0001653558-21-000065.txt : 20210503 0001653558-21-000065.hdr.sgml : 20210503 20210503162328 ACCESSION NUMBER: 0001653558-21-000065 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 19 CONFORMED PERIOD OF REPORT: 20210427 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210503 DATE AS OF CHANGE: 20210503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Priority Technology Holdings, Inc. CENTRAL INDEX KEY: 0001653558 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 474257046 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37872 FILM NUMBER: 21883875 BUSINESS ADDRESS: STREET 1: 2001 WESTSIDE PARKWAY STREET 2: SUITE 155 CITY: ALPHARETTA STATE: GA ZIP: 30004 BUSINESS PHONE: 800-935-5961 MAIL ADDRESS: STREET 1: 2001 WESTSIDE PARKWAY STREET 2: SUITE 155 CITY: ALPHARETTA STATE: GA ZIP: 30004 FORMER COMPANY: FORMER CONFORMED NAME: M I Acquisitions, Inc. DATE OF NAME CHANGE: 20150918 8-K 1 prth-20210427.htm 8-K prth-20210427
0001653558December 31false00016535582021-04-272021-04-27

United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
April 27, 2021
Date of Report (Date of earliest event reported)
 
Priority Technology Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware 001-37872 47-4257046
(State or other jurisdiction of incorporation)  (Commission File Number)  (I.R.S. Employer Identification No.) 
 
2001 Westside Parkway 30004
Suite 155
Alpharetta,Georgia
(Address of Principal Executive Offices)  (Zip Code) 
 
Registrant’s telephone number, including area code: (800) 935-5961 
 
(Former name or former address, if changed since last report) 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.001 par valuePRTHNasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of (1933 §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                        Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 1.01    Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On April 27, 2021, Priority Technology Holdings, Inc., a Delaware corporation (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with credit funds managed by certain affiliates of Ares Management Corporation (the “Investors”), pursuant to which the Company (i) issued and sold 150,000 shares of senior preferred stock, par value $0.001 per share (the “Senior Preferred Stock”, and the shares issued the “Senior Preferred Shares”) at a purchase price of $150,000,000, or $1,000 per Senior Preferred Share (the “Initial Senior Preferred Stock Sale”), and (ii) issued warrants (the “Warrants”) to purchase up to 1,803,841 shares of the Company’s common stock, par value $0.001 per share (“Common Stock” and together with the Warrants, the “Securities”), at an exercise price $0.001. The exercise price and the number of shares issuable upon exercise of the warrants are subject to certain adjustments from time to time on the terms outlined in the Warrants.

In addition to the issuance and sale of Senior Preferred Shares which occurred on April 27, 2021, pursuant to the Purchase Agreement, upon the consummation of the Company’s acquisition of Finxera Holdings, Inc. (“Finxera”) and the satisfaction of other customary closing conditions, the Company will issue and sell to the Investors an additional 50,000 shares of Senior Preferred Stock, at a purchase price of $50,000,000, or $1,000 per share. The Company may also issue and sell to the Investors up to an additional 50,000 shares of Senior Preferred Stock, at a purchase price of $1,000 per share within 18 months after the consummation of the Acquisition Senior Preferred Stock Sale upon the satisfaction of certain customary closing conditions.

The Company and the Investors entered into the Purchase Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933 (as amended, “1933 Act”), and Rule 506(b) of Regulation D as promulgated by the Securities and Exchange Commission (the “SEC”) under the 1933 Act.

The Company used the proceeds from the sale of the Securities to fund the Refinancing (as defined below) and to pay certain fees and expenses relating to the Refinancing and the offering of the Securities.

Registration Rights Agreement

On April 27, 2021 the Company entered into a Registration Rights Agreement, by and among the Company and the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed to provide certain registration rights with respect to the shares of Common Stock issuable upon exercise of the Warrants (the “Registrable Securities”).

Under the Registration Rights Agreement, the holders of the Registrable Securities were granted (i) piggyback rights to be included in certain underwritten offerings of Common Stock and (ii) the right to demand a shelf registration of Registrable Securities.

Credit and Guaranty Agreement

On April 27, 2021, Priority Holdings, LLC, a Delaware limited liability company (“Holdings”), which is a direct wholly-owned subsidiary of the Company, and certain direct and indirect subsidiaries of Holdings (together with Holdings, collectively, the “Loan Parties”), entered into a Credit and Guaranty Agreement (the “Credit Agreement”) with Truist Bank (“Truist”) and the lenders party thereto, pursuant to which Holdings has access to senior credit facilities in an aggregate principal amount of $630.0 million which are secured by substantially all of the assets of the Loan Parties and by the equity interests of Holdings. The credit facilities under the Credit Agreement are comprised of (i) a senior secured first lien term loan facility in an aggregate principal amount of $300,000,000 (the “Initial Term Loan”), the proceeds of which have been used to fund the Refinancing, (ii) a senior secured revolving credit facility in an aggregate amount not to exceed $40,000,000 outstanding at any time and (iii) a senior secured first lien delayed draw term loan facility in an aggregate principal amount of $290,000,000, the proceeds of which may be used to fund the Company’s acquisition of Finxera.

Interest and Fees

Outstanding borrowings under the Credit Agreement accrue interest using either a base rate (as defined therein) or a LIBOR rate plus an applicable margin per annum, as provided in the Credit Agreement, which includes a LIBOR rate “floor” of 1.0% per annum. Accrued interest is payable on each interest payment date (as defined in the Credit Agreement). The revolving credit facility incurs an unused commitment fee on any undrawn amount of the $40,000,000 credit line in an amount equal to 0.50% per annum of the unused portion. Under the terms of the Credit Agreement, the future applicable interest rate margins



may vary based on the Loan Parties Total Net Leverage Ratio (as defined therein) in addition to future changes in the underlying market rates for LIBOR and the rate used for base-rate borrowings.

Prepayments

Under the Credit Agreement, prepayments of outstanding principal may be made in permitted increments with a 1.0% penalty for certain prepayments made in connection with repricing transactions. Such premium will be based on the principal amount that is prepaid, subject to the terms of the credit agreements.

Acceleration

The outstanding amount of any loans and any other amounts owing by the Loan Parties under the Credit Agreement may, after the occurrence of an Event of Default (as defined in the Credit Agreement), at the option of Truist, be declared immediately due and payable. Events of Default include, without limitation, the failure of the Loan Parties to pay principal, premium or interest when due under the Credit Agreement, or the failure by the Loan Parties to perform or comply with any term or covenant in the Credit Agreement, in each case, subject to any applicable cure periods provided therein.

Covenants

The Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default, and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the Loan Parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates), and to enter into certain leases.

If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the Loan Parties are required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the Credit Agreement as the ratio of consolidated total debt of the Loan Parties to the Loan Parties Consolidated Adjusted EBITDA (as defined in the Credit Agreement). If applicable, the maximum permitted Total Net Leverage Ratio is (i) 6.50:1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022, (ii) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023, and (iii) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter.

Item 1.02    Termination of Material Definitive Agreement.

Refinancing

Holdings and certain other Loan Parties have previously entered into (A) that certain Credit and Guaranty Agreement, dated as of January 3, 2017, with Goldman Sachs Specialty Lending Group, L.P. (the “Existing Subordinated Term Loan Facility”) and (B) that certain Credit and Guaranty Agreement, dated as of January 3, 2017, with Truist (the “Existing Credit Agreement”). On April 27, 2021, the proceeds from the sale of the Securities and from the Initial Term Loan were used to refinance the Existing Subordinated Term Loan Facility and the Existing Credit Agreement and all outstanding obligations thereunder were repaid in full (or in the case of outstanding undrawn letters of credit, deemed issued under the Credit Agreement), and all commitments and guaranties in connection therewith have been terminated or released (the “Refinancing”).


Item 2.03    Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 in connection with the Credit Agreement is incorporated by reference into this Item 2.03.

Item 3.02    Unregistered Sales of Equity Securities

The information set forth in Item 1.01 in connection with the Purchase Agreement and the Warrants is incorporated by reference into this Item 3.02.

Item 3.03 Material Modification to Rights of Security Holders.




On April 27, 2021, the Company authorized and created 250,000 shares of Senior Preferred Stock, par value $0.001, with a liquidation preference per share equal to $1,000. Of the 250,000 Senior Preferred Shares created, 150,000 were issued on April 27, 2021 on the terms and conditions set forth in the Purchase Agreement.

The terms of the Senior Preferred Shares are more fully described in the Certificate of Designations, which establishes the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Senior Preferred Shares. A Copy of the Certificate of Designations is included as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On April 27, 2021, the Company filed a Certificate of Designations of the Powers, Preferences, Relative, Participating, Optional and Other Special Rights, and Qualifications, Limitations and Restrictions of Senior Preferred Stock (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Senior Preferred Shares. The Certificate of Designations became effective with the Secretary of State of the State of Delaware upon filing.

Capitalized terms used in this Item 5.03 but not defined herein shall have the meanings set forth in the Certificate of Designations.

Security  Senior Preferred Stock, par value $0.001 per share
Ranking, with respect to rights as to as to dividends, distributions, redemptions and payments upon the liquidation, dissolution and winding up of the Company  The Senior Preferred Stock will rank (i) senior to the Common Stock and each other existing or future class or series of capital stock of the Company, except for any Parity Securities or Senior Securities, (ii) on a parity with each other class or series of capital stock hereafter issued in compliance with the terms the Certificate of Designations and which terms expressly provide that it will rank on a parity basis with the Senior Preferred Stock, and (iii) junior to each other class or series of capital stock hereafter issued in compliance with the terms of the Certificate of Designations which terms expressly provide that it will rank senior to the Senior Preferred Stock.
Liquidation Preference  $1,000 per share of Senior Preferred Stock
Dividend  
The initial dividend rate will be equal to the Three-Month LIBOR Rate (subject to a 1.00% floor) plus 12.00% per annum, reset quarterly as provided in the Certificate of Designations.

The Dividend Rate shall increase automatically by (i) 2.00% per annum effective as of the first day of each Dividend Period in respect of which the Company for any reason does not pay cash Dividends at or greater than the Three-Month LIBOR Rate for such Dividend Period plus 5.00% per annum through the final day of such Dividend Period, (ii) 3.00% per annum effective immediately upon the occurrence of and during the continuance of a Preferred Default and (iii) 5.00% per annum effective immediately upon the 120th calendar day following the approval by the Sale Demand Special Committee of a Sale Transaction if all required stockholder approval shall not have been obtained on or prior to such 120th calendar day, plus an additional 5.00% per annum on the 30th calendar day after such 120th calendar day and on the first day of each subsequent 30 calendar day period, which incremental increase(s) shall continue until such time as the Required Stockholder Approval shall have been obtained.



Redemption  
Optional Redemption

Prior to April 27, 2023, the Company may redeem the outstanding Senior Preferred Shares at any time, and from time to time, in whole or in part, for cash at a price equal to 100% of the Liquidation Preference plus any accrued and unpaid Dividends thereon, through and including the applicable redemption date plus the Make-Whole Amount.

On and after April 27, 2023, the Company may redeem the outstanding Senior Preferred Shares at any time, and from time to time, in whole or in part, for cash at the prices (expressed as percentages of the sum of (x) outstanding Liquidation Preference plus (y) any accrued and unpaid Dividends on the Senior Preferred Shares redeemed, through and including the applicable redemption date) indicated in the Certificate of Designations.
  
Mandatory Redemption Upon Change of Control or Liquidation Event

Upon the occurrence of a Change of Control or a Liquidation Event, the Company shall redeem all then outstanding Senior Preferred Shares for cash at the Redemption Price set forth above, as applicable.
CovenantsThe Company will be subject to certain restrictions, including restrictions on its ability to (1) pay dividends, make distributions or repurchase the Company’s capital stock, (2) incur additional indebtedness, (3) make dispositions, (4) make investments or acquisitions or (5) engage in certain transactions with affiliates.
Conversion Rights  None.
Voting  None.
Change of Control  
The Company may not effect a Change of Control without the consent of the holders of more than 50% of the Liquidation Preference of the then issued and outstanding Senior Preferred Stock (which must include the Investors set forth in the Purchase Agreement, if such Investors hold in the aggregate at least 10.0% of the aggregate Liquidation Preference of the then issued and outstanding Senior Preferred Stock).

Upon the occurrence of a Change of Control or a Liquidation Event, the Company shall redeem all then outstanding Senior Preferred Shares for cash at the Redemption Price set forth in the Certificate of Designations, as applicable.

Failure to consummate when due a Mandatory Redemption of the Senior Preferred Stock upon the occurrence of a Change of Control shall afford the Required Holders the right to deliver the Company a written notice (a “Sale Demand”) requesting that the Company commence a process diligently and in good faith to seek to effect a Sale Event. Upon receipt of a Sale Demand, the Company shall promptly engage in a Sale Process in good faith, and subject to the terms of the Certificate of Designations.
Maturity Date  The Senior Preferred Shares has no stated maturity. The Senior Preferred Stock will remain outstanding indefinitely until redeemed in accordance with the terms of the Certificate of Designations or otherwise repurchased by the Company.



A copy of the Certificate of Designations is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing description of the Certificate of Designations does not purport to be complete and is qualified in its entirety by reference to such exhibit.

Forward-Looking Statements
This Current Report on Form 8-K, including the exhibits hereto, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1993, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. The words “believe” “continue,” “could,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. Statements in this communication regarding the Company that are forward-looking, including projections as to the anticipated benefits of the proposed transaction, the impact of the proposed transaction on the Company’s business and future financial and operating results, the amount and timing of synergies from the proposed transaction, and the closing date for the proposed transaction, are based on management’s estimates, assumptions and projections, and are subject to significant uncertainties and other factors, many of which are beyond the Company’s control. These factors and risks include, but are not limited to, (a) the risk that the acquisition of Finxera may not be completed in a timely manner or at all; (b) the failure to satisfy any of the conditions to the consummation of the acquisition of Finxera, including failure to obtain receipt of certain regulatory approvals; (c) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement relating to the acquisition of Finxera; (d) the effect of the announcement or pendency of the proposed transaction on the Company’s business relationships, operating results and business generally; (e) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; (f) risks related to diverting management’s attention from the Company’s ongoing business operations; (g) the outcome of any legal proceedings that may be instituted against the Company related to the acquisition of Finxera or the transactions or agreements contemplated thereunder, (h) unexpected costs, charges or expenses resulting from the proposed transaction; (i) other risks described in the Company’s filings with the SEC, such as its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K; and (j) other risk factors and additional information.

Item 9.01    Financial Statements and Exhibits.


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 hereunto duly authorized.
 



Dated: May 3, 2021 
  
 PRIORITY TECHNOLOGY HOLDINGS, INC.
  
 By: /s/ Michael Vollkommer
 Name: Michael Vollkommer
 Title:   Chief Financial Officer






EX-3.1 2 exhibit31-priorityxcertifi.htm EX-3.1 Document

PRIORITY TECHNOLOGY HOLDINGS, INC.
CERTIFICATE OF DESIGNATIONS
OF
THE POWERS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS,
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF,
OF
SENIOR PREFERRED STOCK
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Priority Technology Holdings, Inc., a Delaware corporation (the “Corporation”), does hereby certify that the Board of Directors of the Corporation (the “Board”), by unanimous written consent dated April 26, 2021, duly approved and adopted the following resolution:
WHEREAS, on the terms and subject to the conditions set forth in the purchase agreement, dated April 27, 2021 (the “Purchase Agreement”), among the Corporation and the investors set forth on Schedule 1 thereto (collectively, the “Investors”), the Investors agreed to purchase and the Corporation agreed to issue and sell (i) $150,000,000 in aggregate liquidation preference of Authorized Initial Senior Preferred Stock (as defined below), (ii) $50,000,000 in aggregate liquidation preference of Authorized Acquisition Senior Preferred Stock (as defined below) and (iii) up to $50,000,000 in aggregate liquidation preference of Authorized Delayed Senior Preferred Stock (as defined below)
RESOLVED, that, pursuant to the authority vested in the Board by the Corporation’s Second Amended and Restated Certificate of Incorporation, the Board does hereby create, authorize and provide for the issuance of, out of the authorized but unissued shares of the preferred stock, par value $.001 per share, of the Corporation, 250,000 shares of a new series of preferred stock with the designation set forth below, and there is hereby stated and fixed the number of shares constituting such series and the powers, preferences and rights, and qualifications, limitations and restrictions, of such series as follows:
Section 1.    Designation. Such new series of preferred stock shall be designated as shares of “Senior Preferred Stock,” par value $.001 per share, of the Corporation (the “Senior Preferred Stock”), and the number of shares constituting such series shall be 250,000, of which 150,000 shares shall be issued on the Initial Closing Date pursuant to the Purchase Agreement (the “Authorized Initial Senior Preferred Stock”), 50,000 of which shall be issued on the Acquisition Closing Date pursuant to the Purchase Agreement (the “Authorized Acquisition Senior Preferred Stock”), and up to 50,000 of which shall be issued on one or more Delayed Closing Dates pursuant to the Purchase Agreement (the “Authorized Delayed Senior Preferred Stock”, and the Authorized Delayed Senior Preferred Stock together with the Authorized Acquisition Preferred Stock, the “Authorized Additional Senior Preferred Stock”).
Section 2.    Ranking. The Senior Preferred Stock ranks, (a) with respect to the payment of dividends and distributions on, and purchase, repurchase or any redemption of, any Capital Stock (provided, however, that nothing in this Section 2 shall prohibit the Corporation from paying a dividend or distribution, or making a purchase, repurchase or redemption, that is permitted pursuant to Section 7 or require the Corporation to pay any cash Dividend on the



Senior Preferred Stock except to the extent that the Board has declared such Dividend) and (b) in the liquidation, dissolution or winding up of, and upon any distribution of the assets of, the Corporation: (i) senior to the Common Stock and each other existing or future class or series of Capital Stock of the Corporation, except for any Parity Securities or Senior Securities (collectively, with the Common Stock (but excluding, for the avoidance of doubt, any Parity Securities or Senior Securities), the “Junior Securities”); (ii) on a parity with each other class or series of Capital Stock of the Corporation hereafter issued in compliance with the terms hereof (including Section 7) and the terms of which expressly provide that it will rank on a parity basis with the Senior Preferred Stock with respect to payment of any such dividends and distributions, such purchase, repurchase or redemption and in any such liquidation, dissolution or winding up of, and upon any such distribution of the assets of, the Corporation (collectively, the “Parity Securities”); and (iii) junior to each other class or series of Preferred Stock or any other Capital Stock of the Corporation hereafter issued in compliance with the terms hereof (including Section 7) and the terms of which expressly provide that it will rank senior to the Senior Preferred Stock with respect to payment of such dividends and distributions, such purchase, repurchase or redemption and in any such liquidation, dissolution or winding up of, and upon any such distribution of the assets of, the Corporation (collectively, the “Senior Securities”).
Section 3.    Maturity. The Senior Preferred Stock has no stated maturity. Shares of Senior Preferred Stock will remain outstanding indefinitely until redeemed in accordance with the terms of this Certificate of Designations or otherwise repurchased by the Corporation. The Corporation shall not be required to set aside funds to redeem or repurchase the Senior Preferred Stock.
Section 4.    Dividends.
(a)Payment and Accrual of Dividends. Dividends (“Dividends”) on the outstanding Senior Preferred Stock (i) shall accrue on a daily basis on the sum of the Liquidation Preference plus the aggregate accrued and unpaid Dividends as of the end of the immediately preceding Dividend Period, in each case, at the Dividend Rate set forth in Section 4(b) below and (ii) shall be cumulative. Dividends shall be payable only in cash and shall be payable on each Dividend Payment Date only when, as and if declared by the Board out of legally available funds for such purpose. Notwithstanding anything to the contrary contained herein, and for the avoidance of doubt; (x) no Dividends may be declared and paid in securities or otherwise “in kind,” (y) no Dividends shall be declared or paid in cash in anticipation of any optional or mandatory redemption of the Senior Preferred Stock pursuant to Section 9 or any liquidation, dissolution or winding up of the Corporation and (z) Dividends will accrue as set forth herein regardless of whether such Dividends have been declared by the Board and whether or not there are any profits, surplus or other funds legally available for the payment thereof. All Dividends paid with respect to shares of the Senior Preferred Stock shall be paid pro rata to the Holders in proportion to the number of shares of Senior Preferred Stock held.
If the Corporation elects to pay Dividends on a Dividend Payment Date in whole or in part in cash, then not less than 10 days prior to such Dividend Payment Date, the Corporation shall notify the Holders in writing of such election; provided that, for the avoidance of doubt, if the Holders are not so notified, such Dividends shall accrue (and be cumulative) but shall not be paid. After the end of each Dividend Period, at such times as the Corporation is required to deliver any financial statements pursuant to Section 13(a)(ii) with respect to the quarterly period that corresponds with such Dividend Period (or in which such Dividend Period occurred), the Corporation shall provide each Holder with a written statement setting forth the aggregate
2


amount of accrued and unpaid Dividends through and including the last day of the applicable Dividend Period with respect to each share of Senior Preferred Stock, including a reasonably detailed calculation thereof and of the applicable Three-Month LIBOR Rate included therein.
Each Dividend paid in cash shall be paid by wire transfer in immediately available funds to the account(s) designated by each Holder that holds shares of Senior Preferred Stock in writing given to the Corporation at least 5 days prior to the Dividend Payment Date.
The record date for Dividends payable on any Dividend Payment Date shall be the close of business on the 15th calendar day immediately preceding such Dividend Payment Date.
(b)Dividend Rate. “Dividend Rate” means a rate per annum equal to the Three-Month LIBOR Rate, reset quarterly as provided herein, subject to Section 16, plus the Applicable Margin; provided that, except as provided in this clause (b), the Dividend Rate shall not exceed the sum of (i) 22.50% per annum, plus (ii) the Non-Cash Pay Rate Increase, if any, plus (iii) the Default Rate Increase, if any, plus (iv) the Forced Sale Default Rate Increase, if any. The Three-Month LIBOR Rate for the initial Dividend Payment Period is 1.00%. The Dividend Rate shall increase automatically by (i) 2.00% per annum effective as of the first day of each Dividend Period in respect of which the Corporation for any reason does not pay cash Dividends (whether or not declared and whether or not there are any profits, surplus or other funds legally available for the payment thereof or such payment is then permitted by applicable law or any instrument or agreement to which it or any of its subsidiaries is a party) at or greater than the Three-Month LIBOR Rate for such Dividend Period plus 5.00% per annum (“Non-Cash Pay Rate Increase”) through the final day of such Dividend Period, (ii) 3.00% per annum effective immediately upon the occurrence of and during the continuance of a Preferred Default (a “Default Rate Increase”) and (iii) 5.00% per annum effective immediately upon the 120th calendar day following the approval by the Sale Demand Special Committee of a Sale Transaction if all required stockholder approval under the DGCL, the Corporation’s Certificate of Incorporation or otherwise to approve such Sale Transaction shall not have been obtained on or prior to such 120th calendar day (the “Required Stockholder Approval”), plus an additional 5.00% per annum on the 30th calendar day after such 120th calendar day and on the first day of each subsequent 30 calendar day period, which incremental increase(s) shall continue until such time as the Required Stockholder Approval shall have been obtained (the “Forced Sale Default Rate Increase”).
(c)    Dividend Payment Date, LIBOR Rate Reset Date, and Dividend Period. A “Dividend Payment Date” shall mean each March 31, June 30, September 30 and December 31. The first Dividend Payment Date and the first LIBOR Rate Reset Date will be June 30, 2021. If a Dividend Payment Date, other than a redemption date, falls on a day that is not a Business Day, the Dividend Payment Date will be postponed to the next day that is a Business Day.
A “LIBOR Rate Reset Date” shall mean each March 31, June 30, September 30 and December 31. The first LIBOR Rate Reset Date will be June 30, 2021. If any LIBOR Rate Reset Date falls on a day that is not a Business Day, the LIBOR Rate Reset Date will be postponed to the next day that is a Business Day, except that if that Business Day is in the next succeeding calendar month, the LIBOR Rate Reset Date will be the immediately preceding Business Day.
A “Dividend Period” shall mean (x) April 27, 2021 through and including June 29, 2021 and (y) thereafter, each: (i) June 30 through and including September 29; (ii) September
3


30 through and including December 30; (iii) December 31 through and including March 30; and (iv) March 31 through and including June 29.
(d)    Determination of Three-Month LIBOR Rate. The Holder Representative shall determine the Three-Month LIBOR Rate as of each LIBOR Rate Reset Date, except as set forth below or in Section 16. Promptly upon each such determination, the Holder Representative will inform the Corporation and, at the request of any Holder, such Holder or, in certain circumstances described below or in Section 16, the Holder Representative will inform the Corporation, of its determination of the Three-Month LIBOR Rate as of such LIBOR Rate Reset Date for the next Dividend Period.
The Three-Month LIBOR Rate will be reset on each LIBOR Rate Reset Date and will be the Three-Month LIBOR Rate applicable from such LIBOR Rate Reset Date (or, in the case of any day preceding the first LIBOR Rate Reset Date, the Three-Month LIBOR Rate determined as described below on April 23, 2021) to the next succeeding LIBOR Rate Reset Date.
The amount of Dividends accrued for any Dividend Period will be determined by the Corporation and will be computed by multiplying the Dividend Rate for that Dividend Period by a fraction, the numerator of which will be the actual number of days elapsed during that Dividend Period (determined by including the first day of the Dividend Period and excluding the last day and on the basis of twelve 30-day months), and the denominator of which will be 360, and by multiplying the result by the sum of (i) the Liquidation Preference plus (ii) the aggregate accrued and unpaid Dividends as of the last day of the immediately preceding Dividend Period.
Dividends shall accrue from and including the date of original issuance to but excluding the first Dividend Payment Date. Thereafter, Dividends will accrue from and including the last Dividend Payment Date to but excluding the next succeeding Dividend Payment Date.
(e)    Dividend Rate Calculation. The “Three-Month LIBOR Rate” means, for each Dividend Period beginning on a LIBOR Rate Reset Date (or April 27, 2021, in the case of the initial Dividend Period), the rate determined in accordance with the following provisions:
(1)    On the related LIBOR Rate Determination Date, the Holder Representative will determine the Three-Month LIBOR Rate, which will be the rate for deposits in U.S. Dollars having an index maturity of three months which appears on the Reuters Page LIBOR01 (or on such other page as may replace the Reuters Page LIBOR01 on that service) or, if on such LIBOR Rate Determination Date, the Three-Month LIBOR Rate does not appear or is not available on the designated Reuters Page LIBOR01 (or on such other page as may replace the Reuters Page LIBOR01 on that service), the Bloomberg L.P. page “BBAM” (or on such other page as may replace the Bloomberg L.P. page “BBAM” on that service), as of 11:00 a.m., London time, on the LIBOR Rate Determination Date; and
(2)    If the Three-Month LIBOR Rate cannot be determined as described above on the LIBOR Rate Determination Date, the Holder Representative will request the principal London offices of four major reference banks in the London Inter-Bank Market selected by the Holder Representative to provide it with their offered quotations for deposits in U.S. Dollars for the period of three months, beginning on the applicable LIBOR Rate Reset Date, to prime banks in the London Inter-Bank Market at
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approximately 11:00 a.m., London time, on that LIBOR Rate Determination Date and in a principal amount of not less than $1,000,000. If at least two quotations are provided, then the Three-Month LIBOR Rate will be the average (rounded, if necessary, to the nearest one hundredth (0.01) of a percent) of those quotations. If fewer than two quotations are provided, then the Three-Month LIBOR Rate will be the average (rounded, if necessary, to the nearest one hundredth (0.01) of a percent) of the rates quoted at approximately 11:00 a.m., New York City time, on the LIBOR Rate Determination Date by three major banks in New York City selected by the Holder Representative for loans in U.S. Dollars to leading European banks, having a three-month maturity and in a principal amount of not less than $1,000,000. If the banks selected by the Holder Representative are not providing quotations in the manner described by this paragraph, the Three-Month LIBOR Rate for the Dividend Period following the LIBOR Rate Determination Date will be the Three-Month LIBOR Rate in effect on the immediately prior LIBOR Rate Determination Date;
provided that notwithstanding anything to the contrary, in no event shall the Three Month LIBOR Rate be less than 1.00% per annum.
Notwithstanding clauses (1) and (2) of the preceding paragraph, if the Holder Representative or the Corporation reasonably determines on or prior to the relevant LIBOR Rate Determination Date that a Benchmark Transition Event and its related Benchmark Related Date have occurred with respect to the Three-Month LIBOR Rate (or the then-current Benchmark, as applicable), then the provisions of Section 16 will thereafter apply to all determinations of the Dividend Rate. In accordance with Section 16, after a Benchmark Transition Event and its related Benchmark Replacement Date have occurred, the amount of Dividends that will be accrue for each Dividend Period will be an annual rate equal to the sum of the Benchmark Replacement and the Applicable Margin. However, if the Holder Representative or the Corporation reasonably determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the then-current Benchmark, but for any reason the Benchmark Replacement has not been determined as of the relevant LIBOR Rate Determination Date, the Dividend Rate for the applicable Dividend Period will be equal to the Dividend Rate for the immediately preceding Dividend Period.
Absent willful misconduct, bad faith or manifest error, the calculation of the applicable Three-Month LIBOR for each Dividend Period by the Holder Representative shall be final and binding on the Corporation and the Holders and the calculation of the applicable Dividend Rate for each Dividend Period by the Corporation shall be final and binding on the Holders.
(f)    Rounding. All percentages resulting from any calculation of any Dividend Rate will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 3.456789% (or .03456789) being rounded to 3.45679% (or .0345679)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).
Section 5.    Liquidation Event. Upon the occurrence of a Liquidation Event, each share of Senior Preferred Stock shall be entitled to receive and to be paid out of the assets of the Corporation legally available for distribution to the Corporation’s stockholders, before any distribution or payment may be made to a holder of any Junior Securities by reason of its ownership thereof, an amount per share of Senior Preferred Stock in cash in immediately available funds equal to the Redemption Price payable at the time of such Liquidation Event
5


pursuant to Section 9(b). If upon any such Liquidation Event, the assets of the Corporation legally available for distribution to the Corporation’s stockholders are insufficient to pay the Holders the full amount of such Redemption Price for each outstanding share of Senior Preferred Stock and the full amount (if any) to which the holders of any Parity Securities are entitled, the Holders and the holders of such Parity Securities, as applicable, will share ratably in any such distribution of the assets of the Corporation in proportion to the full respective amounts (if any) to which they are entitled with respect to their shares of Senior Preferred Stock and Parity Securities upon such Liquidation Event. After indefeasible payment to the Holders of the full amount of such Redemption Price to which they are entitled, the Holders as such will have no right or claim to any of the assets of the Corporation. No holder of Junior Securities shall receive any cash or other consideration upon a Liquidation Event by reason of its ownership thereof unless the full amount of such Redemption Price to which Holders are entitled in respect of all outstanding Senior Preferred Stock and any amounts to which any holders of Parity Securities are entitled upon such Liquidation Event have been paid in full in cash in immediately available funds.
Section 6.    Voting Rights. Subject to the express provisions of this Certificate of Designations, except to the extent required by the DGCL, the Senior Preferred Stock shall not have any voting rights.
Section 7.    Protective Provisions. For so long as any Senior Preferred Stock is outstanding or any Person shall have any obligation to purchase Senior Preferred Stock pursuant to the Purchase Agreement, the Corporation shall not (and, to the extent such restriction applies to any Subsidiary, shall not cause or permit any of its Subsidiaries to) effect any of the following without the prior consent of the Required Holders, voting or consenting, as the case may be, as one class, in person or by proxy, either in writing or by resolution adopted at an annual or special meeting (and any such act or transaction entered into without such consent and approval shall be null and void ab initio and of no force and effect):
(i)the entry into by the Corporation of any voluntary insolvency, dissolution, reorganization of the Corporation or any unwinding of the business of the Corporation;
(ii)the authorization, creation, classification or reclassification, increase in the number of authorized or issued shares, or issuance of, any Capital Stock, in each case, by the Corporation, other than (x) Junior Securities (other than Disqualified Capital Stock) and (y) issuances of the Authorized Additional Senior Preferred Stock in accordance with the terms of this Certificate of Designations and the Purchase Agreement;
(iii)the reclassification or recapitalization of any Capital Stock of the Corporation or any of its Subsidiaries by any means (including by merger or consolidation) or amendment or other alteration (including by merger or consolidation) of the Corporation’s certificate of incorporation or by-laws or this Certificate of Designations that adversely affects the rights or privileges of the Senior Preferred Stock, including any such amendment or alteration that (A) adversely affects the preferential ranking of the Senior Preferred Stock, or (B) adversely affects the powers, preferences or special rights of the Senior Preferred Stock; provided that no such amendment shall (i) decrease the Dividend Rate, the Non-Cash Pay Rate Increase, the Default Rate Increase or the Forced Sale Default Rate Increase, (ii) reduce the Redemption Price or (iii) extend the Sale Trigger Date, in each case without the prior written consent of the Supermajority Holders;
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(iv)any direct or indirect Transfer by the Corporation’s Controlling Stockholders of Common Stock of the Corporation unless such Transfer complies with Section 2 of the Transfer Restriction and Voting Agreement, dated as of April 27, 2021, among the Controlling Stockholders and the Investors parties thereto;
(v)any Change of Control, Sale Event, merger, consolidation, binding share exchange, voluntary liquidation, dissolution or winding-up, recapitalization or transfer of all or substantially all of the assets of the Corporation and its Subsidiaries (on a consolidated basis), unless in connection therewith the Senior Preferred Stock is redeemed in full in cash at the Redemption Price pursuant to Section 9(a) below;
(vi)any action for which a separate vote of the Holders is required by applicable law;
(vii)any action by the Corporation directly or indirectly for the purpose of causing the Common Stock to no longer be listed on any of the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange, or any failure by the Corporation to take any commercially reasonable step or steps within its reasonable control in order to prevent the Common Stock from no longer being so listed;
(viii)any action that would cause the Corporation to cease to be treated as a domestic C corporation for U.S. federal income tax purposes;
(ix)the authorization, creation, classification or reclassification, increase in the number of authorized or issued shares, or issuance of, any preferred stock of any Subsidiary of the Corporation, unless such preferred stock is held by the Corporation or a wholly-owned Restricted Subsidiary of the Corporation, in each case, other than the issuance of preferred stock by an Unrestricted Subsidiary to one or more sellers of portfolio assets in a financing portfolio acquisition permitted by clause (xiii)(4) below;
(x)any direct or indirect creation, incurrence, assumption, or guaranty or otherwise becoming or remaining directly or indirectly liable with respect to any Indebtedness for Borrowed Money or Disqualified Capital Stock by the Corporation or any of its Restricted Subsidiaries or the issuance of Disqualified Capital Stock after the issuance of the initial issuance of the Senior Preferred Stock other than (A) Indebtedness for Borrowed Money or Disqualified Capital Stock of the Corporation or any of its Restricted Subsidiaries in existence on the Initial Closing Date, (B) the incurrence by the Borrowers (as defined in the Credit Agreement as in effect on the Initial Closing Date) of the Delayed Draw Term Loans in an aggregate amount not to exceed $290,000,000 in accordance with the terms of the Credit Agreement as in effect on the Initial Closing Date or as amended, provided that such amendments taken as a whole are not materially adverse to (I) the Corporation or its subsidiaries or (II) the Holders (for the avoidance of doubt, any amendment to, or modification or waiver of, any leverage-based condition to the incurrence of the Delayed Draw Term Loans under the Credit Agreement as in effect on the Initial Closing Date shall be deemed to be materially adverse to the Holders), (C) the incurrence by the Borrowers of Revolving Loans (other than the incurrence of any increase in Revolving Commitments or any additional or other incremental revolving facility not committed to as of the Initial Closing Date), (D) the incurrence by the Borrowers and their Restricted Subsidiaries of Indebtedness for Borrowed Money or the issuance of Disqualified Capital Stock not to exceed $10,000,000 in aggregate principal amount at any one time outstanding and (E) so long as no Preferred Default, Preferred
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Event of Default or Bankruptcy Event shall have occurred and be continuing or would immediately result therefrom, the incurrence by the Borrowers and their Restricted Subsidiaries of additional Indebtedness for Borrowed Money or the issuance of Disqualified Capital Stock if after giving Pro Forma Effect thereto (without netting the cash proceeds from such Indebtedness then proposed to be incurred and, in the case of any increase in Revolving Commitments or commitments under any additional or other incremental revolving facility not committed to as of the Initial Closing Date, assuming any such increase in commitments or additional or incremental facility is fully drawn) the Total Net Leverage Ratio calculated on a Pro Forma Basis as of the end of most recently ended Test Period is less than or equal to 4.25:1.00 (for the avoidance of doubt, even if the Borrowers and/or one or more of their Restricted Subsidiaries would otherwise have capacity for such Indebtedness for Borrowed Money or Disqualified Capital Stock under the Credit Agreement, they may not incur such Indebtedness for Borrowed Money or issue such Disqualified Capital Stock unless such incurrence satisfies one of clauses (A) through (E)), and satisfaction of such Total Net Leverage Ratio test shall be evidenced by a certificate from an Authorized Officer of the Corporation demonstrating such satisfaction calculated in reasonable detail reasonably satisfactory to the Required Holders;
(xi)[reserved];

