any ERISA Event, notice of such ERISA Event (in reasonable detail), and (B) within ten (10) Business Days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to any Pension Plan, and (C)
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within ten (10) Business Days after any Loan Party sends notice of a plant closing or mass layoff (as defined in WARN) to employees, copies of each such notice sent by such Loan Party;
(x)promptly after the commencement thereof but in any event not later than five (5) days after service of process with respect thereto on, or the obtaining of knowledge thereof by, any Loan Party, notice of each action, suit or proceeding before any court or other Governmental Authority or other regulatory body or any arbitrator, in which the amount of damages claimed is $500,000 (or its equivalent in another currency or currencies) or more in the aggregate for all such actions, suits or proceedings;
(xi)as soon as possible and in any event within five (5) days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with any Material Contract;
(xii)as soon as possible and in any event within five (5) days after execution, receipt or delivery thereof, copies of any material notices that any Loan Party executes or receives in connection with the sale or other Disposition of the Equity Interests of, or all or substantially all of the assets of, any Loan Party;
(xiii)as soon as possible and in any event within five (5) days after the delivery thereof to Holdings’ Board of Directors, copies of all reports or other information so delivered in connection with a meeting of such Board of Directors (other than any such reports or other information that are subject to attorney-client or other legal privilege); provided that all such reports and other information is subject to Section 12.19;
(xiv)promptly after (A) the sending or filing thereof, copies of all statements, reports and other information any Loan Party sends to any holders of its Indebtedness or its securities or files with the SEC or any national (domestic or foreign) securities exchange and (B) the receipt thereof, a copy of any material notice received from any holder of its Indebtedness;
(xv)promptly upon receipt thereof, copies of all financial reports (including, without limitation, management letters), if any, submitted to any Loan Party by its auditors in connection with any annual or interim audit of the books thereof;
(xvi)promptly upon request, any certification or other evidence requested from time to time by any Lender in its sole discretion, confirming the Borrower’s compliance with Section 7.02(r);
(xvii)[reserved];
(xviii)simultaneously with the delivery of the financial statements of Holdings and its Subsidiaries required by clauses (i), (ii) and (iii) of this Section 7.01(a), if, as a result of any change in accounting principles and policies from those used in the preparation of the Financial Statements that is permitted by Section 7.02(q), the consolidated financial statements of Holdings and its Subsidiaries delivered pursuant to clauses (i), (ii) and (iii) of this Section 7.01(a) will differ from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance satisfactory to the Agents;
(xix)(A) as soon as available, and in any event within three (3) Business Days after the end of each fiscal month of Holdings and its Subsidiaries, (1) a calculation of the
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Liquidity of Holdings and its Subsidiaries as of the last day of such month, in form and substance satisfactory to the Agents and (2) a 13-week cash flow forecast of Holdings and its Subsidiaries in form and substance satisfactory to the Agents (the “13-Week Cash Flow”) and (B) if the Liquidity of Holdings and its Subsidiaries is less than $7,000,000 at any time during a week, then commencing on Wednesday of the following week and for every week thereafter until the Liquidity of Holdings and its Subsidiaries for each day in the prior week is greater than $7,000,000, (1) a calculation of the Liquidity of Holdings and its Subsidiaries as of the last day of the preceding week in form and substance satisfactory to the Agents and (2) a 13-Week Cash Flow; and
(xx)promptly upon request, such other information concerning the condition or operations, financial or otherwise, of any Loan Party (including, without limitation, any Environmental, Social, and Corporate Governance information) as any Agent may from time to time may reasonably request.
(b)Additional Borrowers, Guarantors and Collateral Security. Cause:
(i)each Subsidiary of any Loan Party not in existence on the Effective Date (other than any Immaterial Subsidiary and/or any Excluded Foreign Subsidiary), to execute and deliver to the Collateral Agent promptly and in any event within 30 days after the formation, acquisition or change in status thereof, (A) a Joinder Agreement, pursuant to which such Subsidiary shall be made a party to this Agreement as a Borrower or Guarantor, (B) a supplement to the Security Agreement, together with (1) certificates evidencing all of the Equity Interests of any Person owned by such Subsidiary required to be pledged under the terms of the Security Agreement, (2) undated stock powers for such Equity Interests executed in blank with signature guaranteed, and (3) such opinions of counsel as the Collateral Agent may reasonably request, (C) to the extent required under the terms of this Agreement, one or more Mortgages creating on the real property of such Subsidiary a perfected, first priority Lien (in terms of priority, subject only to Permitted Liens) on such real property and such other Real Property Deliverables as may be required by the Collateral Agent with respect to each such real property, and (D) such other agreements, instruments, approvals or other documents reasonably requested by the Collateral Agent in order to create, perfect, establish the first priority of or otherwise protect any Lien purported to be covered by any such Security Agreement or Mortgage or otherwise to effect the intent that such Subsidiary shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that all property and assets of such Subsidiary shall become Collateral for the Obligations; and
(ii)each owner of the Equity Interests of any such Subsidiary to execute and deliver promptly and in any event within 30 days after the formation or acquisition of such Subsidiary a Pledge Amendment (as defined in the Security Agreement), together with (A) certificates evidencing all of the Equity Interests of such Subsidiary required to be pledged under the terms of the Security Agreement, (B) undated stock powers or other appropriate instruments of assignment for such Equity Interests executed in blank, (C) such opinions of counsel as the Collateral Agent may reasonably request and (D) such other agreements, instruments, approvals or other documents requested by the Collateral Agent.
(c)Compliance with Laws; Payment of Taxes.
(i)Comply, and cause each of its Subsidiaries to comply, with all Requirements of Law, judgments and awards (including any settlement of any claim that, if breached, could give rise to any of the foregoing).
(ii)Pay, and cause each of its Subsidiaries to pay, in full before delinquency or before the expiration of any extension period, all Taxes imposed upon any Loan
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Party or any of its Subsidiaries or any property of any Loan Party or any of its Subsidiaries, except (i) unpaid Taxes in an aggregate amount at any one time not in excess of $250,000, and (ii) Taxes contested in good faith by proper proceedings which stay the imposition of any Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP.
(d)Preservation of Existence, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except to the extent that the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
(e)Keeping of Records and Books of Account. Keep, and cause each of its Subsidiaries to keep, adequate records and books of account, with complete entries made to permit the preparation of financial statements in accordance with GAAP.
(f)Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the agents and representatives of any Agent at any time and from time to time during normal business hours and with reasonable notice to the Borrower, at the expense of the Borrower, to examine and make copies of and abstracts from its records and books of account, to visit and inspect its properties, to verify materials, leases, notes, accounts receivable, deposit accounts and its other assets, to conduct audits, physical counts, valuations, appraisals or examinations and to discuss its affairs, finances and accounts with any of its directors, officers, managerial employees, independent accountants or any of its other representatives. In furtherance of the foregoing, each Loan Party hereby authorizes its independent accountants, and the independent accountants of each of its Subsidiaries, to discuss the affairs, finances and accounts of such Person (independently or together with representatives of such Person) with the agents and representatives of any Agent in accordance with this Section 7.01(f).
(g)Maintenance of Properties, Etc. Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear and casualty excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder, except to the extent the failure to so maintain and preserve or so comply could not reasonably be expected to have a Material Adverse Effect.
(h)Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations (including, without limitation, comprehensive general liability, cyber, hazard, flood, rent, worker’s compensation and business interruption insurance) with respect to the Collateral and its other properties (including all real property leased or owned by it) and business, in such amounts and covering such risks as is (i) carried generally in accordance with sound business practice by companies in similar businesses similarly situated, (ii) required by any Requirement of Law, (iii) required by any Material Contract and (iv) in any event in amount, adequacy and scope reasonably satisfactory to the Collateral Agent. All policies covering the Collateral are to be made payable to the Collateral Agent for the benefit of the Agents and the Lenders, as their interests may appear, in case of loss, under a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as the Collateral Agent may require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of insurance are to be delivered to the Collateral Agent and the policies are to be premium prepaid, with the loss payable and additional insured endorsement in favor of
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the Collateral Agent for the benefit of the Agents and the Lenders, as their respective interests may appear, and such other Persons as the Collateral Agent may designate from time to time, and shall provide for not less than 30 days’ (10 days’ in the case of non-payment) prior written notice to the Collateral Agent of the exercise of any right of cancellation. If any Loan Party or any of its Subsidiaries fails to maintain such insurance, the Collateral Agent may arrange for such insurance, but at the Borrower’s expense and without any responsibility on the Collateral Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the sole right, in the name of the Lenders, any Loan Party and its Subsidiaries, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.
(i)Obtaining of Permits, Etc. Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all permits, licenses, authorizations, approvals, entitlements and accreditations that are necessary or useful in the proper conduct of its business, in each case, except to the extent the failure to obtain, maintain, preserve or take such action could not reasonably be expected to have a Material Adverse Effect.
(j)Environmental.
(i)Keep the Collateral free of any Environmental Lien;
(ii)Obtain, maintain and preserve, and cause each of its Subsidiaries to obtain, maintain and preserve, and take all necessary action to timely renew, all Environmental Permits that are necessary or useful in the proper conduct of its business, and comply, and cause each of its Subsidiaries to comply, with all Environmental Laws and Environmental Permits;
(iii)Take all commercially reasonable steps to prevent any Release or threatened Release of Hazardous Materials in violation of any Environmental Law or Environmental Permit at, in, on, under or from any property owned, leased or operated by any Loan Party or its Subsidiaries;
(iv)Provide the Collateral Agent with written notice within ten (10) days of any of the following: (A) discovery of any Release of a Hazardous Material or environmental condition at, in, on, under or from any property currently or formerly owned, leased or operated by any Loan Party, Subsidiary or predecessor in interest or any violation of Environmental Law or Environmental Permit that in any case could reasonably be expected to result in any material Environmental Claim or Environmental Liability; (B) notice that an Environmental Lien has been filed against any Collateral; or (C) an Environmental Claim or Environmental Liabilities; and provide such reports, documents and information as the Collateral Agent may reasonably request from time to time with respect to any of the foregoing.