(xii)any direct or indirect declaration, order, payment, making or setting apart, or agreement to declare, order, pay, make or set apart, any sum for any Restricted Payment in each case by the Corporation or any of its Restricted Subsidiaries except for: (1) Restricted Payments by a Restricted Subsidiary to the Corporation or any other Restricted Subsidiary of the Corporation that is the direct parent of such Restricted Subsidiary (and, in the case of a Restricted Payment by a non-wholly-owned Restricted Subsidiary, to the Corporation and any other Restricted Subsidiary and to each other owner of Capital Stock of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Capital Stock); (2) to the extent constituting Restricted Payments, (A) so long as no Preferred Default, Preferred Event of Default or Bankruptcy Event shall have occurred and be continuing or would immediately result therefrom, the payment of directors’ fees (other than pursuant to the TCP Director Agreement) by the Corporation consistent with the Corporation’s historical practice and (B) payments under the TCP Director Agreement (1) in the form of Cash, in an amount per Fiscal Year not to exceed the greater of (x) $1,5000,000 and (y) 2.5% of Consolidated Adjusted EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) and (2) in the form of Common Stock of the Corporation, in an unlimited amount; provided that, in each case of (1) and (2), (x) the terms of such compensation are not, taken as a whole, less favorable in any material respect to the Corporation than those that might be obtained at the time in a comparable arm’s-length transaction from a Person who is not an Affiliate and (y) such compensation has been approved by at least a majority of the members of the compensation committee of the Board (including a majority of the disinterested members of the compensation committee); (3) so long as no Preferred Event of Default or Bankruptcy Event shall have occurred and be continuing or would immediately result therefrom, the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Corporation held by any current or former officer, director, employee or consultant of the Corporation (other than TCP), or his or her estate, spouse, former spouse, family member or Affiliate of the foregoing (or for the payment of principal or interest on any Indebtedness issued in connection with such repurchase, redemption or other acquisition) in each case, pursuant to any equity subscription agreement, stock
8


option agreement, shareholders’ agreement or other agreement or benefit plan of any kind; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock in any Fiscal Year may not exceed the greater of (x) $10,000,000 and (y) 15.0% of Consolidated Adjusted EBITDA determined (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period (with unused amounts permitted to be carried forward to the next succeeding Fiscal Year, subject to a maximum in any Fiscal Year not to exceed the greater of (x) $15,000,000.00 and (y) 22.5% of Consolidated Adjusted EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis)); (4) payments in respect of withholding or similar taxes or exercise prices resulting from the exercise or settlement of equity awards; (5) so long as no Preferred Default, Preferred Event of Default or Bankruptcy Event shall have occurred and be continuing or would immediately result therefrom, the Corporation may make Restricted Payments not to exceed $5,000,000 in the aggregate from and after the Initial Closing Date; (6) the redemption or repurchase of Capital Stock of a Restricted Subsidiary of the Corporation held by Persons other than the Corporation or any Restricted Subsidiary or Affiliate of the Corporation either (A) in exchange for Common Stock of the Corporation or (B) with the net cash proceeds from the issuance and sale after the Initial Closing Date (other than (I) any such issuance to the Corporation or a Restricted Subsidiary of the Corporation, (II) the Equity Contribution (as defined in the Purchase Agreement) or (III) Capital Stock the proceeds of which are applied for any other purpose hereunder) of Junior Securities; and (7) the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Corporation; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock in any Fiscal Year may not exceed the greater of (x) $5,000,000 and (y) 5.0% of Consolidated Adjusted EBITDA determined (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period and provided, further, that immediately before and after giving effect to such repurchase, redemption or acquisition, the Total Preferred Net Leverage Ratio calculated on a Pro Forma Basis as of the end of most recently ended Test Period is less than or equal to 4.50:1.00; provided, however that, notwithstanding the foregoing clauses (1)-(7), from and after the sixth anniversary of the Initial Closing Date, no Restricted Payments may be made (x) by the Corporation or (y) to the Corporation unless, in the case of this clause (y) such Restricted Payments are made in cash and the proceeds thereof are immediately utilized by the Corporation to pay Dividends on the Senior Preferred Stock in accordance with Section 2 hereof or redeem the Senior Preferred Stock in accordance with Section 9 hereof;
(xiii)the direct or indirect making or ownership of any Investment by the Corporation or any of its Restricted Subsidiaries in any Person, including, without limitation, a Joint Venture except for: (1) Investments in Cash and Cash Equivalents; (2) so long as no Preferred Event of Default or Bankruptcy Event then exists or would result therefrom, Investments not to exceed an aggregate amount equal to the greater of (x) $19,000,000 and (y) 30.0% of Consolidated Adjusted EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis); (3) Investments (x) consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, (y) in any Securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors, and (z) consisting of deposits, prepayments and other credits to suppliers, lessors or utilities or for workers’ compensation made in the ordinary course of business consistent with the past practices of the Corporation and its Subsidiaries; (4) Investments by the Corporation or any Restricted Subsidiary in the Corporation or any other Restricted Subsidiary; (5) to the extent constituting an Investment, the reinvestment of Net Asset
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Sale Proceeds (as defined in the Credit Agreement as in effect on the Initial Closing Date) (arising from any Asset Sale) to repair, replace or restore any property in respect of which such Net Asset Sale Proceeds (as defined in the Credit Agreement as in effect on the Initial Closing Date) were paid or to reinvest in assets that are otherwise useful in the business of any the Corporation or any Restricted Subsidiary; (6) loans and advances to officers, employees and directors of the Corporation and its Restricted Subsidiaries (other than TCP) made (x) in the ordinary course of business for bona fide business purposes (including travel and relocation) (including any re-financings of such loans after the Initial Closing Date) in an aggregate amount not to exceed $5,000,000 and (y) in connection with such Person’s purchase of Capital Stock of the Corporation or any direct or indirect parent thereof; provided that no cash is actually advanced pursuant to this clause (y) unless immediately repaid; (7) Investments made to consummate Permitted Acquisitions; provided that the aggregate consideration (whether in cash, securities, indebtedness or otherwise and including the maximum possible liability in the case of contingent payments) paid or payable (x) for any individual Permitted Acquisition shall not exceed the greater of $50,000,000 and 33% of Consolidated Adjusted EBITDA determined (on a Pro Forma Basis) as of the last day of the most recently ended Test Period and (y) for all Permitted Acquisitions from and after the Initial Closing Date shall not exceed the greater of $100,000,000 and 66% of Consolidated Adjusted EBITDA determined (on a Pro Forma Basis) as of the last day of the most recently ended Test Period (in the case of this clause (y), excluding any portion of such consideration paid in the form of Common Stock or funded with the proceeds of the sale of Common Stock, in each case issued after the Initial Closing Date (other than (I) any such issuance to the Corporation or a Restricted Subsidiary of the Corporation, (II) the Equity Contribution (as defined in the Purchase Agreement) or (III) Capital Stock the proceeds of which are applied for any other purpose hereunder)), and no such Permitted Acquisition shall be in a business not primarily directly or indirectly part of the payments or integrated software industry in North America or any other region in which the Corporation then operates or which facilitates any Restricted Industries; (8) loans, guarantees of loans, advances, and other extensions of credit to current and former officers, directors, employees, and consultants of the Corporation (other than TCP) for the purpose of permitting such Persons to purchase Capital Stock of the Corporation (or any direct or indirect parent thereof) in an aggregate amount not to exceed $5,000,000 at any time; provided that the amount of such loan, advance and other extension of credit shall be promptly contributed to the Common Stock of the Corporation; (9) Permitted ISO Loans (as defined in the Credit Agreement as in effect in the Initial Closing Date); (10) Investments under Interest Rate Agreements; (11) Permitted Joint Venture Investments (as defined in the Credit Agreement as in effect on the Initial Closing Date) and Investments in Unrestricted Subsidiaries made to consummate financing portfolio acquisitions in an aggregate amount outstanding at any one time not to exceed 35% of Consolidated Adjusted EBITDA determined (on a Pro Forma Basis) as of the last day of the most recently ended Test Period, so long as immediately before and after giving effect to such Investment, the Total Preferred Net Leverage Ratio calculated on a Pro Forma Basis as of the end of most recently ended Test Period is less than or equal to 6.25:1.00, and satisfaction of such test shall be evidenced by a certificate from an Authorized Officer of the Corporation demonstrating such satisfaction calculated in reasonable detail reasonably satisfactory to the Required Holders; provided that (x) all Indebtedness of Unrestricted Subsidiaries shall be non-recourse to the Corporation or any of its other Subsidiaries and (y) no Investments made pursuant to this clause (11) in any individual Unrestricted Subsidiary (determined on a consolidated basis with its respective Subsidiaries) shall exceed 10% of Consolidated Adjusted EBITDA determined at the time of such Investment (on a Pro
10


Forma Basis) as of the last day of the most recently ended Test Period; (12) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business; (13) Investments to the extent that payment therefor is made solely with Capital Stock of the Corporation to the extent not resulting in a Change of Control; (14) Investments constituting nonCash consideration received by the Corporation or any of its Subsidiaries in connection with permitted Asset Sales and other sales and dispositions permitted under Section 7(xv); (15) Investments of a Restricted Subsidiary acquired after the Initial Closing Date or of a corporation or other Person merged into the Corporation or merged into or consolidated with a Restricted Subsidiary to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation; (16) Investments made in connection with the Transactions; (17) any Investment in a Receivables Subsidiary (as defined in the Credit Agreement as in Effect on the Initial Closing Date) or any Investment by a Receivables Subsidiary (as defined in the Credit Agreement as in Effect on the Initial Closing Date) in any other Person in connection with a Qualified Receivables Financing (as defined in the Credit Agreement as in Effect on the Initial Closing Date), including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing (as defined in the Credit Agreement as in Effect on the Initial Closing Date) or any related Indebtedness; (18) Investments described in Schedule 7(xiii)(18) to the Purchase Agreement (including renewals and extensions of any such Investment to the extent not involving any new or additional Investments other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay inkind securities, in each case, pursuant to the terms of such Investments as in effect on the Initial Closing Date); (19) Investments, other than Permitted Acquisitions, made with the proceeds of Permitted Stock Issuances (other than (I) any such issuance to the Corporation or a Restricted Subsidiary of the Corporation, (II) the Equity Contribution (as defined in the Purchase Agreement) or (III) Capital Stock the proceeds of which are applied for any other purpose hereunder); and (20) any Investment permitted pursuant to Section 6.07(s) of the Credit Agreement as in effect on the Initial Closing Date , so long as immediately before and after giving effect to such Investment, the Total Preferred Net Leverage Ratio calculated on a Pro Forma Basis as of the end of the most recently ended Test Period is no greater than 6.25:1.00;
(xiv)[reserved];
(xv)the conveyance, sale, leasing or sub-leasing (as lessor or sublessor), exchange, transfer or other disposition by the Corporation or any of its Restricted Subsidiaries of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired, or acquire by purchase or otherwise (other than purchases or other acquisitions of inventory, materials and equipment and Consolidated Capital Expenditures in the ordinary course of business) the business, property or fixed assets of, or Capital Stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person, except: (1) (I) any Restricted Subsidiary may dispose of any of its assets (upon voluntary liquidation or otherwise) to the Corporation or to another Restricted Subsidiary and (II) sales, leases, licenses or other dispositions of assets that do not constitute Asset Sales pursuant to clauses (i) through (vi) of the definition of “Asset Sale”; (2) the Corporation and the Restricted Subsidiaries may make Asset Sales; provided (A) the consideration received for such assets shall be in an amount at least equal to the fair
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market value thereof (determined in good faith by the Corporation), (B) with respect to Asset Sales pursuant to this clause (2) for an aggregate purchase price in excess of $10,000,000 in any Fiscal Year, at least 75% of the purchase price for such assets shall be paid to the Corporation or such Restricted Subsidiary in Cash or Cash Equivalents; provided, however, that, for the purposes of this clause (2), the following shall be deemed to be cash: (I) any liabilities (as shown on the Corporation’s most recent balance sheet provided hereunder or in the footnotes thereto) of the Corporation or such Restricted Subsidiary that are assumed by the transferee with respect to the applicable Asset Sale and for which the Corporation and all of its Restricted Subsidiaries shall have been validly released by all applicable creditors in writing, (II) any securities received by the Corporation or the applicable Restricted Subsidiary from such transferee that are converted by the Corporation or such Restricted Subsidiary into Cash or Cash Equivalents (to the extent of the Cash or Cash Equivalents received) within ninety (90) days following the closing of the applicable Asset Sale, and (III) aggregate non-Cash consideration received by the Corporation or the applicable Restricted Subsidiary having an aggregate fair market value (determined as of the closing of the applicable Asset Sale for which such non-Cash consideration is received) not to exceed the greater of (x) $6,000,000 and (y) 10.0% of Consolidated Adjusted EBITDA at any time, (C) the Net Asset Sale Proceeds thereof shall be applied to prepay the Loans (as defined in the Credit Agreement) to the extent required by Section 2.13(a) of the Credit Agreement and (D) at the time of such Asset Sale, no Preferred Event of Default or Bankruptcy Event shall exist or would result from such Asset Sale (other than any such Asset Sale made pursuant to a legally binding commitment entered into at a time when no Preferred Event of Default or Bankruptcy Event has occurred and is continuing); (3) (x) a sale, assignment or other transfer of Receivables Assets (as defined in the Credit Agreement as in effect on the Initial Closing Date), or participations therein, and related assets to a Receivables Subsidiary in a Qualified Receivables Financing (as defined in the Credit Agreement as in effect on the Initial Closing Date) and (y) a sale, assignment or other transfer of Receivables Assets (as defined in the Credit Agreement as in effect on the Initial Closing Date), or participations therein, and related assets by a Receivables Subsidiary (as defined in the Credit Agreement as in effect on the Initial Closing Date) in a Qualified Receivables Financing (as defined in the Credit Agreement as in effect on the Initial Closing Date); (4) the lapse of registered immaterial intellectual property of the Corporation or any of its Restricted Subsidiaries that is no longer used or useful in their business; (5) the settlement or write-off of accounts receivable or sale of overdue accounts receivable for collection in the ordinary course of business consistent with past practice; (6) leases, licenses or sublicenses of real or personal property in the ordinary course of business and to the extent not otherwise expressly prohibited by this Certificate of Designations or the other Preferred Equity Documents; (7) the disposition of property which constitutes, or which is subject to, a casualty event or condemnation, in each case, so long as the proceeds thereof are applied in accordance with the terms of the Credit Agreement; (8) the sale or other disposition of a nominal amount of Capital Stock in any Restricted Subsidiary in order to qualify members of the board of directors or equivalent governing body of such Restricted Subsidiary to the extent required by applicable law; (9) the unwinding or settlement of any Interest Rate Agreement incurred in accordance with Section 7(x) pursuant to its terms; (10) cancellation of any intercompany Indebtedness among the Corporation and any of its Restricted Subsidiaries; (11) the termination, surrender or sublease of a real estate lease of the Corporation or any of its Restricted Subsidiaries that is no longer used or useful in its business in the ordinary course of its business; (12) any sale of Capital Stock in, or Indebtedness or other securities of, an Unrestricted Subsidiary and (13) Asset Sales of Permitted Joint Venture
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Investments to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding agreements;
(xvi)[reserved];
(xvii)the entry into or permitting to exist, directly or indirectly, any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) by the Corporation or any of its Restricted Subsidiaries with any of their Affiliates; provided that the Corporation and the Restricted Subsidiaries may enter into or permit to exist any such transaction if the terms of such transaction are not, taken as a whole, less favorable in any material respect to the Corporation or such Restricted Subsidiary, as the case may be, than those that might be obtained at the time in a comparable arm’s-length transaction from a Person who is not an Affiliate; provided, further, that the foregoing restrictions shall not apply to (1) (i) any transaction between or among the Corporation and any wholly-owned Restricted Subsidiaries and (ii) transactions between or among wholly-owned Restricted Subsidiaries; (2) transactions, arrangements, fees reimbursements and indemnities specifically and expressly permitted between or among such parties under this Certificate of Designations or any other Preferred Equity Document; (3) reasonable compensation arrangements for members of the board of directors (or similar governing body), officers and other employees (in each case other than TCP) of the Corporation and its Restricted Subsidiaries entered into in the ordinary course of business; (4) Restricted Payments permitted by Section 7(xii), (5) Investments permitted by Section 7(xiii); (6) Permitted Stock Issuances; (7) the existence of, and the performance by the Corporation or any Restricted Subsidiary of its obligations under the terms of, any Organizational Document or security holders agreement (including any purchase agreement related thereto) to which it is a party on the Initial Closing Date and set forth on Schedule 3.29 of the Purchase Agreement; and (8) payments under the TCP Director Agreement in an amount not to exceed the amount permitted under Section 7(xii)(2)(B);
(xviii)engaging in any business other than the businesses engaged in by the Corporation or such Restricted Subsidiary on the Initial Closing Date and businesses reasonably related, ancillary or complementary thereto or reasonable extensions of any of the foregoing;
(xix)notwithstanding anything to the contrary in this Section 7, (1) the incurrence, directly or indirectly, by the Corporation of any Indebtedness or any other obligation or liability whatsoever other than liabilities under engagement letters, retention letters and other similar agreements with accounting firms, law firms and corporate service companies and other similar agreements and contracts entered into the ordinary course of its business, customary agreements in connection with the establishment and maintenance of deposit accounts and employee benefit plans and programs, and non-consensual obligations permitted hereunder; (2) the creation or suffering to exist by the Corporation of any Lien upon any property or assets now owned or hereafter acquired by it other than non-consensual Liens; (3) the engaging by the Corporation in any business or activity or own any assets other than (i) holding one hundred percent (100%) of the Capital Stock of Holdings; (ii) performing its obligations and activities incidental thereto; (iii) the maintenance of its existence; (iv) selling Capital Stock pursuant to Permitted Stock Issuances and entering into agreements and other documents not prohibited by this Certificate of Designations to effectuate such sale and issuance; (v) its participation in
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tax, accounting and other administrative matters as a member of the consolidated group of the Corporation and its Subsidiaries; (vi) incurring fees, costs and expenses relating to overhead and general operations including professional fees for legal, tax and accounting issues; (vii) providing indemnification to officers and directors; (viii) engaging in activities expressly permitted to be conducted by the Corporation hereunder; and (ix) to make or pay any Restricted Payments permitted by Section 7(xii); (4) any consolidation of the Corporation with or merger with or into, or conveyance, transfer, leasing or licensing of all or substantially all its assets to, any Person (except as permitted by Section 7(v); (5) the sale or other disposition by the Corporation of any Capital Stock of any of its directly-owned Restricted Subsidiaries (except as permitted by Section 7(xv)); (6) the creation or acquisition by the Corporation of any Restricted Subsidiary or the making or ownership by the Corporation of any Investment in any Person other than Cash Equivalents and as permitted by Section 7(xiii); or (7) any failure by the Corporation to hold itself out to the public as a legal entity separate and distinct from all other Persons;
(xx)any change to the Fiscal Year-end of the Corporation from December 31, unless required by applicable law, or any change to the Fiscal Year of a Restricted Subsidiary other than to conform its Fiscal Year to that of the Corporation; or
(xxi)the authorization or entry into any agreement to do or consenting to, in each case, any of the foregoing.
Section 8.    Remedies for Breach.
(a)The increase in the dividend rate provided for in the definition of “Default Rate Increase” and the exercise of the rights set forth in Section 10, in each case, shall not be the exclusive remedy at law or in equity of the Holders for any Preferred Default and shall in no way be deemed a waiver of such Preferred Default or be deemed to validate any action underlying any such Preferred Default.
(b)The various provisions set forth herein are for the benefit of the Holders and shall be enforceable by them, including by one or more actions for specific performance. The Corporation acknowledges that the subject matter of this Certificate of Designations is unique and that the Holders would be damaged irreparably in the event that any of the provisions of this Certificate of Designations is not performed in accordance with its specific terms or otherwise is breached, and that remedies at law would not be adequate to compensate such other parties not in default or in breach. Accordingly, the Corporation agrees that the Holders shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Certificate of Designations and to enforce specifically the terms and provisions of this Certificate of Designations in addition to any other remedy to which they may be entitled, at law or in equity. The Corporation waives any defense that a remedy at law is adequate and any requirement to post bond or provide similar security in connection with actions instituted for injunctive relief or specific performance of this Certificate of Designations. Except as expressly set forth herein, all remedies available under this Certificate of Designations, at law, in equity or otherwise, shall be deemed cumulative and not alternative or exclusive of other remedies. The exercise by any Holder of a particular remedy shall not preclude the exercise of any other remedy.
Section 9.    Redemption and Repurchases.
(a)    Optional Redemption.
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(i)Prior to April 27, 2023, the Corporation may redeem the outstanding shares of Senior Preferred Stock at any time, and from time to time, in whole or in part, for cash at a price equal to 100% of the Liquidation Preference plus any accrued and unpaid Dividends thereon, through and including the applicable redemption date plus the Make-Whole Amount.
(ii)On and after April 27, 2023, the Corporation may redeem the outstanding shares of Senior Preferred Stock at any time, and from time to time, in whole or in part, for cash at the prices (expressed as percentages of the sum of (x) outstanding Liquidation Preference plus (y) any accrued and unpaid Dividends on the shares of Senior Preferred Stock redeemed, through and including the applicable redemption date) indicated below, if redeemed during the applicable period indicated below:
Period     Percentage
On and after April 27, 2023 and to, but not
including, April 27, 2024……………………………………………….    102.00%    
On and after April 27, 2024      100.00%
In the event that at any time fewer than all of the outstanding shares of Senior Preferred Stock are to be redeemed pursuant to clause (i) or (ii) above, (x) the selection of the shares to be redeemed shall be made pro rata in proportion to the number of shares held by each Holder, (y) the minimum amount of Liquidation Preference of shares of Senior Preferred Stock shall be at least $25,000,000 and (z) after giving effect to the redemption at least $75,000,000 in Liquidation Preference of Senior Preferred Stock shall remain outstanding.
(b)Mandatory Redemption Upon Change of Control or Liquidation Event. Upon the occurrence of a Change of Control or a Liquidation Event, the Corporation shall redeem all then outstanding shares of Senior Preferred Stock for cash at the Redemption Price set forth in Section 9(a)(i) or 9(a)(ii), as applicable, above corresponding to the timing of the occurrence of such Change of Control or Liquidation Event. If applicable law does not permit the Corporation to consummate the redemption described in this Section 9(b) in connection with a Change of Control or Liquidation Event, the Corporation shall not consummate the Change of Control or Liquidation Event unless at the closing thereof all then outstanding shares of Senior Preferred Stock are purchased from the Holders (by an affiliate of the Corporation or a third party) for cash at the Redemption Price set forth in Section 9(a)(i) or 9(a)(ii), as applicable, above corresponding to the timing of the occurrence of such Change of Control or Liquidation Event (such mandatory redemption or purchase described in this Section 9(b), as applicable, a “Mandatory Redemption”).
(c)Notice of Redemption. The Corporation shall provide notice of any redemption pursuant to this Section 9 at least three (3) days but not more than sixty (60) days prior to the redemption date, to each Holder of record of shares of Senior Preferred Stock to be redeemed at such Holder’s address appearing on the stock register of the Corporation. Each such notice shall state (i) the date fixed for such redemption, (ii) the place or places where certificates (if the shares are certificated) for the shares of Senior Preferred Stock called for redemption are to be surrendered for payment, (iii) the Redemption Price, (iv) that unless the Corporation defaults in making the redemption payment, Dividends on the shares of Senior Preferred Stock called for redemption shall cease to accrue on and after the redemption date, (v) that if fewer than all of the shares of Senior Preferred Stock owned by such Holder are then to be redeemed, the number of shares or aggregate Liquidation Preference of which are to be redeemed, and (vi)
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if such notice of redemption is subject to one or more conditions, a description of such conditions.
If the notice of redemption shall have been so given and if prior to the date of redemption specified in such notice all funds necessary to pay the aggregate Redemption Price for such redemption shall have been irrevocably deposited in trust, for the account of the Holders of the shares of Senior Preferred Stock to be redeemed, with a bank, trustee or trust company named in such notice doing business in New York, New York, and having capital and surplus of at least $500,000,000, then, without awaiting the redemption date, all shares of Senior Preferred Stock with respect to which such notice shall have been so given and such deposit shall have been so made thereupon shall, notwithstanding that any certificate for shares of Senior Preferred Stock shall not have been surrendered for cancellation, be deemed no longer to be outstanding, and all rights with respect to such shares of Senior Preferred Stock forthwith upon such deposit in trust shall cease and terminate, except for the right of the Holders thereof on or after the redemption date to receive out of such deposit the applicable Redemption Price, without interest. If the Holders of any shares of Senior Preferred Stock which have been called for redemption shall not within two (2) years (or any longer period required by law) after the applicable redemption date claim any amount so deposited in trust for the redemption of such shares, then such bank or trust company shall, if permitted by applicable law, pay over to the Corporation any such unclaimed amount so deposited with it and thereupon shall be relieved of all responsibility in respect thereof; and thereafter the Holders of such shares shall, subject to applicable unclaimed property laws, look only to the Corporation for payment of the Redemption Price for such shares, without interest. Upon surrender, in accordance with such notice, of the certificates for any shares so redeemed, the applicable Redemption Price shall be paid in cash by wire transfer of immediately available funds to an account or accounts designated by such Holder. In the event that less than all of the shares of Senior Preferred Stock represented by any certificate are redeemed, a new certificate representing the unredeemed shares shall be promptly issued to the Holder thereof without cost to such Holder.
If a redemption date falls on a day that is not a Business Day, then payment of the Liquidation Preference and the aggregate accrued and unpaid Dividends payable on that date will be made on the next succeeding day which is a Business Day, and no Dividends will accrue or other payment made in respect of such delay.
Section 10.    Forced Sale Trigger. From and after the earliest of (i) October 27, 2028, (ii) 30 days after written notice from the Holders to the Corporation of a breach of Section 7(vii) hereof, which breach is not cured within such 30 day period, and (iii) the date that is 90 days following the Corporation’s failure to consummate when due a Mandatory Redemption of the Senior Preferred Stock upon the occurrence of a Change of Control or Liquidation Event (whether or not there are any profits, surplus or other funds legally available for the payment thereof or such payment is then permitted by applicable law or any instrument or agreement to which the Corporation or any of its Subsidiaries is a party) (such earliest date, the “Sale Trigger Date”), the Required Holders may deliver to the Corporation a written notice (a “Sale Demand”) requesting that the Corporation commence a process diligently and in good faith to seek to effect a Sale Event (a “Sale Process” and, the transaction resulting therefrom, a “Sale Transaction”). Upon receipt of a Sale Demand, the Corporation shall promptly engage in a Sale Process in good faith, including selecting a nationally recognized investment banking firm having experience in the industry in which the Corporation and its Subsidiaries are engaged and reasonably acceptable to the Required Holders to assist the Corporation in the Sale Process on engagement terms reasonably acceptable to the Required Holders. If the Corporation fails to promptly engage in such a Sale Process, fails to conduct such a Sale Process in good faith, fails to enter into a
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definitive agreement with respect to a Sale Transaction within six months of the Sale Demand or fails to consummate a Sale Transaction within twelve (12) months of the Sale Demand, then any such failure shall constitute a Preferred Event of Default and shall further constitute a “Sale Demand Default Event” and, by written notice (which notice may be given more than once) to the Corporation from the Required Holders:
(a)at the election of the Required Holders either (x) the number of directors constituting the Board shall be increased by two members and the Required Holders, voting separately and as one class, shall have the exclusive right to nominate and elect each such director to serve on the Board (each, a “Sale Demand Director” and, collectively, the “Sale Demand Directors”) at a meeting called therefor upon the occurrence of such Sale Demand Default Event and at every subsequent meeting at which the terms of office of the director so elected by the Required Holders expires and/or (y) the number of directors constituting the Board shall be increased by the number necessary to permit the Required Holders, voting separately and as one class, to nominate and elect that number of directors constituting a majority of the Board and the Required Holders shall have the exclusive right to nominate and elect such directors to serve on the Board (the “Majority Directors”) at a meeting called therefor upon the occurrence of such Sale Demand Default Event and at every subsequent meeting at which the terms of office of the director so elected by the Required Holders expires; and
(b)    the Corporation shall take all corporate action necessary and shall fully cooperate with the Holders to cause each Sale Demand Director and/or the Majority Directors, as applicable, to be nominated and reelected to the Board.
The right of the Holders voting together as a separate class to elect one or more members of the Board as set forth in this Section 10 above shall continue unless and until there is no Senior Preferred Stock outstanding. At any time after voting power to elect a director shall have become vested and be continuing in the Holders pursuant to this Section 10, or if vacancies shall exist in the offices of any director elected by the Holders, a proper officer of the Corporation may, and upon the written request of any Holder then outstanding addressed to the secretary of the Corporation shall, call a special meeting of the Holders, for the purpose of electing the director which such Holders are entitled to elect, in each case subject to applicable law. If such meeting shall not be called by a proper officer of the Corporation within fifteen (15) days after personal service of said written request upon the secretary of the Corporation, or within thirty (30) days after mailing the same within the United States of America by certified mail, addressed to the secretary of the Corporation at its principal executive offices, then any Holder may designate in writing one Holder to call such meeting at the expense of the Corporation, and such meeting may be called by the Holder so designated upon notice to the other Holders and shall be held at the place designated by such Holder. Any Holder so designated shall have, and the Corporation shall provide, access to the lists of stockholders to be called pursuant to the provisions hereof. At any meeting held for the purpose of electing directors at which the Holders shall have the right, voting together as a separate class, to elect one or more directors as aforesaid, the presence in person or by proxy of the Required Holders shall be required to constitute a quorum of the Holders. Any vacancy occurring in the office of a director elected by the Holders may be filled solely by the Holders in accordance with this Section 10.
The Board hereby designates, effective from the occurrence of a Sale Demand Trigger Event until consummation of a Sale Transaction, a special committee (the “Sale Demand
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Special Committee”) to consist solely of the Sale Demand Directors or one or more Majority Directors designated by the Required Holders; provided that for so long as TCP shall continue to be the Chief Executive Officer of the Corporation and a member of the Board, TCP, or an independent director of the Board designated by him, shall be entitled to participate as a member of the Sale Demand Special Committee. At all times following the occurrence of a Sale Demand Trigger Event and until consummation of a Sale Transaction, the Sale Demand Special Committee shall have and may exercise all the powers and authority of the Board with respect to any act, decision or determination relating to or in furtherance of the consummation of a Sale Transaction (including, without limitation, the authority to exclusively initiate, investigate, negotiate, implement, direct, control, review, communicate, act upon and approve any and all matters in furtherance of a Sale Transaction); provided that the Sale Demand Special Committee shall not have the power or authority to (a) approve or adopt any action or matter expressly required by the DGCL to be submitted to the stockholders for approval or (b) adopt, amend or repeal any by-law of the Corporation. The Sale Demand Special Committee shall keep regular minutes of its meetings and report the same to the Board when required. The Sale Demand Directors or the Majority Directors, as applicable, shall have full power and authority to retain on behalf of the Sale Demand Special Committee and/or the Corporation, such legal counsel and financial, accounting, tax or other advisors as the Sale Demand Directors or Majority Directors, as applicable, deem necessary or advisable in connection with any Sale Transaction (collectively, “Sale Demand Advisors”). The Corporation shall fully cooperate (and shall cause its and its Subsidiaries’ officers and employees to fully cooperate) with the Sale Demand Special Committee in connection with any and all actions, decisions and determinations taken by the Sale Demand Special Committee in furtherance of a Sale Transaction and otherwise in accordance with this Section 10.
The Corporation shall (i) reimburse each member of the Sale Demand Special Committee for all reasonable travel and other reasonable and documented out-of-pocket expenses related to such member’s role or performance of duties contemplated by this Certificate of Designations, (ii) enter into an indemnification agreement with each Sale Demand Director and Majority Director no less favorable to such Director than the indemnification agreements then in effect between the Corporation and any other non-employee member of the Board and (iii) upon election to the Board cause each such Sale Demand Director and Majority Director to be included in all directors and officers liability insurance policies and endorsements.
The Corporation shall use reasonable best efforts to cause the Corporation and its Subsidiaries’ management to cooperate fully with (and not to impede) any such Sale Process and take such other actions as are reasonably required for the Corporation to comply with its obligations under this Section 10 with respect to any such Sale Process.
Section 11.    Written Consent. Any action as to which a class vote of the Holders is required pursuant to the terms of this Certificate of Designations or the DGCL may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by Holders having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Senior Preferred Stock entitled to vote thereon were present and voted and shall be delivered to the Corporation. The Corporation will provide to each Holder a copy of or notice of each such proposed written consent not less than five (5) Business Days prior to the proposed date of effectiveness of such written consent (or will provide such copy or notice a shorter period in advance as is practicable if five (5) Business Days’ notice is not practicable), and promptly following the effectiveness of any action taken by written consent, will give written notice of
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such action to each Holder; provided, however, that failure to give any notice as required by this sentence shall not impair or affect the validity of such consent or action.
Section 12.    Transfer Restrictions. The shares of Senior Preferred Stock owned by any Holder shall be freely transferable upon no less than five days’ prior written notice to the Corporation (except no such notice shall be required in the case of any such transfer to any other Holder or Affiliate of a Holder), subject to compliance with applicable securities laws; provided that, to the extent that the list of Disqualified Institutions (the “DQ List”) is made available to all Holders or potential transferees, no transfer shall be made to any Person which is a Disqualified Institution; provided, further, that such restriction in the immediately preceding proviso shall not apply (x) during the occurrence and continuance of a Preferred Event of Default or a Bankruptcy Event and (y) from and after the Forced Sale Trigger Date or the occurrence of a Bankruptcy Event. The Corporation hereby agrees to provide the DQ List to any Holder or potential transferee of the Senior Preferred Stock upon request and expressly authorizes the Holders to provide the DQ List to any potential transferee.
Section 13.    Information and Inspection Rights.
(a)    The Corporation shall deliver to the Holders:
(i)    Monthly Financial Statements. As soon as available, and in any event within 30 days after the end of each month of each Fiscal Year (including the 12th month of each Fiscal Year), commencing with the first such month ending after the Initial Closing Date, the consolidated balance sheets of the Corporation and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of operations and cash flows of the Corporation and its Subsidiaries for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, setting forth, in each case, in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, all in reasonable detail; provided that each Holder may notify the Corporation in writing that it does not wish to receive any financial information required to be delivered pursuant to this clause (a)(i), in which case the Corporation shall not deliver any such information to such Holder unless and until such Holder notifies the Corporation in writing that it desires to receive such information;
(ii)    Quarterly Financial Statements. As soon as available, and in any event within 45 days after the end of each Fiscal Quarter of each Fiscal Year (including the fourth Fiscal Quarter of each Fiscal Year), commencing with the Fiscal Quarter ended March 31, 2021, the consolidated balance sheets of the Corporation and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of operations and cash flows of the Corporation and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth, in each case, in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto and any other operating reports prepared by management for such period;
(iii)    Annual Financial Statements. As soon as available, and in any event within 120 days after the end of each Fiscal Year (commencing with the Fiscal Year ending December 31, 2021), (x) the consolidated balance sheets of the Corporation and
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its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, changes in members’ equity and Cash flows of the Corporation and its Subsidiaries for such Fiscal Year, setting forth, in each case, in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by such financial statements, in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; and (y) with respect to such consolidated financial statements a report thereon of independent certified public accountants of recognized national standing selected by the Corporation and reasonably satisfactory to the Required Holders (it being agreed that Ernst & Young LLP is reasonably satisfactory to the Required Holders), which report shall be unqualified as to “going concern” and scope of audit (other than any qualification or exception that is solely with respect to, or resulting solely from, (A) an upcoming maturity date within one year from the date of such report of any of the Obligations (as defined in the Credit Agreement as in effect on the Initial Closing Date) or (B) any potential inability to satisfy a financial maintenance covenant on a future date or in a future period), and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of the Corporation and its Subsidiaries as at the dates indicated and the results of their operations and their Cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards);
(iv)    Compliance Certificate. Together with each delivery of financial statements of the Corporation and its Subsidiaries pursuant to Sections 13(a)(ii) and 13(a)(iii), a duly executed and completed compliance certificate (a “Compliance Certificate”) (x) certifying on behalf of the Corporation that no Senior Officer of the Corporation has actual knowledge that a Preferred Default, Preferred Event of Default or Bankruptcy Event has occurred and is continuing or, if such known Preferred Default, Preferred Event of Default or Bankruptcy Event has occurred and is continuing, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto; (y) that identifies each Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary as of the date of delivery of such certificate or a confirmation that there is no change in such information since the later of the Initial Closing Date and the date of the last such certificate, and (z) attaching the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements;
(v)    Statements of Reconciliation after Change in Accounting Principles. If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Corporation Financial Statements (as defined in the Purchase Agreement), the consolidated financial statements of the Corporation and its Subsidiaries delivered pursuant to Section 13(a)(ii) or 13(a)(iii)) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such Section 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 reasonably satisfactory to the Required Holders;
(vi)    Notice of Default or Material Adverse Effect. Promptly upon any Senior Officer of the Corporation or any of its Restricted Subsidiaries obtaining actual
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knowledge (A) of any condition or event that constitutes a Preferred Default, a Preferred Event of Default or that written notice thereof has been given to the Corporation or any of its Restricted Subsidiaries with respect thereto, (B) that any Person has given any written notice to the Corporation or any of its Restricted Subsidiaries or taken any other action with respect to any Bankruptcy Event, (C) of any written notice of the occurrence of an Event of Default (as defined in the Credit Agreement as in effect on the Initial Closing Date) sent or received by the Corporation or any of its Restricted Subsidiaries under the Credit Agreement or any other Indebtedness in an aggregate outstanding principal amount in excess of the greater of (x) $10,000,000 and (y) 15% of Consolidated Adjusted EBITDA for the most recently completed Test Period, (D) of any amendment or other modification to the Credit Agreement being posted to the lenders thereunder; or (E) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its Authorized Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Preferred Default, Preferred Event of Default, Bankruptcy Event, default, event or condition, and what action the Corporation has taken, is taking and proposes to take with respect thereto;
(vii)    Notice of Litigation. Promptly upon any Senior Officer of the Corporation or any of its Restricted Subsidiaries obtaining actual knowledge of (x) the institution of, or non-frivolous written threat of, any Adverse Proceeding not previously disclosed in writing by the Corporation to the Holders, or (y) any material development in any Adverse Proceeding that, in the case of either clause (x) or (y), could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to the Corporation to enable the Holders and their counsel to evaluate such matters;
(viii)    ERISA. (i) Promptly upon a Senior Officer of the Corporatoin becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, what action the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as any Holder shall reasonably request;
(ix)    Financial Plan. As soon as practicable and in any event no later than March 1 of each Fiscal Year, a consolidated plan and financial forecast for such Fiscal Year (a “Financial Plan”), including (x) a forecasted consolidated balance sheet and forecasted consolidated statements of income and cash flows of the Corporation and its Restricted Subsidiaries for each such Fiscal Year, together with an explanation of the assumptions on which such forecasts are based, and (y) forecasted consolidated
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statements of income and cash flows of the Corporation and its Restricted Subsidiaries for each Fiscal Quarter of each such Fiscal Year; and
(x)    Other Information. (A) Promptly upon their becoming available, copies of (x) all material reports, notices and proxy statements sent or made available generally by the Corporation to its security holders acting in such capacity or by any Subsidiary of the Corporation to its security holders other than the Corporation or another Subsidiary, and (y) all press releases and other statements made available generally by the Corporation or any of its Subsidiaries to the public concerning material developments in the business of the Corporation or any of its Subsidiaries, and (B) promptly upon request, (x) such other information and data with respect to the Corporation or any of its Subsidiaries as from time to time may be reasonably requested by any Holder and (ii) information and documentation reasonably requested by the Holder Representative or any Holder for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act or other applicable anti-money laundering laws.
(b)    Inspections. The Corporation will, and will cause each of its Restricted Subsidiaries to, permit any authorized representatives designated by any Holder to visit and inspect any of the properties of the Corporation and any of its Restricted Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records and other books and records, and to discuss its and their affairs, finances and accounts with its and their officers, in each case, (x) so long as no Preferred Event of Default or Bankruptcy Event has occurred and is continuing, upon prior reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested so as not to interfere with the normal business and operations of the Corporation and its Restricted Subsidiaries; provided, however, that the Corporation shall not be obligated to pay for more than one such inspection per calendar year; and (y) after the occurrence and during the continuation of a Preferred Event of Default or a Bankruptcy Event, at all times and without advance notice (and without limitation on paid inspections). The Corporation and its Restricted Subsidiaries shall have no obligation to disclose materials (i) that constitute non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to a Holder (or any of its contractors) is prohibited by law or any binding agreement (not created in contemplation thereof), or (iii) that are protected by attorney-client privilege and materials the disclosure of which would violate confidentiality obligations of the Corporation or such Restricted Subsidiary.
(c)    Holder Calls. The Corporation will participate in a meeting of the Holders once during each Fiscal Quarter, following delivery of the quarterly financial statements pursuant to Section 13(a)(ii) (other than the fourth Fiscal Quarter) and Section 13(a)(iii), to be held by telephone conference at such time as may be agreed to by the Corporation and attending Holders.
Section 14.    Board Observer Rights. The Holders shall have the right to appoint one non-voting observer selected by the Required Holders (a “Senior Preferred Observer”) to attend all meetings of the Board, each committee thereof and each Board of Directors or equivalent governing body of each Subsidiary of the Corporation (each a “Sub Board”) and each committee thereof. The Senior Preferred Observer shall be entitled to notice of all meetings of the Board, each Sub Board and each committee and to receive all information provided to any members of the Board, each Sub Board and each committee. Notwithstanding the foregoing, the Corporation shall be entitled to excuse the Senior Preferred Observer from any portion of any meeting of its Board and/or withhold any portion of the information required to be provided in accordance with the terms of this Section 14 to the extent necessary to preserve the attorney-
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client privilege related to communications between the Corporation and its legal counsel or otherwise necessary or appropriate based on the advice of the Corporation’s legal counsel. The Senior Preferred Observer shall receive reimbursement from the Corporation with respect to meetings of the Board, each Sub Board and committees thereof for reasonable out-of-pocket expenses incurred by such Senior Preferred Observer in connection with attendance as any and all meetings thereof.
Section 15.    No Conversion or Exchange Rights. The Holders shall not have any right to convert any shares of Senior Preferred Stock into, or to exchange any shares of the Senior Preferred Stock for, any other class or series of Capital Stock or obligations of the Corporation or any Subsidiary of the Corporation, and the Holders shall not have the right to require the Corporation to repurchase, redeem or otherwise acquire the Senior Preferred Stock except as set forth in Section 9(b).
Section 16.    Effect of Benchmark Transition Event.
(a)    Benchmark Replacement. If the Holder Representative in consultation with the Corporation determines that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any determination of the Benchmark on any date, the Benchmark Replacement will replace the then-current Benchmark for all purposes relating to the Senior Preferred Stock in respect of such determination on such date and all determinations on all subsequent dates.
(b)    Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Holder Representative in consultation with the Corporation will have the right to make Benchmark Replacement Conforming Changes from time to time, except to the extent that such changes would increase or materially change or affect the duties, obligations or liabilities of the Holder Representative (including, without limitation, the imposition or expansion of discretionary authority), or reduce, eliminate, limit or otherwise change any right, privilege or protection of the Holder Representative, or would otherwise materially and adversely affect the Holder Representative, in each case in its reasonable judgment, without such party’s express written consent.
(c)    Decisions and Determinations. Any determination, decision or election that may be made by the Holder Representative pursuant to this Section 16, including any determination with respect to 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, will be made in the sole discretion of the Holder Representative, and, notwithstanding anything to the contrary in the documentation relating to the Senior Preferred Stock, shall become effective without consent from any other party. The Holder Representative will have no liability for any determination made by or on behalf of the Holder Representative in connection with a Benchmark Transition Event or a Benchmark Replacement.
Section 17.    Additional Definitions. For purposes of this Certificate of Designations, the following terms shall have the following meanings:
Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of, or against, the Corporation or any of its Subsidiaries) at law or in
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equity, or before or by any Governmental Authority, domestic or foreign, whether pending or, to the knowledge of a Senior Officer of the Corporation or any of its Subsidiaries, threatened in writing against the Corporation or any of its Subsidiaries or any property of the Corporation or any of its Subsidiaries.
Affiliate” means, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under Common Control with, that Person.
Anti-Corruption Laws” means, collectively, all laws, rules, and regulations of any jurisdiction applicable to the Corporation or its Subsidiaries from time to time concerning or relating to bribery or corruption (including the FCPA).
Anti-Terrorism Laws” means all applicable Sanctions and all applicable laws relating to anti-money laundering and counter-terrorism including, without limitation, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, the laws and regulations administered by OFAC, the Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330), the Money Laundering Control Act (18 U.S.C. §§1956-1957 and 1960) and the International Emergency Economic Powers Act (50 U.S.C. §§1701-1707).
Applicable Margin” means the sum of (i) 12.0% per annum, plus (ii) from and after the first day of the first Dividend Period commencing after the fifth anniversary of the Initial Closing Date, an additional 1.0% per annum, plus (iii) from and after the first day of the first Dividend Period commencing after the sixth anniversary of the Initial Closing Date, an additional 2.5% per annum, plus (iv) from and after the first day of the second Dividend Period commencing after the sixth anniversary of the Initial Closing Date, an additional 1.0% per annum, plus (v) from and after the first day of each subsequent Dividend Period, an additional 1.0% per annum.
Ares Holders” means the Holders that are “Investors” as set forth in the Purchase Agreement as of the date hereof and any other Holders that are investment vehicles, affiliates, funds, investors, entities or accounts that are managed, sponsored, administered or advised by Ares Management LLC to whom shares of Senior Preferred Stock were transferred in accordance with this Certificate of Designations.
Asset Sale” means a sale, lease or sub-lease (as lessor or sub-lessor), sale and leaseback transaction, assignment, conveyance, transfer, exclusive license or other disposition to, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of the Corporation’s or any of its Restricted Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, including the Capital Stock of the Corporation, other than, solely in the case of Section 7(xv), (i) inventory (or other assets) sold, licensed (on a non-exclusive basis) or leased in the ordinary course of business, (ii) equipment or other assets sold, replaced, abandoned, leased or otherwise disposed of that are obsolete, worn-out or are no longer used or useful in the business of the Corporation or any of its Subsidiaries, (iii) dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced, substantially concurrently, by like-kind equipment, (iv) the use, transfer or other disposition of Cash and Cash Equivalents in a manner that is not prohibited by the terms of this Certificate of Designations or any other Preferred Equity Document, (v) licensing, on a non-exclusive basis, of patents, trademarks, copyrights and other intellectual property rights in the ordinary course of business, (vi) the creation of a Lien and (vii) Investments made in
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accordance with Section 7(xiii) (other than Section 7(xiii)(14)). For purposes of clarification, “Asset Sale” shall include (x) the sale or other disposition (other than Investments made in accordance with Section 7(xiii)(14) (other than Section 7(xiii)(14)) of any contracts, (y) any sale or other disposition of Merchant Agreements (as defined in the Credit Agreement as in effect on the Initial Closing Date) and/or Merchant Accounts (as defined in the Credit Agreement as in effect on the Initial Closing Date) (or any rights thereto (including any rights to any residual payment stream with respect thereto)) (other than Investments made in accordance with Section 7(xiii)(14) (other than Section 7(xiii)(14)) by the Corporation and (z) any sale or other disposition of Permitted ISO Loans (as defined in the Credit Agreement as in effect on the Initial Closing Date) (or any rights thereto (including any rights to any payment stream with respect thereto)) or Permitted Joint Venture Investments (as defined in the Credit Agreement as in effect on the Initial Closing Date) (other than Investments made in accordance with Section 7(xiii)(14) (other than Section 7(xiii)(14)) by any Restricted Subsidiary of the Corporation.
Authorized Officer” means, as applied to any Person (other than a natural person), any individual holding the position of chairman of the board (if an officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer, treasurer, secretary or other officer expressly authorized by a resolution or written consent (delivered to the Holders) to represent such Person in such capacity and such Authorized Officer shall conclusively presume to have acted on behalf of such Person.
Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Bankruptcy Event” means:
(a)    (i) a court of competent jurisdiction shall enter a decree or order for relief in respect of the Corporation or any of its Restricted Subsidiaries in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed, or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against the Corporation or any of its Restricted Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Corporation or any of its Restricted Subsidiaries, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer of the Corporation or any of its Restricted Subsidiaries for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of the Corporation or any of its Restricted Subsidiaries, and any such event described in this clause (ii) shall continue for sixty (60) days without having been dismissed, bonded or discharged; or
(b)    (i) the Corporation or any of its Restricted Subsidiaries shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver,
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trustee or other custodian for all or a substantial part of its property; or the Corporation or any of its Restricted Subsidiaries shall make any assignment for the benefit of creditors; or (ii) the Corporation or any of its Restricted Subsidiaries shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the Board or the Board of Directors (or similar governing body) of any of its Restricted Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in clause (a) above.
Benchmark” means, initially, the Three-Month LIBOR Rate; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the Three-Month LIBOR Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement; provided, further, that notwithstanding anything to the contrary, in no event shall the Benchmark be less than 1.00% per annum.
Benchmark Replacement” means the Interpolated Benchmark with respect to the then-current Benchmark, plus the Benchmark Replacement Adjustment for such Benchmark; provided that if the Holder Representative in consultation with the Corporation cannot determine the Interpolated Benchmark as of the Benchmark Replacement Date, then “Benchmark Replacement” means the first alternative set forth in the order below that can be determined by the Holder Representative in consultation with the Corporation as of the Benchmark Replacement Date:
(1)    the sum of: (a) Term SOFR and (b) the Benchmark Replacement Adjustment;
(2)    the sum of: (a) Compounded SOFR and (b) the Benchmark Replacement Adjustment;
(3)    the sum of: (a) the alternate rate of interest that has been selected or recommended by the Relevant Governmental Body as the replacement for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark Replacement Adjustment;
(4)    the sum of: (a) the ISDA Fallback Rate and (b) the Benchmark Replacement Adjustment; and
(5)    the sum of: (a) the alternate rate of interest that has been selected by the Holder Representative in consultation with the Corporation as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to any industry-accepted rate of interest as a replacement for the then-current Benchmark for U.S. dollar denominated floating rate notes at such time and (b) the Benchmark Replacement Adjustment.
Benchmark Replacement Adjustments” means the first alternative set forth in the order below that can be determined by the Holder Representative in consultation with the Corporation as of the Benchmark Replacement Date:
(1)    the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero), that has been
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selected or recommended by the Relevant Governmental Body for the applicable Unadjusted Benchmark Replacement;
(2)    if the applicable Unadjusted Benchmark Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment;
(3)    the spread adjustment (which may be a positive or negative value or zero) that has been selected by the Holder Representative in consultation with the Corporation giving due consideration to any industry-accepted spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated floating rate notes at such time.
The Benchmark Replacement Adjustment shall not include the Applicable Margin specified herein and such Applicable Margin shall be applied to the Benchmark Replacement to determine the Dividend Rate payable on the Senior Preferred Stock.
Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Dividend Period,” timing and frequency of determining rates and making payments of Dividends, rounding of amounts or tenor, and other administrative matters) that the Holder Representative in consultation with the Corporation decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially consistent with market practice (or, if the Holder Representative in consultation with the Corporation decides that adoption of any portion of such market practice is not administratively feasible or if the Holder Representative in consultation with the Corporation determines that no market practice for use of the Benchmark Replacement exists, in such other manner as the Holder Representative in consultation with the Corporation determines is reasonably necessary).
Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then- current Benchmark:
(1)    in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark; or
(2)    in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
For the avoidance of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination.
Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(1)    a public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that such administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely; provided that, at the time of
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such statement or publication, there is no successor administrator that will continue to provide the Benchmark;
(2)    a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the central bank for the currency of the Benchmark, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; or
(3)    a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative.
Board” has the meaning set forth in the introductory paragraph of this Certificate of Designations.
Board of Directors” means: (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; (2) with respect to a partnership, the board of directors of the general partner of the partnership; (3) with respect to a limited liability company, the board of managers (if any) or the managing member or members or any controlling committee of managing members thereof; and (4) with respect to any other Person, the board or committee of such Person serving a similar function.
Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person (i) as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person or (ii) as lessee which is a transaction of a type commonly known as a “synthetic lease” (i.e., a transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for U.S. federal income tax purposes); provided, that any leases that were not capital leases when entered into but are re-characterized as capital leases due to a change in GAAP after the Initial Closing Date shall for all purposes of this Certificate of Designations not be treated as “Capital Leases.”
Capital Stock” means: (a) in the case of a corporation, corporate stock, and (b) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests, and including any debt securities convertible into or warrants, options or rights to acquire Capital Stock, whether or not such debt securities, warrants, options or rights include any right of participation with Capital Stock.
Cash” means money, currency or a credit balance in any demand or deposit account, in each case, determined in accordance with GAAP.
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Cash Equivalents” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government, or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States government, in each case, maturing within one (1) year after such date; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case, maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s (or, if at any time either S&P or Moody’s are not rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (iii) commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s (or, if at any time either S&P or Moody’s are not rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (iv) certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary federal banking regulator), and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has, at the time of the acquisition thereof, the highest rating obtainable from either S&P or Moody’s (or, if at any time either S&P or Moody’s are not rating such funds, an equivalent rating from another nationally recognized statistical rating agency); and (vi) fully collateralized repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above.
Cause” means (a) TCP’s conviction of, entry into any plea agreement (or material modification of any such agreement that is adverse to TCP) regarding, or plea of nolo contendre to, any felony or any other crime involving moral turpitude or the personal financial enrichment of TCP at the expense of the Corporation or any of its Subsidiaries or (b) a Cause Determination to the effect that TCP has willfully neglected, engaged in willful misconduct in the performance of, or otherwise willfully failed or refused to perform any of his duties or responsibilities to the Corporation or any of its Subsidiaries or willfully violated any of the Corporation’s policies or its code of conduct, in each case in a manner that is materially and demonstrably injurious to the Corporation and its Subsidiaries, as a whole.
Cause Determination” means a determination in good faith, as evidenced by the adoption of a resolution duly adopted by the vote of either the Board or, at the request of the Required Holders, a committee thereof comprised exclusively of disinterested directors (for the avoidance of doubt, any director related to TCP by blood or marriage shall be deemed not to be a disinterested director for purposes of this definition) (the Board or such committee, as applicable, the “Determining Body”) at a meeting of the Determining Body called and held (after reasonable notice is provided to TCP and TCP is given an opportunity, together with counsel for TCP, to be heard before the Determining Body) for the purpose of determining whether TCP is guilty of the conduct described in clause (b) of the definition of “Cause,” which determination shall be binding and conclusive, to the effect that any of the events or circumstances described in clause (b) of the definition of “Cause” (each, a “Cause Determination Event”), (i) finding that, in the good faith opinion of the Determining Board, TCP is guilty of the Cause Determination Event and (ii) specifying the particulars of such Cause Determination Event in reasonable detail. Promptly (and in any event no more than five (5) days) following any Board member or senior
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management of the Corporation becoming aware, or the Required Holders having provided the Determining Body with reasonably-detailed notice of their reasonable belief, that a Cause Determination Event has or may have occurred, the Determining Body shall commence an investigation into, and promptly (but in no event more than 60 days) thereafter reach a conclusion regarding, whether such alleged Cause Determination Event has occurred and shall immediately report such conclusion to the Holders.
Certificate of Designations” means this certificate of designations for the Senior Preferred Stock, as such shall be amended, amended and restated or otherwise modified from time to time.
Change of Control” means:
a.(i)    any failure by the Controlling Stockholders to own a majority of the voting and economic power of the Common Stock, for any reason other than as a result of one or more Permitted Acquisitions by the Corporation or its Subsidiaries whereby Common Stock is issued as consideration in connection therewith; provided that, after giving effect to such Permitted Acquisition, no other stockholder of the Corporation (together with its Affiliates and any other stockholders of the Corporation that are part of the same “group” (as defined in Sections 13(d) and 14(d) of the Exchange Act), not including any shares held by the Controlling Stockholders and their Affiliates) holds a greater percentage of the Common Stock than the Controlling Stockholders,
b.(ii)    the removal of TCP from the position of Chief Executive Officer of the Corporation by the Board or any event or circumstance with respect to TCP that constitutes Cause, unless, in either case, a successor Chief Executive Officer of the Corporation reasonably satisfactory to the Required Holders is appointed within 90 days after (x) in the case of an event or circumstance that constitutes Cause pursuant to clause (b) of the definition thereof, the date of the related Cause Determination or (y) in all other cases, the date of such removal or event or circumstance that constitutes Cause, or
c.(iii)    any “Change of Control” (as defined in the Credit Agreement) shall occur.
Common Stock” means the shares of common stock, par value $0.001 per share, of the Corporation.
Compliance Certificate” “has the meaning set forth in Section 13(a)(iv).
Compounded SOFR” means the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate (which, for example, may be compounded in arrears with a lookback and/or suspension period as a mechanism to determine the amount of accrued Dividends prior to the end of each Dividend Period or compounded in advance) being established by the Holder Representative in consultation with the Corporation in accordance with:
(1)    the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining Compounded SOFR; provided that:
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(2)    if, and to the extent that, the Holder Representative in consultation with the Corporation determines that Compounded SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that have been selected by the Holder Representative in consultation with the Corporation giving due consideration to any industry-accepted market practice for U.S. dollar denominated floating rate notes at such time.
For the avoidance of doubt, the calculation of Compounded SOFR shall exclude the Benchmark Replacement Adjustment and the Applicable Margin specified herein.
1.Consolidated Adjusted EBITDA” means, for any period, an amount determined for the Corporation and its Restricted Subsidiaries (or, when reference is made to another Person, for such other Person and its Subsidiaries) on a consolidated basis equal to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, plus, except with respect to clauses (n) and (r) below, to the extent reducing (and not added back to or excluded from) Consolidated Net Income, the sum of, without duplication:
2.(b)    Consolidated Interest Expense, plus
3.(c)    provisions for taxes based on income of the Corporation and its Restricted Subsidiaries, plus
4.(d)    total depreciation expense, and amortization expense and impairment charges (including amortization of intangible assets (including goodwill), amortization of deferred financing fees or costs) of the Corporation and its Restricted Subsidiaries, plus
5.(e)     [reserved]; plus
6.(f)    other non-Cash items (including non-Cash charges, costs, expenses and losses) reducing Consolidated Net Income (excluding any such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items in any future period or amortization of a prepaid Cash item that was paid in a prior period or write-off or write-down or reserves with respect to current assets), plus
7.(g)    any net loss from discontinued operations and any net after-tax loss on disposal of discontinued operations, plus
8.(h)     other accruals, payments and expenses (including legal fees, costs and expenses), or any amortization thereof, related to the transactions contemplated by the Preferred Equity Documents or the Credit Agreement (including all Transaction Costs), any Permitted Acquisitions, Asset Sales, Investments, Restricted Payments, Restricted Debt Payments, issuances of Indebtedness or Capital Stock permitted under the Preferred Equity Documents or repayment of debt, refinancing transactions or any amendments or other modifications of any Indebtedness, in each case, to the extent such amounts are actually paid in Cash during such period (including, for the avoidance of
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doubt, any such transaction consummated on the Initial Closing Date and any such transaction proposed or undertaken but not completed), plus
9.(i)     any reasonably documented restructuring and integration costs reasonably attributable to the Merger Agreement, any Permitted Acquisition, any Investment or any Asset Sale permitted under the Preferred Equity Documents that are (i) related to the closure, integration and/or consolidation of information technology or facilities, employee termination, or moving or relocating assets, (ii) related to the discontinuance of any portion of operations acquired in a Permitted Acquisition to the extent such discontinuance is initiated within twelve (12) months of, and the costs thereof incurred no later than eighteen (18) months of, the consummation of such Permitted Acquisition, (iii) related to recruitment, retention, relocation and severance as set forth in the Model and lender presentation or (iv) otherwise approved by the Required Holders in their sole discretion, in each case, to the extent such amounts are actually paid in Cash during such period (including, for the avoidance of doubt, any such transaction consummated on the Initial Closing Date and any such transaction proposed or undertaken but not completed); provided that any adjustments or addbacks under this clause (i) in any period of four consecutive Fiscal Quarters, shall not, together with the adjustments and addbacks pursuant to clause (r) below, exceed 25% of Consolidated Adjusted EBITDA (determined before giving effect to such adjustments and addbacks), plus
10.(j)    (i) non-Cash charges relating to employee benefit or other management compensation plans of any direct or indirect parent of the Corporation or any of its Restricted Subsidiaries or (ii) any non-Cash compensation charge and other non-Cash expenses or charges arising from any grant, issuance or repricing of stock appreciation or similar rights, stock, stock options, restricted stock or other equity based awards of any direct or indirect parent of the Corporation or any of its Restricted Subsidiaries, in each case, excluding any non-Cash charge to the extent that it represents an accrual of or reserve for Cash expenses in any future period or amortization of a prepaid Cash expense incurred in a prior period, plus
11.(k)     any non-recurring or unusual costs, expenses or charges actually paid in Cash during such period, plus
12.(l)     [reserved], plus
13.(m)     legal fees and expenses (excluding any judgments) actually paid in Cash during such period in connection with litigation involving the Corporation and its Restricted Subsidiaries; provided that any adjustments or addbacks under this clause (m) in any period of four consecutive Fiscal Quarters, shall not exceed $3,000,000; plus
14.(n)     to the extent not already included in the Consolidated Net Income of the Corporation and its Restricted Subsidiaries, any claim for business interruption insurance for a loss occurring during such period to the extent (x) the proceeds of such insurance are actually received during such period or (y) the applicable insurance carrier
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has not denied coverage of such claim in writing and such loss is in fact reimbursed within 365 days of the date of such loss (with a deduction in the immediately succeeding period for any amount so added back to the extent not so reimbursed within such 365 days), plus
15.(o)     Cash expenses of the Corporation and/or its Restricted Subsidiaries incurred during such period to the extent reimbursed in Cash by any Person (other than Corporation and/or its Restricted Subsidiaries or any owners, directly or indirectly, of Capital Stock therein) during such period pursuant to indemnification or other reimbursement provisions in favor of Corporation and/or its Restricted Subsidiaries in connection with any Investment permitted under the Preferred Equity Documents, any Permitted Acquisition or any Asset Sale permitted under the Preferred Equity Documents, plus
16.(p)     net realized losses relating to mark-to-market of amounts denominated in foreign currencies resulting from the application of FASB ASC 830, plus
17.(q)     the amount of any expense or reduction of Consolidated Net Income consisting of Restricted Subsidiary income attributable to minority interests or non-controlling interests of third parties in any non-wholly-owned Restricted Subsidiary, minus the amount of dividends or distributions that are paid in Cash by such non-wholly-owned Restricted Subsidiary to such third party, plus
18.(r)     (x) the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies related to the Transactions that are reasonably identifiable, factually supportable and reasonably anticipated by the Corporation in good faith to be realized within eighteen (18) months of the Initial Closing Date (which will be added to Consolidated Adjusted EBITDA as so projected until fully realized and calculated on a Pro Forma Basis as though such cost savings, operating expense reductions, other operating improvements and initiatives and synergies had been realized on the first day of such period) and (y) the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies resulting from or related to Permitted Acquisitions (including, for the avoidance of doubt, acquisitions occurring prior to the Initial Closing Date), asset sales, divestitures, restructurings, cost savings initiatives and other similar initiatives, operational changes, and actions that are projected by the Corporation in good faith to be reasonably anticipated to be realized within eighteen (18) months of the date of the consummation of such transaction or implementation of such restructuring or initiative (which will be added to Consolidated Adjusted EBITDA as so projected until fully realized and calculated on a pro forma basis as though such cost savings, operating expense reductions, other operating improvements, operational changes and initiatives and synergies had been realized on the first day of such period), in the case of the preceding clauses (x) and (y), net of the amount of actual benefits realized during such period from such actions; provided that (A) any adjustments or addbacks under this clause (r) in any period of four consecutive Fiscal Quarters, shall not, together with the adjustments and
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addbacks pursuant to clause (i) above, exceed 25% of Consolidated Adjusted EBITDA (determined before giving effect to such adjustments), (B) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated Adjusted EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (C) such adjustments shall be specified in detail in the relevant Compliance Certificate, financial statement or other document provided to any Holder in connection herewith, plus
19.(s)     Cash receipts (or any netting arrangements resulting in reduced Cash expenditures) not representing Consolidated Adjusted EBITDA or Consolidated Net Income in any period to the extent non-Cash gains relating to such income were deducted in the calculation of Consolidated Adjusted EBITDA pursuant to clause (ii)(a) below for any previous period and not added back, plus
20.(t)     non-Cash charges relating to straight rent in accordance with GAAP, plus
21.(u)     any cash or non-cash charge, expense or loss with respect to earn-out and contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments, in each case in connection with Permitted Acquisitions and Investments, to the extent actually paid and expensed, plus
22.(v)     any expenses, charges or losses that are covered by indemnification or other reimbursement provisions in connection with any Investment, Permitted Acquisition or any Asset Sale permitted under the Preferred Equity Documents, to the extent actually reimbursed, or, so long as the applicable insurance carrier has not denied coverage of such expenses, charges or losses and that and only to the extent that such amount is (A) not denied by the applicable carrier in writing within 180 days and (B) in fact reimbursed within 365 days of the date of such evidence (with a deduction in the immediately succeeding period for any amount so added back to the extent not so reimbursed within such 365 days), plus