(k)Fiscal Year. Cause the Fiscal Year of Holdings and its Subsidiaries to end on December 31 of each calendar year unless the Agents consent to a change in such Fiscal Year (and appropriate related changes to this Agreement).
(l)Landlord Waivers; Collateral Access Agreements. At any time any Collateral with a book value in excess of $250,000 (when aggregated with all other Collateral at the same location) is located on any real property of a Loan Party located in the United States (whether such real property is now existing or acquired after the Effective Date) which is not
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owned by a Loan Party, or is stored on the premises of a bailee, warehouseman, or similar party, use its best efforts to obtain written subordinations or waivers or collateral access agreements, as the case may be, in form and substance satisfactory to the Collateral Agent.
(m)After Acquired Real Property. Upon the acquisition by it or any of its Subsidiaries after the date hereof of any interest (whether fee or leasehold) in any real property (wherever located) (each such interest being a “New Facility”) with a Current Value (as defined below) in excess of $500,000 in the case of a fee interest immediately so notify the Collateral Agent, setting forth with specificity a description of the interest acquired, the location of the real property, any structures or improvements thereon and either an appraisal or such Loan Party’s good-faith estimate of the current value of such real property (for purposes of this Section, the “Current Value”). The Collateral Agent shall notify such Loan Party whether it intends to require a Mortgage (and any other Real Property Deliverables or landlord’s waiver (pursuant to Section 7.01(l) hereof) with respect to such New Facility. Upon receipt of such notice requesting a Mortgage (and any other Real Property Deliverables) or landlord’s waiver, the Person that has acquired such New Facility shall promptly furnish the same to the Collateral Agent. The Borrower shall pay all fees and expenses, including, without limitation, reasonable attorneys’ fees and expenses, and all title insurance charges and premiums, in connection with each Loan Party’s obligations under this Section 7.01(m).
(n)Anti-Corruption Laws; Anti-Money Laundering Laws; Sanctions.
(i)Maintain, and cause each of its Subsidiaries to maintain, policies and procedures designed to promote compliance by each Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with all Anti-Corruption Laws and Anti-Money Laundering Laws.
(ii)Comply, and cause each of its Subsidiaries to comply, with all applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.
(iii)Neither Loan Party nor, to the best knowledge of any Loan Party, any director, officer, employee or any Person acting on behalf of any Loan Party will engage in any activity that would breach any Anti-Corruption Law.
(iv)Promptly notify the Administrative Agent of any action, suit or investigations by any court or Governmental Authority in relation to an alleged breach of the Anti-Corruption Law.
(v)Not directly or indirectly use, lend or contribute the proceeds of any Loan for any purpose that would breach any Anti-Corruption Law.
(vi)Each Loan Party and Affiliate, officer, employee or director, acting on behalf of the Loan Party is (and will take no action which would result in any such Person not being) in compliance with (A) all applicable OFAC rules and regulations, (B) all applicable United States of America, United Kingdom, United Nations, European Union, German, Canadian, Australian and all other reasonable internationally respected national autonomous sanctions, embargos and trade restrictions and (C) all applicable provisions of the USA Patriot Act. In addition, none of the activities or business of any Loan Party includes any kind of activities or business of or with any Person or in any country or territory that is subject to any Sanctions.
(vii)In order to comply with the “know your customer/borrower” requirements of the Anti-Money Laundering Laws, promptly provide to the Administrative Agent upon its reasonable request from time to time (A) information relating to individuals and
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entities affiliated with any Loan Party that maintain a business relationship with the Administrative Agent, and (B) such identifying information and documentation as may be available for such Loan Party in order to enable the Administrative Agent or any Lender to comply with Anti-Money Laundering Laws.
(o)Lender Meetings. Upon the request of any Agent or the Required Lenders (which request, so long as no Event of Default shall have occurred and be continuing, shall not be made more than once during each fiscal quarter and shall not occur until after the earnings call for the most recently ended fiscal quarter), participate in a meeting with the Agents and the Lenders at Holding’s corporate offices (or at such other location as may be agreed to by the Borrower and such Agent or the Required Lenders) at such time as may be agreed to by the Borrower and such Agent or the Required Lenders to discuss the financial condition and results of operation of Holdings and its Subsidiaries for the most recently ended fiscal quarter.
(p)Board Information Rights. The Administrative Agent shall be timely notified of the time and place of any regular or special meetings (regular meetings shall be held no less than once per quarter) and will be given written notice of all proposed actions to be taken by the Board of Directors (or any relevant committee thereof) of Holdings (or its direct or indirect parent holding company) and any of its Subsidiaries at such meeting as if the Administrative Agent were a member thereof. Such notice shall describe in reasonable detail the nature and substance of the matters to be discussed and/or voted upon at such meeting (or the proposed actions to be taken by written consent without a meeting). The Administrative Agent shall have the right to, and shall, receive all information provided to the members of the Board of Directors or any similar group performing an executive oversight or similar function (or any relevant committee thereof) of Holdings (or its direct or indirect parent holding company) and any of its Subsidiaries in anticipation of or at such meeting (regular or special and whether telephonic or otherwise), in addition to copies of the records of the proceedings or minutes of such meeting, when provided to the members other than such information subject to attorney-client or other legal privilege; provided that, the Administrative Agent shall keep such materials and information confidential in accordance with Section 12.19 of this Agreement.
(q)Further Assurances. Take such action and execute, acknowledge and deliver, and cause each of its Subsidiaries to take such action and execute, acknowledge and deliver, at its sole cost and expense, such agreements, instruments or other documents as any Agent may require from time to time in order (i) to carry out more effectively the purposes of this Agreement and the other Loan Documents, (ii) to subject to valid and perfected first priority Liens any of the Collateral or any other property of any Loan Party and its Subsidiaries, (iii) to establish and maintain the validity and effectiveness of any of the Loan Documents and the validity, perfection and priority of the Liens intended to be created thereby, and (iv) to better assure, convey, grant, assign, transfer and confirm unto each Secured Party the rights now or hereafter intended to be granted to it under this Agreement or any other Loan Document. In furtherance of the foregoing, to the maximum extent permitted by applicable law, each Loan Party (i) authorizes each Agent to execute any such agreements, instruments or other documents in such Loan Party’s name and to file such agreements, instruments or other documents in any appropriate filing office, (ii) authorizes each Agent to file any financing statement required hereunder or under any other Loan Document, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of such Loan Party, and (iii) ratifies the filing of any financing statement, and any continuation statement or amendment with respect thereto, filed without the signature of such Loan Party prior to the date hereof.
(r)Post-Closing Matters. Execute and deliver the documents and comply with the requirements set forth on Schedule 7.01(r), in each case within the time limits specified on such schedule.
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Section 7.02     Negative Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:
(a)Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with respect to any of its properties, whether now owned or hereafter acquired; file or suffer to exist under the Uniform Commercial Code or any Requirement of Law of any jurisdiction, a financing statement (or the equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or suffer to exist any security agreement authorizing any secured party thereunder to file such financing statement (or the equivalent thereof) other than, as to all of the above, Permitted Liens.
(b)Indebtedness. Create, incur, assume, guarantee or suffer to exist, or otherwise become or remain liable with respect to, or permit any of its Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise become or remain liable with respect to, any Indebtedness other than Permitted Indebtedness.
(c)Fundamental Changes; Dispositions.
(i)Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any Person, including by means of a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, or permit any of its Subsidiaries to do (or agree to do) any of the foregoing; provided, however, that (x) any wholly-owned Subsidiary of any Loan Party (other than the Borrower) may be merged into any Loan Party (other than Holdings or the Mexican Loan Parties), (y) any wholly-owned Subsidiary that is not a Loan Party may be merged into another wholly-owned Subsidiary of such Loan Party, so long as (A) no other provision of this Agreement would be violated thereby, (B) such Loan Party gives the Agents at least 30 days’ prior written notice of such merger, consolidation or amalgamation accompanied by true, correct and complete copies of all material agreements, documents and instruments relating to such merger, consolidation or amalgamation, including, without limitation, the certificate or certificates of merger or amalgamation to be filed with each appropriate Secretary of State (with a copy as filed promptly after such filing), (C) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such transaction, (D) the Lenders’ rights in any Collateral, including, without limitation, the existence, perfection and priority of any Lien thereon, are not adversely affected by such merger, consolidation or amalgamation, and (E) the surviving Subsidiary, if any, if not already a Loan Party, is joined as a Loan Party hereunder pursuant to a Joinder Agreement and is a party to a Security Agreement and the Equity Interests of such Subsidiary is the subject of a Security Agreement, in each case, which is in full force and effect on the date of and immediately after giving effect to such merger, consolidation or amalgamation, and (z) any winding-up, liquidation or dissolution contemplated as a party of Project Thunder may be done so long as (A) no other provision of this Agreement would be violated thereby, (B) such Loan Party gives the Agents at least 30 days’ prior written notice thereof (and provide the Agents copies of any certificate of dissolution as filed promptly after such filing), (C) no Default or Event of Default shall have occurred and be continuing either before or after giving effect to such transaction, (D) the Lenders’ rights in any Collateral, including, without limitation, the existence, perfection and priority of any Lien thereon, are not adversely affected thereby; and
(ii)Make any Disposition, whether in one transaction or a series of related transactions, of all or any part of its business, property or assets, whether now owned or hereafter acquired (or agree to do any of the foregoing), or permit any of its Subsidiaries to do any of the foregoing; provided, however, that any Loan Party and its Subsidiaries may make Permitted Dispositions.
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(d)Change in Nature of Business. Make or permit any of its Subsidiaries to make, any change in the nature of its business as described in Section 6.01(l).
(e)Loans, Advances, Investments, Etc. Make or commit or agree to make, or permit any of its Subsidiaries make or commit or agree to make, any Investment in any other Person except for Permitted Investments.
(f)Sale and Leaseback Transactions. Enter into, or permit any of its Subsidiaries to enter into, any Sale and Leaseback Transaction.
(g)[Reserved].
(h)Restricted Payments. Make or permit any of its Subsidiaries to make any Restricted Payment other than Permitted Restricted Payments.
(i)Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan under this Agreement to be used for any purpose that would cause such Loan to be a margin loan under the provisions of Regulation T, U or X of the Board.