23.(w)     fees and expenses incurred in connection with the consummation of the Transactions and paid on the Initial Closing Date (or within sixty (60) days of the Initial Closing Date),
24.minus (ii) the sum, without duplication of the amounts for such period and to the extent included in arriving at such Consolidated Net Income, of
25.(a)    other non-Cash items increasing Consolidated Net Income for such period (excluding any such non-Cash item to the extent it represents the reversal of an accrual or reserve for potential Cash items that reduced Consolidated Adjusted EBITDA in any prior period), plus
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26.(b)    the amount of any minority interest income consisting of Restricted Subsidiary losses attributable to minority interests or non-controlling interests of third parties in any non-wholly-owned Restricted Subsidiary, plus
27.(c)    any net gain from discontinued operations and any net after-tax gain on disposal of discontinued operations, plus
28.(d)    capitalized customer acquisition costs (excluding Permitted Acquisitions and Permitted Joint Venture Investments (as defined in the Credit Agreement as in effect on the Initial Closing Date)), plus
29.(e)    federal, state, local and foreign income tax credits and reimbursements received by the Corporation or any of its Restricted Subsidiaries during such period, plus
30.(f)    all gains (whether Cash or non-Cash) resulting from the early termination or extinguishment of Indebtedness, plus
31.(g)    the excess of actual Cash rent paid over rent expense during such period due to the use of straight line rent for GAAP purposes, plus
32.(h)    net realized gains relating to mark-to-market of amounts denominated in foreign currencies resulting from the application of FASB ASC 830.
33.Notwithstanding anything to the contrary contained herein, for the purposes of determining Consolidated Adjusted EBITDA under this Certificate of Designations for any period that includes the Fiscal Quarters ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020, (i) Consolidated Adjusted EBITDA of the Corporation and its Restricted Subsidiaries shall be deemed to be for each such Fiscal Quarter $14,149,953.81, $14,448,764.97, $18,046,757.57 and $18,877,237.76, respectively and (ii) Consolidated Adjusted EBITDA of Target and its Restricted Subsidiaries shall be deemed to be for each such Fiscal Quarter $8,612,594.21, $14,980,518.96, $15,247,330.49 and $15,037,189.79, respectively; provided that to the extent that any unaudited quarterly consolidated financial statements for Target have been delivered by the Corporation to the Holders pursuant to Section 5.2(d)(i) of the Purchase Agreement prior to the Acquisition Closing Date (as defined in the Purchase Agreement), the Corporation shall provide the Holders with the Consolidated Adjusted EBITDA of the Target for each such Fiscal Quarter, together with a reasonably detailed calculation thereof, which amounts and calculations shall be reasonably satisfactory to the Holders, and such amounts shall be deemed to be Consolidated Adjusted EBITDA of the Target for such Fiscal Quarters and included in all pro forma calculations of Consolidated Adjusted EBITDA of the Corporation for all purposes of the Preferred Equity Documents.
34.Consolidated Capital Expenditures” means, for any period, the aggregate of all expenditures of the Corporation and its Restricted Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment or which should otherwise be capitalized” or similar items reflected in
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the consolidated statement of Cash flows of the Corporation and its Restricted Subsidiaries; provided that “Consolidated Capital Expenditures” shall not include (i) any expenditures made with Net Asset Sale Proceeds (as defined in the Credit Agreement as in effect on the Initial Closing Date) to the extent reinvested in accordance with Section 2.13(a) of the Credit Agreement (as in effect on the Initial Closing Date) (or, to the extent not required to be reinvested in accordance with Section 2.13(a) of the Credit Agreement (as in effect on the Initial Closing Date), to the extent used to acquire, replace, repair or restore properties or assets used or useful in the business of the Corporation) or Net Insurance/Condemnation Proceeds (as defined in the Credit Agreement as in effect on the Initial Closing Date) to the extent reinvested in accordance with Section 2.13(b) of the Credit Agreement (as in effect on the Initial Closing Date), (ii) the purchase price of assets purchased in any Permitted Acquisition, (iii) any expenditures made to the extent that they are financed with the proceeds of the Permitted Stock Issuances, (iv) any expenditures made to the extent that they are made by the Corporation or any of its Restricted Subsidiaries to effect leasehold improvements to any property leased by such Person as lessee, to the extent that such expenses have been actually reimbursed in Cash by the landlord that is not the Corporation or an Affiliate of the Corporation, (v) any expenditures to the extent that they are actually paid for by a third party (excluding the Corporation or any Affiliate of the Corporation) and for which the Corporation has not provided or is not required to provide or incur, directly or indirectly, any consideration or monetary obligation to such third party or any other Person (whether before, during or after such period), (vi) property, plant and equipment taken in settlement of accounts in the ordinary course of business, and (vii) the purchase price of equipment purchased during such period to the extent the consideration paid therefor consists solely of any combination of (a) used or surplus equipment traded in at the time of such purchase, and (b) the proceeds of a concurrent sale of used or surplus equipment, in the case of clauses (a) and (b), to the extent such trade-in or sale is permitted by the Preferred Equity Documents.
35.Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest including paid-in-kind amounts) of the Corporation and its Restricted Subsidiaries on a consolidated basis for such period, including all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under Interest Rate Agreements and amortization or write off of deferred financing fees, debt issuance costs, debt discount or premium, commissions, fees and expenses, including commitment, letter of credit and administrative fees and charges with respect to the credit facilities provided for under the Credit Agreement and with respect to other Indebtedness permitted to be incurred under the Preferred Equity Documents.
36.Consolidated Net Income” means, for any period, (i) the net income (or loss) of the Corporation and its Restricted Subsidiaries (or, when reference is made to another Person, for such other Person and its Subsidiaries) on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, minus (ii) the sum of, without duplication, (a) the income (or loss) of any Person (other than a Restricted Subsidiary) (x) in which any other Person (other than the Corporation) has a joint interest or (y) that is an Unrestricted Subsidiary, except to the extent of the amount of any dividends or other
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distributions actually paid in Cash or Cash Equivalents (or to the extent subsequently converted into Cash or Cash Equivalents) to the Corporation and its Restricted Subsidiaries by such Person during such period, plus (b) the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Corporation or is merged into or consolidated with the Corporation or any of its Restricted Subsidiaries or that Person’s assets are acquired by the Corporation or any of its Restricted Subsidiaries (except to the extent required for any calculation of Consolidated Adjusted EBITDA on a Pro Forma Basis in accordance with Section 18(g)), plus (c) the income of any Restricted Subsidiary of the Corporation to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its Organizational Documents or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, plus (d) any gains or losses, together with any related provision for taxes on such gain (or loss), realized in connection with any Asset Sales or other disposition or abandonment and any reserves relating thereto, in each case, not in the ordinary course of business, plus (e) any net unrealized gain (loss) (after any offset) resulting during such period from obligations under any Interest Rate Agreement or other derivative instruments as determined in accordance with GAAP and the application of Statement of Financial Accounting Standards No. 133, plus (f) to the extent not included in clauses (a) through (e) above, any net extraordinary gains or net extraordinary losses for such period, plus (g) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.
37.There shall be excluded from Consolidated Net Income for any period, the purchase accounting effects of adjustments in component amounts required or permitted by GAAP (including the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) and related authoritative pronouncements (including the effects of such adjustments pushed down to the Corporation and the Restricted Subsidiaries), as a result of the Transactions, any acquisition constituting an Investment permitted under the Preferred Equity Documents consummated prior to or after the Initial Closing Date, or the amortization or write-off of any amounts thereof. For the avoidance of doubt, Consolidated Net Income shall be calculated, including pro forma adjustments, in accordance with Section 18(g).
Consolidated Total Debt” means, as at any date of determination, the aggregate principal amount of all Indebtedness for Borrowed Money and Disqualified Capital Stock (other than Disqualified Capital Stock of a Restricted Subsidiary of the Corporation held by the Corporation or a wholly-owned Restricted Subsidiary of the Corporation) of the Corporation and its Restricted Subsidiaries outstanding on such date; provided that “Consolidated Total Debt” (x) shall be calculated based on the initial stated principal amount (or liquidation preference, as the case may be) without giving effect to any discounts and (y) shall not include letters of credit, bankers’ acceptances or bank guarantees except to the extent of drawn and unreimbursed amounts thereunder.
Control” (including, with correlative meanings, the terms “Controlling,” “Controlled by” and “under Common Control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management
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and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
Controlling Stockholders” means any of TCP, the Thomas C. Priore 2019 GRAT and the Thomas C. Priore Irrevocable Insurance Trust U/A/D 1/8/2010.
38.Corresponding Tenor” with respect to a Benchmark Replacement means a tenor (including overnight) having approximately the same length (disregarding Business Day adjustment) as the applicable tenor for the then-current Benchmark.
39.Credit Agreement” means the Credit and Guaranty Agreement, dated as of April 27, 2021, among Holdings, the other borrowers party thereto from time to time, the guarantors party thereto from time to time, Truist Bank, as administrative agent, collateral agent, an issuing bank and swing line lender, and the lenders party thereto from time to time, as amended, modified or otherwise supplemented from time to time, and (ii) any other debt facilities, indentures or other arrangements with banks, other financial institutions or investors providing for revolving credit loans, term loans, notes or other indebtedness, that restates or replaces any of the foregoing, in each case as further amended or otherwise modified or replaced from time to time (whether or not with the original administrative agent and lenders or another administrative agent or agents or other banks or institutions and whether provided under the original facilities or credit agreements or one or more other facilities credit agreements or other agreements, indentures, financing agreements or otherwise).
40.Delayed Draw Term Loans” has the meaning assigned to such term in the Credit Agreement (as in effect on the Initial Closing Date).
41.Disqualified Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security or any other Capital Stock 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 (other than solely for a Permitted Stock Issuance), pursuant to a sinking fund obligation or otherwise (except as a result of a customarily defined change of control or asset sale and only so long as any rights of the holders thereof after such change of control or asset sale shall be subject to the prior redemption or repayment in full of the Senior Preferred Stock (other than (i) unasserted contingent indemnification or reimbursement obligations not yet due and (ii) obligations under cash management agreements or obligations under Interest Rate Agreements) that are accrued and payable, the cancellation, expiration, replacement, backstopping or cash collateralization of all outstanding letters of credit reasonably satisfactory to the applicable issuing banks and the termination of the Revolving Commitments), (b) provides for scheduled payments of dividends in Cash, (c) is redeemable at the option of the holder thereof (other than solely for a Permitted Stock Issuance), in whole or in part, (d) is secured by any assets of the Corporation or its Subsidiaries or (e) is or becomes convertible into or exchangeable for Indebtedness or any other Disqualified Capital Stock, in whole or in part, in each case, on or prior to the date that is ninety-one (91) days after October 27, 2028.
42.Disqualified Institutions” means (i) those investment funds, financial institutions and other investors, in each case separately identified by name in writing to the
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Investors by the Corporation prior to March 5, 2021, (ii) competitors that, directly or through a controlled Affiliate or Subsidiary or portfolio company, are engaged in the same or substantially similar line of business as the Corporation or its Subsidiaries or the Target and its Subsidiaries and identified by name in writing by the Corporation to the Holders from time to time (which list of competitors may be supplemented by the Corporation after the Initial Closing Date by means of a written notice to the Holders) or (iii) in the case of each of clauses (i) and (ii), any of their Affiliates that are either (a) identified in writing by the Corporation from time to time to the Holders or (b) clearly identifiable solely on the basis of the similarity of such Affiliate’s name; provided that (x) Disqualified Institutions referenced in clauses (ii) and (iii) (as clause (iii) pertains to clause (ii)) above shall not include a bona fide debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is engaged in, or that advises funds or investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, debt securities, preferred stock and similar extensions of credit or securities in the ordinary course of business which is managed, sponsored or advised by any Person controlling, controlled by or under common control with any competitor of the Corporation, the Target and the Corporation’s and Target’s respective Subsidiaries or any Affiliate of such competitor, but with respect to which no personnel involved with any investment in such Person (other than a limited number of senior employees in connection with internal legal, compliance, risk management or credit practices) directly or indirectly makes, has the right to make or participates with others in making any investment decisions with respect to such debt fund, investment vehicle, regulated bank entity or unregulated lending entity and (y) any supplementations shall not apply retroactively to disqualify any parties that have previously acquired an assignment of the Senior Preferred Stock.
43.DGCL” means the Delaware General Corporation Law.
44.Dollar” and “$” mean lawful money of the United States.
45.Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by, the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates.
46.ERISA” means the Employee Retirement Income Security Act of 1974, including any regulations promulgated thereunder.
47.ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under Common Control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of the Corporation or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of the Corporation or any such Subsidiary within the meaning of this definition
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with respect to the period such entity was an ERISA Affiliate of the Corporation or such Subsidiary and with respect to liabilities arising after such period for which the Corporation or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
48.ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for thirtyday notice to the PBGC has been waived by regulation); (ii) the failure to meet all applicable requirements under the Pension Funding Rules or the filing of an application for the waiver of the minimum funding standards under the Pension Funding Rules with respect to any Pension Plan ; (iii) the failure to make any required contribution to any Pension Plan or Multiemployer Plan when due; (iv) the filing of a notice of intent to terminate, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination under Section 4041 or 4041A of ERISA; (v) the withdrawal by the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to the Corporation, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA, or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (vi) the institution by the PBGC of proceedings to terminate any Pension Plan or Multiemployer Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (vii) the imposition of liability on the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Title IV of ERISA or Chapter 43 of the Internal Revenue Code, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; (viii) the withdrawal of the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan; (ix) notification of the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates concerning the imposition of withdrawal liability with respect to any Multiemployer Plan or notification that a Multiemployer Plan is insolvent within the meaning of Title IV of ERISA or in endangered or critical status, within the meaning of Section 305 of ERISA,; (x) the occurrence of an act or omission which could give rise to the imposition on the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (xi) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (xii) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit 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 Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (xiii) a Pension Plan is in “at risk” status within the meaning of Code Section 430(i); or (xiv) the imposition of a Lien pursuant to Section 412 or 430(k) of the Internal Revenue Code or pursuant to Section 303 or 4068 of ERISA. Notwithstanding any provision of this Certificate of Designations to the contrary, “ERISA Event” shall not include the termination
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of the “defined benefit pension plan” (within the meaning of Section 3(35) of ERISA) sponsored by Target in accordance with the requirements of the terms and conditions of the Merger Agreement (as defined in the Purchase Agreement).
49.Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
50.FCPA” means the United States Foreign Corrupt Practices Act of 1977.
51.Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of the Corporation that such financial statements fairly present, in all material respects, the financial condition of the Corporation and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and, with respect to unaudited financial statements, the absence of footnotes.
Financial Plan” has the meaning set forth in Section 13(a)(ix).
Fiscal Quarter” means a fiscal quarter of any Fiscal Year.
Fiscal Year” means the fiscal year of the Corporation and its Restricted Subsidiaries ending on December 31 of each calendar year.
Fixed Amounts” has the meaning set forth in Section 18(j)(ii).
Foreign Official” means a Person acting in an official capacity for or on behalf of any Governmental Authority (other than a Governmental Authority of the United States, any state thereof or the District of Columbia).
GAAP” means, subject to the limitations on the application thereof set forth in Section 18(a), United States generally accepted accounting principles in effect as of the date of determination thereof.
Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government (including, NAIC and any supra-national bodies such as the European Union or the European Central Bank), any court or any central bank, in each case, whether associated with a state of the United States, the United States, or a foreign entity or government.
Guarantee” means, as to any Person, without duplication, any obligation, contingent or otherwise of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
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Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance or such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonable anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
Holder Representative” means Ares Capital Corporation or any other Holder or Affiliate of a Holder to whom Ares Capital Corporation assigns its rights and obligations as “Holder Representative” hereunder.
Holders” means the holders of outstanding Senior Preferred Stock as they appear in the records of the Corporation.
Holdings” means Priority Holdings, LLC, a Delaware limited liability company.
Incurrence Based Amounts” has the meaning set forth in Section 18(j)(ii).
Indebtedness” means, as applied to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (i) all indebtedness for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA and any current trade accounts payable incurred in the ordinary course of business), which purchase price is (a) due more than six (6) months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on any property or asset owned, held or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings) regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit issued (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (vii) any Guarantee by such Person of the Indebtedness of another Person; (viii) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including any Interest Rate Agreement, whether entered into for hedging or speculative purposes; and (ix) all obligations of such Person in respect of Disqualified Capital Stock. For purposes of this definition, (A) the amount of any Indebtedness described in clause (v) above for which recourse is limited to certain property of such Person shall be the lesser of the amount of the obligation and the fair market value of the property securing such obligation, (B) the principal amount of the Indebtedness
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under any Interest Rate Agreement at any time shall be equal to the Swap Termination Value (as defined in the Credit Agreement as in effect on the Initial Closing Date) and (C) the amount of any Indebtedness issued at a discount to the initial principal amount shall be calculated based on the initial stated principal amount thereof without giving effect to any such discount.
Indebtedness for Borrowed Money” means, with respect any Person on a consolidated basis at any date, without duplication, all Indebtedness of such Person and its Restricted Subsidiaries comprising (i) liabilities, contingent or otherwise, of such Person for borrowed money, (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) finance lease obligations or purchase money indebtedness, (iv) earn-out obligations payable in cash that are shown as liabilities on the balance sheet of such Person in accordance with GAAP, (v) any seller notes, and (vi) any guarantees of any of the foregoing.
Initial Closing Date” means April 27, 2021.
Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement, each of which is (i) for the purpose of hedging the interest rate exposure associated with Borrowers’ and their Restricted Subsidiaries’ operations and (ii) not for speculative purposes.
Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
52.Interpolated Benchmark” with respect to the Benchmark means the rate determined for the Corresponding Tenor by interpolating on a linear basis between: (1) the Benchmark for the longest period (for which the Benchmark is available) that is shorter than the Corresponding Tenor and (2) the Benchmark for the shortest period (for which the Benchmark is available) that is longer than the Corresponding Tenor.
53.Investment” means as to any Person, any direct or indirect acquisition or investment by such Person, by means of (a) the purchase or other acquisition of Capital Stock or debt or other Securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of (i) all or substantially all of the assets of any Person or any business unit, line of business or division thereof or (ii) all or substantially all of the customer lists of any Person or any business unit, line of business or division thereof (including, for the avoidance of all doubt, “tuck in” acquisitions). For purposes of covenant compliance, the amount of any Investment at any time shall be the amount actually invested (measured at the time made), without adjustment for subsequent increases or decreases in the value of such Investment less any Returns (as defined in the Credit Agreement) in respect of such Investment; provided that the aggregate amount of such Returns shall not exceed the original amount of such Investment).
54.Investors” has the meaning set forth in the preamble.
55.ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or
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supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time.
56.ISDA Fallback Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to the Benchmark for the applicable tenor.
57.ISDA Fallback Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable ISDA Fallback Adjustment.
58.Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form.
59.Junior Financing” has all have the meaning set forth in the Credit Agreement (as in effect on the Initial Closing Date).
60.LIBOR Business Day” means any day on which dealings in deposits in U.S. Dollars are transacted in the London Inter-Bank Market.
61.LIBOR Rate Determination Date” means (i) the second LIBOR Business Day preceding each LIBOR Rate Reset Date or (ii) April 23, 2021 in the case of the initial Dividend Period.
Lien” means any lien, mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, right of set-off, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any Capital Lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.
Limited Condition Transaction” means any Permitted Acquisition or any similar Investment permitted hereunder that is not conditioned on the availability of, or on obtaining, third party financing.
Liquidation Event” means:
(i)    the Corporation (x) voluntarily commences any proceeding, or consents to the entry of an order for relief against it in an involuntary proceeding, under domestic or foreign bankruptcy law seeking to adjudicate it as bankrupt or insolvent, (y) makes a general assignment for the benefit of its creditors, or (z) consents to a receiver, trustee, custodian or similar agent being appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business;
(ii)a court of competent jurisdiction (x) enters an order or decree under any domestic or foreign bankruptcy law that is for relief against the Corporation in an involuntary case, (y) appoints a receiver, trustee, custodian or similar agent being appointed by order of any court of competent jurisdiction to take charge of or sell any
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material portion of the Corporation’s property or business or (z) orders the liquidation of the Corporation, and in the case of each of clauses (x), (y) and (z), the order or decree remains unstayed and in effect for 60 consecutive days; or
(iii)the Corporation otherwise liquidates, dissolves or winds up its affairs.
Liquidation Preference” means, with respect to each share of Senior Preferred Stock, $1,000.00 (subject to adjustment for any stock splits, reverse splits or similar transactions).
Make-Whole Amount” means with respect to any share of Senior Preferred Stock on any redemption date: the sum of the present values at such redemption date of (i) 2.00% of the sum of (x) the Liquidation Preference thereon plus (y) any accrued and unpaid Dividends thereon, through and including the applicable redemption date, plus (ii) 102.00% of the amount of Dividends that would accrue in respect of such share of Senior Preferred Stock from the date of such redemption through April 27, 2023, discounted to the date of redemption on a quarterly basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate determined with respect to such redemption date plus 50 basis points, and assuming for purposes hereof that (1) the Dividends referred to in this clause (ii) are paid in cash in full, and (2) the Dividend Rate for the period from the date of such redemption through April 27, 2023 is equal to the Dividend Rate in effect as of the date of such redemption.
Material Adverse Effect” means any event, change or condition, that individually or in the aggregate, has had a material adverse effect with respect to (i) the business, results of operations or financial condition of the Corporation and its Restricted Subsidiaries taken as a whole; (ii) the ability of the Corporation to fully and timely perform its payment and other obligations under any Preferred Equity Document; (iii) the legality, validity, binding effect, or enforceability against the Corporation of any of the Preferred Equity Documents; or (iv) the rights, remedies and benefits, taken as a whole, available to, or conferred upon, any Investor or any other Holder under any Preferred Equity Document.
Moody’s” means Moody’s Investor Services, Inc.
Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
Narrative Report” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of the Corporation and its Restricted Subsidiaries in the form prepared for presentation to senior management thereof for the applicable month, Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate with comparison to and variances from the immediately preceding period and budget.
OFAC” has the meaning set forth in the definition of “Sanctions.”
Organizational Documents” means (i) with respect to any corporation, its certificate or articles of incorporation or organization and its by-laws (or similar documents), (ii) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement (or similar documents), (iii) with respect to any general partnership, its partnership agreement (or similar documents), (iv) with respect to any limited liability company, its articles
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of organization or certificate of formation and its operating agreement (or similar documents), and (v) with respect to any other form of entity, such other organizational documents required by local law or customary under such jurisdiction to document the formation and governance principles of such type of entity. In the event any term or condition of any Preferred Equity Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.
PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001).
PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA regarding minimum funding standards and minimum required contributions (including any installment payment thereof) and set forth in Sections 412, 430, 431, 432 and 436 of the Internal Revenue Code and Sections 302, 303, 304 and 305 of ERISA.
Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.
Permitted Acquisition” means the acquisition of all or substantially all of the assets of any Person or any line of business or division thereof, or at least a majority of the Capital Stock of any Person (including any Investment which serves to increase the Corporation’s direct or indirect equity ownership in any Joint Venture) or any portfolio acquisitions, so long as (A) no Preferred Default, Preferred Event of Default or Bankruptcy Event exists at the time of signing the definitive agreement with respect to such acquisition and no Preferred Payment Default or Bankruptcy Event exists immediately before or after the consummation thereof, (B) the nature of business covenant in Section 13 (xviii) is satisfied, (C) the Corporation delivers to the Holders not less than ten (10) Business Days prior to the closing of such acquisition (i) diligence materials customary for transactions of such type, (ii) in the case of any Permitted Acquisition being funded in whole or in part with the proceeds of any Authorized Delayed Senior Preferred Stock, final drafts of the definitive documentation with respect to such acquisition, and (iii) in the case of acquisitions for consideration in excess of $50,000,000, a quality of earnings report, (D) the Corporation is in compliance on a Pro Forma Basis with a Total Net Leverage Ratio and Total Preferred Net Leverage Ratio of 4.25:1.00 and 6.25:1.00, respectively, determined as of the time of signing of the definitive agreement with respect to such acquisition and (E) such acquisition is not hostile.
Permitted Stock Issuances” means any sale, transfer, issuance or other disposition of any Capital Stock by the Corporation or any Restricted Subsidiary in accordance with its Organizational Documents, other than Disqualified Capital Stock, in each case, to the extent not resulting in a Change of Control or a Sale Event.
Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, governmental authority or any other entity.
Preferred Covenant Default” the Corporation’s failure to observe, breach of or default under any provision of this Certificate of Designations (including, without limitation,
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Section 7) or any other Preferred Equity Document (including, without limitation, the Purchase Agreement), other than a Preferred Payment Default, and, in the case of all such provisions other than Sections 7, 10 and 13(a)(vi) hereof and Sections 1.6 and 3 of the Purchase Agreement, such failure, breach or default shall not have been remedied or waived within thirty (30) days after the earlier of (i) a Senior Officer of the Corporation or any Restricted Subsidiary becoming aware of such failure, breach, of default or (ii) receipt by the Corporation of notice from any Holder of such failure, breach or default.
Preferred Default” means a condition or event that constitutes a Preferred Event of Default or that, after notice or lapse of time or both, would constitute a Preferred Event of Default.
Preferred Equity Documents” means this Certificate of Designations, the Purchase Agreement, the Warrants (as defined in the Purchase Agreement), the Controlling Stockholder Letter Agreement (as defined in the Purchase Agreement), the Registration Rights Agreement (as defined in the Purchase Agreement), the Stockholders’ Agreement (as defined in the Purchase Agreement) and the certificates (if any) representing the Senior Preferred Stock.
Preferred Event of Default” means (a) any Preferred Payment Default or (b) any Preferred Covenant Default.
Preferred Payment Default” means any failure to make any payment in respect of the Senior Preferred Stock under this Certificate of Designations as and when due of any amounts (including, for the avoidance of doubt, any Dividends or any payments stemming from a redemption or prepayment under this Certificate of Designations), which failure, in the case of Dividend payments only, continues for a period of five (5) Business Days or more.
Pro Forma Basis” and “Pro Forma Effect” means, with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Specified Transactions) in accordance with Section 18(g).
Redemption Price” means the redemption price (expressed as a percentage of the outstanding Liquidation Preference) pursuant to Section 9(a)(i), Section 9(a)(ii) or Section 9(b) together with any accrued and unpaid Dividends on the shares of Senior Preferred Stock redeemed, up to, but not including, the applicable redemption date, which price shall be determined as follows: (x) for redemptions pursuant to Section 9(a)(i) or Section 9(a)(ii), based on the applicable redemption date; and (y) for redemptions pursuant to Section 9(b), based on the date of occurrence of the applicable Change of Control or Liquidation Event.
Reference Time” with respect to any determination of the Benchmark means (1) if the Benchmark is the Three-Month LIBOR Rate, 11:00 a.m., London time, on the LIBOR Rate Determination Date, and (2) if the Benchmark is not the Three-Month LIBOR Rate, the time determined by the Holder Representative in consultation with the Corporation in accordance with the Benchmark Replacement Conforming Changes.
Relevant Governing Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
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Required Holders” means Holders of more than 50% of the Liquidation Preference of the then issued and outstanding Senior Preferred Stock; provided that any determination of “Required Holders” must include the Ares Holders if, at the time the determination of Required Holders is made, the Ares Holders in the aggregate hold at least 10.0% of the aggregate Liquidation Preference of the then issued and outstanding Senior Preferred Stock.
Restricted Debt Payment” means any voluntary or optional payment or prepayment on (including in respect of principal of or interest), or repurchase, redemption, defeasance (including in substance or legal defeasance) or acquisition for value of, or any prepayment or redemption as a result of any Asset Sale, Change of Control or similar event of, any Indebtedness outstanding under any Junior Financing, in each case, prior to the scheduled maturity date thereof, or any payment of “earn-outs” or other Indebtedness incurred by any Borrower and/or any Restricted Subsidiary consisting of the deferred purchase price of property acquired in any Permitted Acquisition.
Restricted Industries” means the following industries or sectors: adult entertainment (including pornography); alternative financing to low income populations (including “payday” lenders); cannabis (to the extent that such activity violates applicable state law or to the extent that the Corporation’s activity violates U.S. federal law); coal-fired electrical generation plans; thermal coal; manufacturers of, and retailers that, to the Corporation’s knowledge, derive a majority of their revenue from the sale of, firearms, weapons or ammunition; acquisitions that primarily relate to (x) gambling, casinos and equivalent enterprises, (y) tobacco or (z) opioids; human cloning; oil sands, shale or other fracking activities; opioids; private prisons; and production or trade of radioactive materials.
Restricted Payments” means (i) any dividend or other distribution (whether in Cash, securities or other property), direct or indirect, on account of any shares of any class of Capital Stock of the Corporation or any of its Restricted Subsidiaries now or hereafter outstanding; (ii) any redemption, retirement, sinking fund or similar payment, purchase, retirement, defeasance, acquisition, cancellation or termination for value, direct or indirect, of any shares of any class of Capital Stock of the Corporation or any of its Restricted Subsidiaries now or hereafter outstanding, or on account of any return of capital to the Corporation’s or a Restricted Subsidiary’s stockholders, partners or members (or equivalent Person thereof); and (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Corporation or any of its Restricted Subsidiaries now or hereafter outstanding.
Restricted Subsidiary” means each Subsidiary of the Corporation other than an Unrestricted Subsidiary.
Revolving Commitments” has the meaning assigned to such term in the Credit Agreement (as in effect on the Initial Closing Date).
Revolving Loan” has the meaning assigned to such term in the Credit Agreement (as in effect on the Initial Closing Date).
S&P” means Standard & Poor’s Financial Services, LLC, a subsidiary of S&P Global Inc.
Sale Demand” has the meaning set forth in Section 10.
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Sale Event” means any of the following: (a) a merger or consolidation of the Corporation into or with any Person, or a sale, exchange, conveyance or other disposition of Capital Stock of the Corporation to any Person, in a single transaction or a series of related transactions, as a result of which the shareholders of the Corporation immediately prior to such merger, consolidation, sale, exchange, conveyance or other disposition (determined at the time of the first of such series of transactions) beneficially own less than a majority of the Corporation’s or any successor entity’s issued and outstanding Capital Stock immediately after such merger, consolidation, sale, exchange, conveyance or other disposition or series of such transactions; or (b) a single transaction or series of related transactions pursuant to which any Person acquires a majority of the Corporation’s assets determined on a consolidated basis, including through the purchase of Capital Stock of one or more Subsidiaries of the Company or by means of any merger, consolidation or other transaction involving one or more Subsidiaries of the Corporation, in the case of either (a) or (b) in connection with which the Senior Preferred Stock is redeemed in full in cash at the Redemption Price pursuant to Section 9.
Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the United States Government (including without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State), the United Nations Security Council, the European Union or any European member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.
Sanctioned Country” means, at any time, a country, region or territory which itself is, or whose government is, the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, and Syria).
Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the United States Government (including, without limitation, OFAC or the U.S. Department of State), the United Nations Security Council, the European Union or any European Union member state, the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or Controlled by any such Person or Persons described in the foregoing clauses (a) or (b).
SEC” means the United States Securities and Exchange Commission and any successor organization.
Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
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Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Senior Officer” means, with respect to any Person other than a natural person, the President, Chief Executive Officer, Chief Financial Officer or Chief Operating Officer of such Person.
SOFR” with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator), on the Federal Reserve Bank of New York’s Website.
Specified Transaction” means (a) the Transactions, (b) any Investment that results in a Person becoming a Restricted Subsidiary, (c) any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary, (d) any Permitted Acquisition, (e) any Asset Sale that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Corporation and any Asset Sale of a business unit, line of business or division of the Corporation or any Restricted Subsidiary, in each case, whether by merger, consolidation, amalgamation or otherwise or (f) any incurrence or repayment of Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit) or Restricted Payment, in each case, that by the terms of this Certificate of Designations requires a financial ratio or test to be calculated on a “Pro Forma Basis” or after giving “Pro Forma Effect.”
Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, Joint Venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or Controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person Controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.
Supermajority Holders” means Holders of more than 90% of the Liquidation Preference of the then issued and outstanding Senior Preferred Stock.
Target” means Finxera Holdings, Inc., a Delaware corporation.
TCP” means Thomas C. Priore, an individual resident in the State of New York.
TCP Director Agreement” means the Director Agreement, dated as of May 21, 2014 and as in effect on March 5, 2021.
Term SOFR” means the forward-looking term rate for the applicable Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body.
Test Period” means, for any date of determination under this Certificate of Designations, the four consecutive Fiscal Quarters of the Corporation most recently ended as of such date of determination for which financial statements have been delivered to the Holders.
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Total Net Leverage Ratio” means, at any date of determination, as of any date, the ratio of (x) Consolidated Total Debt net of Unrestricted Cash to (y) Consolidated Adjusted EBITDA for the most recently ended Test Period.
Total Preferred Net Leverage Ratio” means, at any date of determination, the ratio of (x) the sum of (i) Consolidated Total Debt net of Unrestricted Cash, (ii) the aggregate Liquidation Preference of all outstanding Senior Preferred Stock and any other Parity Securities and Senior Securities and (iii) the aggregate accrued and unpaid Dividends on the Senior Preferred Stock and the accrued and unpaid dividends on any other Parity Securities and Senior Securities to (y) Consolidated Adjusted EBITDA for the most recently ended Test Period.
Transaction Costs” has the meaning assigned to such term in the Credit Agreement (as in effect on the Initial Closing Date).
Transactions” has the meaning assigned to such term in the Credit Agreement (as in effect on the Initial Closing Date).
Transfer” means a transfer, sale, assignment, pledge, hypothecation or other disposition, or conveyance of legal or beneficial interest in, whether directly or indirectly (including pursuant to the creation of a derivative security), the grant of an option or other right or the imposition of a restriction on disposition or voting, and irrespective of whether any of the foregoing are effected, with or without consideration, voluntarily or involuntarily, by operation of law or otherwise, or whether inter vivos or upon death.
Treasury Rate” means, as obtained by the Corporation, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 Selected Interest Rates) that has become publicly available at least two Business Days (but not more than five Business Days) prior to the date of notice of the applicable redemption date (or, if such Statistical Release is no longer published (or the relevant information published therein), any publicly available source of similar market data most nearly equal to the period from such redemption date to April 27, 2023; provided, however, that if the period from such redemption date to April 27, 2023 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.
Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
Unrestricted Cash” means, with respect to any Person(s) as of any date of determination, (i) Cash and Cash Equivalents on hand of such Person(s), minus (ii) the sum of (a) Cash held for Merchant (as defined in the Credit Agreement as in effect on the Initial Closing Date) reserves or otherwise held in trust for the benefit of Merchants (including any funds in a Reserve Funds Account (as defined in the Credit Agreement as in effect on the Initial Closing Date)), and amounts constituting reserves and/or segregated amounts held by a Processor (as defined in the Credit Agreement as in effect on the Initial Closing Date) which may be subject to offset under any Approved Processor Agreement (as defined in the Credit Agreement as in effect on the Initial Closing Date), (b) any Cash deposited into escrow or set aside as a reserve in connection with a Permitted Acquisition or other transaction permitted hereunder, (c) any Cash set aside as a reserve pursuant to Section 8.01(m) of the Credit Agreement (as in effect on the Initial Closing Date), and (d) any other Cash or Cash Equivalents of such Person(s) that have
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been pledged to a third party (other than the Secured Parties (as defined in the Credit Agreement as in effect on the Initial Closing Date)).
Unrestricted Subsidiary” means (a) any Subsidiary of the Corporation that is designated as an Unrestricted Subsidiary by the Corporation after the Initial Closing Date in a written notice to the Holders; provided that no Preferred Event of Default or Bankruptcy Event shall have occurred and be continuing or exist or would immediately result from such designation after giving Pro Forma Effect thereto, and (b) each Subsidiary of an Unrestricted Subsidiary; provided that upon such designation or re-designation, (i) no Subsidiary designated as an Unrestricted Subsidiary pursuant hereto may be designated as a “Restricted Subsidiary” under any other material Indebtedness of the Corporation or its Restricted Subsidiaries outstanding at such time, (ii) the Corporation shall be in compliance on a Pro Forma Basis with a Total Net Leverage Ratio of no greater than 4.25:1.00 as of the last day of the most recently ended Test Period before and after giving effect to such designation or re-designation and (iii) such designation shall be deemed to be an Investment on the date of such designation in an amount equal to the fair market value of the net assets of such Restricted Subsidiary attributable to the Corporation’s interest in the Capital Stock of such Subsidiary (as reasonably determined by the Corporation) and such designation shall be permitted only to the extent permitted under Section 7(xiii) on the date of such designation. The Corporation may, by written notice to the Holders, re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, and thereafter, such Subsidiary shall no longer constitute an Unrestricted Subsidiary, but only if no Preferred Event of Default or Bankruptcy Event would immediately result from such re-designation. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (y) the incurrence by such Restricted Subsidiary at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary outstanding at such time (after giving effect to, and taking into account, any payoff or termination of Indebtedness or any release or termination of Liens, in each case, occurring in connection or substantially concurrently therewith) and (z) a return on any Investment by the Corporation in such Unrestricted Subsidiary in an amount equal to the net book value at the date of such prior designation of such Restricted Subsidiary as an Unrestricted Subsidiary. It is understood and agreed that no Unrestricted Subsidiary designated as a Restricted Subsidiary may thereafter be re-designated an Unrestricted Subsidiary. No Unrestricted Subsidiary may own or hold any intellectual property that is material to the business of the Corporation and its Restricted Subsidiaries. Neither the Corporation nor any Restricted Subsidiary may transfer any intellectual property that is material to the business of the Corporation and its Restricted Subsidiaries to any Unrestricted Subsidiary.
Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
wholly-owned” means, as to any Person, (a) any corporation 100% of whose Capital Stock (other than directors’ qualifying shares or other nominal issuance in order to comply with local laws) is at the time owned by such Person and/or one or more wholly-owned Subsidiaries of such Person and (b) any partnership, association, Joint Venture, limited liability company or other entity in which such Person and/or one or more wholly-owned Subsidiaries of such Person have a 100% equity interest at such time.
Section 18.    Interpretation.
(a)    Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in
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conformity with GAAP. Financial statements and other financial data (including financial ratios and other financial calculations) required to be delivered by the Corporation to the Holders pursuant to this Certificate of Designations shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 13, if applicable). If at any time any change in GAAP would affect the computation of any financial ratio set forth in any Preferred Equity Document, and the Corporation or the Required Holders shall so request, the Required Holders and the Corporation shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to approval by the Requisite Holders); provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP immediately prior to such change therein, and the Corporation shall provide to the Holders within five (5) days after delivery of each certificate or financial report required hereunder that is affected thereby a written statement of a Senior Officer of the Corporation setting forth in reasonable detail the differences that would have resulted if such financial statements had been prepared without giving effect to such change. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Statement of Financial Accounting Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Corporation or any of its Subsidiaries at “fair value,” as defined therein or (ii) any treatment of Indebtedness in respect of convertible debt instruments under ASC 470-20 (or any other financial accounting standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
(b)    Interpretation, Etc. With reference to this Certificate of Designations and each other Preferred Equity Document, unless otherwise specified herein or in such other Preferred Equity Document:
(i)    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, (1) any reference herein (A) to any Person shall be construed to include such Person’s successors and assigns and (B) to the Corporation or any Restricted Subsidiary shall be construed to include the Corporation or such Restricted Subsidiary as debtor and debtor-in-possession and any receiver or trustee for the Corporation or any Restricted Subsidiary, as the case may be, in any insolvency or liquidation proceeding, (2) the words “herein,” “hereto,” “hereof” and “hereunder,” and words of similar import when used in any Preferred Equity Document, shall be construed to refer to such Preferred Equity Document in its entirety and not to any particular provision thereof, (3) all references in a Preferred Equity Document to Sections, Exhibits, Preliminary Statements, Recitals and Schedules shall be construed to refer to Sections of, and Exhibits, Preliminary Statements, Recitals and Schedules to, the Preferred Equity Document in which such references appear, (4) the word “incur” (and its correlatives) shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist, (5) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including Cash, securities,
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accounts and contract rights, and (6) any certification hereunder required to be given by a corporate officer shall be deemed to be made on behalf of the Corporation or the applicable Restricted Subsidiary and not in the individual capacity of such officer.
(ii)    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.”
(c)    Rounding. Any financial ratios required to be satisfied in order for a specific action to be permitted under this Certificate of Designations shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).
(d)    References to Organizational Documents, Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) any definition of or reference to Organizational Documents, agreements (including the Preferred Equity Documents), instruments or other documents shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements and other modifications are permitted by the Preferred Equity Documents; (b) references to any law (including by succession of comparable successor laws) shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such law; and (c) all references to any Governmental Authority, shall include any other Governmental Authority that shall have succeeded to any or all of the functions thereof.
(e)    Time of Day. Unless otherwise specified, all references herein to times of day shall be references to New York City time (daylight or standard, as applicable).
(f)    Timing of Payment of Performance. When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as described in Section 4(c) or Section 9(c)) or performance shall extend to the immediately succeeding Business Day and such extension shall be reflected in the computation of Dividends or fees, as the case may be.
(g)    Pro Forma Calculations.
    (i)    Notwithstanding anything to the contrary herein, financial ratios and tests, including the Total Net Leverage Ratio, the Total Preferred Net Leverage Ratio and compliance with covenants determined by reference to Consolidated Adjusted EBITDA, shall be calculated in the manner prescribed by this Section 18(g); provided that notwithstanding anything to the contrary in clauses (ii), (iii), (iv) or (v) of this Section 18(g), when calculating any such ratio or test for purposes of the incurrence of any Indebtedness, Cash and Cash Equivalents resulting from the incurrence of any such Indebtedness shall be excluded from the pro forma calculation of any applicable ratio or test (including compliance with covenants defined by reference to Consolidated Adjusted EBITDA). In addition, whenever a financial ratio or test is to be calculated on a Pro Forma Basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been delivered to
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the Holders pursuant to Section 13(a)(ii) or (iii), as applicable, for the relevant Test Period.
    (ii)    For purposes of calculating any financial ratio or test or compliance with any covenant determined by reference to Consolidated Adjusted EBITDA, any Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (iv) of this Section 18(g)) that have been consummated (x) during the applicable Test Period or (y) if applicable as described in clause (i) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a Pro Forma Basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated Adjusted EBITDA, and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Corporation or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 18(g), then such financial ratio or test shall be calculated to give Pro Forma Effect thereto in accordance with this Section 18(g).
    (iii)    Whenever Pro Forma Effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by an Authorized Officer of the Corporation and may include, for the avoidance of doubt, the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies resulting from or relating to any Specified Transaction (including the Transactions), in a manner permitted under and without duplication with clause (i)(r) of the definition of Consolidated Adjusted EBITDA.
    (iv)    In the event that the Corporation or any Restricted Subsidiary incurs (including by assumption or guarantees) or repays (including by redemption, repayment, retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility (for ordinary course working capital draws and repayments) unless such Indebtedness has been permanently repaid and not replaced), (A) during the applicable Test Period or (B) subject to clause (i) above, subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving Pro Forma Effect to such incurrence or repayment of Indebtedness, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period.
    (v)    [Reserved].
    (vi)    In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of:
(A)    determining compliance with any provision of this Certificate of Designations which requires the calculation of any financial ratio or test, including the Total Net Leverage Ratio and the Total Preferred Net Leverage Ratio; or
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(B)    testing availability under baskets set forth in this Certificate of Designations (including baskets determined by reference to Consolidated Adjusted EBITDA and baskets subject to Preferred Default, Preferred Event of Default and Bankruptcy Event conditions),
in each case, at the option of the Corporation (the Corporation’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder (or any requirement, representation or warranty or condition therefor is complied with or satisfied (including as to the absence of any continuing Preferred Default, Preferred Event of Default or Bankruptcy Event (other than with respect to a condition that no Preferred Payment Default and no Bankruptcy Event has occurred and is continuing, which shall be tested on the date of the consummation of such Limited Condition Transaction)) shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCT Test Date”), and if, after giving Pro Forma Effect to the Limited Condition Transaction (and the other transactions to be entered into in connection therewith), the Corporation or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in compliance with such ratio, test or basket (and any related requirements and conditions), such ratio, test or basket (and any related requirements and conditions) shall be deemed to have been complied with (or satisfied). For the avoidance of doubt, if the Corporation has made an LCT Election and any of the ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would have failed to have been complied with as a result of fluctuations in any such ratio, test or basket, including due to fluctuations in Consolidated Adjusted EBITDA of the Corporation or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such baskets, tests or ratios will not be deemed to have failed to have been complied with as a result of such fluctuations. If the Corporation has made an LCT Election for any Limited Condition Transaction, then in connection with any calculation of any ratio, test or basket availability with respect to the incurrence of Indebtedness or Liens, the making of Restricted Payments, the making of any Investment, mergers, the conveyance, lease or other transfer of all or substantially all of the assets of the Corporation or any of its Restricted Subsidiaries, the prepayment, redemption, purchase, defeasance or other satisfaction of Indebtedness, or the designation of an Unrestricted Subsidiary (each, a “Subsequent Transaction”) following the relevant LCT Test Date and prior to the earlier of (x) the date on which such Limited Condition Transaction is consummated or (y) the date that the definitive agreement is terminated or expires without consummation of such Limited Condition Transaction, for purposes of determining whether such Subsequent Transaction is permitted under this Certificate of Designations, any such ratio, test or basket shall be required to be satisfied on a Pro Forma Basis (i) assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and (ii) in the case of any Restricted Payment, assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have not been consummated.
(h)    Currency Generally. For purposes of calculating the Total Net Leverage Ratio and the Total Preferred Net Leverage Ratio on any date of determination, amounts denominated in a currency other than Dollars will be translated into Dollars at the currency exchange rates used in the latest financial statements delivered pursuant to Section 13(a)(ii) or (iii), and will, in
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the case of Indebtedness, reflect the currency translation effects, determined in accordance with GAAP, of Interest Rate Agreements for currency exchange risks with respect to the applicable currency in effect on the date of determination of the amount in Dollars of such Indebtedness.
(i)    Divisions. For all purposes under the Preferred Equity Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized (and, if applicable, treated as a newly formed or acquired Restricted Subsidiary) on the first date of its existence by the holders of its Capital Stock at such time; provided that, notwithstanding anything to the contrary herein, in no event shall the Corporation enter into any such division or plan of division transaction.
(j)    Certain Determinations.
(i)    For purposes of determining compliance with any of the covenants set forth in Section 7 or Section 13 at any time (whether at the time of incurrence or thereafter), if any Investment, Indebtedness, Asset Sale, Restricted Payment or Affiliate transaction meets the criteria of one, or more than one, of the clauses of the provision permitting such Investment, Asset Sale, Restricted Payment or Affiliate transaction as the case may be, the Corporation (x) shall in its sole discretion determine under which clause or clauses such Investment, Indebtedness, Asset Sale, Restricted Payment or Affiliate transaction (or, in each case, any portion thereof), as the case may be, is classified and (y) shall be permitted in its sole discretion to make any subsequent re-determination and/or at a later time divide, classify or reclassify under which clause or clauses such Investment, Indebtedness, Asset Sale, Restricted Payment or Affiliate transaction as the case may be, is permitted from time to time. For the avoidance of doubt, except as otherwise provided herein, if the applicable date for meeting any requirement hereunder or under any other Preferred Equity Document falls on a day that is not a Business Day, compliance with such requirement shall not be required until noon on the first Business Day following such applicable date.
(ii)    Notwithstanding anything to the contrary herein, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Certificate of Designations that does not require compliance with a financial ratio or test (including, without limitation, Total Net Leverage Ratio or the Total Preferred Net Leverage Ratio) (any such amounts, the “Fixed Amounts”) intended to be utilized with or substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Certificate of Designations that requires compliance with any such financial ratio or test (any such amounts, the “Incurrence Based Amounts”), it is understood and agreed that the Fixed Amounts (and any cash proceeds thereof) shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence Based Amounts in connection with such substantially concurrent incurrence.
(iii)    If any baskets set forth in Section 7 are exceeded solely as a result of fluctuations in Consolidated Adjusted EBITDA for the most recent Test Period after the last time such baskets were calculated for any purpose under Section 7, such baskets will be deemed not to have been exceeded solely as a result of such fluctuations.
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Section 19.    Share Certificates; Legends.
(a)If any certificates representing shares of Senior Preferred Stock shall be mutilated, lost, stolen or destroyed, the Corporation shall issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the lost, stolen or destroyed certificate, a new certificate of like tenor and representing an equivalent number of shares of Senior Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such certificate and indemnity by the Holder thereof, if requested, reasonably satisfactory to the Corporation.
(b)Each certificate representing shares of Senior Preferred Stock shall contain a legend substantially to the following effect (in addition to any legends required under applicable securities laws):
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) IN COMPLIANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS AND (B)(1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B)(2), PROVIDED THAT THE CORPORATION, IF IT SO REQUESTS, RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
If any shares of Senior Preferred Stock are not represented by certificates, an appropriate notation shall be made in book entry in the share registry with respect to such shares to make appropriate reference to such restrictions.
Section 20.    Miscellaneous. For purposes of this Certificate of Designations, the following provisions shall apply:
(a)Status of Cancelled Shares. Shares of Senior Preferred Stock that have been redeemed, repurchased or otherwise cancelled shall be retired and, following the filing of any certificate required by the DGCL, have the status of authorized and unissued shares of Senior Preferred Stock, without designation as to series, until such shares are once more designated by the Board as part of a particular series of Senior Preferred Stock of the Corporation.
(b)Severability. If any right, preference or limitation of the Senior Preferred Stock set forth in this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth in this Certificate of Designations which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in
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full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.
(c)Headings. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
(d)Notices. Unless otherwise provided in this Certificate of Designations or by applicable law, all notices, requests, demands, and other communications shall be in writing and shall be personally delivered, delivered by facsimile, email or courier service, or mailed, certified with first class postage prepaid, to the address set forth on the books of the Corporation, in the case of communications to a stockholder, and to the registered office of the Corporation in the State of Delaware with a copy to the chief executive offices of the Corporation at 2001 Westside Parkway, Suite 155, Alpharetta, Georgia 30004, attention: General Counsel, for all communications to the Corporation. Each such notice, request, demand, or other communication shall be deemed to have been given and received (whether actually received or not) on the date of actual delivery thereof, if personally delivered or delivered by facsimile transmission or email (if receipt is confirmed at the time of such transmission by telephone or electronically), or on the third (3rd) day following the date of mailing, if mailed in accordance with this clause (d), or on the day specified for delivery to the courier service (if such day is one on which the courier service will give normal assurances that such specified delivery will be made). Any notice, request, demand, or other communication given otherwise than in accordance with this clause (d) shall be deemed to have been given on the date actually received. Any stockholder may change its address for purposes of this clause (d) by giving written notice of such change to the Corporation in the manner herein above provided. Whenever any notice is required to be given by law or by this Certificate of Designations, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of notice.
(e)Interpretation. When a reference is made in this Certificate of Designations to Sections, paragraphs, clauses or similar subdivisions, such reference shall be to a Section, paragraph, clause or subdivision to or of this Certificate of Designations unless otherwise indicated. The words “include,” “includes,” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.”
(f)Certain Tax Matters.
(i)All payments, dividends and distributions on the Senior Preferred Stock shall be subject to withholding and backup withholding of tax to the extent required by law, and amounts withheld, if any, shall be treated as received by the Holders in respect of which such amounts were withheld. The Senior Preferred Stock shall be treated as equity for tax purposes.
(ii)If, at any time during which any Senior Preferred Stock remains outstanding, it is reasonably expected that the Corporation will or has become a “United States real property holding corporation” within the meaning of Internal Revenue Code Section 897(c)(2), the Corporation shall notify each Holder in writing of such change in tax status within a reasonable period of time.
(iii)If the Corporation makes any cash distribution to Holders or if there is any deemed distribution to Holders for U.S. federal income tax purposes, the
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Corporation shall provide each Holder, no later than 30 days after the date of such cash or deemed distribution, with a reasonable estimate of the portion of such distribution that will be considered a dividend for U.S. federal income tax purposes; provided that if such estimate is not available at such time, the Corporation shall provide such estimate as soon as reasonably practicable and, in all events, no later than 60 days after the end of the taxable year in which such distribution occurs.
(g)Amendment. Subject to Section 7(iii) and Section 16, (i) no provision of this Certificate of Designations may be amended, including pursuant to or as a result of a merger, consolidation or business combination, except in a written instrument signed by the Corporation and the Required Holders and (ii) any of the rights of the Holders set forth herein may be waived by a vote or written consent of the Required Holders. No waiver of any default with respect to any provision, condition or requirement of this Certificate of Designations shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
(h)Equity; No Collateral Protection. The Senior Preferred Stock is equity and has no collateral protection or security.
(i)Holder Representative. The Holder Representative shall not have any liability for (x) the selection of major reference banks in the London Inter-Bank Market or major banks in New York City used for purposes of calculating the Three-Month LIBOR Rate, or for the failure or unwillingness of any major reference banks in the London Inter-Bank Market or major banks in New York City to provide a quotation or (y) any quotations received from such major reference banks in the London Inter-Bank Market or major banks in New York City, as applicable. For the avoidance of doubt, if the rate appearing on the Reuters Page LIBOR01 or Bloomberg L.P. page “BBAM” for the Three-Month LIBOR Rate is unavailable, the Holder Representative shall not be under any duty or obligation to take any action other than the Holder Representative’s obligation to take the actions expressly set forth in this Certificate of Designations, in each case whether or not quotations are provided by such major reference banks in the London Inter-Bank Market or major banks in New York City, as applicable. The Holder Representative will not be obliged to solicit rates pursuant to clause (2) of the definition of “Three-Month LIBOR Rate” if it receives no quotations for three (3) consecutive London Business Days or if the Three-Month LIBOR Rate (or other applicable Benchmark) has been disrupted permanently or indefinitely.
The Holder Representative shall be under no obligation (i) to monitor, determine or verify the unavailability or cessation of the Three-Month LIBOR Rate (or other applicable Benchmark), or whether or when there has occurred, or to give notice to any other transaction party of the occurrence of, any Benchmark Transition Event or Benchmark Replacement Date, (ii) to select, determine or designate any alternative reference rate or Benchmark Replacement, or other successor or replacement benchmark index, or whether any conditions to the designation of such a rate have been satisfied, or (iii) to select, determine or designate any Benchmark Replacement Adjustment, or other modifier to any replacement or successor index, or (iv) to determine whether or what Benchmark Replacement Conforming Changes are necessary or advisable, if any, in connection with any of the foregoing. The Holder Representative shall not be liable for any inability, failure or delay on its part to perform any of its duties set forth in this Certificate of Designations as a result of the unavailability of the Three-Month LIBOR Rate (or other applicable Benchmark) and absence of a designated replacement Benchmark, including as a result of any inability, delay, error or inaccuracy on the part of any other transaction party, including, without limitation the Corporation, in providing any direction, instruction, notice or
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information required or contemplated in this Certificate of Designations and reasonably required for the performance of such duties. The Holder Representative shall have no liability for any rate published by any publication that is the source for determining the Dividend Rate, including, but not limited to, the Reuters Page LIBOR01 or Bloomberg L.P. page “BBAM” or for any rates compiled by the ICE Benchmark Administration or any successor thereto, or for any rates published on any publicly available source, including, without limitation, the Federal Reserve Bank of New York’s Website, or in any of the foregoing cases for any delay, error or inaccuracy in the publication of any such rates, or for any subsequent correction or adjustment thereto.
[Remainder of page intentionally left blank.]


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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be executed by a duly authorized officer of the Corporation as of this 27th day of April, 2021.
PRIORITY TECHNOLOGY HOLDINGS, INC.
By:     /s/ Thomas Priore            
Name: Thomas Priore
Title: President, Chief Executive Officer, &
     Chairman
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EX-4.1 3 exhibit41-priorityxwarrant.htm EX-4.1 Document

WARRANT CERTIFICATE
THESE WARRANTS AND ANY SHARES ACQUIRED UPON THE EXERCISE HEREOF WERE ISSUED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SHARES AND ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT CERTIFICATE, AND NO TRANSFER OF THESE WARRANTS OR SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.
WARRANT CERTIFICATE
To Purchase Shares of Common Stock of
Priority Technology Holdings, Inc.
No. [   ]            [   ] Warrants
THIS CERTIFIES THAT, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, [INSERT NAME OF WARRANT HOLDER], having an address at [INSERT ADDRESS OF WARRANT HOLDER] or its registered assigns (the “Holder”), is the registered owner of the number of warrants specified above (collectively, the “Warrants”), each of which warrants entitles the holder, subject to the adjustment provisions and the conditions and limitations hereinafter set forth, to purchase from Priority Technology Holdings, Inc. (together with its successor and assignee, the “Company”), a corporation organized and existing under the laws of the State of Delaware, [____] shares, as adjusted pursuant to Section 4 hereof, of the Company’s Common Stock at a purchase price of $.001 per share, as adjusted pursuant to Section 4 hereof, (the “Exercise Price”). The Warrants shall not be terminable by the Company prior to the Expiration Date (as defined in Section 9 hereof). The shares of Common Stock issuable upon exercise of the Warrants (and any other or additional shares, securities or property that may hereafter be issuable upon exercise of the Warrants) are sometimes referred to herein as the “Warrant Shares,” and the maximum number of shares so issuable under this Warrant Certificate is sometimes referred to as the “Aggregate Number” (as such number may be increased or decreased, as more fully set forth herein).
The Warrants shall be void and all rights represented hereby shall cease after 5:00 p.m., New York City time, on the Expiration Date.


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The Warrants are part of an authorized issue of warrants (the “Authorized Warrants”) initially exercisable for an aggregate of [_____] shares of Common Stock issued on the date hereof pursuant to the terms of the Purchase Agreement.
Certain terms used in this Warrant Certificate are defined in Section 10 hereof.
The Warrants are subject to the following provisions, terms and conditions:
1.Exercise; Issue of Certificates; Payment for Shares. The Warrants represented by this Warrant Certificate may be exercised by the Holder, in whole or in part (but not as to fractional shares of Common Stock), to purchase up to the Aggregate Number of shares (initially equal to [____] shares) of Common Stock at all times on or prior to 5:00 p.m., New York City time, on the Expiration Date hereof.
(a)The Warrants shall be exercisable in whole at any time or in part from time to time by surrendering this Warrant Certificate on any Business Day (with the Exercise Form annexed hereto as Schedule 1 properly completed and executed) to the Company at its principal office specified in Section 15, or its then current address, and upon payment to the Company of the Exercise Price for the Warrant Shares being purchased.
(b)Payment of the aggregate Exercise Price with respect to an exercise in whole or in part of any Warrants may be made, in the sole discretion of the Holder, in the form of any of the following: (i) by cash or a check or bank draft in New York Clearing House funds or by wire transfer of immediately available funds, (ii) by the surrender of the applicable Warrant or Warrants, and without the payment of the Exercise Price in cash, for such number of Warrant Shares equal to the product of (A) the number of Warrant Shares for which such Warrant or Warrants are exercisable with payment in cash of the Exercise Price as of the date of exercise and (B) the Cashless Exercise Ratio, (iii) by tendering shares of Senior Preferred Stock having an aggregate Liquidation Preference (as defined in the Certificate of Designations) plus accrued but unpaid Dividends (as defined in the Certificate of Designations) thereon to the date of exercise equal to the Exercise Price or (iv)  by any combination of (i), (ii) and (iii) above. Such certificate or certificates shall be deemed to have been issued and any Person so designated to be named therein shall be deemed for all purposes to have become a holder of record of such Warrant Shares as of the close of business on the Business Day of the surrender of this Warrant Certificate and payment of the Exercise Price as aforesaid.
(c)Certificates for the shares so purchased shall be delivered to the Holder within a reasonable time, not exceeding five (5) days, after this Warrant Certificate shall have been so exercised, and unless the Warrants represented by this Warrant Certificate have expired or been fully exercised, a new Warrant Certificate representing the number of shares with respect to which this Warrant Certificate shall not then have been exercised shall also be delivered to the Holder within such time.


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2.Shares to be Fully Paid; Reservation of Shares; Listing. The Company covenants and agrees that: (a) all Warrant Shares will, upon issuance, be originalissue shares (and not treasury stock) fully paid and nonassessable and free from all taxes, claims, liens, charges and other encumbrances with respect to the issue thereof (other than as may be imposed by federal or state securities laws); (b) without limiting the generality of the foregoing, it will from time to time take all such action as may be required to assure that the par value per share of Common Stock shall at all times be less than or equal to the Exercise Price; (c) during the period within which the Warrants represented by this Warrant Certificate may be exercised, the Company will at all times have authorized and reserved for the purpose of issue or transfer upon exercise of the Warrants represented by this Warrant Certificate a sufficient number of originalissue shares of its Common Stock to provide for the exercise of all the Warrants represented by this Warrant Certificate; and (d) upon the exercise of the Warrants represented by this Warrant Certificate, it will, at its expense, promptly notify each securities exchange on which any Common Stock is at the time listed of such issuance, to the extent required by rules of such securities exchange, and use its best efforts to maintain a listing of all shares of Common Stock from time to time issuable upon the exercise of the Warrants represented by this Warrant Certificate to the extent such shares can be listed.
3.Registration Rights Agreement. The Holder shall be entitled to all of the benefits, and subject to all of the obligations, of the Registration Rights Agreement, in connection with the Warrants and the Warrant Shares, if issued.
4.Adjustments to Exercise Price and Aggregate Number. The Exercise Price and the Aggregate Number of shares of Common Stock issuable upon the exercise of each Warrant (the “Exercise Rate”) is subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 4.
(a)Adjustment for Change in Capital Stock. If the Company:
(i)pays a dividend or makes any other distribution on its Common Stock in shares of its Common Stock or other capital stock of the Company; or
(ii)subdivides, combines or reclassifies its outstanding shares of Common Stock,
then, in each case, the Exercise Rate and the Exercise Price in effect immediately prior to such action shall be proportionately adjusted so that the Holder may upon payment of the same aggregate Exercise Price payable immediately prior to such action receive the Aggregate Number and kind of shares of capital stock of the Company which the Holder would have owned immediately following such action if such Warrants had been exercised immediately prior to such action.


-4-
Any such adjustment shall become effective immediately after the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification.
If after an adjustment the Holder upon exercise of any Warrants may receive shares of two or more classes of capital stock of the Company, the board of directors of the Company shall determine the allocation of the adjusted Exercise Price between the classes of capital stock. After such allocation, the Exercise Rate and the Exercise Price of each such class of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 4.
Such adjustment shall be made successively whenever any event listed above shall occur.
(b)Adjustment for Certain Issuances of Common Stock. If the Company issues or sells to any Person shares of its Common Stock or distributes any rights, options or warrants entitling any Person to purchase shares of Common Stock, or any rights, warrants or options or other securities convertible into or exchangeable for Common Stock, in each case, at a price per share less than the Current Market Value on the record date for determining entitlements to participate in such issuance, sale or distribution (the “Time of Determination”), the Exercise Rate shall be adjusted in accordance with the formula:
                    E’ = E x    O + N   
                         O + N x P
                             M
and the Exercise Price shall be adjusted in accordance with the following formula:
                    EP’ = EP x
                         E’
where:
E’ =    the adjusted Exercise Rate.
E =    the Exercise Rate immediately prior to the Time of Determination for any such issuance, sale or distribution.
EP’ =    the Adjusted Exercise Price.
EP =    the Exercise Price immediately prior to the Time of Determination for any such issuance, sale or distribution.


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O =    the number of Fully Diluted Shares (as defined below) outstanding immediately prior to the Time of Determination for any such issuance, sale or distribution.
N =    the number of additional shares of Common Stock issued, sold or issuable upon exercise of such rights, options or warrants or other convertible or exchangeable securities.
P =    the per share price received and receivable by the Company in the case of any issuance or sale of Common Stock or rights, options or warrants or other convertible or exchangeable securities inclusive of the exercise price per share of Common Stock payable upon exercise of such rights, options or warrants or other convertible or exchangeable securities.
M =    the Current Market Value per share of Common Stock on the Time of Determination for any such issuance, sale or distribution.
For purposes of this Section 4, (x) the term “Fully Diluted Shares” shall mean (i) the shares of Common Stock outstanding as of a specified date, and (ii) the shares of Common Stock into or for which rights, options, warrants or other convertible or exchangeable securities outstanding as of such date are exercisable, convertible or exchangeable (other than the Warrants or any of the other Authorized Warrants), (y) the price per share received by the Company shall include the amount of any arm’s length underwriter or placement agent discount of fee paid by the Company in connection with such issuance and (y) each share of Common Stock issued in connection with the Equity Contribution or otherwise as consideration in connection with the Company’s acquisition of Finxera Holdings Inc. pursuant to, the Merger Agreement shall be deemed to have been issued at $0.00 per share.
The adjustments shall be made successively whenever any such rights, options or warrants or other convertible or exchangeable securities are issued and shall become effective immediately after the relevant Time of Determination. Notwithstanding the foregoing, the Exercise Rate and the Exercise Price shall not be subject to adjustment in connection with (i) the issuance of any shares of Common Stock upon exercise of any such rights, options or warrants or other convertible or exchangeable securities which have previously been the subject of an adjustment under this Agreement for which the required adjustment has been made, (ii) any exercise of the Warrants or any of the other Authorized Warrants, (iii) the issuance of any rights, options or warrants entitling any Person to purchase shares of Common Stock, or any rights, warrants or options or other securities convertible into or exchangeable for Common Stock, in each case, granted pursuant to the Company’s or its subsidiaries’ stock ownership, stock option, long-term incentive or similar management equity plan or any cash settled arrangement having substantially the same economic effect to any officer, employee, director or consultant to the Company or any of its Subsidiaries, (iv) the issuance of Common Stock on arm’s length terms to


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one or more sellers that are not Affiliates of the Company as full or partial consideration in connection with a bona fide business acquisition, (v) Common Stock issued for cash in a bona fide registered public offering to non-Affiliates of the Company and (vi) Common Stock issued in a bona fide private placement to non-Affiliates of the Company at a price per share not less than 95% of the Current Market Value immediately prior to the earlier of (x) the issuance of such Common Stock and (y) the date of any definitive agreement with respect to such issuance. If at the end of the period during which any such rights, options or warrants or other convertible or exchangeable securities are exercisable, not all rights, options or warrants or other convertible or exchangeable securities shall have been exercised, the Exercise Rate and the Exercise Price shall be immediately readjusted to what they would have been if “N” in each of the above formulas had been the number of shares actually issued with respect thereto.
(c)Adjustment for Other Distributions. If the Company distributes to holders of its Common Stock (i) any evidences of indebtedness of the Company or any of its subsidiaries, (ii) any assets of the Company or any of its subsidiaries (whether in cash, property or otherwise), or (iii) any rights, options or warrants to acquire any of the foregoing or to acquire any other securities of the Company, unless a Holder Distribution Election (as defined below) shall have been made with respect to such distribution, the Exercise Rate shall be adjusted in accordance with the following formula:
                    E’ = E x M  
                     M - F
and the Exercise Price shall be decreased (but not increased) in accordance with the following formula:
                    EP’ = EP x E
                         E’
where:
E’ =    the adjusted Exercise Rate.
E =    the current Exercise Rate on the record date referred to in this paragraph (c) below.
EP’ =    the Adjusted Exercise Price.
EP =    the current Exercise Price on the record date referred to in this paragraph (c) below.
M =    the Current Market Value per share of Common Stock on the record date referred to in this paragraph (c) below.


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F =    the fair market value (as determined in good faith by the Company’s board of directors) on the record date referred to in this paragraph (c) below of the indebtedness, assets, rights, options or warrants distributable in respect of one share of Common Stock.
The adjustments shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. If any adjustment is made pursuant to clause (iii) above of this subsection (c) as a result of the issuance of rights, options or warrants and at the end of the period during which any such rights, options or warrants are exercisable, not all such rights, options or warrants shall have been exercised, the Exercise Rate and the Exercise Price shall be immediately readjusted as if “F” in the above formula was the fair market value on the record date of the indebtedness or assets actually distributed upon exercise of such rights, options or warrants divided by the number of shares of Common Stock outstanding on the record date. Notwithstanding anything to the contrary contained in this subsection (c), if “M-F” in the above formula is less than $1.00 (or is a negative number) then in lieu of the adjustment otherwise required by this subsection (c), the Company may elect to distribute to the Holder, upon exercise of any Warrants, the evidences of indebtedness, assets, rights, options or warrants which would have been distributed to such Holder had such Warrants been exercised immediately prior to the record date for such distribution.
Notwithstanding the foregoing, a Holder may, in lieu of the adjustments described above in this subsection (c), elect to receive a distribution from the Company of its proportionate share of the evidences of indebtedness, assets, rights, options or warrants, as the case may be, which would have been distributed to such Holder had such Warrants been exercised immediately prior to the record date for such distribution (a “Holder Distribution Election”); provided that such Holder shall have notified the Company in writing of such election no later than 10 days after receipt of notice thereof from the Company pursuant to Section 4(f).
This subsection does not apply to rights, options or warrants referred to in subsection (b) of this Section 4.
(d)The following provisions shall be applicable to the making of adjustments of the Exercise Price and Exercise Rate hereinbefore provided for in this Section 4:
(1)The sale or other disposition of any issued shares of Common Stock owned or held by or for the account of the Company shall be deemed an issuance thereof for the purposes of this Section 4.
(2)The adjustments required by the preceding paragraphs of this Section 4 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except as otherwise expressly provided herein. For the purpose of any adjustment,


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any specified event shall be deemed to have occurred at the close of business on the date of its occurrence.
(3)In computing adjustments under this Section 4 fractional interests in Common Stock shall be taken into account to the nearest onethousandth (.001) of a share and shall be aggregated until they equal one whole share.
(4)If the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any item described in Sections 4(a) through 4(c) hereof, but abandon its plan to pay or deliver such item, then no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled.
(5)The consideration for any additional shares of Common Stock issuable pursuant to any options, warrants or other rights to subscribe for or purchase the same shall be the consideration received or receivable by the Company for issuing such options, warrants or other rights, plus the additional consideration payable to the Company upon the exercise of such options, warrants or other rights. The consideration for any additional shares of Common Stock issuable pursuant to the terms of any convertible or exchangeable securities shall be the consideration received or receivable by the Company for issuing any options, warrants or other rights to subscribe for or purchase such convertible or exchangeable securities, plus the consideration paid or payable to the Company in respect of the subscription for or purchase of such convertible or exchangeable securities, plus the additional consideration, if any, payable to the Company upon the exercise of the right of conversion, exercise or exchange of such convertible or exchangeable securities. In case of the issuance at any time of any additional shares of Common Stock or convertible or exchangeable securities in payment or satisfaction of any dividend upon any class of stock other than Common Stock, the Company shall be deemed to have received for such additional shares of Common Stock or convertible or exchangeable securities a consideration equal to the amount of such dividend so paid or satisfied.
(e) If any event occurs as to which the other provisions of this Section 4 are not strictly applicable but the lack of any provision for the exercise of the rights of the Holder would not fairly protect the exercise rights of such Holder in accordance with the essential intent and principles of such provisions, or, if strictly applicable, would not fairly protect the exercise rights of such Holder in accordance with the essential intent and principles of such provisions, then the Company shall appoint a firm of independent certified public accountants in the United States (which may be the regular auditors of the Company) of recognized national standing in the United States reasonably satisfactory to the Required Holders, which shall give their opinion as to the adjustments, if any, necessary to preserve, without dilution, on a basis consistent with the essential intent and principles established in the other provisions of this Section 4, the exercise


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rights of such Holder. Upon receipt of such opinion, the Company shall forthwith make the adjustments described therein.
(1)In case of any capital reorganization, other than in the cases referred to in Section 4(a), (b) or (c) hereof and other than any capital reorganization that does not result in any reclassification of the outstanding shares of Common Stock into shares of other stock or other securities or property, or the consolidation or merger of the Company with or into another corporation (other than a merger or consolidation in which the Company is the continuing corporation and which does not result in any reclassification of the outstanding shares of Common Stock into shares of other stock or other securities or property), or the sale of all or substantially all of the assets of the Company (collectively such actions being hereinafter referred to as “Reorganizations”), there shall thereafter be deliverable upon exercise of any Warrant (in lieu of the number of shares of Common Stock theretofore deliverable) the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock that would otherwise have been deliverable upon the exercise of such Warrant would have been entitled upon such Reorganization if such Warrant had been exercised in full immediately prior to such Reorganization. In case of any Reorganization, appropriate adjustment, as determined in good faith by the board of directors of the Company, whose determination shall be described in a duly adopted resolution certified by the Company’s Secretary or Assistant Secretary, shall be made in the application of the provisions herein set forth with respect to the rights and interests of the Holder so that the provisions set forth herein shall thereafter be applicable, as nearly as possible, in relation to any such shares or other securities or property thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Reorganization or the corporation or other entity purchasing such assets shall expressly assume, by a supplemental warrant or other acknowledgment executed and delivered to the Holder, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase, and the due and punctual performance and observance of each and every covenant, condition, obligation and liability under this Warrant Certificate to be performed and observed by the Company in the manner prescribed herein.
The foregoing provisions of this Section 4(e)(ii) shall apply to successive Reorganization transactions.
(f) In case:
    (A)    the Company shall authorize the issuance to holders of shares of Common Stock of rights, options or warrants to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants; or


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    (B)    the Company shall authorize the distribution to holders of shares of Common Stock of evidences of its indebtedness or assets or of rights, options or warrants to subscribe for or purchase any of the foregoing; or
    (C)    of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale of all or substantially all of the assets of the Company, or of any reclassification or change of Common Stock issuable upon exercise of the Warrants, or a tender offer or exchange offer for shares of Common Stock; or
    (D)    of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or
    (E)    the Company proposes to take any action that would require an adjustment to the Exercise Rate or Exercise Price pursuant to this Section 4,
then the Company shall give prompt written notice to the Holder at least 15 days prior to the applicable record date hereinafter specified, or the date of the event in the case of events for which there is no record date, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such shares, rights, options, warrants or distribution are to be determined, or (ii) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (iii) the date on which any such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up. The failure by the Company to give such notice or any defect therein shall not affect the legality or validity of any distribution, right, option, warrant, consolidation, merger, conveyance, dissolution, liquidation or winding up, or the vote upon any action.

(1)Within five (5) days after the occurrence of an event resulting in an adjustment pursuant to this Section 4, the Company shall cause to be promptly mailed to the Holder (and upon the exercise hereof, to the exercising Holder) by firstclass mail, postage prepaid, notice of each adjustment or adjustments to the Exercise Price and Exercise Rate effected since the date of the last such notice and a certificate of the Company’s Chief Financial Officer or Chief Accounting Officer, setting forth the Exercise Price and Exercise Rate after such adjustment(s), a brief statement of the facts requiring such adjustment(s) and the computation by which such adjustment(s) was made.
(g)The occurrence of a single event shall not trigger an adjustment of the Exercise Price and Exercise Rate under more than one paragraph of this Section 4.


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5.[Reserved.]
6.Taxes on Conversion. The issuance of certificates for Warrant Shares upon the exercise of the Warrants shall be made without charge to the Holder exercising the Warrants for any issue or stamp tax in respect of the issuance of such certificates, and such certificates shall be issued in the respective names of, or in such names as may be directed by, the Holder; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder, and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the reasonable satisfaction of the Company that such tax has been paid.
7.Limitation of Liability. No provision hereof in the absence of the exercise of the Warrants by the Holder and no enumeration herein of the rights or privileges of the Holder shall give rise to any liability on the part of the Holder for the Exercise Price of the Warrant Shares or as a stockholder of the Company, whether such liability is asserted by the Company or by any creditor of the Company. Upon exercise of Warrants the Holder will have the right to vote the Common Stock received upon such exercise. No Holder shall be entitled to vote or be deemed the holder of Common Stock (or any other securities as may be issuable upon the exercise of the Warrants) nor shall anything contained herein be construed to confer upon the Holder the rights of a stockholder of the Company or the right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting stockholders or to receive dividends, distributions or subscription rights or otherwise (except as provided herein), until the Warrants shall have been exercised in accordance with the terms and conditions of the Warrants.
8.Closing of Books. The Company will at no time close its transfer books against the transfer of the Warrants or of any Warrant Shares issued or issuable upon the exercise of the Warrants in any manner that interferes with the timely exercise hereof. The Company shall deem and treat the Holder as the absolute owner of the Warrants for all purposes, including, without limitation, for the purpose of exercise thereof. The Company agrees that, upon exercise of the Warrants in accordance with the terms hereof (including receipt by the Company of payment of the aggregate Exercise Price therefor), the shares so purchased shall be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the date on which the Warrants shall have been exercised and the Holder shall be deemed for all purposes a stockholder of the Company with respect to such shares as though the certificate for such shares had been issued on the date of such exercise.


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9.Restrictions on Transfer.
a.Restrictive Legends. Each certificate for any Warrant Shares issued upon the exercise of the Warrants, and each stock certificate issued upon the transfer of any such Warrant Shares (except as otherwise permitted by this Section 9), shall be stamped or otherwise imprinted with a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THE WARRANT CERTIFICATE PURSUANT TO WHICH THESE SHARES HAVE BEEN ISSUED, AND NO TRANSFER OF THESE SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.
Each Warrant Certificate issued in substitution for any Warrant Certificate pursuant to Section 11, 12 or 13 hereof and each Warrant Certificate issued upon the transfer of any Warrant (except as otherwise permitted by this Section 9) shall be stamped or otherwise imprinted with a legend in substantially the following form:
THESE WARRANTS AND ANY SHARES ACQUIRED UPON THE EXERCISE HEREOF WERE ISSUED IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SHARES AND ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SHARES MAY NOT BE TRANSFERRED EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT CERTIFICATE, AND NO TRANSFER OF THESE WARRANTS OR SUCH SHARES SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.
b.Termination of Restrictions. The restrictions imposed by Section 9A upon the transferability of Warrants and Warrant Shares shall apply as to the Warrants and any Warrant Shares until (a) such securities shall have been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering such


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securities, or (b) such time as, in the reasonable opinion of counsel for the Company, or in the written opinion of counsel for the Holder reasonably acceptable to the Company, such restrictions are not required in order to comply with the Securities Act. Whenever such restrictions shall terminate as to any Warrants or Warrant Shares, the Holder shall be entitled to receive from the Company, without expense, new certificates of like tenor not bearing the restrictive legends set forth in Section 9A.
10.Definitions. As used in this Warrant Certificate, unless the context otherwise requires, the following terms have the following respective meanings:
Affiliate: as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under Common Control with, that Person.
Aggregate Number: as set forth in the first paragraph of this Warrant Certificate.
Authorized Warrant Shares: the Warrant Shares and all shares of Common Stock (and any other or additional shares, securities or property issued upon exercise of any other Authorized Warrants) issued upon exercise of any other Authorized Warrants.
Authorized Warrants: as set forth in the second paragraph of this Warrant Certificate.
Business Day: any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York on which banking institutions located in the State of New York are authorized or required by law or other governmental action to close.
capital stock: (a) in the case of a corporation, corporate stock, and (b) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests, and including any debt securities convertible into or warrants, options or rights to acquire capital stock, whether or not such debt securities, warrants, options or rights include any right of participation with capital stock.
Cashless Exercise Ratio: shall equal a fraction, the numerator of which is the excess of the Current Market Value of one share of Common Stock on the date of exercise over the Exercise Price per share as of the date of exercise and the denominator of which is the Current Market Value of one share of Common Stock on the date of exercise.
Certificate of Designations: the Company’s certificate of designations of the powers, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions thereof, of senior preferred stock.