(j)Transactions with Affiliates. Enter into, renew, extend or be a party to, or permit any of its Subsidiaries to enter into, renew, extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except (i) transactions consummated in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that is not an Affiliate thereof, and that are fully disclosed to the Agents prior to the consummation thereof, if they involve one or more payments by Holdings or any of its Subsidiaries in excess of $100,000 for any single transaction or series of related transactions, (ii) transactions with another Loan Party (other than the Mexican Loan Parties); (iii) transactions permitted by Section 7.02(e) and Section 7.02(h), (iv) sales of Qualified Equity Interests of Holdings to Affiliates of Holdings not otherwise prohibited by the Loan Documents and the granting of registration and other customary rights in connection therewith, (v) subject to the terms of this Agreement and the Intercreditor Agreement, the Existing Second Lien Credit Facility and Permitted Second Lien Loan Payments, and (vi) reasonable and customary director and officer compensation (including bonuses and stock option programs), benefits and indemnification arrangements, in each case approved by the Board of Directors (or a committee thereof) of such Loan Party or such Subsidiary.
(k)Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to make any other distribution on any shares of Equity Interests of such Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or prepay or to subordinate any Indebtedness owed to any Loan Party or any of its Subsidiaries, (iii) to make loans or advances to any Loan Party or any of its Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing; provided, however, that nothing in any of clauses (i) through (iv) of this Section 7.02(k) shall prohibit or restrict compliance with:
(A)this Agreement, the other Loan Documents and the Existing Second Lien Credit Facility;
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(B)any agreement in effect on the date of this Agreement and described on Schedule 7.02(k), or any extension, replacement or continuation of any such agreement; provided, that, any such encumbrance or restriction contained in such extended, replaced or continued agreement is no less favorable to the Agents and the Lenders than the encumbrance or restriction under or pursuant to the agreement so extended, replaced or continued;
(C)any applicable law, rule or regulation (including, without limitation, applicable currency control laws and applicable state corporate statutes restricting the payment of dividends in certain circumstances);
(D)in the case of clause (iv), (1) customary restrictions on the subletting, assignment or transfer of any specified property or asset set forth in a lease, license, asset sale agreement or similar contract for the conveyance of such property or asset and (2) instrument or other document evidencing a Permitted Lien (or the Indebtedness secured thereby) from restricting on customary terms the transfer of any property or assets subject thereto;
(E)customary restrictions on dispositions of real property interests in reciprocal easement agreements;
(F)customary restrictions in agreements for the sale of assets on the transfer or encumbrance of such assets during an interim period prior to the closing of the sale of such assets; or
(G)customary restrictions in contracts that prohibit the assignment of such contract.
(l)Limitations on Negative Pledges. Enter into, incur or permit to exist, or permit any Subsidiary to enter into, incur or permit to exist, directly or indirectly, any agreement, instrument, deed, lease or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Loan Party or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, or that requires the grant of any security for an obligation if security is granted for another obligation, except the following: (i) this Agreement and the other Loan Documents, (ii) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by Section 7.02(b) of this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iii) any customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or of a Subsidiary pending such sale or other disposition; provided that such restrictions and conditions apply only to the assets or Subsidiary to be sold or disposed of and such sale or disposition is permitted hereunder, and (iv) customary provisions in leases restricting the assignment or sublet thereof.
(m)Modifications of Indebtedness, Organizational Documents and Certain Other Agreements; Etc.
(i)Amend, modify or otherwise change (or permit the amendment, modification or other change in any manner of) any of the provisions of any of its or its Subsidiaries’ Indebtedness or of any instrument or agreement (including, without limitation, any purchase agreement, indenture, loan agreement or security agreement) relating to any such Indebtedness if such amendment, modification or change would shorten the final maturity or average life to maturity of, or require any payment to be made (other than any payment to be made in Equity Interests consisting of common stock) earlier than the date originally scheduled on, such Indebtedness, would increase the interest rate applicable to such Indebtedness, would
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add any covenant or event of default, would change the subordination provision, if any, of such Indebtedness, or would otherwise be adverse to the Lenders or the issuer of such Indebtedness in any material respect.
(ii)except for the Obligations and the Unpaid Taxes,
(A)     make any voluntary or optional payment (including, without limitation, any payment of interest in cash that, at the option of the issuer, may be paid in cash or in kind), prepayment, redemption, defeasance, sinking fund payment or other acquisition for value of any of its or its Subsidiaries’ Indebtedness, including, for the avoidance of doubt, the Existing Second Lien Credit Facility (including, without limitation, by way of depositing money or securities with the trustee therefor before the date required for the purpose of paying any portion of such Indebtedness when due),
(B)     refund, refinance, replace or exchange any other Indebtedness for any such Indebtedness (other than with respect to Permitted Refinancing Indebtedness),
(C)     make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Existing Warrants, any Subordinated Indebtedness, or any Existing Earn-Out Obligations, or
(D)     make any payment, prepayment, redemption, defeasance, sinking fund payment or repurchase of any Indebtedness as a result of any asset sale, change of control, issuance and sale of debt or equity securities or similar event, or give any notice with respect to any of the foregoing;
provided, that notwithstanding anything to the contrary contained herein,
(1)    so long as, immediately prior to and after giving effect to such payment, prepayment, redemption, defeasance, sinking fund payment or repurchase (x) the First Lien Leverage Ratio of Holdings and its Subsidiaries does not exceed 2.50 to 1.00 (in the case of clause (y) below, calculated on a pro forma basis after giving effect to the related Equity Issuance and the application of the proceeds thereof), (y) Holdings and its Subsidiaries are in compliance of each of the financial covenants contained in Section 7.03, and (z) no Event of Default has occurred and is continuing, this clause (ii) shall not be deemed to restrict any payments, prepayments, repayments, repurchases or redemptions of:
(x)     the Existing Warrants in an aggregate amount not to exceed $3,000,000, and
(y)     so long as such payment, prepayment, repayment, repurchase or redemption is made solely with the Net Cash Proceeds of any Equity Issuance, (i) subject to the terms of the Intercreditor Agreement, the Existing Second Lien Credit Facility (including, without limitation, payments of principal of, interest on, and any other amount in respect of the Existing Second Lien Credit Facility), (ii) the AN Extend Earn-Out or (iii) any Subordinated Indebtedness, in each case, in an aggregate amount not to exceed 25% of the Net Cash Proceeds of such Equity
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Issuance (after giving effect to any mandatory prepayment under Section 2.06(c)(iii)),
(2)    so long as, immediately prior to and after giving effect to such payment, prepayment, redemption, defeasance, sinking fund payment or repurchase (x) the First Lien Leverage Ratio of Holdings and its Subsidiaries does not exceed 3.00 to 1.00, (y) Holdings and its Subsidiaries are in compliance of each of the financial covenants contained in Section 7.03, and (z) no Event of Default has occurred and is continuing, this clause (ii) shall not be deemed to restrict any payments of the Deferred Monroe Fees,
(3)    the Existing Warrants, Subordinated Debt and Existing Earn-Out Obligations may be paid or prepaid solely with Equity Interests of Holdings (and not in cash),
(4)    subject to the terms of the Intercreditor Agreement, payments, prepayments, repayments, repurchases or redemptions of the Existing Second Lien Credit Facility constituting Permitted Second Lien Loan Payments, and
(5)    payments of the Exitus Renewal Fee.
(iii)amend, modify or otherwise change any of its Governing Documents (including, without limitation, by the filing or modification of any certificate of designation, or any agreement or arrangement entered into by it) with respect to any of its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to any of its Equity Interests, except any such amendments, modifications or changes or any such new agreements or arrangements pursuant to this clause (iii) that either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, provided that no such amendment, modification or change or new agreement or arrangement shall provide for any plan of division pursuant to Section 18-217 of the Delaware Limited Liability Company Act (or any similar statute or provision under applicable law); or
(iv)agree to any amendment, modification or other change to or waiver of any of its rights under any Material Contract if such amendment, modification, change or waiver would be materially adverse to any Loan Party or any of its Subsidiaries or the Agents and the Lenders.
(n)Investment Company Act of 1940. Engage in any business, enter into any transaction, use any securities or take any other action or permit any of its Subsidiaries to do any of the foregoing, that would cause it or any of its Subsidiaries to become subject to the registration requirements of the Investment Company Act of 1940, as amended, by virtue of being an “investment company” or a company “controlled” by an “investment company” not entitled to an exemption within the meaning of such Act.
(o)ERISA. (i) Cause or fail to prevent, or permit any of its ERISA Affiliates to cause or fail to prevent, an ERISA Event that individually or in the aggregate has, or could reasonably be expected to have a Material Adverse Effect, or (ii) adopt any employee welfare benefit plan within the meaning of Section 3(1) of ERISA that provides benefits to employees after termination of employment other than as required by Section 601 of ERISA or other Requirements of Law.
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(p)Environmental. Permit the use, handling, generation, storage, treatment, Release or disposal of Hazardous Materials on, in, at, under or from any property owned, leased or operated by it or any of its Subsidiaries, except in compliance with Environmental Laws .
(q)Accounting Methods. Modify or change, or permit any of its Subsidiaries to modify or change, its method of accounting or accounting principles from those utilized in the preparation of the Financial Statements (other than as may be required to conform to GAAP).
(r)Sanctioned Persons; Anti-Corruption Laws; Anti-Money Laundering Laws.
(i)Conduct, nor permit any of its Subsidiaries to conduct, any business or engage in any transaction or deal with or for the benefit of any Sanctioned Person, including the making or receiving of any contribution of funds, goods or services to, from or for the benefit of any Sanctioned Person; or
(ii)Use, nor permit any of its Subsidiaries to use, directly or indirectly, any of the proceeds of any Loan, (A) to fund any activities or business of or with any Sanctioned Person or in any other manner that would result in a violation of any Sanctions by any Person (including by any Person participating in any Loan, whether as underwriter, advisor, investor or otherwise), or (B) for the purpose 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 Law.
(s)Accounts Payable. On and after the date that is 45 days after the Effective Date, have, or permit any of its Subsidiaries to have, any accounts payable that are more than 60 days past due in an aggregate amount greater than or equal to $1,300,000.
Section 7.03     Financial Covenants. So long as any principal of or interest on any Loan or any other Obligation (whether or not due) shall remain unpaid (other than Contingent Indemnity Obligations) or any Lender shall have any Commitment hereunder, each Loan Party shall not, unless the Required Lenders shall otherwise consent in writing:
(a)Revenue. Permit Revenue of Holdings and its Subsidiaries for any period of four consecutive fiscal quarters of Holdings and its Subsidiaries for which the last fiscal month ends on a date set forth below to be less than the amount set forth opposite such date:
Fiscal Month EndRevenue
June 30, 2022$150,000,000
September 30, 2022$150,000,000
December 31, 2022$150,000,000
March 31, 2023 and each fiscal month ending thereafter$150,000,000