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closing bid price: for any Security on each trading day, (A) if such Security is listed or admitted to trading on any securities exchange, the closing price, regular way, on such day on the principal exchange on which such Security is traded, or if no sale takes place on such day, the average of the closing bid and asked prices on such day, (B) if such Security is not then listed or admitted to trading on any securities exchange, the last reported sale price on such day, or if there is no such last reported sale price on such day, the average of the closing bid and the asked prices on such day, as reported by a reputable quotation source designated by the Company or (C) if neither clause (A) nor (B) is applicable, the average of the reported high bid and low asked prices on such day, as reported by a reputable quotation service, or a newspaper of general circulation in the Borough of Manhattan, City of New York, customarily published on each trading day, in each case, designated by the Company. If there are no such prices on a trading day, then the closing bid price shall not be determinable for such trading day.
Commission: the United States Securities and Exchange Commission and any other similar or successor agency of the United States federal government administering the Securities Act or the Exchange Act.
Common Stock: the shares of Common Stock, par value $.001 per share, of the Company, currently provided for in the Second Amended and Restated Certificate of Incorporation of the Company, and including, for all purposes hereunder, any other capital stock of the Company into which such shares of Common Stock may be converted or reclassified or that may be issued in respect of, in exchange for, or in substitution of, such Common Stock by reason of any stock splits, stock dividends, distributions, mergers, consolidations or like events.
Company: as set forth in the first paragraph of this Warrant Certificate.
Control: (including, with correlative meanings, the terms “Controlling,” “Controlled by” and “under Common Control with”):, as applied to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.
Current Market Value: per share of Common Stock or of any other security (herein collectively referred to as a “Security”) at any date shall be:
(i)if the Security is not registered under the Exchange Act, the value of the Security determined by an Independent Financial Expert, or
(ii)if the Security is registered under the Exchange Act, the daily volume weighted average price of such Security for such date (or the nearest precedent date), but only if such Security shall have been listed on a national


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securities exchange or the Nasdaq National Market or traded through an automated quotation system. If such Security shall have not been so listed or traded, the Current Market Value of such Security shall be determined as if the Security was not registered under the Exchange Act.
Equity Contribution: has the meaning provided to such term in the Purchase Agreement.
Exercise Price: as set forth in the first paragraph of this Warrant Certificate.
Exercise Rate: as set forth in Section 4(a).
Exchange Act: the Securities Exchange Act of 1934, as amended.
Expiration Date: April 27, 2031.
Fully Diluted Shares: as set forth in Section 4(b).
Holder: as set forth in the first paragraph of this Warrant Certificate.
Holder Distribution Election: shall have the meaning set forth in Section 4(c).
Independent: any Person who (i) is in fact independent, (ii) does not have any direct financial interest or any material indirect financial interest in the Company or any of its subsidiaries, or in any Affiliate of the Company or any of its subsidiaries (other than as a result of holding securities of the Company in trading accounts) and (iii) is not an officer, employee, promoter, trustee, partner, director or Person performing similar functions for the Company or any of its subsidiaries or any Affiliate of the Company or any of its subsidiaries.
Independent Financial Expert: a reputable accounting, appraisal or investment banking firm that is, in the reasonable judgment of the board of directors of the Company, qualified to perform the task for which such firm has been engaged hereunder, is nationally recognized and disinterested and Independent with respect to the Company and its Affiliates and is reasonably acceptable to the Required Holders.
Merger Agreement: that certain Agreement and Plan of Merger, dated as of March 5, 2021, by and among the Finxera Holdings, Inc., the Company, Prime Warrior Acquisition Corp., and, solely in its capacity as the “Equityholder Representative” (as defined therein), Stone Point Capital LLC.
Person: an individual, corporation, partnership, limited liability company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture,


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court or governmental unit or any agency or subdivision thereof, or any other legally recognizable entity.
Purchase Agreement: the Purchase Agreement dated April 27, 2021 among the Company and the Investors set forth on Schedule I thereto pursuant to which senior preferred stock of the Corporation and the Authorized Warrants were issued.
Registration Rights Agreement: the Registration Rights Agreement, dated as of the date hereof, by and among the Company, the Investors set forth on Schedule A thereto and the other Holders (as defined therein) from time to time party thereto.
Reorganization: as set forth in Section 4(e).
Required Holders: any registered holder or holders holding more than 50% of the outstanding Authorized Warrants (including the Warrants) and Authorized Warrant Shares.
Securities Act: the Securities Act of 1933, as amended.
Senior Preferred Stock: the Senior Preferred Stock, $0.001 par value of the Company issued pursuant to the Certificate of Designations and the Purchase Agreement.
Time of Determination: as set forth in Section 4(b).
Warrants: as set forth in the first paragraph of this Warrant Certificate.
Warrant Shares: as set forth in the first paragraph of this Warrant Certificate.
11.Warrants Transferable. This Warrant Certificate is issued as a Warrant Certificate for which there is a register maintained by the Company. Subject to the provisions of Section 9, the transfer of the Warrants represented by this Warrant Certificate and all rights hereunder, in whole or in part, is registerable at the office or agency of the Company referred to in Section 1 hereof by the Holder in person or by duly authorized attorney, upon surrender of this Warrant Certificate with a properly completed Form of Assignment in the form annexed hereto as Schedule 2. The Holder, by taking or holding the same, consents and agrees that this Warrant Certificate, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant Certificate shall have been so endorsed, may be treated by the Company and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights of a “Holder” represented by this Warrant Certificate, or to the registration of transfer hereof on the books of the Company; and until due presentment for registration of transfer on such books, the Company may treat the Holder thereof as the owner for all purposes, and the Company shall not be affected by notice to


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the contrary. Any transfer tax relating to a transfer of this Warrant Certificate shall be paid by the Holder who transfers such Warrant Certificate.
12.Warrant Certificates Exchangeable for Different Denominations. Subject to the provisions of Section 9, this Warrant Certificate is exchangeable, upon the surrender hereof by the Holder hereof at such office or agency of the Company, for new Warrant Certificates of like tenor representing in the aggregate the number of Warrants represented hereby, each of such new Warrant Certificates to represent the number of Warrants as shall be designated by said Holder at the time of such surrender.
13.Replacement of Warrant Certificates. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant Certificate and, in the case of any such loss, theft or destruction, upon delivery of an indemnity bond (or, in the case of the original Holder hereof or any substantial financial institution to which any Warrants represented by this Warrant Certificate may be transferred, an unsecured indemnity agreement) reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Warrant Certificate, the Company will execute and deliver, subject to the provisions of Section 9, in lieu thereof, a new Warrant Certificate of like tenor to the Holder of such Warrant, at such Holder’s expense.
14.Certificate Rights and Obligations Survive Exercise of Warrants. The rights and obligations of the Company contained in this Warrant Certificate shall survive the exercise or repurchase of the Warrants represented by this Warrant Certificate solely to the extent that such survival is necessary to give effect to a provision hereof.
15.Notices. All notices, requests and other communications required or permitted to be given or delivered to the Holder under this Warrant Certificate shall be in writing, and shall be delivered, or shall be sent by certified or registered mail postage prepaid and addressed, to such Holder at the address shown on this Warrant Certificate, or at such other address as shall have been furnished to the Company by notice from such Holder. All notices, requests and other communications required or permitted to be given or delivered to the Company shall be in writing, and shall be delivered, or shall be sent by certified or registered mail, postage prepaid and addressed to the office of the Company (return receipt requested) at 2001 Westside Parkway, Suite 155, Alpharetta, Georgia 30004, Attention: Tom Priore, Email: tpriore@pps.io, with a copy to: Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022,Attention: Michael E. Gilligan and Xavier Kowalski, Email: michael.gilligan@srz.com and xavier.kowalski@srz.com. Any such notice, request or other communication may be sent by telegram or telex or by email, but shall in such case be subsequently confirmed by a writing delivered or sent by certified or registered mail as provided above and, in the case of an email communication, confirmed by reply e-mail from the intended recipient thereof. All notices shall be deemed to have been given either at the time of the delivery thereof to (or the receipt by, in the case of a telegram or telex; or such time as the


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intended recipient thereof shall reply confirming receipt, in the case of e-mail) any officer or employee of the person entitled to receive such notice at the address of such person for purposes of this Section 15, or, if mailed, at the completion of the third full day following the time of such mailing thereof to such address, as the case may be.
16.Amendments. Neither this Warrant Certificate nor any term or provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Company and the Holder.
17.Remedies. The Holder may seek to enforce the terms of this Warrant Certificate by seeking a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. If any default under the terms of this Warrant Certificate shall occur and be continuing, the Holder may proceed to protect and enforce its rights under this Warrant Certificate by exercising such remedies as are available to such Holder in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in this Warrant Certificate or in aid of the exercise of any power granted in this Warrant Certificate. No remedy conferred in this Warrant Certificate or the Purchase Agreement upon the Holder is intended to be exclusive of any other remedy available to such Holder, and each and every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or now or hereafter existing at law or in equity or by statute or otherwise.
18.Governing Law; Submission to Jurisdiction; Service of Process. THIS WARRANT CERTIFICATE HAS BEEN EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW YORK. THIS WARRANT CERTIFICATE AND THE RIGHTS GRANTED HEREIN SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED UNDER THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW RULES OR PRINCIPLES). ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST THE COMPANY WITH RESPECT TO THIS WARRANT CERTIFICATE OR ANY RELATED AGREEMENT SHALL BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS WARRANT CERTIFICATE, THE COMPANY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS WARRANT. IF ANY ACTION IS COMMENCED IN ANY OTHER JURISDICTION THE PARTIES HERETO HEREBY CONSENT TO THE REMOVAL OF SUCH ACTION TO THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR


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CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE HOLDERS OF THIS WARRANT OR THE WARRANT SHARES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS IN OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
19.Waiver of Jury Trial. THE COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT CERTIFICATE OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS WARRANT CERTIFICATE AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THE RELATIONSHIP THAT IS BEING ESTABLISHED HEREUNDER. THE COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALLENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS WARRANT CERTIFICATE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS WARRANT CERTIFICATE AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS WARRANT CERTIFICATE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
20.Treatment of Warrants. The Warrants shall be treated as stock for all U.S. income tax purposes and neither the Company nor the Holder shall take a position in contravention therewith unless otherwise required by law. For the avoidance of doubt, the sentence shall not alter the commercial rights and obligations of the Company and the Holder


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with respect to the Warrants, including, but not limited to, the presence or absence of voting rights and the right to participate in dividends or disposition proceeds with respect to the Warrant Shares, and shall not impact the financial or accounting treatment by the Company of the put right associated with the Warrants.



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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed by its duly authorized officer as of April 27, 2021.
Priority Technology Holdings, Inc.
By:        
    Name:
    Title:



Schedule 1
EXERCISE FORM
[To be executed only upon exercise of Warrants]
To:    [                           ]
The undersigned irrevocably exercises _______________ of the Warrants for the purchase of [one] share (subject to adjustment) of Common Stock, par value $.001 per share, of PRIORITY TECHNOLOGY HOLDINGS, INC. (the “Company”) for each Warrant represented by the within Warrant Certificate and herewith makes payment of $____ (such payment being (a) in cash or by check or bank draft in New York Clearing House funds payable to the order of the Company or by wire transfer of immediately available funds, (b) by the surrender of the applicable Warrant or Warrants, and without the payment of the Exercise Price in cash, for such number of Warrant Shares equal to the product of (1) the number of Warrants Shares for which such Warrant or Warrants are exercisable with payment in cash of the Exercise Price as of the date of exercise and (2) the Cashless Exercise Ratio, (c) by tendering shares of Senior Preferred Stock having an aggregate Liquidation Preference (as defined in the Certificate of Designations) plus accrued but unpaid Dividends (as defined in the Certificate of Designations) thereon to the date of exercise equal to the Exercise Price or (d) by any combination of (a), (b) and (c) above, all at the Exercise Price and on the terms and conditions specified in the within Warrant Certificate, surrenders the within Warrant Certificate and all right, title and interest therein (except as to any unexercised Warrants) to the Company and directs that the Warrant Shares deliverable upon the exercise of such Warrants be registered or placed in the name and at the address specified below and delivered thereto.
Date:_________________    ____________________________



Schedule 2
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant Certificate hereby sells, assigns and transfers unto the Assignee(s) named below (including the undersigned with respect to any Warrants constituting a part of the Warrants evidenced by the within Warrant Certificate not being assigned hereby) all of the rights of the undersigned under the within Warrant Certificate with respect to the number of Warrants set forth below:


Names of
Assignees



Address

Social Security or Other Identifying Number of Assignee(s)


Number of
Warrants

and does hereby irrevocably constitute and appoint ___________ the undersigned’s attorney to make such transfer on the books of [                                       ] maintained for that purpose, with full power of substitution in the premises.
Dated: ___________________
________________________________1
(Signature of Owner)

________________________________
(Street Address)

________________________________
(City) (State) (Zip Code)

11    The signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatever

EX-10.1 4 exhibit101-priorityxpurcha.htm EX-10.1 Document
EXECUTION VERSION
PRIORITY TECHNOLOGY HOLDINGS, INC.
PURCHASE AGREEMENT
This Purchase Agreement (this “Agreement”) is made as of April 27, 2021, by and among Priority Technology Holdings, Inc., a Delaware corporation (the “Corporation”), and the entities set forth on Schedule I (the “Investors”).
WHEREAS, the Corporation proposes to issue and sell to the Investors, and the Investors propose to purchase from the Corporation, in each case on the terms and subject to the conditions set forth in this Agreement, (i) up to $250,000,000 in aggregate Liquidation Preference of a series of preferred stock, par value $0.001 per share, of the Corporation (“Preferred Stock”), designated as “Senior Preferred Stock” (the “Senior Preferred Stock”), having the powers, preferences and rights, and the qualifications, limitations and restrictions, as set forth in the Certificate of Designations (the “Certificate of Designations”) in substantially the form of Exhibit A, and (ii) warrants to purchase the total number of shares of the Corporation’s common stock, par value $0.001 (the “Common Stock”), set forth on Schedule I (subject to adjustment) (the “Warrants”), in substantially the form of Exhibit B.
WHEREAS the Senior Preferred Stock and the Warrants are being offered and sold to the Investors, on the terms and subject to the conditions set forth in this Agreement, without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption from the registration requirements under the Securities Act.
NOW, THEREFORE, in consideration of, and on the basis of, the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:
SECTION 1.     PURCHASE AND SALE
    1.1    Agreement to Purchase and Sell.
(a)     On the terms and subject to the conditions of this Agreement, each Investor (severally and not jointly) agrees to purchase at the Initial Closing (as defined below), and the Corporation agrees to sell and issue to each Investor at the Initial Closing, (x) that number of shares of Senior Preferred Stock set forth opposite such Investor’s name on Schedule I under the heading “Number of Purchased Shares of Initial Preferred Stock” (the total number of such shares of Senior Preferred Stock as set forth on Schedule I, the “Initial Preferred Stock” and together with the Warrants, the “Initial Securities”) and (y) Warrants to purchase that number of shares of Common Stock set forth opposite such Investor’s name on Schedule I under the heading “Number of Shares of Common Stock Underlying Warrants,” in each case for the aggregate cash purchase price set forth opposite the name of such Investor on Schedule I under the heading “Purchase Price.”
(b)    On the terms and subject to the conditions of this Agreement, each Investor (severally and not jointly) agrees to purchase at the Acquisition Closing (as defined below), if it occurs, and the Corporation agrees to sell and issue to each Investor at the Acquisition Closing, if it occurs, that number of shares of Senior Preferred Stock set forth opposite such Investor’s name on Schedule II under the heading “Number of Purchased Shares of Acquisition Preferred Stock” (the total number of such shares of Senior Preferred Stock as set forth on Schedule II, the “Acquisition Preferred Stock”) for the cash purchase price set forth opposite the name of such Investor on Schedule II under the heading “Purchase Price”; provided that each Investor’s obligation to purchase shares of Acquisition Preferred Stock



pursuant to this Agreement shall terminate automatically and without further action of the parties on the earliest of (i) 5:00 p.m., New York City time, on February 28, 2022, (ii) the date that the Acquisition is consummated without the proceeds of the issuance and sale of the Acquisition Preferred Stock, (iii) the date on which the Merger Agreement is terminated in accordance with its terms and (iv) the date on which the Corporation delivers written notice to the Investors of its election to terminate the Investors’ obligations to purchase shares of Acquisition Preferred Stock pursuant to this Agreement.
(c)    On the terms and subject to the conditions of this Agreement, each Investor (severally and not jointly) agrees to purchase in the aggregate at one or more Delayed Closings (as defined below), if any occurs, and the Corporation agrees to sell and issue to each Investor at any Delayed Closing, if it occurs, its Proportionate Share of the aggregate number of shares of Senior Preferred Stock to be issued and sold at such Delayed Closing (as set forth in the applicable Delayed Closing Notice (as defined below)) for a cash purchase price of $1,000.00 per share; provided that (i) in no event shall any Investor be obligated pursuant to this Section 1.1(c) to purchase in the aggregate more than the number of shares of Senior Preferred Stock set forth opposite such Investor’s name on Schedule III under the heading “Delayed Preferred Stock” (the total number of such shares of Senior Preferred Stock as set forth on Schedule III, the “Delayed Preferred Stock”), and (ii) each Investor’s obligation to purchase shares of Delayed Preferred Stock pursuant to this Agreement shall terminate automatically and without further action of the parties upon the earlier of (x) 5:00 p.m., New York City time, on October 27, 2022 and (y) the date on which the Corporation delivers written notice to the Investors of its election to terminate the Investors’ obligations to purchase shares of Delayed Preferred Stock pursuant to this Agreement.
    1.2    Initial Closing. The purchase and sale of the Initial Securities (the “Initial Closing”) shall take place remotely via the exchange of documents and signatures, at 10:00 a.m., New York City time, on the date hereof, or at such other time and place as the Corporation and the Investors shall mutually agree, orally or in writing (the date of the Initial Closing is hereinafter referred to as the “Initial Closing Date”).
1.3    Acquisition Closing. The purchase and sale of the Acquisition Preferred Stock, if any (the “Acquisition Closing”), shall take place remotely via the exchange of documents and signatures on the date specified in writing to the Investors at least ten (10) Business Days prior to such purchase and sale, or at such other time and place as the Corporation and the Investors shall mutually agree, orally or in writing (the date of the Acquisition Closing is hereinafter referred to as the “Acquisition Closing Date”).
1.4    Delayed Closing. The purchase and sale of the Delayed Preferred Stock, if any (each, a “Delayed Closing”) shall take place remotely via the exchange of documents and signatures on the date and in the amount (subject to the limitations set forth in Section 1.1(c)) specified in writing to the Investors (each such writing, a “Delayed Closing Notice”) at least ten (10) calendar days prior to such purchase and sale, or at such other time and place as the Corporation and the Investors shall mutually agree, orally or in writing (the date of any Delayed Closing is hereinafter referred to as a “Delayed Closing Date”). Unless otherwise specified, “Closing” shall refer to the Initial Closing and, if it occurs, the Acquisition Closing, and if it occurs, each Delayed Closing, and “Closing Date” shall refer to the Initial Closing Date and, if it occurs, the Acquisition Closing Date, and if it occurs, each Delayed Closing Date.
    1.5    Delivery and Payment.
(a)The Corporation shall register on the books and records of the Corporation each Investor as the owner of, and deliver to each Investor a certificate evidencing, the Senior Preferred
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Stock purchased by such Investor hereunder on the applicable Closing Date and the Warrants purchased by such Investor hereunder on the Initial Closing Date.
(b)On the terms and subject to the conditions set forth in this Agreement, each Investor shall remit or cause to be remitted by wire transfer the amount of immediately available funds equal to (i) its “Purchase Price” as set forth on Schedule I (in the case of the Initial Securities) or Schedule II (in the case of the Acquisition Preferred Stock) or (ii) the product of the number of shares of Delayed Preferred Stock to be purchased by such Investor on the applicable Delayed Closing Date multiplied by the per share price specified in Section 1.1(c) above, in each case, on the applicable Closing Date to an account designated by the Corporation.
    1.6    Use of Proceeds.
(a)    On the Initial Closing Date, the Corporation will use the proceeds from the issuance and sale of the Initial Securities, together with the proceeds of the Initial Term Loans and (to the extent permitted under the Debt Commitment Letter as in effect on March 5, 2021) borrowings of Revolving Loans, (i) to fund the Initial Closing Date Refinancing and (ii) to pay Initial Closing Date Transaction Costs.
(b)    On the Acquisition Closing Date, the Corporation will use the proceeds from the issuance and sale of the Acquisition Preferred Stock, together with the proceeds of borrowings of the Delayed Draw Term Loans, (i) to pay the cash consideration in connection with the Acquisition, (ii) to fund the Target Refinancing and (iii) to pay Acquisition Closing Date Transaction Costs.
(c)    On each Delayed Closing Date, the Corporation will use the proceeds from the issuance and sale of the Delayed Preferred Stock issued and sold on such date to fund one or more Permitted Acquisitions.
SECTION 2.    DEFINED TERMS
Acquisition” means the acquisition by the Corporation, directly or indirectly, of the Target and its subsidiaries pursuant to the Merger Agreement.
Acquisition Closing Date Transaction Costs” has the meaning set forth in the definition of “Acquisition Closing Date Transactions.”
Acquisition Closing Date Transactions” means (a) the consummation of the Acquisition, (b) the issuance and sale of the Acquisition Closing Preferred Stock hereunder and the use of the proceeds thereof as provided herein, (c) the drawing of the Delayed Draw Term Loans under the New Credit Agreement, (d) the Target Refinancing, (e) the consummation of the Equity Contribution and (f) the payment of all fees, costs and expenses incurred or payable by the Corporation or any of its Subsidiaries in connection with the foregoing (this clause (f), the “Acquisition Closing Date Transaction Costs”).
Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of, or against, the Corporation or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of a Senior Officer of the Corporation or any of its Subsidiaries, threatened in writing
3