(b)First Lien Leverage Ratio. Permit the First Lien Leverage Ratio for any period of 4 consecutive fiscal quarters of Holdings and its Subsidiaries for ending on the date set forth below to be greater than the ratio set forth opposite such date:
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Fiscal Quarter EndFirst Lien Leverage Ratio
December 31, 20224.00:1.00
March 31, 20233.75:1.00
June 30, 2023 and each fiscal quarter ending thereafter3.50:1.00

(c)Liquidity. Permit Liquidity to be less than $5,000,000 at any time on and after the date that is ten (10) Business Days after the Effective Date.

ARTICLE VIII

CASH MANAGEMENT ARRANGEMENTS
AND OTHER COLLATERAL MATTERS
Section 8.01    Cash Management Arrangements. (a) The Loan Parties shall (i) establish and maintain cash management services of a type and on terms reasonably satisfactory to the Agents at one or more of the banks set forth on Schedule 8.01 (each a “Cash Management Bank”) and (ii) except as otherwise provided under Section 8.01(b), deposit or cause to be deposited promptly, and in any event no later than the next Business Day after the date of receipt thereof, all proceeds in respect of any Collateral, all Collections (of a nature susceptible to a deposit in a bank account) and all other amounts received by any Loan Party (including payments made by Account Debtors directly to any Loan Party) into a Cash Management Account.
(b)Subject to Section 7.01(r), the Loan Parties shall, with respect to each Cash Management Account (other than Excluded Accounts), deliver to the Collateral Agent a Control Agreement with respect to such Cash Management Account. The Loan Parties shall not maintain, and shall not permit any of their Domestic Subsidiaries to maintain, cash, Cash Equivalents or other amounts in any deposit account or securities account (other than Excluded Accounts), unless the Collateral Agent shall have received a Control Agreement in respect of each such Cash Management Account; provided that, the total amount of cash, Cash Equivalents or other amounts in any deposit account or securities account of any Foreign Subsidiary not subject to a Control Agreement shall not exceed, at any time on and after the date that is ten (10) Business Days after the Effective Date, $2,000,000.
(c)Upon the terms and subject to the conditions set forth in a Control Agreement with respect to a Cash Management Account, all amounts received in such Cash Management Account shall at the Administrative Agent’s direction be wired each Business Day into the Administrative Agent’s Accounts, except that, so long as no Event of Default has occurred and is continuing, the Administrative Agent will not direct the Cash Management Bank to transfer funds in such Cash Management Account to the Administrative Agent’s Accounts.
(d)So long as no Default or Event of Default has occurred and is continuing, the Borrower may amend Schedule 8.01 to add or replace a Cash Management Bank or Cash Management Account; provided, however, that (i) such prospective Cash Management Bank shall be reasonably satisfactory to the Collateral Agent and the Collateral Agent shall have
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consented in writing in advance to the opening of such Cash Management Account with the prospective Cash Management Bank, and (ii) prior to the time of the opening of such Cash Management Account, each Loan Party and such prospective Cash Management Bank shall have executed and delivered to the Collateral Agent a Control Agreement. Each Loan Party shall close any of its Cash Management Accounts (and establish replacement cash management accounts in accordance with the foregoing sentence) promptly and in any event within 30 days of notice from the Collateral Agent that the creditworthiness of any Cash Management Bank is no longer acceptable in the Collateral Agent’s reasonable judgment, or that the operating performance, funds transfer, or availability procedures or performance of such Cash Management Bank with respect to Cash Management Accounts or the Collateral Agent’s liability under any Control Agreement with such Cash Management Bank is no longer acceptable in the Collateral Agent’s reasonable judgment.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.01     Events of Default. Each of the following events shall constitute an event of default (each, an “Event of Default”):
(a)the Borrower shall fail to pay, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), (i) any interest on any Loan, any Collateral Agent Advance, or any fee, indemnity or other amount payable under this Agreement (other than any portion thereof constituting principal of the Loans) or any other Loan Document, and such failure continues for a period of three (3) Business Days or (ii) all or any portion of the principal of the Loans;
(b)any representation or warranty made or deemed made by or on behalf of any Loan Party or by any officer of the foregoing under or in connection with any Loan Document or under or in connection with any certificate or other writing delivered to any Secured Party pursuant to any Loan Document shall have been incorrect in any material respect (or in any respect if such representation or warranty is qualified or modified as to materiality or “Material Adverse Effect” in the text thereof) when made or deemed made;
(c)any Loan Party shall fail to perform or comply with any covenant or agreement contained in (i) Section 7.01(a), 7.01(b), Section 7.01(c), Section 7.01(d), Section 7.01(f), Section 7.01(h), Section 7.01(k), Section 7.01(m), Section 7.01(o), Section 7.02, Section 7.03 or Article VIII, or (ii) any Loan Party shall fail to perform or comply with any covenant or agreement contained in any Security Agreement to which it is a party or any Mortgage to which it is a party and such failure, in the case of this clause (c)(ii) shall remain unremedied for two (2) Business Days;
(d)any Loan Party shall fail to perform or comply with any other term, covenant or agreement contained in any Loan Document to be performed or observed by it and, except as set forth in subsections (a), (b) and (c) of this Section 9.01, such failure, if capable of being remedied, shall remain unremedied for 30 days after the earlier of the date a senior officer of any Loan Party has knowledge of such failure and the date written notice of such default shall have been given by any Agent to such Loan Party;
(e)(i) Holdings or any of its Subsidiaries shall fail to pay when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal, interest or other amount payable in respect of Indebtedness (excluding Indebtedness evidenced by this Agreement), which Indebtedness is in an aggregate amount at least equal to $500,000
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(including, for the avoidance of doubt, under the Existing Second Lien Facility), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness, or any other default under any agreement or instrument relating to any such Indebtedness, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case, prior to the stated maturity thereof;
(f)Holdings or any of its Subsidiaries (i) shall institute any proceeding or voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, (ii) shall be generally not paying its debts as such debts become due or shall admit in writing its inability to pay its debts generally, (iii) shall make a general assignment for the benefit of creditors, or (iv) shall take any action to authorize or effect any of the actions set forth above in this subsection (f);
(g)any proceeding shall be instituted against Holdings or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Person or for any substantial part of its property, and either such proceeding shall remain undismissed or unstayed for a period of 30 days (or, in the case of a Foreign Subsidiary, 60 days) or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against any such Person or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur;
(h)any material provision of any Loan Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or the validity or enforceability thereof shall be contested by any Loan Party that is party thereto, or a proceeding shall be commenced by any Loan Party or any Governmental Authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or any Loan Party shall deny in writing that it has any liability or obligation purported to be created under any Loan Document;
(i)any Security Agreement, any Mortgage or any other security document, after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien in favor of the Collateral Agent for the benefit of the Agents and the Lenders on any Collateral purported to be covered thereby;
(j)one or more judgments, orders or awards (or any settlement of any litigation or other proceeding that, if breached, could result in a judgment, order or award) for the payment of money exceeding $500,000 in the aggregate (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has been notified and has not denied coverage) shall be rendered against Holdings or any of its Subsidiaries and remain unsatisfied and (i) enforcement proceedings shall have been commenced
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by any creditor upon any such judgment, order, award or settlement or (ii) there shall be a period of 10 consecutive days (or, in the case of a Foreign Subsidiary, a period of 30 consecutive days) after entry thereof during which (A) a stay of enforcement thereof is not be in effect or (B) the same is not vacated, discharged, stayed or bonded pending appeal;
(k)Holdings or any of its Subsidiaries is enjoined, restrained or in any way prevented by the order of any court or any Governmental Authority from conducting, or otherwise ceases to conduct for any reason whatsoever, all or any material part of its business for more than 15 days;
(l)any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than 15 consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of any Loan Party, if any such event or circumstance could reasonably be expected to have a Material Adverse Effect;
(m)the loss, suspension or revocation of, or failure to renew, any license or permit now held or hereafter acquired by Holdings or any of its Subsidiaries, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
(n)the indictment, or the threatened indictment of Holdings or any of its Subsidiaries or any senior officer thereof under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against Holdings or any of its Subsidiaries or any senior officer thereof, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of the property of Holdings or any such Subsidiary or any property that such senior officer holds in his or her capacity as an officer;
(o)(i) there shall occur one or more ERISA Events that individually or in the aggregate results in, or could reasonably be expected to result in liability of any Loan Party or any of its ERISA Affiliates in excess of $500,000, or (ii) there exists any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Internal Revenue Code or Section 4068 of ERISA upon the property or rights to property of any Loan Party or any of its ERISA Affiliates;
(p)(i) there shall occur and be continuing any “Event of Default” (or any comparable term) under, and as defined in the documents evidencing or governing the Existing Second Lien Facility (including, for the avoidance of doubt, any “Default” or “Event of Default” thereunder that does not constitute a Default or Event of Default hereunder) or any other Subordinated Indebtedness, (ii) any of the Obligations for any reason shall cease to be “Senior Indebtedness” or “Designated Senior Indebtedness” (or any comparable terms) under, and as defined in the documents evidencing or governing any Subordinated Indebtedness, (iii) any Indebtedness other than the Obligations shall constitute “Designated Senior Indebtedness” (or any comparable term) under, and as defined in, the documents evidencing or governing any Subordinated Indebtedness, (iv) any holder of Subordinated Indebtedness shall fail to perform or comply with any of the subordination provisions of the documents evidencing or governing such Subordinated Indebtedness, or (v) the subordination provisions of the documents evidencing or governing any Subordinated Indebtedness shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable Subordinated Indebtedness; or
(q)a Change of Control shall have occurred;
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then, and in any such event, the Collateral Agent may, and shall at the request of the Required Lenders, by notice to the Borrower, (i) terminate or reduce all Commitments, whereupon all Commitments shall immediately be so terminated or reduced, (ii) declare all or any portion of the Loans then outstanding to be accelerated and due and payable, whereupon all or such portion of the aggregate principal of all Loans , all accrued and unpaid interest thereon, all fees and all other amounts payable under this Agreement and the other Loan Documents shall become due and payable immediately, together with the payment of the Applicable Premium, if any, with respect to the Commitments so terminated and the Loans so repaid, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (iii) exercise any and all of its other rights and remedies under applicable law, hereunder and under the other Loan Documents; provided, however, that upon the occurrence of any Event of Default described in subsection (f) or (g) of this Section 9.01 with respect to any Loan Party, without any notice to any Loan Party or any other Person or any act by any Agent or any Lender, all Commitments shall automatically terminate and all Loans then outstanding, together with all accrued and unpaid interest thereon, all fees and all other amounts due under this Agreement and the other Loan Documents, including, without limitation, the Applicable Premium, if any, shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by each Loan Party.
Section 9.02     Cure Right. In the event that Holdings fails to comply with the requirements of the financial covenant set forth in Section 7.03(a) or 7.03(b), during the period from the date that is 60 days prior to and until the expiration of the 10th Business Days after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, Holdings shall have the right to (a) issue Permitted Cure Equity for cash or otherwise receive cash contributions to the capital of Holdings or (b) incur Additional Second Lien Indebtedness, and to have all of such cash contributions and Additional Second Lien Indebtedness deemed, for purposes of said Sections, to be both Revenue and EBITDA for such fiscal quarter (and for the avoidance of doubt, only for such fiscal quarter), including for purposes of calculating compliance with such Sections as of the last day of any subsequent fiscal quarter (the “Cure Right”); provided that (i) such proceeds are actually received by Holdings during the period from the date that is 60 days prior to and until the expiration of the 10th Business Days after the date on which financial statements are required to be delivered with respect to such fiscal quarter hereunder, (ii) the Cure Right shall not be exercised more than five (5) times during the term of the Loans, (iii) the Cure Right shall not be exercised in consecutive fiscal quarters, (iv) such proceeds shall be applied to prepay the Loans in accordance with Section 2.06(c)(v) and (v) each such Permitted Cure Equity or Additional Second Lien Indebtedness shall be designated at the time of issuance or incurrence for application under the “Cure Right” pursuant to this Section 9.02. If, after giving effect to the treatment of such cash contributions or Additional Second Lien Indebtedness as Revenue and EBITDA, Holdings is in compliance with the financial covenant set forth in Sections 7.03(a) and 7.03(b), Holdings shall be deemed to have satisfied the requirements of each such Section as of the relevant date of determination with the same effect as though there had been no failure to comply on such date, and the applicable breach or default of such Section 7.03(a) and/or Section 7.03(b) that had occurred shall be deemed cured for purposes of this Agreement. The parties hereby acknowledge that this Section may not be relied on for purposes of calculating any financial ratios other than as applicable to Sections 7.03(a) and 7.03(b).
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ARTICLE X
AGENTS
Section 10.01    Appointment. Each Lender (and each subsequent maker of any Loan by its making thereof) hereby irrevocably appoints, authorizes and empowers the Administrative Agent and the Collateral Agent to perform the duties of each such Agent as set forth in this Agreement and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto, including: (i) to receive on behalf of each Lender any payment of principal of or interest on the Loans outstanding hereunder and all other amounts accrued hereunder for the account of the Lenders and paid to such Agent, and, subject to Section 2.02 of this Agreement, to distribute promptly to each Lender its Pro Rata Share of all payments so received; (ii) to distribute to each Lender copies of all material notices and agreements received by such Agent and not required to be delivered to each Lender pursuant to the terms of this Agreement, provided that the Agents shall not have any liability to the Lenders for any Agent’s inadvertent failure to distribute any such notices or agreements to the Lenders; (iii) to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Loans, and related matters and to maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Collateral and related matters; (iv) to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other Loan Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or on behalf of the applicable Lenders as provided in this Agreement or any other Loan Document; (vi) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Loan Parties, the Obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document; (vii) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; (viii) subject to Section 10.03, to take such action as such Agent deems appropriate on its behalf to administer the Loans and the Loan Documents and to exercise such other powers delegated to such Agent by the terms hereof or the other Loan Documents (including, without limitation, the power to give or to refuse to give notices, waivers, consents, approvals and instructions and the power to make or to refuse to make determinations and calculations); and (ix) to act with respect to all Collateral under the Loan Documents, including for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations. As to any matters not expressly provided for by this Agreement and the other Loan Documents (including, without limitation, enforcement or collection of the Loans), the Agents shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), and such instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) shall be binding upon all Lenders and all makers of Loans; provided, however, the Agents shall not be required to take any action which, in the reasonable opinion of any Agent, exposes such Agent to liability or which is contrary to this Agreement or any other Loan Document or applicable law.
Section 10.2    Nature of Duties; Delegation. (a) The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement or in the other Loan Documents. The duties of the Agents shall be mechanical and administrative in nature. The Agents shall not have by reason of this Agreement or any other Loan Document a fiduciary
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relationship in respect of any Lender. Nothing in this Agreement or any other Loan Document, express or implied, is intended to or shall be construed to impose upon the Agents any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein. Each Lender shall make its own independent investigation of the financial condition and affairs of the Loan Parties in connection with the making and the continuance of the Loans hereunder and shall make its own appraisal of the creditworthiness of the Loan Parties and the value of the Collateral without reliance upon the Administrative Agent or any other Lender or any of their Related Parties, and neither the Agents nor any of their Related Parties shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into their possession before the initial Loan hereunder or at any time or times thereafter, provided that, upon the reasonable request of a Lender, each Agent shall provide to such Lender any documents or reports delivered to such Agent by the Loan Parties pursuant to the terms of this Agreement or any other Loan Document. If any Agent seeks the consent or approval of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) to the taking or refraining from taking any action hereunder, such Agent shall send notice thereof to each Lender. Each Agent shall promptly notify each Lender any time that the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents) have instructed such Agent to act or refrain from acting pursuant hereto.
(b)Each Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any of its Related Parties or any other trustee, co-agent or other Person (including any Lender). Any such Related Party, trustee, co-agent or other Person shall benefit from this Article X to the extent provided by the applicable Agent.
Section 10.03    Rights, Exculpation, Etc. The Agents and their Related Parties shall not be liable for any action taken or omitted to be taken by them under or in connection with this Agreement or the other Loan Documents, except for their own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, the Agents (i) may treat the payee of any Loan as the owner thereof until the Collateral Agent receives written notice of the assignment or transfer thereof, pursuant to Section 12.07 hereof, signed by such payee and in form satisfactory to the Collateral Agent; (ii) may consult with legal counsel (including, without limitation, counsel to any Agent or counsel to the Loan Parties), independent public accountants, and other experts selected by any of them and shall not be liable for any action taken or omitted to be taken in good faith by any of them in accordance with the advice of such counsel or experts; (iii) make no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, certificates, warranties or representations made in or in connection with this Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Person, the existence or possible existence of any Default or Event of Default, or to inspect the Collateral or other property (including, without limitation, the books and records) of any Person; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and (vi) shall not be deemed to have made any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Agents be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral. The Agents shall not be liable for any apportionment or distribution of payments made in good faith pursuant
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to Section 4.03, and if any such apportionment or distribution is subsequently determined to have been made in error, and the sole recourse of any Lender to whom payment was due but not made shall be to recover from other Lenders any payment in excess of the amount which they are determined to be entitled. The Agents may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the other Loan Documents the Agents are permitted or required to take or to grant, and if such instructions are promptly requested, the Agents shall be absolutely entitled to refrain from taking any action or to withhold any approval under any of the Loan Documents until they shall have received such instructions from the Required Lenders. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents).
Section 10.04    Reliance. Each Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement or any of the other Loan Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05    Indemnification. To the extent that any Agent or any Related Party of the foregoing is not reimbursed and indemnified by any Loan Party, and whether or not such Agent has made demand on any Loan Party for the same, the Lenders will, within five (5) days of written demand by such Agent, reimburse such Agent and such Related Parties for and indemnify such Agent and such Related Parties from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, client charges and expenses of counsel or any other advisor to such Agent and such Related Parties), advances or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against such Agent and the Related Parties in any way relating to or arising out of this Agreement or any of the other Loan Documents or any action taken or omitted by such Agent and such Related Parties under this Agreement or any of the other Loan Documents, in proportion to each Lender’s Pro Rata Share, including, without limitation, advances and disbursements made pursuant to Section 10.08; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements for which there has been a final non-appealable judicial determination that such liability resulted from such Agent’s or such Related Party’s gross negligence or willful misconduct. The obligations of the Lenders under this Section 10.05 shall survive the payment in full of the Loans and the termination of this Agreement.
Section 10.06    Agents Individually. With respect to its Pro Rata Share of the Total Commitment hereunder and the Loans made by it, each Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any similar terms shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity as a Lender or one of the Required Lenders. Each Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with the Borrower as if it were not acting as an Agent pursuant hereto without any duty to account to the other Lenders.
Section 10.07    Successor Agent. (a)     Any Agent may at any time give at least 30 days prior written notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right to appoint a successor Agent. If no such successor Agent shall have been so appointed by the Required Lenders and
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shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Agent. Whether or not a successor Agent has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b)With effect from the Resignation Effective Date, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by such Agent on behalf of the Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through such retiring Agent shall instead be made by or to each Lender directly, until such time, if any, as a successor Agent shall have been appointed as provided for above. Upon the acceptance of a successor’s Agent’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article, Section 12.04 and Section 12.15 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by it while the retiring Agent was acting as Agent.
Section 10.08    Collateral Matters.
(a)The Collateral Agent may from time to time make such disbursements and advances (“Collateral Agent Advances”) which the Collateral Agent, in its sole discretion, deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral or any portion thereof, to enhance the likelihood or maximize the amount of repayment by the Borrower of the Loans and other Obligations or to pay any other amount chargeable to the Borrower pursuant to the terms of this Agreement, including, without limitation, costs, fees and expenses as described in Section 10.18 and Section 12.04. The Collateral Agent Advances shall be repayable on demand and be secured by the Collateral and shall bear interest at a rate per annum equal to the rate then applicable to Revolving Loans that are Reference Rate Loans. The Collateral Agent Advances shall constitute Obligations hereunder which may be charged to the Loan Account in accordance with Section 4.01. The Collateral Agent shall notify each Lender and the Borrower in writing of each such Collateral Agent Advance, which notice shall include a description of the purpose of such Collateral Agent Advance. Without limitation to its obligations pursuant to Section 10.05, each Lender agrees that it shall make available to the Collateral Agent, upon the Collateral Agent’s demand, in Dollars in immediately available funds, the amount equal to such Lender’s Pro Rata Share of each such Collateral Agent Advance. If such funds are not made available to the Collateral Agent by such Lender, the Collateral Agent shall be entitled to recover such funds on demand from such Lender, together with interest thereon for each day from the date such payment was due until the date such amount is paid to the Collateral Agent, at the Federal Funds Rate for three (3) Business Days and thereafter at the Reference Rate.
(b)The Lenders hereby irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by the Collateral Agent upon any Collateral upon termination of the Total Commitment and payment and satisfaction of all Loans and all other Obligations (other than Contingent Indemnity Obligations) in accordance with the terms hereof; or constituting property being sold or disposed of in the ordinary course of any Loan Party’s business or otherwise in compliance with the terms of this Agreement and the other Loan Documents; or constituting property in which the Loan Parties owned no interest at
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the time the Lien was granted or at any time thereafter; or if approved, authorized or ratified in writing by the Lenders in accordance with Section 12.02. Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.08(b).
(c)Without in any manner limiting the Collateral Agent’s authority to act without any specific or further authorization or consent by the Lenders (as set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to release Collateral conferred upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from the Lenders of its authority to release any particular item or types of Collateral, and upon prior written request by any Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for the benefit of the Agents and the Lenders upon such Collateral; provided, however, that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent’s opinion, would expose the Collateral Agent to liability or create any obligations or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Lien upon (or obligations of any Loan Party in respect of) all interests in the Collateral retained by any Loan Party.
(d)Anything contained in any of the Loan Documents to the contrary notwithstanding, the Loan Parties, each Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral under any Loan Document or to enforce any Guaranty, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Collateral Agent for the benefit of the Lenders in accordance with the terms thereof, (ii) in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale, the Administrative Agent, the Collateral Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and (iii) the Collateral Agent, as agent for and representative of the Agents and the Lenders (but not any other Agent or any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing) shall be entitled (either directly or through one or more acquisition vehicles) for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral to be sold (A) at any public or private sale, (B) at any sale conducted by the Collateral Agent under the provisions of the Uniform Commercial Code (including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial Code), (C) at any sale or foreclosure conducted by the Collateral Agent (whether by judicial action or otherwise) in accordance with applicable law or (D) any sale conducted pursuant to the provisions of any Debtor Relief Law (including Section 363 of the Bankruptcy Code), to use and apply all or any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale.