against the Corporation or any of its Subsidiaries or any property of the Corporation or any of its Subsidiaries.
Affiliate” has the meaning given to such term in the Certificate of Designations.
Anti-Corruption Laws” means, collectively, all laws, rules, and regulations of any jurisdiction applicable to the Corporation or its Subsidiaries from time to time concerning or relating to bribery or corruption (including, the FCPA).
Ares” means Ares Capital Management LLC (together with its managed funds and accounts) and Ares Alternative Credit Management LLC (together with its managed funds and accounts).
Authorized Officer” means, as applied to any Person (other than a natural person), any individual holding the position of chairman of the board (if an officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer, treasurer, secretary or other officer expressly authorized by a resolution or written consent (delivered to Investors) to represent such Person in such capacity and such Authorized Officer shall conclusively presume to have acted on behalf of such Person.
Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).
Bankruptcy Event” has the meaning given to such term in the Certificate of Designations.
Beneficial Ownership Regulation” means 31 C.F.R. §1010.230.
Board of Directors” has the meaning given to such term in the Certificate of Designations.
Borrowers” has the meaning given to such term in the New Credit Agreement.
Business Day” has the meaning given to such term in the Certificate of Designations.
Capital Stock” has the meaning given to such term in the Certificate of Designations.
Cash” means money, currency or a credit balance in any demand or deposit account, in each case, determined in accordance with GAAP.
Common Stock Equivalents” means, collectively, Options and Convertible Securities.
Control” (including, with correlative meanings, the terms “Controlling,” “Controlled by” and “under Common Control”), has the meaning given to such term in the Certificate of Designations.
Controlling Stockholder Letter Agreement” means that certain letter agreement, dated the date hereof, in substantially the form attached as Exhibit D hereto, among the Controlling Stockholders and the Investors.
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Controlling Stockholders” has the meaning set forth in the definition of Interim Period Covenants.
Convertible Securities” means any stock or securities (other than Options) convertible into or exercisable or exchangeable for shares of Common Stock.
Credit Documents” has the meaning given to such term in the New Credit Agreement.
Debt Commitment Letter” means that certain Commitment Letter, dated as of March 5, 2021 (including the exhibits thereto), by and among Holdings, Truist Bank and Truist Securities, Inc.
Debt Fee Letter” means that certain First Lien Fee Letter, dated as of March 5, 2021, by and among Holdings, Truist Bank and Truist Securities, Inc.
Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
Delayed Draw Term Loans” has the meaning given to such term in the New Credit Agreement.
Disqualified Institutions” has the meaning given to such term in the Certificate of Designations.
Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed by the Corporation or any of its Subsidiaries or any of their respective ERISA Affiliates.
Environmental Claim” means any investigation, written notice, written notice of violation, claim, action, suit, proceeding, demand, abatement order or other written order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (a) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (b) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (c) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
Environmental Laws” means any and all current or future foreign or domestic, federal or state (or any subdivision of any of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (a) environmental matters, including those relating to any Hazardous Materials Activity; (b) the generation, use, storage, transportation or disposal of Hazardous Materials; or (c) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to the Corporation or any of its Subsidiaries or any Real Estate Asset.
Environmental Liability” means any liability, obligation, loss, claim, action, order or cost, contingent or otherwise (including any liability for damages, costs of medical monitoring, costs of environmental remediation or restoration, administrative oversight costs, consultants’ fees, fines, penalties and indemnities) directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law or permit, license or approval issued thereunder, (b) the generation, use, handling, transportation, storage, or treatment of any Hazardous Materials, (c) exposure to any Hazardous
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Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
Equity Contribution” means the issuance by the Corporation of Common Stock to Stone Point Capital LLC and/or its controlled affiliates, certain members of the Target’s management and certain other investors arranged by and/or designated by Stone Point Capital LLC that are reasonably acceptable to the Investors as merger consideration in accordance with the Merger Agreement.
Equity Interests” has the meaning given to such term in the Certificate of Designations.
ERISA” means the Employee Retirement Income Security Act of 1974, including any regulations promulgated thereunder.
ERISA Affiliate” means, as applied to any Person, (a) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (b) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under Common Control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (c) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (a) above or any trade or business described in clause (b) above is a member. Any former ERISA Affiliate of the Corporation or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of the Corporation or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of the Corporation or such Subsidiary and with respect to liabilities arising after such period for which the Corporation or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for thirty day notice to the PBGC has been waived by regulation); (ii) the failure to meet all applicable requirements under the Pension Funding Rules or the filing of an application for the waiver of the minimum funding standards under the Pension Funding Rules with respect to any Pension Plan ; (iii) the failure to make any required contribution to any Pension Plan or Multiemployer Plan when due; (iv) the filing of a notice of intent to terminate, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination under Section 4041 or 4041A of ERISA; (v) the withdrawal by the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to the Corporation, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA, or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (vi) the institution by the PBGC of proceedings to terminate any Pension Plan or Multiemployer Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (vii) the imposition of liability on the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Title IV of ERISA or Chapter 43 of the Internal Revenue Code, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA; (viii) the withdrawal of the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial
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withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan; (ix) notification of the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates concerning the imposition of withdrawal liability with respect to any Multiemployer Plan or notification that a Multiemployer Plan is insolvent within the meaning of Title IV of ERISA or in endangered or critical status, within the meaning of Section 305 of ERISA,; (x) the occurrence of an act or omission which could give rise to the imposition on the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (xi) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against the Corporation, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (xii) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit 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 Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (xiii) a Pension Plan is in “at risk” status within the meaning of Code Section 430(i); or (xiv) the imposition of a Lien pursuant to Section 412 or 430(k) of the Internal Revenue Code or pursuant to Section 303 or 4068 of ERISA. Notwithstanding any provision of this Agreement to the contrary, “ERISA Event” shall not include the termination of the “defined benefit pension plan” (within the meaning of Section 3(35) of ERISA) sponsored by Target in accordance with the requirements of the terms and conditions of the Merger Agreement.
Excluded Securities” means any shares of Common Stock issued or issuable: (A) under any Stock Plan; (B) pursuant to the terms of this Agreement or the Warrants or the Transactions; (C) upon conversion, exercise or exchange of any Options or Convertible Securities which are outstanding as of the date hereof and set forth on Schedule 2 hereto, provided that the terms of such Options or Convertible Securities, as applicable, are not amended, modified or changed on or after the date hereof to increase the number of shares issued or issuable pursuant to such securities (other than in connection with stock splits or combinations) or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities; (D) in any publicly-marketed underwritten offering; or (E) as consideration for any Permitted Acquisition (as defined in the Certificate of Designations).
Existing Senior Credit Agreement” means that certain Credit and Guaranty Agreement, dated as of January 3, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time”), among Pipeline Cynergy Holdings, LLC, Priority Institutional Partner Services LLC, Priority Payment Systems Holdings LLC, Holdings, the lenders from time to time party thereto and Truist Bank, as administrative agent and collateral agent.
Existing Subordinated Credit Agreement” means that certain Credit and Guaranty Agreement, dated as of January 3, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Holdings, the guarantors from time to time party thereto, the lenders party thereto from time to time and Goldman Sachs Specialty Lending Group, L.P., as administrative agent.
FCPA” means the United States Foreign Corrupt Practices Act of 1977.
Financial Officer Certification” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of the Corporation that
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such financial statements fairly present, in all material respects, the financial condition of the Corporation and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments and, with respect to unaudited financial statements, the absence of footnotes.
Financial Plan” has the meaning given to such term in the Certificate of Designations.
Financing Agreements” means this Agreement, the Certificate of Designations, the Warrants, the Controlling Stockholder Letter Agreement, the Registration Rights Agreement, the Stockholders’ Agreement and the certificates (if any) representing the Senior Preferred Stock.
Fiscal Quarter” means a fiscal quarter of any Fiscal Year.
Fiscal Year” means the fiscal year of the Corporation and its Restricted Subsidiaries ending on December 31 of each calendar year.
Foreign Official” means a Person acting in an official capacity for or on behalf of any Governmental Authority (other than a Governmental Authority of the United States, any state thereof or the District of Columbia).
GAAP” has the meaning given to such term in the Certificate of Designations.
Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government (including, NAIC and any supra-national bodies such as the European Union or the European Central Bank), any court or any central bank, in each case, whether associated with a state of the United States, the United States, or a foreign entity or government.
Group Companies” has the meaning given to such term in the Merger Agreement.
Hazardous Materials” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which does, may or could pose a hazard to, or cause an adverse effect on, the health and safety of the owners, occupants or any Persons in the vicinity of any Real Estate Asset or to the indoor or outdoor environment.
Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, import, export, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.
Historical Corporation Financial Statements” (a) (i) the audited consolidated balance sheets of the Corporation as at December 31, 2019 and December 31, 2020, and the related audited consolidated statements of income and comprehensive income, changes in owner’s equity and cash flows of the Corporation for the years then ended, (ii) the audited consolidated balance sheets of the Corporation for each fiscal year thereafter ended at least 90 days prior to the Initial Closing Date and the related audited consolidated statements of income and comprehensive income, changes in owner’s equity
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and cash flows of the Corporation for the year then ended, (b) the unaudited consolidated balance sheets of the Corporation for each quarterly period thereafter ended at least 45 days prior to the Initial Closing Date and the related unaudited consolidated statements of income and cash flows for such period and (c) the unaudited consolidated balance sheets of the Corporation as of each fiscal monthly period ending at least 30 days prior to the Initial Closing Date and the related unaudited consolidated statements of income and cash flows for such monthly periods and for the comparable period in the immediately preceding fiscal year.
Historical Target Financial Statements” means (a) (i) the audited consolidated financial statements of the Group Companies for the fiscal years ended December 31, 2018, and December 31, 2019, together with the reports thereon by the Target’s accountants (in each case, including a consolidated balance sheet and consolidated statements of income, cash flows and stockholders’ equity) and (ii) the audited consolidated financial statements of the Group Companies for each fiscal year thereafter (in each case, including a consolidated balance sheet and consolidated statements of income, cash flows and stockholders’ equity) to the extent and in the form required to be delivered to the Corporation prior to the applicable Closing Date pursuant to Section 5.3(b) of the Merger Agreement, (b) (i) the unaudited consolidated financial statements of the Group Companies for the nine (9) month period ended September 30, 2020 (including a consolidated balance sheet and a consolidated statement of income only) and (ii) the unaudited consolidated financial statements of the Group Companies for each quarterly period thereafter (including a consolidated balance sheet and a consolidated statement of income only) to the extent and in the form required to be delivered to the Corporation prior to the applicable Closing Date pursuant to Section 5.3(b) of the Merger Agreement and (c) within ten (10) days following the end of each calendar month ending prior to the applicable Closing Date, the statement of the consolidated monthly income of the Group Companies for each such calendar month ending after March 5, 2021.
Holder” means each Investor and other holder of outstanding shares of Senior Preferred Stock or Warrants as he, she or it may appear in the records of the Corporation.
Holdings” means Priority Holdings, LLC, a wholly owned subsidiary of the Corporation.
Indebtedness” has the meaning given to such term in the Certificate of Designations.
Initial Closing Date Refinancing” means the repayment in full (or the termination, discharge or defeasance in full) of all outstanding third party indebtedness for borrowed money under (including the release of all guarantees, liens, security interests, pledges, mortgages and other encumbrances with respect thereto, to the extent applicable) the Existing Senior Credit Agreement and the Existing Subordinated Credit Agreement, together with any premium accrued and unpaid interest thereon and any fees and expenses with respect thereto.
Initial Closing Date Transaction Costs” has the meaning set forth in the definition of “Initial Closing Date Transactions.”
Initial Closing Date Transactions” means (a) the execution, delivery and performance by the Corporation of the Financing Agreements to be entered into on the Initial Closing Date and the purchase of the Initial Preferred Stock hereunder and the use of the proceeds thereof, (b) the entry into of the New Credit Agreement and the other Credit Documents to be entered into on the Initial Closing Date and the funding of the Initial Term Loans, Revolving Loans (to the extent permitted by the Debt
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Commitment Letter), and issuance of Letters of Credit thereunder, (c) the Initial Closing Date Refinancing and (d) the payment of all fees, costs and expenses incurred or payable by the Corporation or any of its Subsidiaries in connection with the foregoing (this clause (d), the “Initial Closing Date Transaction Costs”).
Initial Term Loans” has the meaning given to such term in the New Credit Agreement.
Interim Period Covenants” means that:
(a)the Corporation shall not cause or permit a Change of Control to occur;
(b)the Corporation shall not cause or permit any of Thomas C. Priore, The Thomas C. Priore 2019 GRAT and the Thomas C. Priore Irrevocable Insurance Trust U/A/D 1/8/2010 (collectively, the “Controlling Stockholders”) to, directly or indirectly, transfer any Common Stock owned beneficially or of record to any Person other than an Affiliate of such Controlling Stockholder and other than transfers by one or more Controlling Stockholders of Common Stock not exceeding in the aggregate for all such transfers the greater of (i) Common Stock with a fair market value of $25,000,000 (determined as of the date of each such transfer based on the closing price per share of Common Stock on such date) and (y) 7% of the Common Stock held by all Controlling Stockholders as of March 5, 2021;
(c)the Corporation shall not, directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Payments except as permitted under clause (a)(2) under the heading “Covenants” in Exhibit B to the Preferred Stock Commitment Letter;
(d)the Corporation shall not, and shall not cause or permit any of its Subsidiaries to, convey, sell, lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired, except to the extent permitted by Sections 6.09(c) – (e) or (g) - (p) of the Existing Senior Credit Agreement as in effect on March 5, 2021;
(e)the Corporation shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Corporation or any of its Subsidiaries except to the extent permitted by Section 6.12 of the Existing Senior Credit Agreement as in effect on March 5, 2021;
(f)the Corporation shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, make an Investment in any Person that is not a wholly owned Subsidiary of the Corporation as of March 5, 2021, other than any such Investments made after March 5, 2021 not to exceed $40,000,000 in the aggregate for all such Investments, not including the Acquisition;
(g)(i) the Corporation shall not, and shall not cause or permit any of its Subsidiaries to, take any action directly or indirectly resulting in the Common Stock no longer being listed on any of the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange, and (ii) the Corporation shall, and shall cause its Subsidiaries to, take all commercially reasonably steps necessary to prevent the Common Stock from no longer being so listed;
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(h)the Corporation shall not cause, permit or effect any amendment to the Corporation’s Organizational Documents, in each case, in any manner that adversely affects the rights, preferences or privileges of the Holders of the Senior Preferred Stock (or the commitments in respect thereof); and
(i)within ten (10) Business Days after the date of delivery to the Investors of the financial statements described in clauses (a) and (b) of the definition of “Historical Corporation Financial Statements,” the Corporation shall cause its senior management to participate in quarterly telephonic conference calls with the Investors on which such senior management shall review the financial results for such period and the financial condition of the Corporation and its Subsidiaries for such period, the overall performance of the Corporation and its Subsidiaries for such period and related matters.
For purposes of the definition of “Interim Period Covenants,” (x) all capitalized terms used but not defined in such definition or otherwise defined in this Agreement (and within the provisions and definitions of the Existing Senior Credit Agreement referenced in such definition) shall have the meanings ascribed thereto in the Existing Senior Credit Agreement as in effect on March 5, 2021 and (y) with respect to the provisions of the Existing Senior Credit Agreement referenced therein:
a.references to “Borrower” or “Holdings” shall be deemed to be references to the Corporation;
b.references to “Restricted Subsidiaries” or “Guarantors” shall be deemed to be references to “Subsidiaries” (as defined in the Existing Senior Credit Agreement as in effect on March 5, 2021);
c.references to “Credit Party” shall be deemed to be references to “the Corporation and its Subsidiaries”
d.references to “Administrative Agent,” “Agent,” “Collateral Agent,” “Lead Arranger,” “Lender” or “Required Lenders” shall be to Ares; and
e.references to other defined terms used in the Existing Senior Credit Agreement as in effect on March 5, 2021 may be interpreted by Ares as necessary or appropriate to give effect to the protective purposes and intent of the Interim Period Covenants (as determined by Ares acting reasonably and in good faith).
Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
Letters of Credit” has the meaning given to such term in the New Credit Agreement.
Lien” has the meaning given to such term in the Certificate of Designations.
Liquidation Preference” has the meaning given to such term in the Certificate of Designations.
Margin Stock” has the meaning set forth in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.
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Material Adverse Effect” means any event, change or condition, that individually or in the aggregate, has had a material adverse effect with respect to (a) the business, results of operations or financial condition of the Corporation and its Restricted Subsidiaries taken as a whole; (b) the ability of the Corporation to fully and timely perform its payment under any Financing Agreement; (c) the legality, validity, binding effect, or enforceability against the Corporation of a Financing Agreement; or (d) the rights, remedies and benefits, taken as a whole, available to, or conferred upon, any Holder under any Financing Agreement.
Merger Agreement” means that certain Agreement and Plan of Merger, dated as of March 5, 2021, by and among the Target, the Corporation, Merger Sub, and, solely in its capacity as the “Equityholder Representative” (as defined therein), Stone Point Capital LLC.
Merger Sub” means Prime Warrior Acquisition Corp., a Delaware corporation and wholly owned indirect subsidiary of the Corporation.
Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
NAIC” means The National Association of Insurance Commissioners or any other similar organization.
Narrative Report” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of the Corporation and its Restricted Subsidiaries in the form prepared for presentation to senior management thereof for the applicable month, Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate with comparison to and variances from the immediately preceding period and budget.
New Credit Agreement” means that certain Credit and Guaranty Agreement, dated as of the date hereof, among Holdings, the other borrowers party thereto, the guarantors party thereto, the lenders party thereto from time to time and Truist Bank, as administrative agent and collateral agent, as in effect on the date hereof.
OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.
Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization and its by-laws (or similar documents), (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement (or similar documents), (c) with respect to any general partnership, its partnership agreement (or similar documents), (d) with respect to any limited liability company, its articles of organization or certificate of formation and its operating agreement (or similar documents), and (e) with respect to any other form of entity, such other organizational documents required by local law or customary under such jurisdiction to document the formation and governance principles of such type of entity. In the event any term or condition of this Agreement requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.
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PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA regarding minimum funding standards and minimum required contributions (including any installment payment thereof) and set forth in Sections 412, 430, 431, 432 and 436 of the Internal Revenue Code and Sections 302, 303, 304 and 305 of ERISA.
Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.
Permitted Acquisition” has the meaning given to such term in the Certificate of Designations.
Person” has the meaning given to such term in the Certificate of Designations.
Preferred Default” has the meaning given to such term in the Certificate of Designations.
Preferred Payment Default” has the meaning given to such term in the Certificate of Designations.
Preferred Stock Commitment Letter” means that certain Preferred Stock Commitment Letter, dated as of March 5, 2021, between the Corporation and Ares, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
Preferred Stock Fee Letter” means that certain Preferred Stock Fee Letter, dated as of March 5, 2021, between the Corporation and Ares, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
Pro Forma Financial Statements” means the unaudited pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Corporation as of and for the twelve-month period ending on the last day of the most recently completed twelve-fiscal month period ended at least 45 days prior to the applicable Closing Date, prepared after giving effect to (a) in the case of the Pro Forma Financial Statements to be delivered on the Initial Closing Date, the Initial Closing Date Transactions and (b) in the case of the Pro Forma Financial Statements to be delivered on the Acquisition Closing Date, the Acquisition Closing Date Transactions and, in the event the Initial Closing has occurred but the Initial Closing Date Transactions are not yet reflected in the Corporation’s historical financial statements, the Initial Closing Date Transactions, in each case as if the applicable Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of income).
Proportionate Share” means, as to a particular Investor, the percentage set forth opposite such Investor’s name on Schedule III under the heading “Proportionate Share.”
Real Estate Asset” means any right, title and interest in real property (including all land, buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by the Corporation or any of its Subsidiaries or any of their respective predecessors or Affiliates.
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Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, in substantially the form attached as Exhibit C hereto, by and among the Corporation, the Investors and the other Holders from time to time party thereto, among others, as amended in accordance with the terms of the Financing Agreements and in effect from time to time, together with all exhibits and schedules thereto.
Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, members, directors, officers, employees, agents, trustees, attorneys and advisors of such Person and of such Person’s Affiliates and the successors and assigns of each such Person.
Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.
Required Holders” has the meaning given to such term in the Certificate of Designations.
Required Warrant Holders” means holders of more than 50% of the aggregate number of Warrant Shares and shares of Common Stock issued upon exercise of the Warrants.
Restricted Subsidiary” has the meaning given to such term in the Certificate of Designations.
Revolving Loans” has the meaning given to such term in the New Credit Agreement.
Sanctioned Country” means, at any time, a country, region or territory which itself is, or whose government is, the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, and Syria).
Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the United States Government (including, without limitation, OFAC or the U.S. Department of State), the United Nations Security Council, the European Union or any European Union member state, the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or Controlled by any such Person or Persons described in the foregoing clauses (a) or (b).
Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the United States Government (including, without limitation, OFAC or the U.S. Department of State), the United Nations Security Council, the European Union or any European member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.
Senior Officer” means, with respect to any Person other than a natural person, the President, Chief Executive Officer, Chief Financial Officer or Chief Operating Officer of such Person.
Solvent” means, with respect to any Person, that as of the date of determination, (a) the sum of the debt (including contingent liabilities) of such Person and its Restricted Subsidiaries, on a consolidated basis, does not exceed the present fair saleable value of the assets of such Person and its
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Restricted Subsidiaries, on a consolidated basis, (b) the present fair saleable value of such Person and its Restricted Subsidiaries, taken as a whole, is not less than the amount that will be required to pay the probable liabilities (including contingent liabilities) of such Person and its Restricted Subsidiaries, on a consolidated basis, or their debts as they become absolute and matured, (c) the capital of such Person and its Restricted Subsidiaries, on a consolidated basis, is not unreasonably small in relation to their business, on a consolidated basis, as contemplated on the date hereof and (d) such Person and its Restricted Subsidiaries, on a consolidated basis, have not incurred and do not intend to incur, or believe that they will incur, debts including contingent obligations, beyond their ability to pay such debts as they become due (whether at maturity or otherwise). For purposes of this definition, the amount of any contingent liability has been computed as the amount that, in light of all of the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standards No. 5).
Specified Merger Agreement Representations” means such of the representations made by or with respect to the Target and its Subsidiaries in the Merger Agreement as are material to the interests of the Holders (in their capacity as such), but only to the extent that the Corporation (or its Affiliates) would, in the event of a breach or inaccuracy of any such representation or warranty, have the right (taking into account any applicable cure provisions) to terminate its or their obligations under the Merger Agreement to consummate the Acquisition (or otherwise decline to consummate the Acquisition) as a result of a breach of such representations in the Merger Agreement.
Specified Permitted Acquisition Agreement Representations” means such of the representations made by or with respect to the target of the applicable Permitted Acquisition or seller (as applicable) and their respective Subsidiaries in the acquisition agreement with respect to such Permitted Acquisition as are material to the interests of the Holders (in their capacity as such), but only to the extent that the Corporation (or its Affiliates) would, in the event of a breach or inaccuracy of any such representation or warranty, have the right (taking into account any applicable cure provisions) to terminate its or their obligations under such acquisition agreement to consummate such Permitted Acquisition (or otherwise decline to consummate such Permitted Acquisition) as a result of a breach of such representations in such acquisition agreement.
Specified Representations” means those representations and warranties made in Section 3.1(a) (with respect to the corporate existence of the Corporation), Section 3.1(b) (with respect to the execution, delivery and performance its obligations under the Financing Agreements and the carrying out of the transactions contemplated thereby), the first sentence of Section 3.5(a), Section 3.6(a)(i), Section 3.8, Section 3.19, Section 3.20, Section 3.23, Section 3.25 (other than with respect to clause (ii) of the first sentence thereof, limited to the use of proceeds of the Acquisition Preferred Stock) and Section 3.27 (as related only to the use of proceeds of the Acquisition Preferred Stock).
Stock Plan” means any employee benefit plan, pursuant to which the Corporation’s securities may be issued to any employee, officer or director for services provided to the Corporation.
Subsidiary” has the meaning given to such term in the Certificate of Designations.
Target” means Finxera Holdings, Inc.
Target Refinancing” means the refinancing and repayment in full of substantially all of the existing third-party indebtedness for borrowed money of the Target and its Subsidiaries and the
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termination or release of any and all commitments, guarantees and security interests in connection therewith.
Total Net Leverage Ratio” has the meaning given to such term in the Certificate of Designations.
Total Preferred Leverage Ratio” has the meaning given to such term in the Certificate of Designations.
Transactions” means, collectively, the Initial Closing Date Transactions and the Acquisition Closing Date Transactions.
SECTION 3.    REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation hereby represents and warrants to the Investors and the other Holders as follows as of the date hereof and as of each Closing Date:
    3.1    Incorporation and Organization. The Corporation and each Restricted Subsidiary (a) is duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization as identified in Schedule 3.1, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to execute, deliver and perform its obligations under the Financing Agreements to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and is in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not be reasonably expected to have, a Material Adverse Effect.
    3.2    Issuance and Delivery of Senior Preferred Stock. The Senior Preferred Stock has been duly authorized and, when issued by the Corporation and delivered for the consideration set forth in this Agreement, in each case in the manner provided for in, and in compliance with the provisions of, this Agreement, (a) shall be free and clear of any and all liens, security interests, options, claims, encumbrances or restrictions, except for such restrictions as expressly set forth in this Agreement or in the Certificate of Designations or otherwise imposed by applicable federal or state securities laws or by the Investors, and shall vest in each Investor good title with respect to such Investor’s Senior Preferred Stock, (b) shall have been duly authorized and validly issued, (c) shall be fully paid and non-assessable, (d) assuming the accuracy of the representations and warranties of the Investors in Section 4, shall have been issued in compliance with all applicable federal and state securities laws and (e) shall not have been issued in violation of, or be subject to, any preemptive rights. The powers, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions, of the Senior Preferred Stock are as stated in the Certificate of Designations.
    3.3    Warrants. The Warrants have been duly authorized and, when issued, sold and delivered for the consideration set forth in this Agreement, in each case in the manner provided for in, and in compliance with the provisions of, this Agreement, (a) shall be free and clear of any and all liens, security interests, options, claims, encumbrances or restrictions, except for such restrictions as expressly set forth in this Agreement or in the Warrants or otherwise imposed by applicable federal or state securities laws or by the Investors, and shall vest in each Investor good title with respect to such Investor’s Warrants, (b) shall have been duly authorized and validly issued, (c) assuming the accuracy of the representations and warranties of the Investors in Section 4, shall have been issued in compliance with all applicable federal and state securities laws and (d) shall not have been issued in violation of, or (other than as provided
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herein) be subject to, any preemptive rights. The maximum number of shares of Common Stock initially issuable upon the exercise of the Warrants have been duly authorized and reserved for issuance by all necessary corporate action and shall, upon their issuance, (i) be free and clear of any and all liens, security interests, options, claims, encumbrances or restrictions, except for such restrictions as expressly set forth in this Agreement or otherwise imposed by applicable federal or state securities laws or by the Investors, and shall vest in each Investor good title with respect to such Investor’s Common Stock, (ii) be validly issued, fully paid, and non-assessable, (iii) assuming the accuracy of the representations and warranties of the Investors in Section 4, have been issued in compliance with all applicable federal and state securities laws and (iv) shall not have been issued in violation of, or (other than as provided herein) be subject to, any preemptive rights.
    3.4    Capital Structure and Ownership.
    (a)    As of the Initial Closing Date after giving effect to the filing of the Certificate of Designations, the authorized Capital Stock of the Corporation consists of 1,100,000,000 shares divided into:
    (i)    1,000,000,000 shares of Common Stock, of which (A) 67,756,120 shares are issued and outstanding, (B) 451,224 shares are held in the Corporation’s treasury, (C) 2,593,679 shares have previously been reserved and are allocated to certain employees and service providers of the Corporation or its Subsidiaries pursuant to the Corporation’s equity based plans, (D) 3,556,413 shares have previously been reserved and are allocated for issuance upon the exercise of warrants (other than the Warrants) and (E) 1,803,841 shares shall be reserved for issuance upon the exercise of the Warrants;
    (ii)    100,000,000 shares of Preferred Stock, of which 250,000 have been designated “Senior Preferred Stock” and none of which are issued and outstanding immediately prior to the Initial Closing.
Except for the Warrants, this Agreement and as set forth above or on Schedule 3.4(a), as of the Initial Closing Date there are no outstanding (i) subscriptions, options, warrants, puts, calls, exchangeable or convertible equity or debt securities or other similar rights, agreements or commitments relating to the issuance of Capital Stock to which the Corporation is a party obligating the Corporation to issue, transfer or sell any shares or other equity interests of the Corporation or securities convertible into or exchangeable for such shares or equity interests of the Corporation, or (ii) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities, rights or units that are derivatives of, any Capital Stock of the Corporation.
    (b)    The Capital Stock of all of the Restricted Subsidiaries of the Corporation has been duly authorized and validly issued and (to the extent applicable) is fully paid and non-assessable. All of the Capital Stock of Holdings is owned directly by the Corporation, and all of the Capital Stock of the other Borrowers is owned directly or indirectly by Holdings.
    (c)    Except as contemplated by the Certificate of Designations and as set forth in Schedule 3.4(c), as of the Initial Closing Date there are no outstanding obligations of the Corporation or any of its Restricted Subsidiaries to repurchase, redeem, retire or otherwise acquire any outstanding securities or interests of any type referred to in Section 3.4(a) or (b) above. Except for this Agreement, the Certificate of Designations and as set forth in Schedule 3.4(c), as of the Initial Closing Date there are no voting
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trusts, shareholder agreements, pooling agreements, proxies or other contracts in effect with respect to the voting or transfer of any Equity Interests of the Corporation.
    3.5    Due Authorization.
(a)    All corporate action on the part of the Corporation necessary for the authorization, execution, delivery, and performance of all of the Corporation’s obligations under this Agreement and the other Financing Agreements, and for the authorization, issuance, and sale of the Senior Preferred Stock and the Warrants being sold under this Agreement and of the shares of Common Stock issuable upon exercise of the Warrants, has been taken by the Corporation. No other corporate action or proceeding on the part of the Corporation is necessary for the authorization, execution, delivery, and performance of all of the Corporation’s obligations under this Agreement and the other Financing Agreements, or for the authorization, issuance, and sale of the Senior Preferred Stock and the Warrants being sold under this Agreement and of the shares of Common Stock issuable upon exercise of the Warrants, other than the filing of the Certificate of Designations, which will be filed prior to or substantially concurrently with the Initial Closing.
(b)    Each of the Corporation and Merger Sub has the requisite corporate power and authority to execute and deliver the Merger Agreement and to consummate the transactions contemplated thereby. The execution and delivery by the Corporation and Merger Sub of the Merger Agreement and the consummation by the Corporation and Merger Sub of the transactions contemplated thereby have been duly authorized by all requisite corporate action of the Corporation and Merger Sub. No other corporate action or proceeding on the part of the Corporation or Merger Sub is necessary for the execution and delivery by the Corporation and Merger Sub of the Merger Agreement or the consummation by the Corporation or Merger Sub of the transactions contemplated thereby.
3.6    No Conflict.
(a)    Subject to the Consents (as defined below) referred to in Section 3.7, none of the execution, delivery or performance by the Corporation of this Agreement and the other Financing Agreements or the consummation by the Corporation of the issuance and sale of the Senior Preferred Stock and the Warrants will conflict with, violate or constitute a breach of or a default under (i) the Corporation’s Organizational Documents, (ii) any bond, note, loan or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument (collectively, “Applicable Contracts”) to which the Corporation is a party or by which it is bound, or (iii) any federal, state or local law, or any judgment, decree, rule, regulation, order, writ, determination, award or injunction (collectively, “Applicable Law”) binding upon the Corporation, except in the case of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b)    Subject to the Consents referred to in Section 3.7, none of the execution, delivery or performance by the Corporation or Merger Sub of the Merger Agreement or the consummation by the Corporation or Merger Sub of the transactions contemplated thereby will conflict with, violate or constitute a breach of or a default under (i) the Organizational Documents of the Corporation or Merger Sub, respectively, (ii) any Applicable Contracts to which the Corporation or Merger Sub is a party or by which it is bound (subject to consummation of the Initial Closing Date Refinancing and the refinancing of certain existing third party indebtedness for borrowed money of the Target and its subsidiaries on or prior to the Acquisition Closing Date as contemplated by the Merger Agreement), or (iii) any Applicable Law binding on the Corporation or Merger Sub, except in the case of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to (x) enjoin, prevent or materially delay the
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consummation by the Corporation and Merger Sub of the Acquisition or (y) to have a Material Adverse Effect.
    3.7    Consents and Approvals. Assuming the accuracy of the representations and warranties of the Investors in Section 4, and except for the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, any filings pursuant to applicable state securities laws and any Consents referred to in the Merger Agreement, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree (collectively, “Consents”) of, any Governmental Authority or third party is necessary or required by or with respect to the Corporation or Merger Sub, respectively, for the execution by the Corporation of this Agreement, the execution by the Corporation or Merger Sub of the Merger Agreement, or the consummation by the Corporation of the issuance and sale of the Senior Preferred Stock or the Warrants, except, in the case of the Merger Agreement, for such Consents in connection with the Acquisition as will have been obtained or made on or prior to the Acquisition Closing Date.
3.8    Binding Obligation. Each of this Agreement, the Warrants, the Controlling Stockholder Letter Agreement and the Registration Rights Agreement has been duly executed and delivered by the Corporation and, assuming due authorization, execution and delivery of this Agreement, the Warrants, the Controlling Stockholder Letter Agreement and the Registration Rights Agreement to which they are a party by the Investors, is a valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms, subject, as to enforcement, to (i) applicable Debtor Relief Laws and (ii) general principles of equity.
3.9    Financial Statements.
(a)    The Historical Corporation Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to the absence of footnotes and changes resulting from audit and normal year-end adjustments.
(b)    To the best knowledge of the Corporation, the Historical Target Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to the absence of footnotes and changes resulting from audit and normal year-end adjustments, in each case other than with respect to any potential requirement to classify the Corporation’s warrants outstanding as of the Initial Closing Date (immediately prior to giving effect to the Initial Closing Date Transactions) as liabilities.
(c)    The unaudited Pro Forma Financial Statements have been prepared based on the Historical Financial Corporation Financial Statements and, to the extent applicable, the Historical Target Financial Statements and have been prepared in good faith, based on assumptions believed by the Corporation to be reasonable as of the date of delivery thereof and adjustment as agreed by the Corporation, and present fairly in all material respects on a pro forma basis the estimated financial position of the Corporation as of the last day of the most recently completed four Fiscal Quarter period
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ended at least 45 days before the Initial Closing Date and its estimated results of operations for the period covered thereby.
3.10    Projections. On and as of the Initial Closing Date, pro forma projections of Holdings, its Restricted Subsidiaries and the Target and its Subsidiaries for fiscal year 2021 through and including fiscal year 2025 (the “Projections”) were prepared in good faith based upon assumptions believed to be reasonable at the time made by the management of Holdings; provided, the Projections are not to be viewed as facts or a guaranty of performance and are subject to significant uncertainties and contingencies many of which are beyond the control of Holdings and (ii) no assurance can be given that such projections will be realized, and that actual results during the period or periods covered by any such projections may differ from the projected results (and such differences may be material).
3.11    No Material Adverse Effect. Since December 31, 2020, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.
3.12    FIRPTA. The Corporation is not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Internal Revenue Code.
3.13    Adverse Proceedings, etc. As of the Initial Closing Date, there are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect. Neither the Corporation nor any of its Restricted Subsidiaries is subject to or in default with respect to any final judgments, writs, injunctions, decrees, orders, rules or regulations of any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
3.14    Taxes. All applicable federal income tax returns and all other tax returns and reports of the Corporation and its Subsidiaries required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon the Corporation and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable, except where the failure to timely file or to pay the foregoing could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Corporation does not know of any proposed material tax assessment against the Corporation or any of its Subsidiaries which is not being actively contested by the Corporation or such Subsidiary in good faith and by appropriate proceedings; provided, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.
3.15    Properties. Each of the Corporation and its Restricted Subsidiaries has (i) good, sufficient and legal title to (in the case of fee interests in real property and interests in easements), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) valid license interests in (in the case of licensed interests in intellectual or real property) and (iv) good title to (in the case of all other personal property), all of their respective material properties and material assets reflected in the Historical Corporation Financial Statements, in each case, except where the failure to have good and legal title, a valid leasehold interest, a valid license or other rights or good title could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and for assets disposed of since the date of such financial statements in the ordinary course of business or as otherwise permitted by this Agreement.
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    3.16    Environmental Matters. Neither the Corporation nor any of its Restricted Subsidiaries nor any of their respective Real Estate Assets or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Corporation nor any of its Restricted Subsidiaries has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable law of any jurisdiction applicable to it, except as promptly disclosed in writing to the Investors (it being acknowledged that no such requests have been received prior to the Initial Closing Date). To the Corporation’s and each Restricted Subsidiary’s knowledge, there are and have been no conditions, occurrences, or Hazardous Materials Activities which could reasonably be expected to form the basis of an Environmental Claim against the Corporation or any of its Restricted Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Corporation nor any of its Restricted Subsidiaries nor, to the Corporation’s knowledge, any predecessor of the Corporation or any of its Restricted Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Real Estate Asset, and neither the Corporation’s nor any of its Restricted Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent or law of any other jurisdiction applicable to it. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. To the Corporation’s and its Restricted Subsidiaries’ knowledge, no event or condition has occurred or is occurring with respect to the Corporation or any of its Restricted Subsidiaries relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which individually or in the aggregate has had, or could reasonably be expected to have, a Material Adverse Effect. The Corporation hereby acknowledges and agrees that none of the Investors or any of their respective officers, directors, employees, attorneys, agents and representatives (i) is now, or has ever been, in control of any Real Estate Asset or the Corporation’s affairs, and (ii) has the capacity or the authority through the provisions of the Financing Agreements or otherwise (other than to the extent that Investors exercise any of their respective remedies under the Financing Agreements) to direct or influence (A) the Corporation’s conduct with respect to the ownership, operation or management of any Real Estate Asset, (B) any undertaking, work or task performed by any employee, agent or contractor of any Credit Party or the manner in which such undertaking, work or task may be carried out or performed, or (C) any compliance with Environmental Laws or Environmental Permits.
    3.17    Use of Proceeds. The Corporation will use the proceeds from (a) the issuance and sale of the Initial Preferred Stock solely for the purposes set forth in Section 1.6(a), (b) the issuance and sale of the Acquisition Preferred Stock, if it occurs, solely for the purposes set forth in Section 1.6(b) and (c) the issuance and sale of any Delayed Preferred Stock, if any such issuance and sale occurs, solely for the purposes set forth in Section 1.6(c).
    3.18    No Solicitation; No Integration. Neither the Corporation nor any of its Subsidiaries, nor any Person acting on its or their behalf, (a) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act in connection with the offer or sale of the Senior Preferred Stock or the Warrants, (b) has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under any circumstances that would require registration of the Senior Preferred Stock or the Warrants under the Securities Act, or (c) has issued any securities which would be integrated with the sale of the Senior Preferred Stock or the Warrants to the Investors for purposes of the Securities Act, nor will the Corporation or any of its Subsidiaries take any
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action or steps that would require registration of any of the Senior Preferred Stock or the Warrants under the Securities Act or cause the offering of the Senior Preferred Stock or the Warrants to be integrated with other offerings. Assuming the accuracy of the representations and warranties of the Investors in Section 4, the offer and sale of the Senior Preferred Stock and the Warrants by the Corporation to the Investors pursuant to this Agreement will be exempt from the registration requirements of the Securities Act.
3.19    Governmental Regulation. Neither the Corporation nor any of its Restricted Subsidiaries is subject to regulation under the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the payment obligations under the Senior Preferred Stock unenforceable. Neither the Corporation nor any of its Restricted Subsidiaries is or is required to be registered as a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.
3.20    Margin Stock. Neither the Corporation nor any of its Restricted Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the Senior Preferred Stock or the Warrants will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
3.21    Employee Matters. None of the Corporation or any of the Restricted Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending against the Corporation or any of its Restricted Subsidiaries, or to the knowledge of the Corporation, threatened in writing against any of them before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against the Corporation or any of its Restricted Subsidiaries or to the knowledge of the Corporation, threatened in writing against any of them, (b) no strike or work stoppage in existence or threatened involving the Corporation or any of its Restricted Subsidiaries, and (c) to the knowledge of the Corporation, no union representation question existing with respect to the employees of the Corporation or any of its Restricted Subsidiaries and, to the knowledge of the Corporation, no union organization activity that is taking place, except (with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) such as is not reasonably likely to have a Material Adverse Effect.
    3.22    Employee Benefit Plans. Except as could not reasonably be expected (either individually or in the aggregate) to result in liability to the Corporation in excess of $2,500,000 at any time, (a) the Corporation, each of its Restricted Subsidiaries and each of their respective ERISA Affiliates are in compliance in all material respects with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan, (b) each Employee Benefit Plan which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which would cause such Employee Benefit Plan to lose its qualified status, (c) no liability to the PBGC (other than required premium payments), the Internal Revenue Service, any Employee Benefit Plan or any trust established under Title IV of ERISA has been or is expected to be
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incurred by the Corporation, any of its Restricted Subsidiaries or any of their ERISA Affiliates, (d) no ERISA Event has occurred or is reasonably expected to occur, (e) except to the extent required under Section 4980B of the Internal Revenue Code or similar state laws, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of the Corporation, any of its Restricted Subsidiaries or any of their respective ERISA Affiliates, (f) the present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by the Corporation, any of its Restricted Subsidiaries or any of their ERISA Affiliates (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the aggregate current value of the assets of such Pension Plan, (g) as of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, the potential liability of the Corporation, its Restricted Subsidiaries and their respective ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, is zero, and (h) the Corporation and each of its Restricted Subsidiaries and each of their respective ERISA Affiliates, where applicable, have complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
3.23    Solvency. The Corporation is and, on each Closing Date, after giving effect to the applicable Transactions consummated on or prior to such Closing Date, will be, Solvent.
3.24    Compliance with Statutes, Etc. Each of the Corporation and its Restricted Subsidiaries is in compliance with all applicable laws, statutes, regulations and orders of, and all applicable restrictions imposed by all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any permits issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of the Corporation or any of its Restricted Subsidiaries), except such non-compliance that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
3.25    PATRIOT Act; FCPA. To the extent applicable, each of the Corporation and its Subsidiaries is in compliance, in all material respects, with the (a) Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act of 2001) (the “PATRIOT Act”). No part of the proceeds of the Senior Preferred Stock or the Warrants will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or any other Person or entity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA or any other Anti-Corruption Law.
    3.26    Patents, Trademarks, Copyrights, Licenses, etc. Except as could not reasonably be expected to have a Material Adverse Effect, (i) the Corporation owns or possesses the right to use all patents, patent rights, technology, trademarks, service marks, trade names, copyrights, trade secrets, domain names, software, database rights, Merchant Account (as defined in the New Credit Agreement as in effect on the date hereof) data bases and other intellectual property rights used in the business of the Corporation and (ii) the Corporation has the necessary staffing with sufficient expertise to service, update, maintain, and operate such Merchant Account data bases.
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3.27    Sanctions; Anti-Corruption; and Anti-Terrorism Law.
1.The Corporation and each of its Subsidiaries is and will remain in compliance in all material respects with all applicable Sanctions or all applicable laws relating to anti-money laundering and counter-terrorism (“Anti-Terrorism Laws”), including, without limitation, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), the laws and regulations administered by OFAC, the Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330), the Money Laundering Control Act (18 U.S.C. §§1956-1957 and 1960) and the International Emergency Economic Powers Act (50 U.S.C. §§1701-1707). None of the Corporation, any of its Subsidiaries or any of their respective officers or directors, and (to the knowledge of a Senior Officer of the Corporation) none of the Affiliates, employees or agents of the Corporation or its Subsidiaries that is acting or benefitting in any capacity in connection with Senior Preferred Stock or the Warrants, is any of the following: (i) a Sanctioned Person, (ii) a Person who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order or (iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law.
2.None of the Corporation, its Subsidiaries, their respective directors and employees or, to the knowledge of a Senior Officer of the Corporation, any Affiliate, agent or other Person acting on behalf of the Corporation or any Subsidiary has paid, offered, promised to pay or authorized the payment of, directly or indirectly, (i) any money or anything of value to any Foreign Official or other Person or entity for the purpose of influencing any act or decision of such Foreign Official or other Person or entity or of such Foreign Official’s Governmental Authority or to secure any improper advantage, for the purpose of obtaining or retaining business for or with, or directing business to, any Person, in each case, in violation of any applicable Anti-Corruption Law including but not limited to the FCPA, or (ii) for the purpose of funding, financing or facilitating any activities or business of or with any Sanctioned Person or in any Sanctioned Country or in any other manner that would result in a violation of Sanctions or Anti-Terrorism Laws by any Person (including any Person participating in the Senior Preferred Stock, whether as Holder Representative (as defined in the Certificate of Designations), Investor, Holder, advisor or otherwise).
    3.28    Affiliates. As of the Initial Closing Date, the Controlling Stockholders and their Affiliates (a) do not own of record or beneficially any capital stock of the Corporation or its Subsidiaries (other than their direct or indirect, as applicable, ownership of Common Stock of the Corporation), (b) do not hold any outstanding indebtedness of the Corporation or its Subsidiaries and (c) are not party to any other agreements or transactions with the Corporation or its Subsidiaries, except as a consequence of their direct or indirect, as applicable, ownership of the Corporation and its Subsidiaries, in each case except as set forth on Schedule 3.29.
    3.29    Interim Period Covenants. From March 5, 2021 through and including the Initial Closing Date, the Corporation and its Subsidiaries (as defined in the Existing Senior Credit Agreement as in effect on March 5, 2021) have complied in all material respects with the Interim Period Covenants.
    3.30    No Other Representations. Except for the representations and warranties made by the Corporation that are contained in this Section 3, none of the Corporation or any of its subsidiaries, or any of their respective officers, directors, employees, stockholders, affiliates, agents, advisors or other representatives, or any other person or entity acting on behalf of the Corporation, makes any representations or warranties, express or implied, and the Corporation hereby expressly disclaims any other representations or warranties made with respect to the Corporation or its subsidiaries or affiliates,
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the Senior Preferred Stock, the Warrants, this Agreement, the issuance and sale of the Senior Preferred Stock and the Warrants or any other transactions referred to in this Agreement.
SECTION 4.     REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors (on behalf of itself), severally and not jointly, represents and warrants to the Corporation as follows, as of the date hereof and as of each Closing Date:
4.1    Authority; Validity of Agreement; Investors Action. Such Investor has all requisite power and authority to execute and deliver this Agreement and the other Financing Agreements and to purchase the Senior Preferred Stock and the Warrants from the Corporation. Such Investor has taken all requisite action to authorize, and no other action or proceeding on the part of such Investor is necessary for, the execution and delivery by such Investor of this Agreement and the other Financing Agreements and the consummation by such Investor of the purchase of the Senior Preferred Stock and the Warrants. This Agreement has been duly executed and delivered by such Investor and, assuming due authorization, execution and delivery of this Agreement by the Corporation and the other Investors, is a valid and binding obligation of such Investor enforceable against such Investor in accordance with its terms, subject, as to enforcement, to (a) applicable Debtor Relief Laws and (b) general principles of equity.
    4.2    Consents and Approvals. Assuming the accuracy of the representations and warranties of the Corporation in Section 3 and of each other Investor in this Section 4, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Authority or third party is necessary or required by or with respect to such Investor for the execution by such Investor of this Agreement or the consummation by such Investor of the purchase of the Senior Preferred Stock and the Warrants.
    4.3    No Conflict. None of the execution, delivery or performance by such Investor of this Agreement nor the consummation by such Investor of the purchase of the Senior Preferred Stock and the Warrants will conflict with, violate or constitute a breach of or a default under (a) such Investor’s or any of its subsidiaries’ organizational documents, (b) any bond, note, loan or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument to which such Investor or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound, or (c) any Applicable Law binding upon such Investor or any of its subsidiaries, except in the case of clauses (b) and (c) as would not, individually or in the aggregate, reasonably be expected to enjoin, prevent or materially delay the consummation by such Investor of the purchase of the Senior Preferred Stock and the Warrants.
    4.4    No Proceedings. There is no action, claim, suit, demand, hearing, notice of violation or deficiency, or proceeding pending or, to such Investor’s knowledge, threatened against such Investor or any of its subsidiaries by Governmental Authorities or any third party that would reasonably be expected, individually or in the aggregate, to enjoin, prevent or materially delay the consummation by such Investor of the purchase of the Senior Preferred Stock and the Warrants.
    4.5    Investment Representations.
(a)    Such Investor (i) is an “accredited investor” as defined in Rule 501(a) under the Securities Act, (ii) is purchasing the Senior Preferred Stock and the Warrants and any shares of common stock that may be purchased upon exercise of the Warrants (the “Warrant Shares”) for its own account or for one or more separate accounts maintained by it for the benefit of one or more other accredited investors and not with a view to the distribution thereof, provided that the disposition of such Investor’s
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property shall at all times be within such Investor’s control, (iii) has no present intention of selling, granting any participation in, or otherwise distributing the Senior Preferred Stock, the Warrants or the Warrant Shares in violation of law, (iv) understands that the Senior Preferred Stock, the Warrants and the Warrant Shares have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available and the Corporation is not required to register the Senior Preferred Stock, (v) will not sell, transfer or otherwise dispose of the Senior Preferred Stock, the Warrants, the Warrant Shares or any interest therein except in compliance with the terms of the Certificate of Designations and the registration requirements of the Securities Act and any other applicable securities laws or pursuant to an applicable exemption therefrom, (vi) is knowledgeable with respect to the Corporation, the Target and their respective subsidiaries, and their respective conditions (financial and otherwise), results of operations, businesses, properties, assets, liabilities, plans, management, financing and prospects, (vii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Senior Preferred Stock, the Warrants and the Warrant Shares and of making an informed investment decision and has so evaluated the merits and risks of such investment and without reliance upon the Corporation, the Target, their respective subsidiaries or affiliates or any other person (except for the Corporation’s representations and warranties and statements set forth in this Agreement) and has made its own analysis and decision to consummate its purchase of the Senior Preferred Stock and the Warrants, (viii) recognizes that an investment in the Senior Preferred Stock, the Warrants and the Warrant Shares involves a high degree of risk, including a risk of total loss of such Investor’s investment, and is able to bear the economic risk of an investment in the Senior Preferred Stock, the Warrants and the Warrant Shares, including holding the Senior Preferred Stock, the Warrants and the Warrant Shares for an indefinite period, and is able to afford a complete loss of such investment, (ix) was given the opportunity to ask questions and receive answers concerning the terms and conditions of the purchase of the Senior Preferred Stock, the Warrants and the Warrant Shares and to obtain any additional information which the Corporation possesses or can acquire without unreasonable effort or expense, including with respect to the Corporation’s, the Target’s and their respective subsidiaries’ conditions (financial and otherwise), results of operations, businesses, properties, assets, liabilities, plans, management, financing and prospects, and the Corporation or its representatives have answered to the satisfaction of such Investor all inquiries that such Investor has put to the Corporation, and (x) acknowledges that it was afforded the opportunity to conduct due diligence on the Corporation prior to execution of this Agreement.
(b)The purchase of Senior Preferred Stock, the Warrants and the Warrant Shares by such Investor has not been solicited by or through anyone other than the Corporation or its affiliates, such Investor’s affiliates or such Investor’s investment adviser.
(c)Such Investor has or will have sufficient immediately available funds in cash to pay (i) its “Purchase Price” as set forth on Schedule I (in the case of the Initial Securities) or Schedule II (in the case of the Acquisition Preferred Stock) and (ii) the product of the number of shares of Delayed Preferred Stock to be purchased on such Closing Date multiplied by the per share price specified in Section 1.1(c) above, in each case, on the applicable Closing Date.
(d)Such Investor’s address set forth on its signature page hereto represents such Investor’s true and correct state of domicile, upon which the Corporation may rely for the purpose of complying with applicable blue sky laws. Such Investor acknowledges that the issuance of the Senior Preferred Stock and the Warrants has not been, and will not be, registered under the Securities Act or under any state securities laws by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of such
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Investor’s investment intent and the accuracy of such Investor’s representations as expressed herein. Prior to the applicable Closing, such Investor shall promptly notify the Corporation in writing of any changes in the information set forth in this Agreement with respect to such Investor.
(e)Such Investor understands that nothing in this Agreement or any other materials presented to such Investor in connection with the consummation by such Investor of the purchase of the Senior Preferred Stock, the Warrants and the Warrant Shares constitutes legal, tax or investment advice. Such Investor has consulted such legal, tax, accounting and investment advisors as it, in its sole discretion, has deemed to be necessary or appropriate in connection with its purchase of the Senior Preferred Stock, the Warrants and the Warrant Shares, and it relies solely on such advisors and not on any statements or representations of the Corporation or any of the Corporation’s agents or representatives with respect to such legal, tax, accounting and investment consequences (except for the Corporation’s representations and warranties and statements set forth in this Agreement).
(f)Such Investor acknowledges that, except as set forth in this Agreement, the Corporation has made no representations, warranties, agreements or undertakings to such Investor with respect to the transactions contemplated hereby. Such Investor further represents and warrants that, in executing and delivering this Agreement, it has not relied on any statement or representation other than the Corporation’s representations and warranties and statements set forth in this Agreement.
SECTION 5.     CONDITIONS TO CLOSING
5.1    Conditions Precedent to Initial Closing. The obligation of each Investor to purchase its committed portion of the Initial Preferred Stock on the Initial Closing Date shall be subject to the satisfaction, or waiver by such Investor, of each of the following conditions precedent:
1.Financing Agreements. Each Investor (or its counsel) shall have received from the Corporation either (i) a counterpart of this Agreement and each other Financing Agreement to be entered into on the Initial Closing Date, each signed on behalf of such party, or (ii) written evidence satisfactory to the Investors (which may include facsimile or other electronic transmission of a signed counterpart of this Agreement) that such party has signed a counterpart of this Agreement and each other Financing Agreement to be entered into on the Initial Closing Date.
2.Certificate of Designations. The Corporation shall have filed the Certificate of Designations with the Secretary of State of the State of Delaware, and such filing shall have become effective.
3.Secretary’s Certificate. Each Investor shall have received a certificate of a secretary, an assistant secretary or any other Authorized Officer of the Corporation dated as of the Initial Closing Date and certifying as to (i) each Organizational Document of the Corporation certified, to the extent applicable, as of a recent date by the applicable Governmental Authority, (ii) signature and incumbency certificates of the Authorized Officers of the Corporation, (iii) copies of resolutions of the Board of Directors of the Corporation approving and authorizing the execution, delivery and performance of Financing Agreements to which it is a party and the issuance and sale of the Initial Preferred Stock and the Warrants, certified as of the Initial Closing Date as being in full force and effect without modification or amendment and (iv) a good standing
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certificate for the Corporation from the applicable Governmental Authority of the Corporation’s jurisdiction of incorporation.
4.Solvency Certificate. Each Investor shall have received a solvency certificate in the form attached to the Preferred Stock Commitment Letter (appropriately completed), from the chief financial officer of Holdings (or other authorized financial officer thereof reasonably acceptable to the Investors), dated the Initial Closing Date, certifying that upon giving effect to the Initial Closing Date Transactions, Holdings and its Restricted Subsidiaries, on a consolidated basis, are Solvent.
5.Legal Opinion. Each Investor shall have received a customary written opinion (addressed to the Investors and dated as of the Initial Closing Date) of Schulte Roth & Zabel LLP in form and substance reasonably satisfactory to the Investors. The Corporation hereby requests such counsel to deliver such opinions.
6.Disbursement Letter. The Investors shall have received a customary disbursement letter, in form and substance reasonably satisfactory to the Investors, in respect of the proceeds of the Initial Preferred Stock to be funded on the Initial Closing Date.
7.Accuracy of Representations and Warranties. As of the Initial Closing Date, the representations and warranties contained herein shall be true and correct in all material respects on and as of the Initial Closing Date to the same extent as though made on and as of that date (unless any such representation and warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects), except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date (unless any such representation and warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects).
8.Officer’s Certificate. The Corporation shall have delivered to the Investors a certificate, dated as of the Initial Closing Date, and signed by an Authorized Officer of the Corporation certifying that the conditions in clause (g) above and clauses (p) (to the extent the Corporation elects to rely on the second sentence thereof to satisfy such condition) and (q) below have been satisfied.
9.Initial Closing Date Refinancing. The Initial Closing Date Refinancing shall have been consummated, or shall be consummated substantially simultaneously with the issuance and sale of the Initial Preferred Stock.
10.New Credit Agreement. The New Credit Agreement and the other Credit Documents shall have been duly executed by the parties thereto and shall be on terms consistent in all material respects with the Debt Commitment Letter and the Debt Fee Letter, each as in effect on March 5, 2021 (and to the extent not expressly set forth therein, shall be reasonably satisfactory to the Investors), and shall have become effective. The Borrowers shall have received, prior to or substantially concurrently with the sale of the Initial Preferred Stock under
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this Agreement, $300,000,000 in gross cash proceeds from the Initial Term Loans on the terms set forth in the Debt Commitment Letter. On the Initial Closing Date, there shall be no Revolving Loans outstanding under the New Credit Agreement other than to fund (x) the Initial Closing Date Transaction Costs (not to exceed $5,000,000) and (y) original issue discount and upfront fees required to be funded on the Initial Closing Date pursuant to the “Market Flex Provisions” in the Debt Fee Letter. After giving effect to the Initial Closing Date Transactions, the Corporation and its Subsidiaries shall have no indebtedness or preferred equity outstanding other than (i) indebtedness under the New Credit Agreement and other indebtedness acceptable to the Investors and (ii) the Initial Preferred Stock.
11.Know-Your Customer Information. The Investors shall have received, at least three (3) Business Days prior to the Initial Closing Date, (i) all documentation and other information theretofore concerning the Corporation as has been reasonably requested in writing at least ten (10) calendar days prior to the Initial Closing Date by the Investors that they reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act and (ii) to the extent the Corporation qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a customary “beneficial ownership” certification in relation to the Corporation.
12.Financial Statements. The Investors shall have received (i) the Historical Corporation Financial Statements, (ii) the Historical Target Financial Statements and (iii) the Pro Forma Financial Statements to be delivered on the Initial Closing Date.
13.Payment of Fees. All fees payable prior to or on the Initial Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, and all costs and expenses invoiced at least two (2) Business Days prior to the Initial Closing Date, in each case, to the extent required to be paid on or before the Initial Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, shall be paid to the Investors on or prior to the Initial Closing Date (which fee amounts may, at the option of the Corporation, be offset against the proceeds of the Initial Preferred Stock).
14.Ratings. The Borrowers shall have obtained a corporate credit rating or corporate family rating, as applicable, from Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services, LLC, a subsidiary of S&P Global Inc.
15.Stock and Warrant Certificates. Each Investor shall have received (i) a certificate representing the number of shares of the Initial Preferred Stock being purchased by such Investor at the Initial Closing as set forth on Schedule I attached hereto opposite the name of such Investor in the column entitled “Number of Purchased Shares of Initial Preferred Stock” and (ii) a certificate representing the Warrants being purchased by such Investor at the Initial Closing Date as set forth on Schedule I attached hereto opposite the name of such Investor in the column entitled “Number of Shares of Common Stock Underlying Warrants.”
16.Leverage Ratio. After giving effect to the Initial Closing Date Transactions, on a pro forma basis (excluding cash proceeds of any borrowings on the Initial Closing Date of Initial
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Term Loans and the cash proceeds of the Initial Preferred Stock funded on the Initial Closing Date), the Corporation shall be in compliance with a pro forma Total Net Leverage Ratio and a Total Preferred Leverage Ratio (provided that notwithstanding anything to the contrary in the Certificate of Designations the numerator used in calculating such ratios shall be calculated with no cap on Unrestricted Cash (as defined in the Certificate of Designations)) of 4.25 to 1.00 and 6.25 to 1.00, respectively.
17.Interim Period Covenants. From March 5, 2021 through and including the Initial Closing Date, the Corporation and its Subsidiaries (as defined in the Existing Senior Credit Agreement as in effect on March 5, 2021) shall have complied in all respects with the Interim Period Covenants.
5.2    Conditions Precedent to Acquisition Closing. The obligation of each Investor to purchase its committed portion of the Acquisition Preferred Stock on the Acquisition Closing Date shall be subject to the satisfaction, or waiver by such Investor, of each of the following conditions precedent:
(a)Acquisition. The Acquisition shall have been consummated, or substantially simultaneously with the issuance and sale of the Acquisition Preferred Stock and the borrowings under the Delayed Draw Term Loans, shall be consummated, in accordance with the terms of the Merger Agreement, without giving effect to any modifications, amendments, consents or waivers thereto by the Corporation or its Subsidiaries that are materially adverse to the Holders without the prior consent of the Required Holders, such consent not to be unreasonably withheld, delayed or conditioned (it being understood that (i) any reduction in the purchase price of, or consideration for, the Acquisition under the Merger Agreement shall not be deemed materially adverse to the interests of the Holders so long as any reduction reduces the amount of the Delayed Draw Term Loans and the amount of the Acquisition Preferred Stock ratably, (ii) any increase in the cash purchase price of, or consideration for, the Acquisition under the Merger Agreement shall not be deemed materially adverse to the interests of the Holders so long as any such increase is funded solely by an increase in the Equity Contribution and (iii) any amendment to the definition of “Company Material Adverse Effect” in the Merger Agreement shall be deemed to be materially adverse to the interests of the Holders. Notwithstanding the foregoing, without the prior written consent of Ares the Corporation shall not have elected to increase the “Cash Consideration Amount” (as defined in the Merger Agreement) pursuant to the proviso in the definition thereof; provided that in lieu of the payment of such additional Cash Consideration Amount the Merger Agreement may be amended to provide for payment of such additional amount in the form of a preferred stock of the Corporation which ranks junior to the Senior Preferred Stock and is on terms satisfactory to the Investors.
(b)Equity Contribution. The Equity Contribution shall have occurred as a result of the Acquisition substantially simultaneously with the Acquisition Closing in accordance with the Merger Agreement as in effect on March 5, 2021.
(c)No Company Material Adverse Effect. No event or events shall have occurred since March 5, 2021 which individually or in the aggregate constitute a “Company Material Adverse Effect” (as defined in the Merger Agreement).
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(d)Financial Statements. The Investors shall have received (i) the Historical Target Financial Statements and (ii) the Pro Forma Financial Statements to be delivered on the Acquisition Closing Date.
(e)Secretary’s Certificate. Each Investor shall have received a certificate of a secretary, an assistant secretary or any other Authorized Officer of the Corporation dated as of the Acquisition Closing Date and certifying as to (i) each Organizational Document of the Corporation certified, to the extent applicable, as of a recent date by the applicable Governmental Authority, (ii) signature and incumbency certificates of the Authorized Officers of the Corporation, (iii) copies of resolutions of the Board of Directors of the Corporation approving and authorizing the issuance and sale of the Acquisition Preferred Stock, certified as of the Acquisition Closing Date as being in full force and effect without modification or amendment and (iv) a good standing certificate for the Corporation from the applicable Governmental Authority of the Corporation’s jurisdiction of incorporation.
(f)Solvency Certificate. Each Investor shall have received a solvency certificate in the form attached to the Preferred Stock Commitment Letter (appropriately completed), from the chief financial officer of Holdings (or other authorized financial officer thereof reasonably acceptable to the Investors), dated the Acquisition Closing Date, certifying that upon giving effect to the Acquisition Closing Date Transactions, Holdings and its Restricted Subsidiaries, on a consolidated basis, are Solvent.
(g)Legal Opinion. Each Investor shall have received a customary written opinion (addressed to the Investors and dated as of the Acquisition Closing Date) of Schulte Roth & Zabel LLP in form and substance reasonably satisfactory to the Investors. The Corporation hereby requests such counsel to deliver such opinions.
(h)Disbursement Letter. The Investors shall have received a customary disbursement letter, in form and substance reasonably satisfactory to the Investors, in respect of the proceeds of the Acquisition Preferred Stock to be funded on the Acquisition Closing Date.
(i)Specified Representations and Specified Merger Agreement Representations. The Specified Representations shall be true and correct in all material respects (or in all respects, if any such Specified Representation is already qualified by materiality) and the Specified Merger Agreement Representations shall be true and correct in all respects on the Acquisition Closing Date (unless such representations relate to an earlier date, in which case such representations shall have been true and correct in all material respects (or in all respects, as applicable) as of such earlier date).
(j)No Default There shall be no Preferred Payment Default or Bankruptcy Event at the time of, and after giving effect to the issuance and sale of, the Acquisition Preferred Stock and the other Acquisition Closing Date Transactions.
(k)Payment of Fees. All fees payable prior to or on the Acquisition Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, and all costs and expenses invoiced at least two (2) Business Days prior to the Acquisition Closing Date, in each case, to the extent required to be paid on or before the Acquisition Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, shall be paid to the
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Investors on or prior to the Acquisition Closing Date (which fee amounts may, at the option of the Corporation, be offset against the proceeds of the Acquisition Preferred Stock).
(l)Know-Your Customer Information. The Investors shall have received, at least three (3) Business Days prior to the Acquisition Closing Date, all documentation and other information theretofore concerning the Target as has been reasonably requested in writing at least ten (10) calendar days prior to the Acquisition Closing Date by any Holder that it reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.
(m)Officer’s Certificate. The Corporation shall have delivered to the Investors a certificate, dated as of the Acquisition Closing Date, and signed by an Authorized Officer of the Corporation certifying that the conditions in clauses (b), (c), (i) and (j) above and clause (o) below have been satisfied.
(n)Delayed Draw Term Loans and Target Refinancing. The Borrowers shall have received, prior to or substantially concurrently with the sale of the Acquisition Preferred Stock under this Agreement, the proceeds from the Delayed Draw Term Loans on the terms set forth in the Debt Commitment Letter. The Target Refinancing shall have been consummated, or shall be consummated substantially simultaneously with the issuance and sale of the Acquisition Preferred Stock, and the Target and its Subsidiaries shall have no outstanding material indebtedness other than indebtedness incurred under the New Credit Agreement, indebtedness permitted to remain outstanding pursuant to the terms of the Merger Agreement, indebtedness permitted under the Financing Agreements and other indebtedness acceptable to the Holders in their reasonable discretion.
(o)Ratio Compliance. After giving effect to the Acquisition Closing Date Transactions, on a pro forma basis (excluding cash proceeds of any borrowings on the Acquisition Closing Date of Initial Term Loans and/or Delayed Draw Term Loans and the cash proceeds of the Initial Preferred Stock and the Acquisition Preferred Stock funded on the Acquisition Closing Date), the Corporation is in compliance with a pro forma Total Net Leverage Ratio of 4.25 to 1.00 and a Total Preferred Leverage Ratio of 6.25 to 1.00.
(p)Stock Certificates. Each Investor shall have received a certificate representing the number of shares of the Acquisition Preferred Stock being purchased by such Investor at the Acquisition Closing as set forth on Schedule II attached hereto opposite the name of such Investor in the column entitled “Number of Purchased Shares of Acquisition Preferred Stock.”
(q)Initial Preferred Stock Closing. The Initial Closing Date shall have occurred or shall occur substantially concurrently with the Acquisition Closing Date, and the Initial Preferred Stock shall have been issued and funded on the Initial Closing Date.
(r)Outside Date. The issuance and sale of the Acquisition Preferred Stock shall have occurred prior to 5:00 p.m., New York City time, on February 28, 2022.
5.3    Conditions Precedent to Delayed Closing. The obligation of each Investor to purchase all or a portion of its committed portion of the Delayed Preferred Stock on a Delayed Closing Date will be subject to the satisfaction, or waiver by such Investor, of each of the following conditions precedent:
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i.Notice. The Corporation shall have provided the Holders and the holders of commitments in respect of the Delayed Preferred Stock with a Delayed Closing Notice not less than ten (10) days prior to such Delayed Closing Date setting forth (x) the Corporation’s or its Subsidiary’s intention to consummate a Permitted Acquisition, the target thereof and the purchase price for such Permitted Acquisition, (y) the amount of Delayed Preferred Stock to be issued and sold to the Investors to finance such Permitted Acquisition (subject to the limitations set forth in Section 1.1(c)) and (z) the amount of commitments in respect of the Delayed Preferred Stock that will remain outstanding after giving pro forma effect to the issuance and sale of the Delayed Preferred Stock used to finance such Permitted Acquisition.
ii.Permitted Acquisition. Such Permitted Acquisition shall have been consummated or, substantially simultaneously with the issuance and sale of the Delayed Preferred Stock, shall be consummated.
iii.No Event of Default. No Preferred Default or Bankruptcy Event, and no default or event of default under the New Credit Agreement or any other indebtedness of the Corporation and its Subsidiaries, in each case, shall have occurred and be continuing.
iv.Ratio Compliance. After giving effect to the consummation of such Permitted Acquisition, on a pro forma basis (excluding the cash proceeds of the Delayed Preferred Stock funded on the date of consummation of such Permitted Acquisition), the Corporation is in compliance with a pro forma Consolidated Total Net Leverage Ratio of 4.25 to 1.00 and a Total Preferred Leverage Ratio of 6.25 to 1.00;
v.Accuracy of Representations and Warranties. As of the Initial Closing Date, the representations and warranties contained herein and in the other Financing Agreements shall be true and correct in all material respects on and as of the Initial Closing Date to the same extent as though made on and as of that date (unless any such representation and warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects), except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date (unless any such representation and warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects).
vi.Accuracy of Specified Permitted Acquisition Agreement Representations. The Specified Permitted Acquisition Agreement Representations shall be true and correct in all respects on the Delayed Closing Date with respect to such Delayed Preferred Stock issuance (unless such representations relate to an earlier date, in which case such representations shall have been true and correct in all material respects (or in all respects, as applicable) as of such earlier date).
vii.Stock Certificates. Each Investor shall have received a certificate representing the number of shares of the Delayed Preferred Stock being purchased by such Investor at such Delayed Closing (subject to the limitations set forth in Section 1.1(c)).
viii.Initial Preferred Stock Closing. The Initial Closing Date shall have occurred or shall occur substantially concurrently with the Acquisition Closing Date, and the Initial Preferred Stock shall have been issued and funded on the Initial Closing Date.
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ix.Outside Date. The issuance and sale of such Delayed Preferred Stock to be issued shall have occurred prior to 5:00 p.m., New York City time, on October 27, 2022.
x.Payment of Fees. All fees payable prior to or on the applicable Delayed Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, and all costs and expenses invoiced at least two (2) Business Days prior to such Delayed Closing Date, in each case, to the extent required to be paid on or before such Delayed Closing Date pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter, shall be paid to the Investors on or prior to such Delayed Closing Date.
xi.Know-Your Customer Information. The Investors shall have received, at least three (3) Business Days prior to the consummation of such Permitted Acquisition, (i) all documentation and other information theretofore concerning the target thereof as has been reasonably requested in writing at least ten (10) calendar days prior to such Delayed Closing Date by any Holder that it reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act.
xii.Officer’s Certificate. The Corporation shall have delivered to the Investors a certificate, dated as of the Acquisition Closing Date, and signed by an Authorized Officer of the Corporation certifying that the conditions in clauses (c), (d), (e) and (f) above have been satisfied.
xiii.Maximum Fundings. No more than two (2) fundings of Delayed Preferred Stock shall have occurred.
xiv.Minimum Liquidation Preference. The Delayed Preferred Stock to be issued on such Delayed Closing Date shall have a Liquidation Preference at least equal to the lesser of (i) $25,000,000 and (ii) the total amount of commitments in respect of the Delayed Preferred Stock remaining outstanding hereunder after giving effect to all previous Delayed Closings; provided that in no event shall the aggregate Liquidation Preference issued and sold at any Delayed Closing be less than $5,000,000.
SECTION 6.     RESTRICTIONS ON TRANSFER OF SENIOR PREFERRED STOCK AND WARRANTS; OTHER COVENANTS
    6.1    Restrictions on Transferability. The Senior Preferred Stock, the Warrants and the Common Stock issuable upon exercise of the Warrants may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, or pursuant to an exemption therefrom, and in each case in compliance with the terms of this Agreement and the Certificate of Designations and the restrictions set forth in the text of the restrictive notation required to be contained in each register and book entry for the Senior Preferred Stock, the Warrants and the Warrant Shares pursuant to Section 6.2 (except to the extent such securities have been registered under the Securities Act, whether pursuant to the Registration Rights Agreement or otherwise). The Corporation shall be entitled to give stop transfer orders to any transfer agent with respect to the Senior Preferred Stock, the Warrants and the Common Stock issuable upon conversion of the Warrants (except to the extent such securities have been registered under the Securities Act, whether pursuant to the Registration Rights Agreement or otherwise) in order to enforce the foregoing restrictions.
    6.2    Restrictive Notation. Each register and book entry for the Senior Preferred Stock, the Warrants and the Common Stock issuable upon exercise of the Warrants shall (except to the extent such
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securities have been registered under the Securities Act, whether pursuant to the Registration Rights Agreement or otherwise) contain a notation in substantially the following form (in addition to any legends or notations required under applicable securities laws).
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION IN A TRANSACTION THAT WAS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) IN COMPLIANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATIONS AND (B)(1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B)(2), PROVIDED THAT THE CORPORATION, IF IT SO REQUESTS, RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
    6.3    Tax Treatment. The Corporation acknowledges that the Investors intend to take the position that (a) the Investors will not be required to include in income as a dividend for U.S. federal income tax purposes any income or gain in respect of the Senior Preferred Stock or the Warrants on account of (i) any accrued and unpaid dividends unless and until such dividends are declared and paid in cash or property or (ii) the purchase by the Investors of such Senior Preferred Stock and the Warrants for a price that is less than (or deemed to be less than) their initial Liquidation Preferences, and (b) except in respect of any declared but unpaid dividends, any “complete redemption” (within the meaning of Section 302 of the Internal Revenue Code) of Senior Preferred Stock held by any Investor permitted under the Certificate of Designations shall be treated as a payment in exchange for stock pursuant to Section 302 of the Internal Revenue Code. The Corporation and the Investors agree to report consistently, and take no action for U.S. federal income tax purposes inconsistent, with the treatment provided for in clauses (a) and (b) of the immediately preceding sentence, unless otherwise required by a change in applicable law or interpretation of the law after the date hereof which is binding on taxpayers, a change in applicable facts after the date hereof involving the terms of the Senior Preferred Stock or the Warrants or the ownership of the Corporation (but (for the avoidance of doubt) limited, in the case of any change in ownership of the Corporation, to the impact, if any, that such change may have on the Section 302 analysis of a complete redemption of an Investor's Senior Preferred Stock), or a binding determination with respect to a tax audit, contest or similar proceeding.
6.4    Payment of Fees. The Corporation agrees to pay all of the fees to be paid by it pursuant to the Preferred Stock Commitment Letter and the Preferred Stock Fee Letter as the same become due and payable in accordance therewith.
6.5    Indemnification of Certain Directors. As provided in the Certificate of Designations, in the event of any Sale Demand (as defined in the Certificate of Designations), the Corporation shall enter into an indemnification agreement with each Sale Demand Director (as defined in the Certificate of Designations) and Majority Director (as defined in the Certificate of Designations) in form and substance
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no less favorable to such director than the indemnification agreements then in effect between the Corporation and any other non-employee member of its Board of Directors (but in no event less favorable to such Sale Demand Director and Majority Director than the indemnification agreements in effect between the Corporation and any non-employee member of its Board of Directors as of the Initial Closing Date).
6.6    Additional Issuances of Securities.
(a)    From the Initial Closing Date until the Investors and their respective Affiliates no longer hold any Warrants or Warrant Shares, the Corporation shall not (i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any shares of Common Stock or Common Stock Equivalents other than Excluded Securities (any such offer, sale, grant, disposition or announcement being referred to as a “Subsequent Placement”) unless the Corporation shall have first complied with this Section 6.6.
(b)     The Corporation shall deliver to Ares Management LLC a written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with the Issuers and their respective Affiliates that are Holders of Warrants or Warrant Shares a number of Offered Securities equal to the total number of Offered Securities multiplied by a fraction, the numerator of which is the sum of number of Warrants and Warrant Shares held by the Investors and their respective Affiliates as of the applicable date requiring determination and the denominator of which is the sum of the total number of outstanding shares of Common Stock and the total number of outstanding Warrants as of the applicable date requiring determination, allocated among such Holders based on such Holder’s pro rata portion of the Warrants and Warrant Shares (the “Basic Amount”).
(c)     To accept an Offer, in whole or in part, such Holder must deliver a written notice to the Corporation prior to the end of the tenth (10th) Business Day after such Holder’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of such Holder’s Basic Amount that such Holder elects to purchase (the “Notice of Acceptance”). Notwithstanding anything to the contrary contained herein, if the Corporation desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Corporation may deliver to Ares Management LLC a new Offer Notice and the Offer Period shall expire on the tenth (10th) Business Day after its receipt of such new Offer Notice.
(d)    Upon the closing of the issuance, sale or exchange of the Offered Securities, the Investors that are Holders of Warrants or Warrant Shares shall acquire from the Corporation, and the Corporation shall issue to such Holders, the number or amount of Offered Securities specified in the Notices of Acceptance above if such Holders have so elected, upon the terms and conditions specified in the Offer. The purchase by the Holders of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Corporation and the Holders of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Holders.
    6.7    Information Rights. The Corporation shall deliver to the holders of the Warrants and the holders of the Warrant Shares:
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(a)    As soon as available, and in any event within 45 days after the end of each Fiscal Quarter of each Fiscal Year (including the fourth Fiscal Quarter of each Fiscal Year), commencing with the Fiscal Quarter ended March 31, 2021, the consolidated balance sheets of the Corporation and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of operations and cash flows of the Corporation and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth, in each case, in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the Financial Plan for the current Fiscal Year, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto and any other operating reports prepared by management for such period.
(b)    As soon as available, and in any event within 120 days after the end of each Fiscal Year (commencing with the Fiscal Year ending December 31, 2021), (x) the consolidated balance sheets of the Corporation and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, changes in members’ equity and Cash flows of the Corporation and its Subsidiaries for such Fiscal Year, setting forth, in each case, in comparative form the corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial Plan for the Fiscal Year covered by such financial statements, in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; and (y) with respect to such consolidated financial statements a report thereon of independent certified public accountants of recognized national standing selected by the Corporation and reasonably satisfactory to the Required Warrant Holders (it being agreed that Ernst & Young LLP is reasonably satisfactory to the Required Warrant Holders), which report shall be unqualified as to “going concern” and scope of audit (other than any qualification or exception that is solely with respect to, or resulting solely from, (A) an upcoming maturity date within one year from the date of such report of any of the Obligations (as defined in the Credit Agreement as in effect on the Initial Closing Date) or (B) any potential inability to satisfy a financial maintenance covenant on a future date or in a future period), and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of the Corporation and its Subsidiaries as at the dates indicated and the results of their operations and their Cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards).
SECTION 7.     TERMINATION
7.1    Termination by the Investors and the Corporation. This Agreement may be terminated at any time by the mutual written consent of the Investors and the Corporation.
    7.2    Automatic Termination. This Agreement shall immediately and automatically terminate without any action by the parties hereto in the event that (a) the Initial Closing has not occurred by 5:00 p.m., New York City time, on February 28, 2022, (b) the Merger Agreement is terminated in accordance with its terms at any time prior to the Initial Closing Date, or (c) the Debt Commitment Letter is terminated in accordance with its terms at any time prior to the Initial Closing Date.
    7.3    Effect of Termination. If this Agreement is validly terminated as provided in this Section 7, this Agreement shall immediately become void and have no effect, without any liability or obligation
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on the part of the Corporation or the Investors (or any stockholder, affiliate, member, manager, partner or representative thereof) (other than this Section 7.3 and Section 8); provided, however, that nothing herein shall relieve the Corporation or the Investors from liability for any intentional and willful material breach of any of its representations, warranties, covenants or agreements set forth in this Agreement.
SECTION 8.     MISCELLANEOUS
8.1    Survival of Representations and Warranties. All representations, warranties and covenants as of each Closing Date contained in this Agreement and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall survive the execution and delivery of this Agreement and the issuance and sale of the Senior Preferred Stock until 36 months after such Closing Date. In addition, Section 8.5 shall survive any termination of this Agreement.
    8.2    Notices. All notices and other communications hereunder shall be in writing and shall be deemed sufficiently given and served for all purposes (a) when personally delivered or given by email to a valid email address, (b) one (1) Business Day after a writing is delivered to a national overnight courier service or (c) three (3) Business Days after a writing is deposited in the United States mail, first class postage or other charges prepaid and registered, return receipt requested, in each case, addressed as set forth on the signature page hereto (or at such other address for a party as shall be specified by like notice).
    8.3    Amendments and Waivers. No modifications or amendments to, or waivers of, any provision of this Agreement may be made, except pursuant to a document signed by the Corporation and Investors holding a majority of the shares of Senior Preferred Stock.
    8.4    Interpretation. When a reference is made in this Agreement to Sections, paragraphs, clauses, Exhibits or Schedules, such reference shall be to a Section, paragraph, clause, Exhibit or Schedule to this Agreement unless otherwise indicated. The words “include,” “includes,” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against any party. The phrases “the date of this Agreement,” “the date hereof,” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to April 27, 2021. The words “hereof,” “herein,” “herewith,” “hereby” and “hereunder” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.
    8.5    Expenses. The Corporation shall pay all (i) reasonable and documented and invoiced out-of-pocket costs and expenses incurred by (A) Ares Capital Management LLC and its Affiliates and (B) any other Holder that, together with its Affiliates, holds a majority of the Senior Preferred Stock outstanding and such Holder’s Affiliates (without duplication) (limited, in the case of legal fees and expenses, to the reasonable, documented and invoiced fees, disbursements and other charges of Cahill Gordon & Reindel LLP and to the extent reasonably determined by Ares Capital Management LLC or such other Holder to be necessary, one local counsel and one regulatory counsel in each applicable jurisdiction (which may include a single special counsel acting in multiple jurisdictions) and, in the case of an actual or reasonably potential conflict of interest where Holder affected by such conflict notifies the Corporation of the existence of such conflict and thereafter retains its own counsel, one additional conflicts counsel (and, to the extent reasonably determined by Ares Capital Management LLC or such other Holder to be necessary, one additional conflicts local counsel and regulatory counsel in each applicable jurisdiction) for the affected Holders similarly situated and such other counsel retained with the
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Corporation’s consent (such consent not to be unreasonably withheld or delayed)), in connection with (x) the preparation, negotiation, execution and delivery of the Financing Agreements including any stamp, issuance, transfer or similar taxes that may be payable in respect of the execution and delivery of any Financing Agreement or the issuance, delivery or acquisition of the Senior Preferred Stock and the Warrants, (y) the administration of the Financing Agreements or (z) any amendments, modifications or waivers of the provisions thereof (or proposed amendments, modifications or waivers of the provisions thereof), and (ii) all reasonable and documented and invoiced out-of-pocket expenses incurred by (A) Ares Capital Corporation and its Affiliates and (B) any other Holder that, together with its Affiliates, holds a majority of the Senior Preferred Stock outstanding and such Holder’s Affiliates (including the fees, disbursements and other charges of counsel for Ares Capital Corporation, such Holder or such Affiliate) in connection with the enforcement, protection or preservation of any rights or remedies (I) in connection with the Financing Agreements (including all such costs and expenses incurred during any legal proceeding, including any proceeding under any Debtor Relief Laws), including its rights under this Section 8.5 or (II) in connection with the Senior Preferred Stock and the Warrants issued hereunder, including all such out-of-pocket costs and expenses incurred during any workout, restructuring or negotiations in respect of such Senior Preferred Stock or the Warrants; provided that such counsel shall be limited to one lead counsel and one local counsel in each applicable jurisdiction (exclusive of any reasonably necessary special counsel) (and, in the case of an actual or reasonably potential conflict of interest, where Ares Capital Corporation or such other Holder affected by such conflict notifies the Corporation of the existence of such conflict and thereafter retains its own counsel, one additional conflicts counsel (and, to the extent reasonably determined by Ares Capital Corporation or such other Holder to be necessary, one additional conflicts local counsel and regulatory counsel in each applicable jurisdiction)) and such other counsel as may be retained with the Corporation’s consent (such consent not to be unreasonably withheld or delayed).
8.6    Further Assurances. Each party to this Agreement shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the purchase of the Senior Preferred Stock and the Warrants.
    8.7    No Third-Party Beneficiaries. No person or entity not a party to this Agreement shall be deemed to be a third-party beneficiary hereunder or entitled to any rights hereunder, except as expressly provided in this Agreement. Any Holders that are not also Investors are express third-party beneficiaries of the provisions of this Agreement.
    8.8    Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the successors of each of the parties hereto. Notwithstanding the foregoing, (a) the Corporation shall not assign or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Holders, (b) no Investor shall assign or delegate any of its rights or obligations under this Agreement to any Disqualified Institution, and (c) other than with respect to an assignment by an Investor to another Investor or an assignment to which the Corporation has consented, no assignment by an Investor shall relieve the assigning Investor of any obligations under this Agreement.
    8.9    Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior documents, agreements and understandings, both written and verbal, among the parties with respect to the subject matter hereof and the consummation of the issuance and sale of the Senior Preferred Stock and the Warrants.
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    8.10    Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, then, if possible, such illegal, invalid or unenforceable provision will be modified to such extent as is necessary to comply with such present or future laws, and the parties hereto hereby agree to replace such illegal, invalid or unenforceable provision with a legal, valid and enforceable arrangement which in its economic effect shall be as close as possible to the illegal, invalid or unenforceable provision and such modification shall not affect any other provision hereof; provided that if such provision may not be so modified, such illegality, invalidity or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.
8.11     GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT SOLELY WITH RESPECT TO THE SATISFACTION OF THE CONDITIONS FOR THE ACQUISITION SET FORTH IN SECTION 5.2 (A) THE INTERPRETATION OF THE DEFINITION OF “COMPANY MATERIAL ADVERSE EFFECT” (AS DEFINED IN THE MERGER AGREEMENT) AND WHETHER THERE SHALL HAVE OCCURRED A “COMPANY MATERIAL ADVERSE EFFECT”, (B) WHETHER THE SPECIFIED MERGER AGREEMENT REPRESENTATIONS ARE ACCURATE AND WHETHER AS A RESULT OF A BREACH OR INACCURACY THEREOF THE CORPORATION (OR ITS AFFILIATE) HAS THE RIGHT TO TERMINATE ITS OBLIGATIONS UNDER THE MERGER AGREEMENT, OR TO DECLINE TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND (C) WHETHER THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE MERGER AGREEMENT, IN EACH CASE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (AS DEFINED IN THE MERGER AGREEMENT) OF THE STATE OF DELAWARE AS APPLIED TO THE MERGER AGREEMENT, WITHOUT GIVING EFFECT TO PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF LAWS (AS DEFINED IN THE MERGER AGREEMENT) OF ANOTHER JURISDICTION.
ANY ACTION BROUGHT BY ANY PARTY TO THIS AGREEMENT AGAINST ANOTHER PARTY TO THIS AGREEMENT CONCERNING THIS AGREEMENT OR THE CONSUMMATION OF THE PURCHASE OF THE SENIOR PREFERRED STOCK AND THE WARRANTS SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS, IN EACH CASE, LOCATED IN THE STATE AND COUNTY OF NEW YORK. THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVE ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS. THE PARTIES EXECUTING THIS AGREEMENT AGREE TO SUBMIT TO THE IN PERSONAM JURISDICTION OF SUCH COURTS AND HEREBY IRREVOCABLY WAIVE TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING IN CONNECTION WITH THIS AGREEMENT BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.
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NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
8.12     Counterparts. This Agreement may be executed in one or more counterparts, including electronic .pdf file, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to each of the other parties, it being understood that all parties need not sign the same counterpart. The words “execution,” “execute,” “signed,” “signature,” and words of like import in or related to this Agreement or any other document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Investors, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
[Signature pages follow]