(e)The Collateral Agent shall have no obligation whatsoever to any Lender to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected or insured or has been encumbered or that the Lien granted to the Collateral Agent pursuant to this Agreement or any other Loan Document has been properly or sufficiently or lawfully created, perfected, protected or enforced or is entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.08 or in any other Loan Document, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to any other Lender, except as otherwise provided herein.
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Section 10.09    Agency for Perfection. Each Agent and each Lender hereby appoints each other Agent and each other Lender as agent and bailee for the purpose of perfecting the security interests in and liens upon the Collateral in assets which, in accordance with Article 9 of the Uniform Commercial Code, can be perfected only by possession or control (or where the security interest of a secured party with possession or control has priority over the security interest of another secured party) and each Agent and each Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral for the benefit of the Agents and the Lenders as secured party. Should the Administrative Agent or any Lender obtain possession or control of any such Collateral, the Administrative Agent or such Lender shall notify the Collateral Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agent’s instructions. In addition, the Collateral Agent shall also have the power and authority hereunder to appoint such other sub-agents as may be necessary or required under applicable state law or otherwise to perform its duties and enforce its rights with respect to the Collateral and under the Loan Documents. Each Loan Party by its execution and delivery of this Agreement hereby consents to the foregoing.
Section 10.10    No Reliance on any Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on any Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other requirements imposed by the USA PATRIOT Act or the regulations issued thereunder, including the regulations set forth in 31 C.F.R. §§ 1010.100(yy), (iii), 1020.100, and 1020.220 (formerly 31 C.F.R. § 103.121), as hereafter amended or replaced (“CIP Regulations”), or any other Anti-Money Laundering Laws, including any programs involving any of the following items relating to or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any recordkeeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or other regulations issued under the USA PATRIOT Act. Each Lender, Affiliate, participant or assignee subject to Section 326 of the USA PATRIOT Act will perform the measures necessary to satisfy its own responsibilities under the CIP Regulations.
Section 10.11    No Third Party Beneficiaries. The provisions of this Article are solely for the benefit of the Secured Parties, and no Loan Party shall have rights as a third-party beneficiary of any of such provisions.
Section 10.12    No Fiduciary Relationship. It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
Section 10.13    Reports; Confidentiality; Disclaimers. By becoming a party to this Agreement, each Lender:
(a)is deemed to have requested that each Agent furnish such Lender, promptly after it becomes available, a copy of each field audit or examination report with respect to Holdings or any of its Subsidiaries (each, a “Report”) prepared by or at the request of such Agent, and each Agent shall so furnish each Lender with each such Report,
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(b)expressly agrees and acknowledges that the Agents (i) do not make any representation or warranty as to the accuracy of any Reports, and (ii) shall not be liable for any information contained in any Reports,
(c)expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that any Agent or other party performing any audit or examination will inspect only specific information regarding Holdings and its Subsidiaries and will rely significantly upon Holdings’ and its Subsidiaries’ books and records, as well as on representations of their personnel,
(d)agrees to keep all Reports and other material, non-public information regarding Holdings and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 12.19, and
(e)without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold any Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of the Borrower, and (ii) to pay and protect, and indemnify, defend and hold any Agent and any other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by any such Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
Section 10.14    Collateral Custodian. Upon the occurrence and during the continuance of any Default or Event of Default, the Collateral Agent or its designee may at any time and from time to time employ and maintain on the premises of any Loan Party a custodian selected by the Collateral Agent or its designee who shall have full authority to do all acts necessary to protect the Agents’ and the Lenders’ interests. Each Loan Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any such custodian and to do whatever the Collateral Agent or its designee may reasonably request to preserve the Collateral. All costs and expenses incurred by the Collateral Agent or its designee by reason of the employment of the custodian shall be the responsibility of the Borrower and charged to the Loan Account.
Section 10.15    Intercreditor Agreement. Each Lender hereby grants to the Collateral Agent all requisite authority to enter into or otherwise become bound by, and to perform its obligations and exercise its rights and remedies under and in accordance with the terms of, the Intercreditor Agreement and to bind the Lenders thereto by the Collateral Agent’s entering into or otherwise becoming bound thereby, and no further consent or approval on the part of any Lender is or will be required in connection with the performance by the Collateral Agent of the Intercreditor Agreement.
Section 10.16    Collateral Agent May File Proofs of Claim
(a)In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Collateral Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
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(b)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties (including any claim for the compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel and all other amounts due the Secured Parties hereunder and under the other Loan Documents) allowed in such judicial proceeding; and
(c)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party to make such payments to the Collateral Agent and, in the event that the Collateral Agent shall consent to the making of such payments directly to the Secured Parties, to pay to the Collateral Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Collateral Agent and its agents and counsel, and any other amounts due the Collateral Agent hereunder and under the other Loan Documents.
Section 10.17    Erroneous Distribution. If all or any part of any payment or other distribution by or on behalf of the Administrative Agent to the Borrower, Lender, or other Person is determined by the Administrative Agent in its sole discretion to have been made in error as determined by the Administrative Agent (any such distribution, an “Erroneous Distribution”), then the Borrower, Lender, or other Person shall forthwith on written demand (accompanied by a reasonably detailed calculation of such Erroneous Distribution) repay to the Administrative Agent the amount of such Erroneous Distribution received by such Person. Any determination by the Administrative Agent, in its sole discretion, that all or a portion of any distribution to the Borrower, a Lender, or other Person was an Erroneous Distribution shall be conclusive absent manifest error. Each Borrower, Lender, and other potential recipient of an Erroneous Distribution hereunder waives any claim of discharge for value and any other claim of entitlement to, or in respect of, any Erroneous Distribution. 
ARTICLE XI
GUARANTY
Section 11.01    Guaranty. Each Guarantor hereby jointly and severally and unconditionally and irrevocably guarantees the punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all Obligations of the Borrower now or hereafter existing under any Loan Document, whether for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of the Borrower, whether or not a claim for post-filing interest is allowed in such Insolvency Proceeding) fees, commissions, expense reimbursements, indemnifications or otherwise (such obligations, to the extent not paid by the Borrower, being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under the guaranty set forth in this Article XI. Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrower to the Secured Parties under any Loan Document but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving the Borrower. Notwithstanding any of the foregoing, Guaranteed Obligations shall not include any Excluded Swap Obligations. In no event shall the obligation of any Guarantor hereunder exceed the maximum amount such Guarantor could guarantee under any Debtor Relief Law.
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Section 11.02    Guaranty Absolute. Each Guarantor jointly and severally guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. Each Guarantor agrees that this Article XI constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be made by any Agent or any Lender to any Collateral. The obligations of each Guarantor under this Article XI are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce such obligations, irrespective of whether any action is brought against any Loan Party or whether any Loan Party is joined in any such action or actions. The liability of each Guarantor under this Article XI shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the following:
(a)any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;
(b)any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or otherwise;
(c)any taking, exchange, release or non-perfection of any Collateral, or any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d)the existence of any claim, set-off, defense or other right that any Guarantor may have at any time against any Person, including, without limitation, any Secured Party;
(e)any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Loan Party; or
(f)any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Secured Parties that might otherwise constitute a defense available to, or a discharge of, any Loan Party or any other guarantor or surety.
This Article XI shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by Secured Parties or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made.
Section 11.03    Waiver. Each Guarantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Article XI and any requirement that the Secured Parties exhaust any right or take any action against any Loan Party or any other Person or any Collateral, (iii) any right to compel or direct any Secured Party to seek payment or recovery of any amounts owed under this Article XI from any one particular fund or source or to exhaust any right or take any action against any other Loan Party, any other Person or any Collateral, (iv) any requirement that any Secured Party protect, secure, perfect or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any Loan Party, any other Person or any Collateral, and (v) any other defense available to any Guarantor. Each Guarantor agrees
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that the Secured Parties shall have no obligation to marshal any assets in favor of any Guarantor or against, or in payment of, any or all of the Obligations. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated herein and that the waiver set forth in this Section 11.03 is knowingly made in contemplation of such benefits. Each Guarantor hereby waives any right to revoke this Article XI, and acknowledges that this Article XI is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.
Section 11.04    Continuing Guaranty; Assignments. This Article XI is a continuing guaranty and shall (a) remain in full force and effect until the later of the cash payment in full of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Secured Parties and their successors, pledgees, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or any portion of its rights and obligations under this Agreement (including, without limitation, all or any portion of its Commitments, its Loans owing to it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted such Lender herein or otherwise, in each case as provided in Section 12.07.
Section 11.05    Subrogation. No Guarantor will exercise any rights that it may now or hereafter acquire against any Loan Party or any other guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Article XI, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Secured Parties against any Loan Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Loan Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI shall have been paid in full in cash and the Final Maturity Date shall have occurred. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations (other than Contingent Indemnity Obligations) and all other amounts payable under this Article XI and the Final Maturity Date, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Article XI, whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Article XI thereafter arising. If (i) any Guarantor shall make payment to the Secured Parties of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Article XI shall be paid in full in cash and (iii) the Final Maturity Date shall have occurred, the Secured Parties will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
Section 11.06    Contribution. All Guarantors desire to allocate among themselves, in a fair and equitable manner, their obligations arising under this Article XI. Accordingly, in the event any payment or distribution is made on any date by a Guarantor under this Article XI such that its Aggregate Payments exceeds its Fair Share as of such date, such Guarantor shall be entitled to a contribution from each of the other Guarantors in an amount sufficient to cause each Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means,
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with respect to any Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Guarantor, to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Guarantors multiplied by, (b) the aggregate amount paid or distributed on or before such date by all Guarantors under this Article XI in respect of the Guaranteed Obligations. “Fair Share Contribution Amount” means, with respect to any Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Guarantor under this Article XI that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Guarantor for purposes of this Section 11.06, any assets or liabilities of such Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect to any Guarantor as of any date of determination, an amount equal to (A) the aggregate amount of all payments and distributions made on or before such date by such Guarantor in respect of this Article XI(including, without limitation, in respect of this Section 11.06), minus (B) the aggregate amount of all payments received on or before such date by such Guarantor from the other Guarantors as contributions under this Section 11.06. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Guarantor. The allocation among Guarantors of their obligations as set forth in this Section 11.06 shall not be construed in any way to limit the liability of any Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 11.06.
ARTICLE XII
MISCELLANEOUS
Section 12.01    Notices, Etc.
(a)Notices Generally. All notices and other communications provided for hereunder shall be in writing and shall be delivered by hand, sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, or telecopier. In the case of notices or other communications to any Loan Party, Administrative Agent or the Collateral Agent, as the case may be, they shall be sent to the respective address set forth below (or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties complying as to delivery with the terms of this Section 12.01):
AgileThought, Inc.
222 Urban Towers
Suite 1650 E
Irving, TX 75039
Attention:  Chief Financial Officer


with a copy to:
Mayer Brown LLP
1221 Avenue of the Americas
New York, New York 10020-1001

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AgileThought, Inc.
222 Urban Towers
Suite 1650 E
Irving, TX 75039
Attention:  Chief Legal Officer

if to the Administrative Agent or the Collateral Agent, to it at the following address:
Blue Torch Finance LLC
c/o Blue Torch Capital LP
150 East 58th Street, 18th Floor
New York, New York 10155
with a copy to:
SEI – Blue Torch Capital Loan Ops
1 Freedom Valley Drive
Oaks, Pennsylvania 19456


in each case, with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Telephone: 212-596-9747

All notices or other communications sent in accordance with this Section 12.01, shall be deemed received on the earlier of the date of actual receipt or three (3) Business Days after the deposit thereof in the mail; provided, that (i) notices sent by overnight courier service shall be deemed to have been given when received and (ii) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient), provided, further that notices to any Agent pursuant to Article II shall not be effective until received by such Agent.
(b)Electronic Communications.
(i)Each Agent and the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites) pursuant to procedures approved by the Agents, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has
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notified the Agents that it is incapable of receiving notices under such Article by electronic communication.
(ii)Unless the Administrative Agent otherwise prescribes, (A) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (B) notices or communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (A), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (A) and (B) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
Section 12.02    Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document (excluding the Fee Letter), and no consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed (a) in the case of an amendment, consent or waiver to cure any ambiguity, omission, defect or inconsistency or granting a new Lien for the benefit of the Agents and the Lenders or extending an existing Lien over additional property, by the Agents and the Borrower, (b) in the case of any other waiver or consent, by the Required Lenders (or by the Collateral Agent with the consent of the Required Lenders) and (c) in the case of any other amendment, by the Required Lenders (or by the Collateral Agent with the consent of the Required Lenders) and the Borrower, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:
(i)increase the Commitment of any Lender, reduce the principal of, or interest on, the Loans payable to any Lender, reduce the amount of any fee payable for the account of any Lender, or postpone or extend any scheduled date fixed for any payment of principal of, or interest or fees on, the Loans payable to any Lender, in each case, without the written consent of such Lender;
(ii)increase the Total Commitment without the written consent of each Lender;
(iii)change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans that is required for the Lenders or any of them to take any action hereunder without the written consent of each Lender;
(iv)amend the definition of “Required Lenders” or “Pro Rata Share” without the written consent of each Lender;
(v)release all or a substantial portion of the Collateral (except as otherwise provided in this Agreement and the other Loan Documents), subordinate any Lien granted in favor of the Collateral Agent for the benefit of the Agents and the Lenders, or release the Borrower or any Guarantor (except in connection with a Disposition of the Equity Interests thereof permitted by Section 7.02(c)(ii)), in each case, without the written consent of each Lender; provided, that the Required Lenders may elect to release all or a substantial portion of the Collateral without the requirement to obtain the written consent of each Lender if such release is in connection with (x) an exercise of remedies by the Collateral Agent at the direction of the Required Lenders pursuant to Section 9.01 or (y) any Disposition of all or a substantial portion of the Collateral by one or more of the Loan Parties with the consent of the Required
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Lenders after the occurrence and during the continuance of an Event of Default so long as such Disposition is conducted in a commercially reasonable manner as if such Disposition were a disposition of collateral by a secured creditor in accordance with Article 9 of the UCC; or
(vi)amend, modify or waive Section 4.02, Section 4.03 or this Section 12.02 of this Agreement without the written consent of each Lender.
(b)Notwithstanding anything to the contrary in Section 12.02(a):
(i)no amendment, waiver or consent shall, unless in writing and signed by an Agent, affect the rights or duties of such Agent (but not in its capacity as a Lender) under this Agreement or the other Loan Documents;
(ii)any amendment, waiver or consent to any provision of this Agreement (including Sections 4.01 and 4.02) that permits any Loan Party, any Permitted Holder (or other equity holder of Holdings) or any of their respective Affiliates to purchase Loans on a non-pro rata basis, become an eligible assignee pursuant to Section 12.07 and/or make offers to make optional prepayments on a non-pro rata basis shall require the prior written consent of the Required Lenders rather than the prior written consent of each Lender directly affected thereby;
(iii)any Control Agreement, Guaranty, Mortgage, Security Agreement, collateral access agreement, landlord waiver or other agreement or document purporting to create or perfect a security interest in any of the Collateral (a “Collateral Document”) may be amended, waived or otherwise modified with the consent of the applicable Agent and the applicable Loan Party without the need to obtain the consent of any Lender or any other Person if such amendment, modification, supplement or waiver is delivered in order (A) to comply with local Requirements of Law (including foreign law or regulatory requirements) or advice of local counsel, (B) to cure any ambiguity, inconsistency, omission, mistake or defect or (C) to cause such Collateral Document to be consistent with this Agreement and the other Loan Documents, and if the Administrative Agent and the Borrower shall have jointly identified an ambiguity, inconsistency, omission, mistake or defect, in each case, in any provision of any Loan Document (other than a Collateral Document), then the Administrative Agent and the Borrower shall be permitted to amend such provision; any amendment, waiver or modification pursuant to this paragraph shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five (5) Business Days following receipt of notice thereof;
(iv)no consent of any Loan Party shall be required to change any order of priority set forth in Section 2.06(d) and Section 4.03;
(v)the Administrative Agent and the Borrower may enter into an amendment to this Agreement pursuant to Section 2.08(g) to reflect an alternate service or index rate and such other related changes to this Agreement as may be applicable; and
(vi)no Defaulting Lender, Loan Party, Permitted Holder (or other equity holder of Holdings) or any of their respective Affiliates that is a Lender shall have any right to approve or disapprove any amendment, waiver or consent under the Loan Documents and any Loans held by such Person for purposes hereof shall be automatically deemed to be voted pro rata according to the Loans of all other Lenders in the aggregate (other than such Defaulting Lender, Loan Party, Permitted Holder (or other equity holder of Holdings) or Affiliate).
(c)If any action to be taken by the Lenders hereunder requires the consent, authorization, or agreement of all of the Lenders or any Lender affected thereby, and a Lender
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other than the Collateral Agent and the Administrative Agent and their respective Affiliates and Related Funds (the “Holdout Lender”) fails to give its consent, authorization, or agreement, then the Collateral Agent, upon at least five (5) Business Days prior irrevocable notice to the Holdout Lender, may permanently replace the Holdout Lender with one or more substitute lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given. Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender being repaid its share of the outstanding Obligations without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Holdout Lender shall be made in accordance with the terms of Section 12.07. Until such time as the Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make its Pro Rata Share of Loans.
Section 12.03    No Waiver; Remedies, Etc. No failure on the part of any Agent or any Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right under any Loan Document preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Agents and the Lenders provided herein and in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Agents and the Lenders under any Loan Document against any party thereto are not conditional or contingent on any attempt by the Agents and the Lenders to exercise any of their rights under any other Loan Document against such party or against any other Person.
Section 12.04    Expenses; Taxes; Attorneys’ Fees. The Borrower will pay on demand, all costs and expenses incurred by or on behalf of each Agent (and, in the case of clauses (b) through (m) below, each Lender), regardless of whether the transactions contemplated hereby are consummated, including, without limitation, reasonable fees, costs, client charges and expenses of counsel for each Agent (and, in the case of clauses (b) through (m) below, each Lender), accounting, due diligence, periodic field audits, physical counts, valuations, investigations, searches and filings, monitoring of assets, appraisals of Collateral, the rating of the Loans, title searches and reviewing environmental assessments, miscellaneous disbursements, examination, travel, lodging and meals, arising from or relating to: (a) the negotiation, preparation, execution, delivery, performance and administration of this Agreement and the other Loan Documents (including, without limitation, the preparation of any additional Loan Documents pursuant to Section 7.01(b) or the review of any of the agreements, instruments and documents referred to in Section 7.01(f)), (b) any requested amendments, waivers or consents to this Agreement or the other Loan Documents whether or not such documents become effective or are given, (c) the preservation and protection of the Agents’ or any of the Lenders’ rights under this Agreement or the other Loan Documents, (d) the defense of any claim or action asserted or brought against any Agent or any Lender by any Person that arises from or relates to this Agreement, any other Loan Document, the Agents’ or the Lenders’ claims against any Loan Party, or any and all matters in connection therewith, (e) the commencement or defense of, or intervention in, any court proceeding arising from or related to this Agreement or any other Loan Document, (f) the filing of any petition, complaint, answer, motion or other pleading by any Agent or any Lender, or the taking of any action in respect of the Collateral or other security, in connection with this Agreement or any other Loan Document, (g) the protection, collection, lease, sale, taking possession of or liquidation of, any Collateral or other security in connection
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with this Agreement or any other Loan Document, (h) any attempt to enforce any Lien or security interest in any Collateral or other security in connection with this Agreement or any other Loan Document, (i) any attempt to collect from any Loan Party, (j) any Environmental Claim, Environmental Liability or Remedial Action arising from or in connection with the past, present or future operations of, or any property currently, formerly or in the future owned, leased or operated by, any Loan Party, any of its Subsidiaries or any predecessor in interest, (k) any Environmental Lien, (l) the rating of the Loans by one or more rating agencies in connection with any Lender’s Securitization, or (m) the receipt by any Agent or any Lender of any advice from professionals with respect to any of the foregoing. Without limitation of the foregoing or any other provision of any Loan Document: (x) the Borrower agrees to pay all broker fees that may become due in connection with the transactions contemplated by this Agreement and the other Loan Documents and (y) if the Borrower fail to perform any covenant or agreement contained herein or in any other Loan Document, any Agent may itself perform or cause performance of such covenant or agreement, and the expenses of such Agent incurred in connection therewith shall be reimbursed on demand by the Borrower. The obligations of the Borrower under this Section 12.04 shall survive the repayment of the Obligations and discharge of any Liens granted under the Loan Documents.
Section 12.05    Right of Set-off. Upon the occurrence and during the continuance of any Event of Default, any Agent or any Lender may, and is hereby authorized to, at any time and from time to time, without notice to any Loan Party (any such notice being expressly waived by the Loan Parties) and to the fullest extent permitted by law, set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Agent or such Lender or any of their respective Affiliates to or for the credit or the account of any Loan Party against any and all obligations of the Loan Parties either now or hereafter existing under any Loan Document, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of set-off, (a) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 4.04 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Agents and the Lenders, and (b) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of set-off. Each Agent and each Lender agrees to notify such Loan Party promptly after any such set-off and application made by such Agent or such Lender or any of their respective Affiliates provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Agents and the Lenders under this Section 12.05 are in addition to the other rights and remedies (including other rights of set-off) which the Agents and the Lenders may have under this Agreement or any other Loan Documents of law or otherwise.
Section 12.06    Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
Section 12.07    Assignments and Participations.
(a)This Agreement and the other Loan Documents shall be binding upon and inure to the benefit of each Loan Party and each Agent and each Lender and their respective successors and assigns; provided, however, that none of the Loan Parties may assign or transfer any of its rights hereunder or under the other Loan Documents without the prior written consent
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of each Lender and any such assignment without the Lenders’ prior written consent shall be null and void.
(b)Subject to the conditions set forth in clause (c) below, each Lender may assign to one or more other lenders or other entities all or a portion of its rights and obligations under this Agreement with respect to:
(i)all or a portion of its Term Loan Commitment and any Term Loan made by it with the written consent of the Borrower (such consent not to be unreasonably withheld) and each Agent, and
(ii)all or a portion of its Revolving Credit Commitment and the Revolving Loans made by it with the written consent the Borrower (such consent not to be unreasonably withheld) and each Agent;
provided, however, that no written consent of the Borrower, the Collateral Agent or the Administrative Agent shall be required (A) in connection with any assignment by a Lender to a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (B) if such assignment is in connection with any merger, consolidation, sale, transfer, or other disposition of all or any substantial portion of the business or loan portfolio of such Lender; provided further, that under this Section 12.07(b), the consent of the Borrower shall not be required if an Event of Default has occurred and is continuing.
(c)Assignments shall be subject to the following additional conditions:
(i)Each such assignment shall be in an amount which is at least $5,000,000 or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender’s Commitment) (except such minimum amount shall not apply to an assignment by a Lender to (A) a Lender, an Affiliate of such Lender or a Related Fund of such Lender or (B) a group of new Lenders, each of whom is an Affiliate or Related Fund of each other to the extent the aggregate amount to be assigned to all such new Lenders is at least $5,000,000 or a multiple of $1,000,000 in excess thereof);
(ii)The parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance, an Assignment and Acceptance, together with any promissory note subject to such assignment and such parties shall deliver to the Collateral Agent, for the benefit of the Administrative Agent, a processing and recordation fee of $5,000 (except the payment of such fee shall not be required in connection with an assignment by a Lender to a Lender, an Affiliate of such Lender or a Related Fund of such Lender) and all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering or terrorist financing rules and regulations, including the USA PATRIOT Act; and
(iii)No such assignment shall be made to (A) any Loan Party, any Permitted Holder (or other equity holder of Holdings) or any of their respective Affiliates or (B) any Defaulting Lender or any of its Affiliates, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(d)Upon such execution, delivery and acceptance, from and after the recordation date of each Assignment and Acceptance on the Register, , (A) the assignee thereunder shall become a “Lender” hereunder and, in addition to the rights and obligations hereunder held by it immediately prior to such effective date, have the rights and obligations hereunder that have been assigned to it pursuant to such Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been
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assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).
(e)By executing and delivering an Assignment and Acceptance, the assigning Lender and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto; (ii) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or any of its Subsidiaries or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the other Loan Documents, together with such other documents and information it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the assigning Lender, any Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents; (v) such assignee appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agents by the terms hereof and thereof, together with such powers as are reasonably incidental hereto and thereto; and (vi) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement and the other Loan Documents are required to be performed by it as a Lender.
(f)The Administrative Agent shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain, or cause to be maintained at one of its offices, a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitments of, and the principal amount of the Loans (and stated interest thereon)owing to each Lender from time to time. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior written notice.
(g)Upon receipt by the Administrative Agent of a completed Assignment and Acceptance, and subject to any consent required from the Borrower, Administrative Agent or the Collateral Agent pursuant to Section 12.07(b) (which consent of the applicable Agent and Borrower must be evidenced by such Agent’s or Borrower’s execution of an acceptance to such Assignment and Acceptance), the Administrative Agent shall accept such assignment, record the information contained therein in the Register (as adjusted to reflect any principal payments on or amounts capitalized and added to the principal balance of the Loans and/or Commitment reductions made subsequent to the effective date of the applicable assignment, as confirmed in writing by the corresponding assignor and assignee in conjunction with delivery of the assignment to the Administrative Agent) and provide to the Collateral Agent a copy of the fully executed Assignment and Acceptance.