41



IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.
PRIORITY TECHNOLOGY HOLDINGS, INC. By:    /s/ Thomas Priore        
Name: Thomas Priore
Title: President, Chief Executive Officer, and
Chairman

                         Priority Technology Holdings, Inc.
                         2001 Westside Parkway, Suite 155
                         Alpharetta, Georgia 30004
                         Attention: Tom Priore
                         Email: tpriore@pps.io

with a copy to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Michael E. Gilligan and Xavier Kowalski
Email: michael.gilligan@srz.com and xavier.kowalski@srz.com
[Signature Page to Preferred Stock Purchase Agreement]


Ares Capital Corporation


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com


[Signature Page to Preferred Stock Purchase Agreement]


Ares Centre Street Partnership, L.P.
By: Ares Centre Street GP, Inc., as general partner


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com


[Signature Page to Preferred Stock Purchase Agreement]


Ares PCS PF Equity Holdings LLC
By: Ares Capital Management LLC, its Servicer


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com


[Signature Page to Preferred Stock Purchase Agreement]


Ares Jasper Fund, L.P.
By: Ares Capital Management LLC, its investment manager


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com


[Signature Page to Preferred Stock Purchase Agreement]


Ares ND Credit Strategies Fund LLC
By: Ares Capital Management LLC, its account manager


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com



[Signature Page to Preferred Stock Purchase Agreement]


Ares Credit Strategies Insurance Dedicated Fund
Series Interests of the SALI Multi-Series Fund, L.P.
By: Ares Management LLC, its investment subadvisor
By: Ares Capital Management LLC, as subadvisor


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com


[Signature Page to Preferred Stock Purchase Agreement]


Ares SDL Blocker Holdings LLC


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com

with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com



[Signature Page to Preferred Stock Purchase Agreement]


Ares SFERS Credit Strategies Fund LLC
By : Ares Capital Management LLC, its investment manager


By: __/s/ Joshua Bloomstein    __
    Name: Joshua Bloomstein
    Title: Authorized Signatory

                         Ares Capital Corporation
                         245 Park Avenue, 44th Floor
                         New York, NY 10167
                         Attention: MiddleOfficeDL
                         Email: MiddleOfficeDL@aresmgmt.com
with a copy to:
Cahill Gordon & Reindel LLP
32 Old Slip
New York, New York 10005
Attention: John Papachristos, Esq.
Email: jpapachristos@cahill.com