(h)A Loan (and the note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each
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note shall expressly so provide). Any assignment or sale of all or part of a Loan (and the note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register or the Register, together with the surrender of the note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s).
(i)If any Lender sells participations in a Loan, such Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the Borrower, maintain, or cause to be maintained, a register, on which it enters the name of all participants in the Loans held by it and the principal amount (and stated interest thereon) of the portion of the Loan that is the subject of the participation (the ”Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under the Code or Treasury Regulations, including without limitation, Section 5f.103-1(c) of the United States Treasury Regulations. A Loan (and the note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each note shall expressly so provide). Any participation of such Loan (and the note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. The Participant Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(j)Any Person who purchases or is assigned or participates in any portion of such Loan shall comply with Section 2.10(d).
(k)Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of its Commitments and the Loans made by it); provided, that (i) such Lender’s obligations under this Agreement (including without limitation, its Commitments hereunder) and the other Loan Documents shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and the Borrower, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents; and (iii) a participant shall not be entitled to require such Lender to take or omit to take any action hereunder except (A) action directly effecting an extension of the maturity dates or decrease in the principal amount of the Loans, (B) action directly effecting an extension of the due dates or a decrease in the rate of interest payable on the Loans or the fees payable under this Agreement, or (C) actions directly effecting a release of all or a substantial portion of the Collateral or any Loan Party (except as set forth in Section 10.08 of this Agreement or any other Loan Document). The Loan Parties agree that each participant shall be entitled to the benefit of Section 2.10 and Section 2.11 of this Agreement with respect to its participation in any portion of the Commitments and the Loans as if it were a Lender; provided that a participant shall not be entitled to receive any greater payment under Section 2.10 or Section 2.11 with respect to its participation than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the participant acquired the applicable participation.
(l)Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including
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any pledge or assignment to secure obligations to a Federal Reserve Bank or loans made to, or other indebtedness issued by, such Lender pursuant to a securitization transaction (including any structured warehouse credit facility, collateralized loan obligation transaction or similar facility or transaction, and including any further securitization of the indebtedness or equity issued under such a transaction) (a “Securitization”); provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. The Loan Parties shall cooperate with such Lender and its Affiliates to effect a Securitization, including, without limitation, by providing such information as may be reasonably requested by such Lender in connection with the rating of its Loans or any Securitization.
Section 12.08    Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by telecopier or electronic mail shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telecopier or electronic mail also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.
Section 12.09    GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10    CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.
(a)ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY ANY MEANS PERMITTED BY APPLICABLE LAW, INCLUDING, WITHOUT LIMITATION, BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. THE LOAN PARTIES AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
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OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
(b)Each Loan Party irrevocably and unconditionally agrees that it will not commence any action or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against any Agent, any Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof.
Section 12.11     WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT.
Section 12.12    Consent by the Agents and Lenders. Except as otherwise expressly set forth herein to the contrary or in any other Loan Document, if the consent, approval, satisfaction, determination, judgment, acceptance or similar action (an “Action”) of any Agent or any Lender shall be permitted or required pursuant to any provision hereof or any provision of any other agreement to which any Loan Party is a party and to which any Agent or any Lender has succeeded thereto, such Action shall be required to be in writing and may be withheld or denied by such Agent or such Lender, in its sole discretion, with or without any reason, and without being subject to question or challenge on the grounds that such Action was not taken in good faith.
Section 12.13    No Party Deemed Drafter. Each of the parties hereto agrees that no party hereto shall be deemed to be the drafter of this Agreement.
Section 12.14    Reinstatement; Certain Payments. If any claim is ever made upon any Secured Party for repayment or recovery of any amount or amounts received by such Secured Party in payment or on account of any of the Obligations, such Secured Party shall give prompt notice of such claim to each other Agent and Lender and the Borrower, and if such
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Secured Party repays all or part of such amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such Secured Party or any of its property, or (ii) any good faith settlement or compromise of any such claim effected by such Secured Party with any such claimant, then and in such event each Loan Party agrees that (A) any such judgment, decree, order, settlement or compromise shall be binding upon it notwithstanding the cancellation of any Indebtedness hereunder or under the other Loan Documents or the termination of this Agreement or the other Loan Documents, and (B) it shall be and remain liable to such Secured Party hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Secured Party.
Section 12.15    Indemnification; Limitation of Liability for Certain Damages.
(a)In addition to each Loan Party’s other Obligations under this Agreement, each Loan Party agrees to, jointly and severally, defend, protect, indemnify and hold harmless each Secured Party and all of their respective Related Parties (collectively called the “Indemnitees”) from and against any and all losses, damages, liabilities, obligations, penalties, fees, reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether prior to or from and after the Effective Date, whether direct, indirect or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the negotiation, preparation, execution or performance or enforcement of this Agreement, any other Loan Document, of any Environmental Claim or any other document executed in connection with the transactions contemplated by this Agreement, (ii) any Agent’s or any Lender’s furnishing of funds to the Borrower under this Agreement or the other Loan Documents, including, without limitation, the management of any such Loans or the Borrower’s use of the proceeds thereof, (iii) the Agents and the Lenders relying on any instructions of the Borrower or the handling of the Loan Account and Collateral of the Borrower as herein provided, (iv) any matter relating to the financing transactions contemplated by this Agreement or the other Loan Documents or by any document executed in connection with the transactions contemplated by this Agreement or the other Loan Documents, or (v) any claim, including any Environmental litigation, investigation or proceeding relating to or arising out of any of the foregoing, whether or not any Indemnitee is a party thereto (collectively, the “Indemnified Matters”); provided, however, that the Loan Parties shall not have any obligation to any Indemnitee under this subsection (a) for any Indemnified Matter caused by the gross negligence or willful misconduct of such Indemnitee, as determined by a final non-appealable judgment of a court of competent jurisdiction.
(b)The indemnification for all of the foregoing losses, damages, fees, costs and expenses of the Indemnitees set forth in this Section 12.15 are chargeable against the Loan Account. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section 12.15 may be unenforceable because it is violative of any law or public policy, each Loan Party shall, jointly and severally, contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
(c)No Loan Party shall assert, and each Loan Party hereby waives, any claim against the Indemnitees, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Loan Party hereby waives, releases and agrees not to sue upon any such claim or seek any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
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(d)The indemnities and waivers set forth in this Section 12.15 shall survive the repayment of the Obligations and discharge of any Liens granted under the Loan Documents.
(e)Section 12.15 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
Section 12.16    Records. The unpaid principal of and interest on the Loans, the interest rate or rates applicable to such unpaid principal and interest, the duration of such applicability, the Commitments, and the accrued and unpaid fees payable pursuant to Section 2.07 hereof, shall at all times be ascertained from the records of the Agents, which shall be conclusive and binding absent manifest error.
Section 12.17    Binding Effect. This Agreement shall become effective when it shall have been executed by each Loan Party, each Agent and each Lender and when the conditions precedent set forth in Section 5.01 hereof have been satisfied or waived in writing by the Agents, and thereafter shall be binding upon and inure to the benefit of each Loan Party, each Agent and each Lender, and their respective successors and assigns, except that the Loan Parties shall not have the right to assign their rights hereunder or any interest herein without the prior written consent of each Agent and each Lender, and any assignment by any Lender shall be governed by Section 12.07 hereof.
Section 12.18    Highest Lawful Rate. It is the intention of the parties hereto that each Agent and each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby or by any other Loan Document would be usurious as to any Agent or any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Agent or such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in this Agreement or any other Loan Document or any agreement entered into in connection with or as security for the Obligations, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to any Agent or any Lender that is contracted for, taken, reserved, charged or received by such Agent or such Lender under this Agreement or any other Loan Document or agreements or otherwise in connection with the Obligations shall under no circumstances exceed the maximum amount allowed by such applicable law, any excess shall be canceled automatically and if theretofore paid shall be credited by such Agent or such Lender on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent or such Lender, as applicable, to the Borrower); and (ii) in the event that the maturity of the Obligations is accelerated by reason of any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Agent or any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall, subject to the last sentence of this Section 12.18, be canceled automatically by such Agent or such Lender, as applicable, as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Agent or such Lender, as applicable, on the principal amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full, refunded by such Agent or such Lender to the Borrower). All sums paid or agreed to be paid to any Agent or any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Agent or such Lender, be amortized, prorated, allocated and spread throughout the full term of the Loans until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (x) the amount of interest payable to any Agent or any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Agent or
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such Lender pursuant to this Section 12.18 and (y) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Agent or such Lender would be less than the amount of interest payable to such Agent or such Lender computed at the Highest Lawful Rate applicable to such Agent or such Lender, then the amount of interest payable to such Agent or such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Agent or such Lender until the total amount of interest payable to such Agent or such Lender shall equal the total amount of interest which would have been payable to such Agent or such Lender if the total amount of interest had been computed without giving effect to this Section 12.18.
For purposes of this Section 12.18, the term “applicable law” shall mean that law in effect from time to time and applicable to the loan transaction between the Borrower, on the one hand, and the Agents and the Lenders, on the other, that lawfully permits the charging and collection of the highest permissible, lawful non-usurious rate of interest on such loan transaction and this Agreement, including laws of the State of New York and, to the extent controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does not include the right to accelerate any interest that has not accrued as of the date of acceleration.
Section 12.19    Confidentiality. Each Agent and each Lender agrees (on behalf of itself and its Related Parties) to use reasonable precautions to keep confidential, in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound practices of comparable commercial finance companies, any non-public information supplied to it by the Loan Parties pursuant to this Agreement or the other Loan Documents which is identified in writing by the Loan Parties as being confidential at the time the same is delivered to such Person (and which at the time is not, and does not thereafter become, publicly available or available to such Person from another source not known to be subject to a confidentiality obligation to such Person not to disclose such information), provided that nothing herein shall limit the disclosure by any Agent or any Lender of any such information (i) to its Affiliates, its Related Parties or the Related Parties of any Person described in clause (ii) or (iii) below) (it being understood that the Persons to whom such disclosure is made either will be informed of the confidential nature of such information and instructed to keep such information confidential in accordance with this Section 12.19 or is subject to other customary confidentiality obligations); (ii) to any other party hereto; (iii) to any assignee or participant (or prospective assignee or participant) or any party to a Securitization, so long as such assignee or participant (or prospective assignee or participant) or party to a Securitization agrees, in writing, to be bound by or is otherwise subject to customary confidentiality obligations (including, without limitation, confidentiality provisions similar in substance to this Section 12.19); (iv) to the extent required by any Requirement of Law or judicial process or as otherwise requested by any Governmental Authority; (v) to the National Association of Insurance Commissioners or any similar organization, any examiner, auditor or accountant or any nationally recognized rating agency; (vi) in connection with any litigation to which any Agent or any Lender is a party; (vii) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (viii) to any other Person if such information is general portfolio information that does not identity the Loan Parties, or (ix) with the consent of the Borrower. In addition, the Agents and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to any Agent or any Lender in connection with the administration of this Agreement, the other Loan Documents and the Commitments.
Section 12.20    Public Disclosure. Each Loan Party agrees that neither it nor any of its Affiliates will now or in the future issue any press release or other public disclosure using
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the name of an Agent, any Lender or any of their respective Affiliates or referring to this Agreement or any other Loan Document without the prior written consent of such Agent or such Lender, except to the extent that such Loan Party or such Affiliate is required to do so under applicable law (in which event, such Loan Party or such Affiliate will consult with such Agent or such Lender before issuing such press release or other public disclosure). Each Loan Party hereby authorizes each Agent and each Lender, after consultation with the Borrower, to advertise the closing of the transactions contemplated by this Agreement, and to make appropriate announcements of the financial arrangements entered into among the parties hereto, as such Agent or such Lender shall deem appropriate, including, without limitation, on a home page or similar place for dissemination of information on the Internet or worldwide web, or in announcements commonly known as tombstones, in such trade publications, business journals, newspapers of general circulation and to such selected parties as such Agent or such Lender shall deem appropriate.
Section 12.21    Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
Section 12.22    USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the entities composing the Borrower, which information includes the name and address of each such entity and other information that will allow such Lender to identify the entities composing the Borrower in accordance with the USA PATRIOT Act. Each Loan Party agrees to take such action and execute, acknowledge and deliver at its sole cost and expense, such instruments and documents as any Lender may reasonably require from time to time in order to enable such Lender to comply with the USA PATRIOT Act.

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EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Manuel Senderos Fernandez, certify that:

1.I have reviewed this quarterly report on Form 10-Q of AgileThought Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2022
By:/s/ Manuel Senderos Fernandez
Manuel Senderos Fernandez
Chief Executive Officer

EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Amit Singh, certify that:

1.I have reviewed this quarterly report on Form 10-Q of AgileThought Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2022
By:/s/ Amit Singh
Amit Singh
Chief Financial Officer

EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Manuel Senderos Fernandez, Chief Executive Officer of AgileThought, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The quarterly report on Form 10-Q for the Company for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 12, 2022
By:
/s/ Manuel Senderos Fernandez
Manuel Senderos Fernandez
Chief Executive Officer

EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Amit Singh, Chief Financial Officer of AgileThought, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The quarterly report on Form 10-Q for the Company for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 12, 2022
By:/s/ Amit Singh
Amit Singh
Chief Financial Officer